Sitting of 29 January 2003

Preamble
The House met at half-past Eleven o'clock
PRAYERS

  MR. SPEAKER'S ABSENCE
  The House being met, the Clerk at the Table informed the House of the absence of MR. SPEAKER from this day's sitting, pursuant to leave given on 28 January.
  Whereupon, SIR ALAN HASELHURST, THE CHAIRMAN OF WAYS AND MEANS, proceeded to the Table, and after Prayers, took the Chair as DEPUTY SPEAKER, pursuant to the Standing Order.

PRIVATE BUSINESS

  TRANSAS GROUP BILL
  Order for Second Reading read.
  To be read a Second time on Wednesday 5 February.

Oral Answers to Questions
  The Deputy Prime Minister was asked—

  Grant Settlement
  Mr. Christopher Chope: When he will announce the Government's response to the consultation on the provisional grant settlement for 2003–04.[93766]
  The Minister for Local Government and the Regions (Mr. Nick Raynsford): We will be publishing our final proposals on Monday 3 February.
  Mr. Chope: That means that there will be just two days before the debate on those important orders, which is unacceptable and typical of the Government's arrogance. Is the Minister aware exactly how angry the people of Dorset are about the vicious attack on their standard of living in the proposed settlement? Does he realise that pensioners in Dorset will receive an increase of £1.95 a week in their state pension but, because of the Government's policies, will be expected to pay over £4 a week in council tax increases? Is that not—
  Mr. Deputy Speaker: Order. Questions must be more concise.
  Mr. Raynsford: I am a little surprised that the hon. Gentleman has forgotten the timetable that has applied for many years, and used to apply when his party was in
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  government. He will realise that local authorities need certainty to plan their budgets, so there is a timetable which involves a provisional settlement published in early December, representations in December and January, the publication at the beginning of February of the Government's proposals, a debate in the House, then implementation by local authorities. That timetable has existed for many years, so his anger is entirely synthetic.
  As for the figures, Dorset is once again getting a very good settlement. Last year, it had a 6.7 per cent. increase, despite which it raised council tax by 9 per cent. If there is scaremongering about high council taxes, the people that the Opposition should be looking at are the councillors of Dorset county council, not the Government.
  Mr. Bill O'Brien: Will my right hon. Friend accept thanks from Government Members for his effort to try to regulate local authority expenditure? Does he also accept that the hon. Member for Christchurch (Mr. Chope) belonged to a Government who devastated that expenditure? When looking at the consultation and the response from local government, will he take into consideration concerns about high council taxes in some areas?
  Mr. Raynsford: I thank my hon. Friend for his kind remarks about our efforts to ensure a fair settlement and consult widely with local government. This year, local authorities throughout the country have got a settlement that gives them an above-inflation increase. Every authority has had such an increase which, we believe, makes it possible for them to set a reasonable level of council tax and maintain council services. We hope that they will do so.
  Mr. Eric Pickles: The Minister has just said that each authority has received an above-inflation increase. At the same time as the provisional announcement, the Minister for School Standards, the hon. Member for South Shields (Mr. Miliband) sent out a letter promising 6.6 per cent. for schools.
  What advice can the right hon. Gentleman give to those 13 local education authorities where the change in grant is insufficient to meet the demands of the Secretary of State for Education and Skills? Should authorities, the day after the Climbié findings, take money away from vulnerable children or the care of the elderly, or should they take the stealth option and increase council tax on the backs of hard-working low-income families?
  Mr. Raynsford: First, my advice to all local authorities is that in the six years in which the Government have been in power there has been a 25 per cent. increase in real terms in grants for local authorities, compared with a 7 per cent. cut in real terms in the last four years in which the Opposition were in power. Local government is therefore getting a better settlement and has better prospects. I have met a number of authorities that have difficulty meeting their passporting obligations, as has the Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Shipley (Mr. Leslie), and we have advised all of them to talk to our colleagues in the Department

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  for Education and Skills, who have indicated willingness to be flexible where there are genuine pressures. However, we want money to be transmitted to schools to improve education, and we want continued improvement in social services. We want to give local authorities the opportunity to develop and improve services on the basis of the real increases in grant that the Government are delivering.
  Mr. Andrew Dismore: I am grateful to the Department for receiving a deputation from my local authority, Barnet. However, when my right hon. Friend is putting together the final draft, could he bear in mind the special circumstances facing us? The impact of the census and the new scheme has had bizarre consequences, and our education budget will be under considerable pressure as a result.
  Mr. Raynsford: We have given careful consideration to the representations that we have received from many local authorities, including my hon. Friend's authority. We will make clear our conclusions in the announcement on 3 February. Some areas have experienced difficulties because of census changes relating to previous mid-year estimates, but the floors ensure that every authority is protected against what might otherwise be a sharp change in grant entitlement. The floor ensures that every authority has an increase at least above the level of inflation.

  Bed Blocking
  Tom Brake: What discussions he has had with the Department of Health on the impact of bed-blocking charges on local authorities. [93767]
  The Minister for Social Exclusion and Deputy Minister for Women (Mrs. Barbara Roche): Ministers and officials in the Office of the Deputy Prime Minister regularly discuss matters of mutual interest with their colleagues in the Department of Health.
  Tom Brake: I thank the Minister for that response. I am sure that those discussions will have revealed that many local authorities work well with the local NHS trust, as mine does. However, bed blocking happens for complex reasons. Will the Minister confirm that, in Sweden, where bed-blocking charges have been introduced, they have not got rid of bed blocking?
  Mrs. Roche: I must tell the hon. Gentleman that we are introducing the system in our own way. He is right that this is a very important matter. In his area, the discharge rate for the Merton and Sutton primary care trust is above the national average. He will know what an issue that is for the 5,000 delayed discharges that we have every day. We are confident that the measures that we have taken, plus the extra resources that we have made available, will deal with the problem.
  Jean Corston: Does my hon. Friend agree that one cause of bed blocking is that people on discharge from hospital have too few opportunities to
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  benefit from packages that would allow them to be supported at home? Does she agree that most people, faced with the choice after hospital of going home or going to a residential home, would prefer to go home? Will she discuss with her colleagues in local authorities ways to give people increased opportunities to be supported at home rather than go into care?
  Mrs. Roche: I absolutely agree with the important points that my hon. Friend makes. From my own experience as a constituency Member, I know that what she says about people's preferences is true. That is why we have made available to local authorities an extra £100 million for each full year that the new scheme is in operation. I shall certainly make sure that the Department have the discussions that my hon. Friend suggests, so that we can ensure that those important opportunities are available for our older people.
  Sir George Young: Has the Minister had time to read the Hansard report of Monday's Second Reading of the Community Care (Delayed Discharges etc.) Bill in another place? Does she realise that the Bill is virtually friendless there, as it was here? Will she use her influence with the Secretary of State for Health to withdraw this misconceived piece of legislation?
  Mrs. Roche: I have not had a chance to read that report, but I shall make sure that I do. Real issues have arisen to do with the different roles and responsibilities of acute hospital trusts and local authorities. We believe that the new arrangements, in addition to the new resources that we have put in, will deal with the matter. Taken together with the better working relationships between local authorities and hospitals, I am confident that they will lead to a great improvement.

  Council Tax (Lancashire)
  Mr. Michael Jack: What steps his Department has taken to respond to representations from Lancashire county council on the expected level of council tax in Lancashire in 2003–04. [93768]
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): The level of council tax in Lancashire is a matter for the local authorities concerned.
  Mr. Jack: That was a complacent answer, to say the least. The Minister for Local Government and the Regions said a moment ago that the Government had been generous, but Labour-controlled Lancashire county council says that it does not have enough money and is trying to live within its means. Will the Minister provide my constituents with a cogent explanation of why they face a council tax increase that is three times the rate of inflation? [Interruption.]
  Mr. Deputy Speaker: Order. Before the Minister responds, I must tell the House that there is far too much conversation going on, and that that is making it very difficult for these exchanges to be heard clearly.
  Mr. Leslie: I suspect that the right hon. Gentleman should wait until the county council sets its council tax.

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  Lancashire county council is expecting to get a 4.8 per cent. increase in grant. Fylde district council in the right hon. Gentleman's area is pencilled in for an increase of 8.8 per cent., and Wyre district council for 12.8 per cent. As far as the Government are concerned, the grant support is there. There can be very few excuses for excessive council tax rises.
  Mr. Peter Pike: Does my hon. Friend accept that Lancashire county council is clearly saying that 4.8 per cent. is not sufficient, and that it has had a raw deal in comparison with other shire county councils? It will have either to cut services or to make an unacceptably high council tax increase.
  Mr. Leslie: In the context of the history of local government settlements, 4.8 per cent. for Lancashire is very generous indeed—well above the rate of inflation. I have never known a council say, "Thank you for the wonderful grant increases," but I think that that is a reasonable settlement.

  Fire Service
  Mr. Mark Francois: What estimate he has made of changes in the number of firefighters in urban areas up to December 2006. [93769]
  The Deputy Prime Minister (Mr. John Prescott): The independent review of the fire service, led by Sir George Bain, set a framework for the future of the fire service. Bain said that changes in the number and deployment of firefighters should be for the fire authorities and the chief fire officers to negotiate and consult on locally. The Government's actuarial report has stated that more than 20 per cent. of the existing force could retire in the next six years, and Bain has made it clear that there should therefore be no need for compulsory redundancies. Indeed, over the last 10 years the number of firefighters in England and Wales has been reduced by 5 per cent. without compulsory redundancies, under the normal negotiating procedures.
  Mr. Francois: I thank the Deputy Prime Minister for that reply. He will know that many retained firefighters and retained stations are based in urban areas but are also responsible for providing critical cover in rural areas further afield. Will he join me in congratulating all the retained firefighters who have continued to provide emergency cover when the regulars have been on strike? Moreover, now that the review is under way, can he provide some assurance that retained firefighters and stations will not suffer under the review because of the actions of the regulars?
  The Deputy Prime Minister: As the hon. Gentleman attended my statement yesterday, I think that he will remember that I made it clear that we were expressing our appreciation of the armed forces, the police and the retained fire workers who made the choice to continue the service. Some of the retained fire workers are members of the Fire Brigades Union as well; they belong to two different organisations. Questions have been raised about their future role in negotiations. Bain refers to that, and we will cover all these matters in the coming White Paper.
  Mr. John Lyons: May I ask my right hon. Friend to reconsider any threat to
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  impose a settlement on the present dispute? We all want it resolved through ACAS, but we all still feel that firefighters are undervalued and underpaid.
  The Deputy Prime Minister: If my hon. Friend feels that firefighters are justified in asking for a 40 per cent. increase—[Interruption.] Their demand at the moment is for 40 per cent., and I have to say time and time again that, for the reasons that I have given, I do not think that we can afford 40 per cent. The House must make its judgments about these matters—[Interruption.] That is totally untrue; Members did not get 40 per cent. It is a lie that is put on the banner outside a number of fire stations, and I am surprised if my hon. Friend the Member for Blyth Valley (Mr. Campbell) wants to repeat it.
  Leaving that aside, however, the question posed to me is whether the actions that I proposed yesterday will have the effect of imposing conditions on firefighters. All that I seek to impose is negotiations. My hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) said that ACAS should be involved in the negotiations, and ACAS has laid down that nothing is ruled in and nothing is ruled out. Both parties should go to those negotiations, but the Fire Brigades Union has said, "No, we're laying down conditions about jobs and fire stations"—assumptions that it has made before negotiations begin. I am saying—and I think that this is the view of the House—that negotiations should start through ACAS, but also that the House may have to take powers to make it clear that the negotiations should continue, but are not unlimited in time, because it has already been 10 months, and longer than that is not required to get a successful conclusion to the negotiations.
  Mr. Edward Davey: Like the Deputy Prime Minister, we believe that fire service modernisation means better fire prevention, not simply job cuts. Given that there are likely to be job losses in some areas, why does he now make a proposal that would remove any legitimate role for a trade union in negotiating the solution, and also remove the independence of fire authorities? Would it not be better for him to call on all sides to commit themselves not just to negotiation at ACAS but to binding arbitration at ACAS, linked to Bain's financial and modernisation framework?
  The Deputy Prime Minister: I assume from the hon. Gentleman's last remarks that binding negotiation means that we compel the firefighters to accept those conditions. My proposal does not do that at all. In fact, it would be necessary to take legislation through the House, which, presumably, would be seen as anti-strike legislation. If that is the policy of the Liberals, let them get on with it; it is not our policy.
  Yes, of course we would like the unions and the employers to come to an agreement. I am making it clear that they should do in negotiations at ACAS. The difficulty comes if both parties refuse to negotiate. What I am facing is deadlock; I have to find some kind of solution that gets them back to the negotiating table. I believe that those negotiations should take place at ACAS. ACAS has made it clear that no one has to

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  comply with any conditions whatever, and they can go into negotiation. Start negotiations: that is the best way to settle industrial disputes.
  Mr. Win Griffiths: Can my right hon. Friend confirm that any changes in the placement and priorities of fire service staff will be the subject of local consultation before being approved?
  The Deputy Prime Minister: Yes.
  David Davis: The Deputy Prime Minister did not answer the question put to him by my hon. Friend the Member for Rayleigh (Mr. Francois) about retained firefighters. The retained firefighters are the lowest-cost part of the fire service so there is the least scope for savings there. This is not just about economics; it is about natural justice. The Deputy Prime Minister has quite properly praised those people who have protected the safety of the country throughout the strikes: the armed forces, the police and the retained firefighters. Will he guarantee today that their public service will not be punished by their losing their jobs at the end of this negotiation?
  The Deputy Prime Minister: Yes.
  David Davis: I am pleased to hear a straight answer from the right hon. Gentleman. It is a novelty. Yesterday, he announced his intention to take powers in order to carry through the changes in job conditions and pay and, of course, the reduction in numbers of personnel in the fire service. In the event that he takes those powers and exercises them and the Fire Brigades Union stays on strike, what will he then do?
  The Deputy Prime Minister: I do not accept for a moment that I would come to some decision as to what will be imposed upon them. I do not have the authority of the past to be able to do that, and I would not want the right hon. Gentleman to suggest that that is the solution, as he did in the earlier part of his question. The question is where we get the parties back to negotiations. I reaffirm today what I told the House yesterday: that if negotiations fail and the deadlock continues, I would come to the House and ask for powers for compulsory arbitration. The Liberal spokesman often says, "Let us have compulsory arbitration," as if somehow one could force them to accept a deal. I think that there are real difficulties about that, but I want the negotiations to start through ACAS, and I am giving notice that if they do not I will come to the House to ask for the powers to impose a solution.
  Andrew Mackinlay: In reply to my hon. Friend the Member for Bridgend (Mr. Griffiths), the Deputy Prime Minister said that the existing consultation arrangements for the alteration of fire cover and personnel would be retained. Can we assume from that that no legislative proposals will be brought to the House that will alter the existing statutory arrangements, which do provide for such consultation? Yes or no?
  The Deputy Prime Minister: If my hon. Friend had heard the earlier replies he would not be asking yes or
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  no, because I have made it very clear to the House that I am going to repeal section 19 of the Fire Services Act 1947, as Bain recommended, and I intend to do so. That would not take powers away from the local area; I am reinforcing the powers of the local area, taking away my right, as central Government, to have the final decision. I do have other powers in the Bill to use if I want to and it is a serious matter in those areas, but I am decentralising that power down to local areas. I thought that that was what my hon. Friend wanted, and that is what I intend to do.

  Grant Settlement (Havering)
  Angela Watkinson: If he will make a statement on the grant settlement for Havering.[93770]
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty): I am afraid that I shall have to disappoint the hon. Lady. There will be no separate statement on the grant settlement for Havering. As the Minister for Local Government and the Regions has already said, the provisional figures were announced on 5 December. The final settlement will be produced on 3 February for debate on 5 February. The Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Shipley (Mr. Leslie), has met a delegation from Havering and taken their views into account during the consultation process.
  Angela Watkinson: The Minister will be aware that Havering is acknowledged to have received a perversely low settlement for many years, which gave rise to a 12.5 per cent. increase in council tax last year. Under the draft settlement, Havering has received the lowest increase, 3.5 per cent., which has sent its finances into crisis. Will he agree to re-examine Havering's financial crisis before the final settlement is announced on 3 February?
  Mr. McNulty: As I said, the consultation period has already closed. Over the past four years, Havering has received increases of almost 5 per cent. year on year. Council tax is a matter for the minority Tory administration. In the equivalent last two years of the Tory Government, Havering's rises were, respectively, minus 1.8 per cent. and 1.2 per cent. —at a time when, I believe, inflation was slightly higher.

  Local Government Finance
  Mr Dave Watts: If he will make a statement on the future of floors and ceilings in the proposed new local government funding system. p[93771]
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): The Government expect the mechanism known as floors and ceilings to be part of the local government funding system for the foreseeable future.
  Mr. Watts: Although many Labour Members believe that the new system being introduced is far fairer, we are concerned that the floors and ceilings mechanism will result in Westminster council continuing to receive

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  £30 million more than it should, while deprived local authorities such as St. Helens receive £2 million less than they should. Will the Minister re-examine that aspect of the changes?
  Mr. Leslie: I hear what my hon. Friend says, but floors and ceilings provide a necessary degree of stability and security for all councils. They ensure that everyone receives a real-terms grant increase and they are an integral part of the grant distribution system. Last year, we promised to protect against rapid reductions in population and the like, and it is right and fair that we honour that commitment.
  Mr. Simon Burns: Is the Minister aware that as a result of the proposed changes, Essex county council will get one of the three worst settlements, with an increase that is £40 million less than it would be if it received the average percentage increase? Will he reflect on his meeting with the leaders of Essex county council and try, before the final decision is taken, to persuade his right hon. Friend the Deputy Prime Minister to come up with a system that is fairer to Essex and does not mean that Essex has to pay for his party's heartlands in the midlands and the north?[Interruption.]
  Mr. Deputy Speaker: Order. I say again to the House that there is far too much noise. We should be able to hear both the hon. Member putting the question and the Minister replying.
  Mr. Leslie: The hon. Member for West Chelmsford (Mr. Burns) seems to think that there is a north-south divide in this respect. Members from the south think that the north is gaining, and Members from the north think that the south is gaining. In reality, all councils, including Essex, will get a real-terms increase in grant. I have met councillors and officers from Essex, which is to receive a 3.7 per cent. increase in grant, above inflation.

  Urban Summit
  Ms Meg Munn: If he will make a statement on the outcome of the recent urban summit in Birmingham. [93772]
  The Deputy Prime Minister (Mr. John Prescott): The 1,500 people who attended the summit came from all walks of life at home and abroad in both the public and the private sectors. They emphasised the need to exchange best practice, simplify and clarify policies and programmes, and engage the community more effectively to establish more sustainable communities. I hope to include some of the lessons from the conference in next week's statement on communities.
  Ms Munn: I thank my right hon. Friend for his answer. Many cities such as my own, Sheffield, are experiencing a building boom in the centre, as people move to live in the city. However, that throws into sharp relief estates on the outskirts of the city, such as Gleadless valley in my constituency, where although quality of life is improving, there is still some way to go. How will the results of the urban summit help such estates?
  The Deputy Prime Minister: The urban summit made it clear that there are different problems in different
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  areas. The mayor of Milwaukee in the United States talked about how the decline in urban areas had led to many people moving to live outside such areas, which gave rise to a different range of problems. I hope that next week's statement on sustainable communities will contain some ideas about how we can learn from best practice in other countries to improve our communities.
  Mr. Gary Streeter: Although I welcome the Deputy Prime Minister throwing his considerable political weight behind the important issue of urban renaissance, may I ask him to call another summit—a rural summit, perhaps in Devon—to examine the also important issue of the crisis in affordable housing to buy and to rent in many parts of rural Britain?
  The Deputy Prime Minister: The hon. Gentleman will be aware that my previous Department produced urban and rural White Papers, and the conference covered both of those aspects. We are thinking about having a separate rural conference to meet some of the demands. In my statement on the right to buy, I announced that I would make it much easier for people in the areas to which he refers to get affordable homes.

  The Prime Minister was asked—

  Engagements
  Ql. [93750] Mr. Simon Burns: If he will list his official engagements for Wednesday 29 January.
  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.
  Mr. Burns: With the stock market at half the level it was five years ago and a number of occupational pension funds being closed to new members, does the Prime Minister regret his Chancellor's raid of £25 billion on pension funds, and will he apologise to those who have been so cruelly punished by it?
  The Prime Minister: First, stock markets have fallen across the world, as the hon. Gentleman knows. Secondly, as a result of the Chancellor's management of the economy, we have the lowest inflation and interest rates that we have had for decades. We have the highest employment that this country has ever had and the lowest unemployment of any major country. Compare and contrast that with 3 million unemployed under the Conservatives.
  Mr. Marsha Singh: Will the Prime Minister join me in expressing profound sympathies to the family of my constituent, Tasawar Hussain, who was gunned down by armed robbers on Monday as he tried to intervene in a robbery? Tasawar was nothing short of a hero. Does the Prime Minister recall that, early in the new year when young girls were gunned

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  down and killed in Birmingham, he promised to stamp down on gun crime? What progress has been made on that?
  The Prime Minister: I am sure that the whole House would wish to express our deep condolences to the family of my hon. Friend's constituent following the appalling circumstances of the tragic and wicked murder of his constituent. The Criminal Justice Bill will include a measure that will impose a mandatory five-year sentence for the possession of illegal firearms. I hope that the whole House supports that.
  Mr. Iain Duncan Smith: May I join the Prime Minister in paying tribute to the constituent of the hon. Member for Bradford, West (Mr. Singh), who was, as the hon. Gentleman said, nothing less than a hero?
  On Monday, the Secretary of State for Defence said that the evidence of links between Saddam Hussein and al-Qaeda was "not strong." However, last night, President Bush said that Saddam Hussein aids and protects terrorists, including members of al-Qaeda. This morning, the Prime Minister's official spokesman appeared to agree with the President and disagree with the Secretary of State for Defence. Does the Prime Minister agree that those who believe that the threat from Iraq must be confronted and not ignored must speak with a clear and consistent voice?
  The Prime Minister: First, I answered questions on this in detail at the Liaison Committee. I have explained that we do not know of evidence linking Iraq to al-Qaeda in circumstances concerning the 11 September attack. However, I chose my words very carefully in front of the Liaison Committee: we do know of links between al-Qaeda and Iraq; we cannot be sure of the exact extent of those links. Every member of the Government has adverted to that.
  Mr. Duncan Smith: The British people know that Saddam is an evil dictator. They know that he has attacked his neighbours and gassed his own people. They know that he is responsible for countless human rights abuses. Is it not also the case that they want to know more detail about the potential threat that he poses to this country and our citizens? President Bush is, as he said last night, preparing to reveal more of what his intelligence services know about Saddam's weapons programme and his terrorist links. Will the Prime Minister also publish further information? Does he accept that the British people deserve to be given the fullest possible information about the scale and nature of the threat that we clearly now face?
  The Prime Minister: Of course we have to give people the fullest possible information, which is why we published the dossier a few months ago. It is extremely important that people understand exactly what the threat is. If Saddam Hussein is allowed to carry on developing weapons of mass destruction—chemical, biological and, potentially, nuclear weapons—he will be a threat not just to his own region, but to the world. This country's security interests are intimately concerned
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  with that matter. However, there is no point in trying to pose differences between, for example, ourselves and the United States when the purpose of what we are doing at the moment is to unite the international community around the United Nations' position as set out in resolution 1441, and to make sure that that resolution is then implemented.
  Ms Karen Buck: Leaders of London's Moroccan community have written to me to express their deep regret at the murder of Stephen Oake and at the terrorist threat, and also their concern that all Muslims, Arabs, refugees and members of the north African community risk being tarred with the same brush of illegality and terrorist threat. Will my right hon. Friend take this opportunity to send the strongest message that a reasonable concern for security cannot be an excuse for the hysteria that is leading to racial abuse and attacks, and causing members of that community to say that old and young are beginning to live in fear?
  The Prime Minister: First, we should make it clear that this is a tolerant country, we are proud that it is a tolerant country, and we never want it to be otherwise. Secondly, my hon. Friend is right to point out that the vast majority of people who claim asylum, for example, are not terrorists or even suspected terrorists. There is a problem with asylum. It is important that we deal with it, for the reasons that have been given, but it is also important that we make it clear that the number of people who come through that route and who are terrorists is small. It is precisely in order to deal with those that we introduced the Anti-terrorism, Crime and Security Act 2001 after 11 September, which gives us for the first time the power to detain suspected terrorists without trial. That is the reason for the arrests that have taken place in Manchester, London and elsewhere. We must balance the tough measures necessary to deal with the threat, and at the same time maintain the tolerant society in which we all want to live.
  Mr. Charles Kennedy: Returning to the issue of Iraq, can the Prime Minister confirm that the British troops deployed in the Gulf will be integrated into the American command and control structure?
  The Prime Minister: The precise command and control structure is still being worked out. Of course we will co-operate very closely with the American troops—it would be bizarre if we did otherwise. That is what we did to such good effect in Afghanistan and also in Kosovo.
  Mr. Kennedy: Is it not therefore the case that if, in practical terms, British forces are to be under American command and control, the decisions in all this will ultimately be taken by President Bush?
  The Prime Minister: No, that is not right. The decisions whether to commit troops on behalf of this country are taken by our Government, our House of Commons, and our country. [Interruption.] We are trying to put the maximum pressure on Saddam to comply with the UN mandate. We had a report on

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  Monday—[Interruption.] If hon. Members will allow me—we had a report on Monday from Dr. Blix, the head of the UN inspection team, who reported to the Security Council that Saddam was not co-operating fully with the inspectors. I should have thought that the right hon. Gentleman, along with other hon. Members, would study that report and say that it is right that we regard Saddam as a threat for the reasons that Dr. Blix sets out, and it is right that we deal with the threat. Let us be clear: the troops are down there in the case of Saddam refusing to comply with the UN resolution. Rather than trying to make points about what the command and control will be, when we know that our troops will have to work with other countries, it is surely better that we combine now as a House and as a country to put maximum pressure on Saddam, because the one thing that would make conflict inevitable is a signal of weakness in our determination to deal with him.
  Mr. Tam Dalyell: Ought not the House of Commons to have a specific vote before British troops are committed under American command?
  The Prime Minister: Let me repeat, as we have said consistently: of course we want a vote of the House of Commons on the matter—[HON. MEMBERS: "When?"] —if we get to conflict. The one set of circumstances in which we have said that that would not be the case is if any circumstances arose in which the security of our troops was at risk and action had to be taken quickly. In the absence of that, however, of course the Government want the full support of the House of Commons if action is to be taken. That is precisely what happened in relation to both Kosovo and Afghanistan, so the idea that we have a record of taking such action without the House being consulted is nonsense. What
  we actually have to do—all of us, with the greatest of respect—is focus not simply on the procedures of the House, which are important and will be carried through, but on the question whether the UN indeed finds that Saddam is in material breach. In that case, I hope that we will have the unified support of the House and, in particular, of the hon. Members who are rightly proclaiming the importance of the UN in taking the necessary action.
  Q2. [93751] Mr. Graham Brady: Why are GCSE results 14 per cent. better in Northern Ireland than in England? Why does the Prime Minister intend to press ahead with Martin McGuinness's ill-conceived plan to scrap grammar schools there?
  The Prime Minister: It is only right to point out that GCSE results are also a lot better here than they were, for example, a few years ago. On the point about selection and grammar schools, I do not believe in returning to a division of children at the age of 11. As for scrapping grammar schools, I point out to the hon. Gentleman that, since we have been in office, we have not scrapped a single one. [Interruption.] That is a fact. In addition, I do not believe that the right way forward is to focus on what happens to the remaining grammar schools; it is to focus on the secondary schools, the vast majority of which are not grammar schools. They are
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  getting extra investment and rising standards under this Government and would be affected by the 20 per cent. across-the-board cuts of the Conservatives.
  Q3. [93752] Ms Meg Munn: The vast majority of young people who get two A-levels go to university. The higher education announcement made last week committed the Government to increasing the number of young people from poorer backgrounds at university. Will the Prime Minister tell me how that will be achieved?
  The Prime Minister: My hon. Friend is absolutely right to make the point that 90 per cent. of children who get two A-levels go to university, whatever their social background. Therefore, the key to increasing the number of people from all social groups who go to university is to improve school standards. That is precisely why we are putting in the extra investment and making the changes that we need in the school system. I am pleased to say that the primary school, GCSE and A-level results are the best that this country has ever had.
  Q4. [93753] Mr. John Greenway: Will the Prime Minister reassure my Ryedale constituents that they have nothing to fear from the planned upgrade of the radar at RAF Fylingdales? Notwithstanding the alarmist scaremongering of the opponents of missile defence, will he take time today to study the Select Committee on Defence report published only this morning, which describes the lack of proper consultation with the local community by the Ministry of Defence as "deplorable"?
  The Prime Minister: Of course we will study the report and respond to any of the concerns that it raises. As for the hon. Gentleman's point about the upgrade of Fylingdales, I do not think that his constituents have anything to fear from that. After all, we have played our part in NATO and the transatlantic alliance for many years, and Fylingdales has been part of that. Should we engage with the defensive system of the Americans, I believe that it will continue to play an important role. I also believe that, in that role, there is nothing for the hon. Gentleman's constituents to fear and everything for this country to gain.
  Shona McIsaac: In a recent survey, 85 per cent. of Cleethorpes residents said that they feared crime and thought that it was rising. What will the Government do to reassure my residents that they are seriously addressing crime? Those fears about crime are being exploited by fascists such as the British National party—something that every hon. Member in this House should be worried about.
  The Prime Minister: My hon. Friend is right that, although, according to the British crime survey, crime is down over the past few years, not up, the fear of crime is up. That is why it is so important that we take the measures that we are outlining both in the Criminal Justice Bill and the antisocial behaviour Bill that will follow it. I hope that we will get support throughout the House for both those measures. Unless we make

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  fundamental reforms to the criminal justice system, we will not restore the confidence that is necessary for the fear of crime to be reduced.
  Mr. Iain Duncan Smith: On Sunday, the Prime Minister said that on asylum policy, he would consider
  "fundamentally looking at the obligations we have under the European Convention on Human Rights."
  Is the Home Secretary in charge of drawing up those plans, and when will they be announced?
  The Prime Minister: What I said was that if measures that we have introduced do not dramatically reduce the number of asylum applications, we are prepared to go further, including fundamentally looking at our obligations under the European convention on human rights. Of course, it is the Home Office that is in charge of these issues.
  Mr. Duncan Smith: Last week, the Home Secretary said that fundamentally looking at our ECHR obligations was impossible. He said:
  "I want to make it clear … that no EU country has derogated or withdrawn from article 3, because none could".
  He went on to say that those
  "who have suggested otherwise are simply wrong." —[Official Report, 20 January 2003; Vol. 398, c. 6.]
  Who is right: the Home Secretary or the Prime Minister?
  The Prime Minister: The Home Secretary is absolutely right: no country has—[Interruption.] Perhaps when the right hon. Gentleman gets to his feet, he can tell us which country has derogated from article 3. No country has derogated from article 3—[Interruption.]
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The House must listen to the answers to the questions raised.
  The Prime Minister: Let me just explain it to the right hon. Gentleman again: no country has derogated from article 3 of the European convention on human rights, which is why what the Home Secretary said is right. If the right hon. Gentleman has got the information as to which country has derogated, perhaps he would tell us about it.
  Mr. Duncan Smith: So the Prime Minister says that he is right on Sunday, and then he says that he is wrong on Wednesday. Everybody knows that Alastair Campbell gave the Prime Minister his new policy as he walked into the television studio on Sunday. The first that the Home Secretary, or anybody else in the Cabinet, knew about it was when they switched on their television sets and heard him. A year ago, we told him that he had to deal with the ECHR, and how to do it. He said then that that "would be a mistake". Why has it taken him a year to change his mind?
  The Prime Minister: What the right hon. Gentleman says is simply factually incorrect. There is no country
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  that has derogated from article 3 of the European convention because derogation is not possible. What we were discussing last year was whether to derogate from article 5 of the European convention. That allows us, if we derogate, to detain without trial people who are suspected terrorists. It was precisely that measure that we introduced in the anti-terrorism measures that came through this House of Commons. However, when we actually introduced the measure, the Conservative party, rather than supporting it—[Interruption.] Oh yes. The shadow Home Secretary told us that it was an affront to civil liberties.
  The fact is that we have recently introduced the following measures: there are identity cards for all asylum seekers; extended leave to remain is being phased out; social security support is withdrawn unless the claim is made quickly; and controls are being introduced across France, with British immigration officers in charge. Again, under the new measures that have been taken, we have also introduced out-of-country appeals—not in-country appeals—for countries listed by the Home Secretary. What I have said is that, unless those measures make a substantial impact, we will go further, including fundamentally looking at our obligations under the European convention. I repeat: the particular point that the right hon. Gentleman is making on article 3 simply happens to be factually wrong.
  Mr. Duncan Smith: The Prime Minister is waffling and he is in a mess. Government estimates now show that at least 1,000 people in Britain have attended terrorist training camps in Afghanistan and elsewhere. We now know, as the Prime Minister admits, that many of them have used the asylum system to get into this country. In the face of that crisis, all that we have had from the Government is panic on Saturday, headlines on Sunday and climb-down on Monday. Is it not the case that we need the powers to deport those who threaten our country—and we need them now?
  The Prime Minister: First, the powers to detain someone who is a suspected terrorist exist now. That is precisely why the arrests have been happening in Manchester, London and elsewhere, and those people are detained without trial. However, let me just read what those on the Tory Front Bench said when the issue arose and we were debating the legislation, so that we realise who is changing policy and who is not. When it was put to the Front-Bench Conservative spokesman just a few months ago that we should detain all asylum seekers, this is what he said:
  "In today's climate"—
  detention of all asylum seekers—
  "is … wrong in principle and impossible, in practical terms".—[Official Report, 12 June 2002; Vol. 386, c. 874.]
  The truth is that we have taken the measures that I have outlined. They are important measures to do with controls in France, identity cards, fingerprinting asylum seekers and making sure that those with manifestly ill-founded cases are taken straight back out of the country, but the power to deal with suspected terrorists is there already, and I repeat that, when we took that power, it was opposed by the Conservative party, which now says that it wants it extended.
  Dr. Brian Iddon: In light of Ariel Sharon's well-known views and actions, does my right

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  hon. Friend agree that there is little hope of reaching a two-state peace settlement with the Palestinians unless the Americans change their policy in respect of Israel?
  The Prime Minister: There is no way that we will make progress unless there is a huge amount of activity, politically and diplomatically, on three fronts: the first is in relation to security; the second is in relation to political reform on the Palestinian side, which is why we had the conference here and will take it further in the next few weeks; and the third is in relation to final status negotiations. It is not just the responsibility of America, but I hope that all the international community, irrespective of what else is happening in the middle east, realises that the only way we will get a lasting and just peace in the middle east is to engage in detailed negotiations over a long period of time to resolve those three issues.
  Q5. [93754] Richard Younger-Ross: Following the likely local government settlement, Devon county council—which is run by all parties, including the Conservatives and Labour—has estimated that the council tax increase will be 15 to 20 per cent. Can the Prime Minister say whether that increase will be the same for pensioners?
  The Prime Minister: I do not know what council tax that council will fix—that is a matter for it—but I can tell the hon. Gentleman that, as a result of the extra settlement, we are putting somewhere in the region of a 6 per cent. real-terms increase into local government. It is therefore very important that he recognises that, whatever the authority, that is infinitely more generous than the settlement in the Conservative years.
  [93755] Mr. David Clelland: Does the Prime Minister recall telling Sir David Frost in January 2002 that a reformed House of Lords must be different from the House of Commons? Does he believe that an elected Chamber would be sufficiently different? Does he agree with those of us who believe that a properly constituted, non-elected Chamber, free from the hereditary system, is the only way to guarantee the kind of deliberative, advisory and balanced second Chamber that would add value to our system of government in the United Kingdom?
  The Prime Minister: My briefing very helpfully starts by saying, "I understand that there are a range of views on this issue." However, everyone agrees that the status quo should not remain. Everyone agrees that the remaining hereditary peers should go and, what is more, that the prime ministerial patronage should also go. However, the issue then is whether we want an elected—[Interruption.] I am asked for my views; I am giving them. Do we want an elected House, or do we want an appointed House? I personally think that a hybrid between the two is wrong and will not work.
  I also think that the key question on election is whether we want a revising Chamber or a rival Chamber. My view is that we want a revising Chamber, and I also believe that we should never allow the argument to gain sway that, somehow, the House of Commons is not a democratically elected body. I believe that it is democratic. [HON. MEMBERS: "A free vote?"] It
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  is a free vote; people can vote in whatever way they want, but I think that all Members, before they vote, should recognise that we are trying to reach a constitutional settlement—not for one Parliament, but for the long term. In my view, we should be cognisant not just of our views as Members of Parliament, but of the need to make sure that we do not have gridlock and that our constitution works effectively.
  Mr. Andrew Mackay: As the Prime Minister is rightly exercised in the fight against international terrorism and the crisis in Iraq, may I urge him not to take his eye off Zimbabwe, where the situation is rapidly deteriorating? May I specifically encourage him to increase the smart sanctions on the regime and resist the behaviour of the French, who have been behaving quite deplorably?
  The Prime Minister: First, I agree entirely with the right hon. Gentleman about the situation in Zimbabwe. The humanitarian situation there is becoming dire. Millions of people are either starving or at risk of starvation in a country that is rich in potential natural resources. That is a tragedy and we are doing whatever we can in every international forum to try to ostracise the Mugabe regime. It cannot be emphasised too often that that regime is a threat most of all to Zimbabwean people: not simply to white Zimbaweans but to black Zimbaweans, too.
  Linda Gilroy: Will the Prime Minister tell the House how the proposals in the higher education White Paper could help a single parent in my constituency who aspires to take a degree? Will he take particular note, and encourage our hon. Friends to take particular note, of the successful track record that Plymouth university has in widening participation?
  The Prime Minister: Yes. First, maintenance grants will be reintroduced for those from lower-income families. Secondly, nobody will have to pay any fees upfront. Anything that is paid will only be paid back on a more generous set of terms than previously and paid back interest free. We will only be able to fund universities properly and fairly for the future if we not only put in more public money but come to a point at which students make some contribution by paying it back, but only when they are earning as graduates and in a position to do so.
  Mr. Roger Gale: Very many shift workers, including emergency workers, those who work in security services and those who work in this House, will, with effect from 17 February, pay £1,000 a year in tax for the privilege of using the only viable means of transport to get to work: their cars. The Prime Minister will no doubt try to blame the Mayor of London for that, but, in fact, it is the result of his policy. Given that it is his responsibility, and that the Transport Act 2000 was passed under his Government, is he satisfied with the detail, and is he ready to take the blame for it?
  The Prime Minister: It is a devolved matter, it was devolved to the Mayor, and the Mayor has taken his decision.
  Phil Sawford: In the light of the report on the torture and tragic death of Victoria Climbié, will my

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  right hon. Friend give urgent consideration to the recommendations of the Laming report, and will he appoint a children's commissioner?
  The Prime Minister: In respect of the report of the Laming commission, it made more than 100 recommendations, and we will implement more than 80 of those within six months. Clearly, in relation to the issue of a children's commissioner, we will study the report carefully, and that is one finding among many on which we will deliberate and then come to a decision.
  Mr. Tim Boswell: When Army numbers are stubbornly and significantly below establishment, why have 450 basic training places been suspended?
  The Prime Minister: I do not know about the basic training places that the hon. Gentleman mentions. We are, however, engaged in a huge recruitment campaign for our armed forces, as he knows, and people are applying to our armed forces as a result. We have a settlement this year, and for the next few years, which, for the first time in many years, provides a substantial real-terms extra amount of spending for our armed forces.
  Lynne Jones: Even if Saddam Hussein does possess weapons of mass destruction—most people accept that he probably retains some residual capability—can my right hon. Friend explain why he did not use those during the Gulf war when his arsenal was massively greater than it is now? In particular, can he explain why Saddam represents a greater threat today than he did in 1997, 1998, 1999 and all his time as Prime Minister until President's Bush's axis of evil speech, when apparently the situation changed?
  The Prime Minister: First, the one thing about which we can be sure is that his reason for not using his chemical, biological and nuclear weapons back in the early 1990s was not out of the goodness of his heart.
  Secondly, my hon. Friend should study the UN inspectors' report. I shall read just one small part of it. Dr. Blix says:
  880
  "The nerve agent VX is one of the most toxic ever developed … Iraq has declared that it only produced VX on a pilot scale, just a few tonnes and that the quality was poor … UNMOVIC, however, has information that conflicts with this account … There are indications that the agent was weaponised."
  He then goes on to detail similar findings in respect of a lot more weapons.
  When my hon. Friend says that we did not regard Saddam as a threat between 1998 and the axis of evil speech, that is wrong. Precisely because he was a threat, thousands of British forces have been down in the Gulf the whole time, flying over the no-fly zones. Precisely because he was a threat, we have had to impose a sanctions regime on Iraq that, because of the way that Saddam implements it, means—I fear—misery and poverty for many, many millions of Iraqis. The fact is that, way before President Bush's speech, at the very first meeting that I held with the President in February 2001, I said that weapons of mass destruction were an issue and that we had to confront them.
  In the House on 14 September, I said that, after 11 September, it was even more important to deal with the issue. I simply say this to my hon. Friend: the UN having taken its stand, if we do not deal with Iraq now—
  Mrs. Alice Mahon: Who is next?
  The Prime Minister: My hon. Friend asks who is next. After we deal with Iraq, we have to—[Interruption.]— yes, through the United Nations. We have to confront North Korea about its weapons programme— [HON. MEMBERS: "Oh."] We have to confront those companies and individuals trading in weapons of mass destruction—
  Mr. Alex Salmond: When do we stop?
  The Prime Minister: Another question has been shouted at me. We stop when the threat to our security is properly and fully dealt with. I say this to the hon. Gentleman: if he reads Dr. Blix's report, who can doubt that Saddam is in breach of his UN obligations?
  We have talked about the UN in this House. Let us, therefore, follow the UN route. Let us implement the resolution and let us make sure that the threat to our security from those weapons is properly dealt with.

Auditing and Accounting
12.32 pm
The Secretary of State for Trade and Industry (Ms Patricia Hewitt): With permission, Mr. Deputy Speaker, I should like to make a statement about the report of the co-ordinating group on audit and accounting issues and the report of the review of the regulatory regime of the accountancy profession, which my right hon. Friend the Chancellor and I are publishing today. Copies of both reports have been placed in the Library.
Last year, the collapse of Enron, WorldCom and Andersen's in the United States appalled investors all over the world. Millions of people saw their savings and pensions collapse. As I told the House last year:
"Audit and accountancy standards in Britain are different from those in the United States: different and, as is now widely acknowledged, in some respects better."—[Official Report, 24 July 2002; Vol. 389, c. 1003.],
So there was no need for the UK to rush into a Hewitt-Brown version of the Sarbanes-Oxley Bill: but, equally, it would have been folly to sit back and say "It couldn't happen here".
Structures, standards and regulations can never be a complete defence against individuals determined to do wrong, nor can they wholly protect us against a culture of corporate greed and loose ethics, but we owe it to savers, investors and employees, as well as to all the honest business people whose reputations have been tarnished by those scandals, to ensure that our defences are as robust as they sensibly can be.
The reforms that I am announcing today, along with those proposed last week by Derek Higgs and Sir Robert Smith, will raise standards of corporate governance. I emphasise that these reforms, in essence, cover only listed companies. They will strengthen our accountancy and audit professions and provide for a more effective system of regulating the professions. Together, they make up a complete package of reforms that are comprehensive and mutually reinforcing.
First, I shall deal with boardrooms. Following Derek Higgs's proposals, the combined code on corporate governance will be strengthened to provide: that at least half the board, as well as the chairman, should be independent, as should all members of the audit and remuneration committees and a majority of the nomination committee; that the definition of an independent director should be strengthened and clarified; that the separation of the roles of chairman and chief executive should be reinforced; and that new descriptions should be given of the respective roles of the board, the chairman and non-executives.
Mr. Higgs's report showed a startling picture of the way in which top-level appointments are handled, with more than half of directors being appointed through personal contacts and friendships. I welcome his proposals to promote meritocracy through an open, fair and rigorous appointments process. As part of the follow-up to the report, a group led by Professor Laura Tyson of the London Business School will examine ways of bringing candidates, including women, from the non-commercial sector to greater prominence. It will report to me in May.
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In revising the combined code, the Financial Reporting Council will implement the recommendations of Sir Robert Smith's group that the audit committee should: consist entirely of independent members, with at least one having relevant financial experience; monitor the auditor's performance, especially on independence and objectivity; and develop and implement policy on the purchase of non-audit services from the auditor, with reference to tough new ethical guidance. Following well-established practice, listed companies will be required either to comply with the provisions or to explain to their shareholders why they are not doing so.
The second aspect of our reforms concerns tougher measures to underpin auditor independence. Following the recommendations of the co-ordinating group, I can announce, in addition to an enhanced role for audit committees and a tightening of the provision of non-audit services by auditors: that the professional bodies have already changed their regulations so that the lead audit partner has to be rotated within five years; that partners and senior employees of audit firms will not be able to take up employment with a company they audit within two years of leaving their audit firm; and that most of the UK's large audit firms have already agreed to publish an annual report, to provide management and financial information; and, in particular, to reveal levels of dependency on single clients, including how the firm handles conflicts of interest and interdependence issues. We think that that will work on a voluntary basis. If not, we will make such disclosures a condition of auditing listed companies.
I am also calling for the standards and ethical guidance for auditors on the provision of non-audit services to be toughened even further.
We will also strengthen the enforcement of accounting standards. At the moment, the financial reporting review panel steps in only if particular concerns are raised with it. However, the co-ordinating group recommends, and we agree, that enforcement of those standards must be proactive. From now on, the Financial Services Authority will help the financial reporting review panel on enforcement—especially by identifying the high-risk cases that most merit investigation. The FSA and the panel will need to agree as soon as possible a memorandum of understanding to clarify their precise roles and responsibilities.
Those measures will be underpinned by the third element of our reforms—more effective regulation of the professions. The Financial Reporting Council will assume the functions of the Accountancy Foundation. That will create a unified, independent UK regulator with three clear roles: setting accounting and audit standards; proactively enforcing and monitoring them; and overseeing the self-regulatory professional bodies. The Financial Reporting Council has, under the chairmanship of Sir Bryan Nicholson, developed an excellent reputation. The Accountancy Foundation, led by Lord Borrie, has also done valuable work. I thank them for that. The new combined body will build on both their achievements.
After wide consultation, the DTI's review team made three recommendations, with which I agree. First, the Auditing Practices Board should take over from the professional bodies the responsibility for setting standards for independence, objectivity and integrity.

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Oversight of other ethical standards will become the responsibility of a new professional oversight board. The Ethics Standards Board will be wound up in due course. I greatly appreciate the work that its chairman, Christopher Jonas, and his colleagues have done to take forward the ethical agenda and to provide the basis for the new board's work.
Secondly, a new independent inspection unit, located within the FRC, should take over from the professional bodies responsibility for monitoring audits of listed companies, major charities and pension funds.
Thirdly, the long-delayed investigation and discipline board should come into operation quickly to provide a truly independent forum for hearing significant public interest disciplinary cases.
It is vital for the new structure to have clarity of accountability and responsibility together with the appropriate powers to operate effectively in the public interest. There is a strong case for statutory underpinning to make the new body work. We will consider that further and report our conclusions to the House.
The proposals that I have outlined are substantial and mean significant changes to the way in which companies and auditors carry out their work. The package should be implemented as quickly as possible. Changes to the regulatory structure will be made immediately. The Department will lead an implementation steering group, on which Sir Bryan Nicholson, Lord Borrie and Peter Wyman, president of the Institute of Chartered Accountants in England and Wales, have kindly agreed to serve.
An FRC with enhanced responsibilities will need more investment. The Government will pay their share of core running costs, but I also expect companies and the profession to contribute. It is in all our interests to make the changes work and it is fair that we all pay for the improvements.
The changes to the combined code that arise from the Higgs and Smith reports will be made in the early summer once the FRC has consulted on the precise wording. All those measures will be taken forward alongside our long-standing programme of company law reform following last year's White Paper.
The proposals are not a response to short-term market movements. They are about strengthening the foundations of our capital markets for the long term. I want to thank Derek Higgs and Sir Robert and his group for their excellent reports as well as all those who participated in the co-ordinating group under the joint chairmanship of the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Welwyn Hatfield (Miss Johnson), who is responsible for competition and consumer affairs, and the Financial Secretary. I pay tribute to the officials who so swiftly took forward the review of the regulatory regime.
The overall package is tough when that is needed but measured and proportionate. It will ensure that our corporate governance structures remain among the best in the world for the benefit of millions of pensioners, savers and businesses that depend on them.
Mr. Tim Yeo: I am grateful to the Secretary of State for making a copy of her statement available to me this morning.
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I broadly welcome the Government's approach. As I said last July, when the interim report was published, there are significant differences between our approach in Britain and that in the United States. Our principles-based approach is right and should continue to be championed.
I hope that the Secretary of State will agree with me on four broad principles. First, no regulatory system, however stringent, can provide total protection against the consequences of human greed, folly or corruption. In auditing and accountancy, as in all matters of corporate governance, the best safeguard against fraud, abuse and incompetence is the integrity and conscientiousness of the men and women in positions of responsibility.
Secondly, any change to existing practice must be scrutinised for its effect on Britain's competitive position and whether it makes wealth creation easier or harder. The purpose of regulation of auditors and accountants, the role of non-executive directors and so on is to provide some protection for lenders, investors, employees and customers. However, it cannot replace the duty of all those people to carry out their checks and responsibilities. Care must be taken not to increase business costs unnecessarily.
Thirdly, self-regulation should always be the preferred option for professions such as accountancy. The statutory route should be taken only when it is clear beyond doubt that self-regulation is inadequate.
Fourthly, even when we rely on self-regulation, any codes of practice or guidance systems must acknowledge the need for flexibility and understand that requirements that may apply to companies of a specific size or type are wrong for many other businesses. A one-size-fits-all approach is damaging.
I welcome much of Derek Higgs's report. The Secretary of State referred to listed companies. Does she include alternative investment market listed companies, off-exchange market companies and foreign companies that have a listing in London in that category? There are wide variations in the size and nature of the businesses even among the fully listed companies. The Higgs recommendations do not entirely acknowledge those differences.
I am worried that, for example, the recommendation to require a senior, non-executive director to develop an independent relationship with shareholders, separate from that of the chairman, chief executive and other executive directors, may be a recipe for division and conflict. That will not improve standards of corporate governance.
I am also concerned about the requirement for some smaller listed companies that half the board, or, if the chairman is included, a majority of the board, shall be independent. I am concerned that that recommendation is onerous, expensive and unnecessary. Further consideration should be given to both those recommendations before they are incorporated in the combined code.
Since institutional investors already have the power to address many of the concerns that Higgs has focused on, does the Secretary of State have any practical suggestions about how those institutions can be encouraged to take a more active role beyond the lip service that is so frequently paid to that need?

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I welcome the recommendations of Sir Robert Smith, and particularly the involvement of an entirely independent audit committee in scrutinising the purchase of non-audit services from an audit firm. That, coupled with a little more transparency, should remove the need for greater restrictions on the freedom of clients to employ their auditors for non-audit work—a freedom that I believe is often in the best interests of shareholders, as when, for example, a client wishes an auditor to help with due diligence work on a proposed acquisition. The Secretary of State says that she would like guidance relating to non-audit services to be toughened still further. Will she explain exactly what she has in mind in that respect?
Looking at the issue of auditor independence, I warmly welcome the steps that the profession has taken on a voluntary basis to meet public concern and maintain confidence.
On the issue of standards, can the Secretary of State clarify exactly what role she expects the Financial Services Authority will play? She says that she is asking the FSA to agree a memorandum of understanding with the financial reporting panel. Will she clarify what issues she thinks that memorandum should cover?
Turning to the regulation of the professions, I welcome the extensive consultation that has taken place and pay tribute to the institute and to its president, Peter Wyman, for his role, and also to the work of the Financial Reporting Council.
Although the Secretary of State referred to a unified, independent regulator with clear roles, it would be helpful if she could explain how she thinks the distinct roles of five different groups will be defined and how their work will interact. I refer to, first, the FRC itself; secondly, the independent inspection unit to be located within the FRC; thirdly, the Auditing Practices Board; fourthly, the professional oversight board; and, fifthly, the investigation and discipline board. Is there any risk of duplication? Will their responsibilities really be clear to outsiders? Is there a danger that what starts to look like a proliferation of bodies may obscure accountability?
There is also the crucial question of cost. At a time when company profits are under pressure, not least because of the extra burden of tax and regulation imposed on them by the Government, there will be concern that audit fees and other charges may rise significantly because of these proposals. What does the Secretary of State expect the effect on profits to be? What will be the Government's contribution to the budget of the FRC?
In addition, when will the Secretary of State be able to say whether legislation is needed to implement the proposals? What timetable is envisaged for their implementation? Does she agree that after a period of consultation there is every advantage in quickly resolving the uncertainty that has inevitably existed in recent months?
Britain has a real chance to lead in the setting of standards for audit and accountancy. We must continue to champion our principles-based approach and the success of much of the self-regulation that has prevailed here. Both the nature of new legislation in the United States and the confusion over key appointments to
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regulatory bodies there are a warning of what may go wrong when a hasty reaction to a corporate scandal occurs.
I hope that the areas of remaining uncertainty in the Secretary of State's statement will soon be addressed. In the long term, the interests of shareholders and management should be aligned. Since every member of a pension fund and every holder of a life insurance policy has an interest, both in the standards of corporate governance and in the profitability of businesses, today's proposals affect almost every man, woman and child in the country.
In the six months since the issues were last discussed in the House, share prices have fallen and uncertainty in financial markets has increased. It is all the more important, therefore, that moves to rebuild confidence do not add excessively to the burden of cost and regulation. Our response to the problems must continue to be proportionate to the dangers involved. The essence of what is needed is not necessarily more regulation, but better regulation.
Ms Hewitt: I am grateful to the hon. Gentleman for his broad support and welcome for the statement and the proposals. He began by setting out the principles. As I said, there cannot be complete protection against determined wrongdoers. The best defence against wrongdoing is the integrity and incorruptibility of the individuals concerned. That is why we want to strengthen not only professional standards but oversight, monitoring and enforcement of them. The reforms must be designed, and have been designed, to strengthen the competitiveness of our companies. At the outset of the work and report, Derek Higgs said that the reforms are about promoting the greater success of our companies, not least by strengthening the confidence of the people who invest in them. We believe in self-regulation where possible, legislation where necessary. That is what we have practised, and I think that the balance in the package is right.
Let me stress and develop what the hon. Gentleman said about the need to avoid one size fits all. Derek Higgs clearly acknowledges that. Perhaps I can clarify matters by confirming that the Higgs proposals apply to listed companies, pension funds and major charities. They do not apply to alternative investment market listed companies. However, he recognises, as we do, that the circumstances of companies, especially smaller companies, that fall within the scope of the combined code will be different. It is important for the FRC to reflect that in the wording of the revised code and it explains why we rely on comply or explain. There will be circumstances in which it is not sensible or appropriate for a company, especially a smaller firm, to meet every Higgs recommendation or combined code standard. They will be able to explain that to their shareholders. That is the great merit of comply or explain.
The hon. Gentleman asked about the implementation of Sir Robert Smith's recommendations, in particular the role of the FSA. The suggestion is that the FSA will extend its proactive enforcement role by conducting a risk assessment to guide the work of the financial reporting panel. Instead of the FRC simply waiting for problems to be drawn to its attention or worries to be raised, the FSA, having conducted a risk assessment, will draw the panel's attention to those audits on which it thinks the panel should focus.

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Let me elaborate on the implications of toughening standards for the purchase and delivery of non-audit services. Sir Robert Smith's recommendations involve stronger policy and standard setting by the audit committees of the companies that purchase the services. Each committee will have to review that and set out company policy on it. On the other side of the fence, where the audit companies themselves are concerned, I am asking the Financial Reporting Council to consider the recommendations by my colleagues in the combined group who have suggested much tighter controls on what audit firms can sell. For instance, a prohibition on the supply of internal audit services by the external auditor might involve checking on management controls. Similarly, a ban on the provision of non-audit services might create a mutuality of financial interest and perverse incentives to distort either the audit or the non-audit services, or both.
The hon. Gentleman asked how all the different groups fit together. I draw his attention to the helpful diagram in the DTI review. By bringing the Accountancy Foundation and the FRC together, we are creating a single unified regulator under which will sit the Auditing Practices Board with its enhanced role, the investigation and discipline board with its strengthened powers, and the professional oversight board, which will include the audit inspection unit. That is a much simpler and more rational system than we have had until now, and because it all fits within the FRC, I think that the hon. Gentleman will find the complementarity of roles that we both want. Finally, he urged on me speedy implementation of the recommendations—that is precisely what we are now doing.
Mr. Martin O'Neill: I welcome the Secretary of State's timely statement. She has avoided, as she said, the excesses of Sarbanes-Oxley, but at the same time she has been able to ensure a proportionate response to the drop in confidence in accounting services and the way in which businesses are run. Intriguingly, however, she missed one point that has been a matter of discussion in recent weeks—trying to avoid the practice of giving golden handshakes to failed executives. The issue provokes great bitterness and discontent, and I know that it will be a subject of a private Member's Bill later this week. However, I feel that my right hon. Friend missed the opportunity to address the issue, and wonder whether she could tell us why.
Ms Hewitt: I am grateful to my hon. Friend for his welcome for this package and for giving me the opportunity to comment on an issue about which, as I have said before, I feel extremely strongly. I have often said that big pay-offs for large corporate failures are unacceptable, which is why last year I introduced new company regulations requiring an annual shareholder vote on the directors' remuneration report for quoted companies. Company owners should, above all, take the matter into their own hands and sort it out. Of course, I am aware of the private Member's Bill proposed by the hon. Member for Tunbridge Wells (Mr. Norman), whose aims I entirely support. We have had an opportunity to discuss his Bill, and I told him that I share the concerns, of investors in particular, about the
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way in which it would work in practice. We are assessing the impact of the changes that we have already made to company law, and I intend to consult on whether further changes are needed to deal with rewards for failure.
Dr. Vincent Cable: May I, too, welcome the Minister's courtesy in giving us early sight of the statement? Like the Conservative spokesman, I agree that its contents are both good and controversial. It is a welcome follow-up to the Higgs report, requiring accounting companies to produce proper accounts, which they often have not done in the past, and the tidying-up of regulation.
Is that enough? There has been a crisis in capitalism and there is a fundamental lack of trust in corporate behaviour, particularly in independent audits. It is striking that on the three big issues that the Government had to confront—audit rotation, competition policy and conflicts of interests—they have not taken the robust action that one might have expected. I shall pose a series of specific questions. First, on corporate governance and Higgs, I welcome the fact that the Government are now taking the initiative to break up the magic circle and break the incestuous links between non-executive directors. As there will be a demand under the reforms for more non-executive directors, what action will be taken to ensure that the existing community does not take on excessive numbers, which is already happening? Why have the Government not responded to advice to set limits on the number of non-executive directorships and chairmanships?
Secondly, on rotation, if it is indeed impractical to rotate audit companies, do the Government not accept that there are great dangers from close personal relationships developing between individuals in audit companies and the companies that they are auditing? Why are the Government not taking steps to encourage or demand that, for example, all audit partners—all signing partners, not just the lead partners—are rotated and that all members of audit teams are rotated, to ensure that those incestuous links are broken?
Thirdly, on conflicts of interest, surely the Government accept that it is inherently unsatisfactory for an audit company simultaneously to carry out an audit role and seek to carry out or carry out big IT consultancy contracts for the same company? The issue is subtle and complex, but surely there should be action beyond the Government's guidance to ensure that the most obvious conflicts of interest are simply stopped? On competition policy, do the Government accept that having four groups auditing the accounts of the top 500 companies is inherently unsatisfactory? The problem is difficult because those companies are global, but do the Government have any plans to pursue with the European or American authorities a combined approach to competition policy to try to break up the groups or introduce more competition in the market?
Finally, why was there no reference whatever in today's statement to the Comptroller and Auditor General and the National Audit Office, as both the private sector and the NAO have suggested that there is a major role for the NAO in auditing private accounts,

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possibly nominating auditors? That would be an excellent way in which the public and private sectors could collaborate, so why is there no reference to it?
Ms Hewitt: I see that the Liberal party is swinging to the left today.
The hon. Gentleman talked about widening the magic circle of directorships. I entirely agree. As I said both in my statement and when we announced the appointment of Derek Higgs to conduct the review, it is not satisfactory, however good the individuals, to have a limited number of people on the boards of our major companies. The hon. Gentleman asked whether there should be a statutory or regulatory limit on the number of directorships. I draw his attention to Derek Higgs's clear recommendation that a full-time executive director should not take on more than one non-executive directorship and that no individual should chair the board of more than one major company.
However, as I told the Conservative spokesman, one size fits all is not appropriate. To try to set a single figure as a ceiling for the number of directorships and non-executive directorships that one individual may hold would not take account of the fact that some directorships may be in much smaller companies and so on. Some non-executive directors, particularly chairs of audit committees, have a much larger company burden than other independent non-executive directors. So I believe that we have got the balance right.
The hon. Gentleman raised the issue of whether the entire audit team, as well as the lead audit partner, should be rotated. Various review teams have looked at that matter carefully, because it was raised as an obvious solution to the problem. As with the issue about rotation of audit firms, the problem is about getting the right balance, ensuring that cosy incestuous relationships do not develop—that was part of the problem at Enron—while not destroying the expertise built by an audit team in relation to its client firm. There is evidence that some of the worst problems arise in an audit firm's first year, when the team, by definition, is completely new. Again, there is a balance to be struck, and we have approached it sensibly.
The hon. Gentleman wanted me to say more about non-audit services, including IT services. I draw his attention to the recommendation in the co-ordinating group report that the new regulator should further restrict the circumstances in which auditors supply internal audit services, and ensure that there is a strong presumption against supplying any internal audit services other than in exceptional circumstances. The report suggests that the regulator should review the circumstances in which it is permissible to provide valuation services, actuarial services, litigation support services, taxation services, and services involved in the design and supply of IT and financial information technology systems. A strong case is made for much stronger standards being set for audit firms. They will complement the strengthened provisions in the combined code that result from Sir Robert Smith's recommendations.
The hon. Gentleman also asked about competition in the supply of auditing and accountancy services. Of course that is a matter for concern, although the Office of Fair Trading has looked at it already, at our request,
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and has agreed to keep it under review. The market for such services is increasingly European and, indeed, global. At a regional level, where smaller companies are concerned, the competition for supply is rather greater.
Several hon. Members: rose—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I do not promise to call every hon. Member who is seeking to catch my eye, but I will be encouraged to be well disposed if questions have just one part and receive concise answers.
Fiona Mactaggart: My right hon. Friend the Secretary of State will be aware of a serious fraud in my constituency, as I have written to her Department about it. It involves some issues to do with accounting practices. In her statement, she referred only to listed companies. The very large multinational company in which some of the fraud to which I refer originated is privately owned. What protection will be given to third parties such as the small company in my constituency that purchased a company that was formerly a supplier to the multinational? That small company's representatives have told me that audit is merely a tax on firms such as theirs. The audit on the company that it purchased was fine, but completely superficial. How will the new recommendations make such audit less superficial?
Ms Hewitt: From what my hon. Friend has said, the company to which she refers would be a suitable candidate for consideration by the financial reporting and review panel. I am aware in outline of the case to which she refers, but it may be sub judice and I therefore do not propose to comment further.
Mr. Archie Norman: I thank the Secretary of State for her remarks on payments for failure to departing directors, which is the subject of my private Member's Bill, and I welcome her confirmation that the Department will put the matter out to consultation. However, my Bill has widespread support across the House, especially among Labour Members. It is also supported by Sir Adrian Cadbury, who in a sense is the father of the combined code, and by firms of solicitors in the City. One of those companies is McFarlane's, which was instrumental in preparing a practical and robust solution. What form will the consultation take; how long will it last; who will be consulted; who will be responsible; and will the right hon. Lady take this opportunity to say that she will present the conclusions of the consultation in a statement to the House in a few months' time?
Ms Hewitt: I know that many hon. Members of all parties want companies and boards to take action on the matter of big rewards for big failure, and they also want better and proportionate regulation. I do not believe in legislating without sensible consultation and consideration of how proposals would work.
We will publish a consultation document on this issue, I think in March. I certainly want to assess views about the changes that we have made already and which will come into effect for the next round of corporate AGMs. We will put forward the proposal made by the

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hon. Gentleman and variations on it. We will ask for views about whether further action, over and above what I have taken already, is required. If so, we will ask whether it should be along the lines suggested by him, or whether there are other possible ways forward. Although there is widespread support for the aims of his Bill, there are also widespread doubts about the means that he has chosen—overriding contracts that have been entered into—to achieve those aims. The TUC is one of the bodies concerned about the precedent that would be set.
There are a number of matters that need to be considered. We will have three months of consultation with everyone who has an interest in these matters and who would like to express a view. Of course I shall report the conclusions to the House.
Alan Howarth: Will my right hon. Friend explain further why she has stopped short of proposing a ban on the provision by auditors of non-audit services such as consultancy services, which may be much more profitable than audit? Following the events at Enron and elsewhere, does she accept that confidence in the integrity of audit is undermined where there is evident conflict of interest? Does she accept that investor confidence is also undermined, with all the damage that that causes?
Ms Hewitt: This is a matter of enormous interest, and one on which I have elaborated already. It has been looked at carefully by the various reviews. Clearly, as the co-ordinating group concluded, there are situations in which a ban would be appropriate. Those circumstances depend on the relationship between the client company and the audit firm, and the particular non-audit services that it is proposed will be bought. In some cases, a company will not be able to buy those non-audit services from its external auditor. In other cases, however, as Sir Robert Smith makes clear, there is no conflict of interest and so no risk of jeopardising the independence of the audit. In those cases, the expertise built up in the external audit may be valuable to the company and therefore help to strengthen its governance and its competitive success. That is why I do not think that the proper way forward is to write into the regulations a blanket ban. Instead, we must ensure—through the role of the audit committee on the company's side, and through the audit standards on the auditor's side—that we have the right balance. We must also ensure that the non-audit services are banned in those cases where that is required.
Mr. Jonathan Djanogly: The pool of people qualified for non-executive positions is relatively small at present. If the role of non-executives is to become more onerous and demanding as a result of these recommendations, that pool could become even smaller. However, Mr. Higgs has also suggested that the boards will have to have more than 50 per cent. non-executive content. That could mean that boards will get larger. How will the Secretary of State tackle the
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significant concerns being raised by business that those possibly conflicting aims could lead to weaker, if not larger, boards?
Ms Hewitt: There is a real problem with non-executive directors, especially in the larger companies, being drawn from such a small pool. The hon. Gentleman is right to say that the burden on any director of a firm is becoming increasingly difficult. We therefore need to widen the recruitment pool. It is pretty implausible to suggest that only the very small number of already existing non-executives are capable of carrying out that role.
We can widen the pool in two ways. First, a growing number of large and medium-sized companies regard a non-executive directorship as an important contribution to the professional and career development of younger executives. That means that the corporate governance of the smaller firms on which those younger executives cut their teeth will be strengthened, and also that the pool of people with the commercial experience needed by good non-executives of major companies in future will grow.
The other step that we are taking, as I have indicated, is to encourage firms appointing non-executive directors to look to the non-commercial sector. In the public services and the not-for-profit sector, there are large organisations such as NHS trusts that are responsible for very large sums of money. Their non-executive directors tend to be drawn from a rather more diverse community than their counterparts in FTSE 100 companies, and to have built up exactly the sort of expertise need by the boards of large listed companies.
Linda Perham: As my right hon. Friend knows, I am interested in the issue of corporate governance and, with 20 or so other colleagues, made a submission on the White Paper. How will the measures that she has announced today fit in with the rest of the agenda for the reform of company law? Is it not a rather piecemeal approach if some reforms are introduced now, while others have to wait for the introduction of a new company law Bill?
Ms Hewitt: I am grateful to my hon. Friend and the other hon. Members for their very detailed submission. I think that my hon. Friend is in part referring to the proposals for the operating and financial report that we made in the company law reform report. It is important that that enormous rewriting of the whole of our company law is all taken forward together, as we intend it will be, so that we can deal with the problem of 150 years' accumulation of company law, both statute and case law—and that is what we are doing, building on last year's White Paper. However, the package that I have announced today can in large part be taken forward by the actions that we have described in reorganising the Financial Reporting Council and the other bodies, and through the combined code and the audit standards that I have mentioned. They will complement and provide a solid foundation for the much larger reform of company law that is also coming.
Mr. Michael Weir: The Secretary of State says that the provisions to reveal levels of dependency on single clients will at this stage be voluntary, but that

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she will consider legislation if necessary. Can she tell us more about how that will be reviewed? Obviously, it is important that any problems are revealed at an early stage. It would be a tragedy if we had to wait for another Enron-style debacle before new rules were brought in.
Ms Hewitt: I think that the hon. Gentleman is referring to how we monitor the comply-or-explain provisions. The combined code on corporate governance is, of course, attached to the listing rules, so for large listed companies—that is what we are talking about here—the Financial Services Authority has responsibility in its role as the listing authority.
Mr. Jim Cousins: I congratulate my right hon. Friend on what she has said about the move away from self-regulation, but I want to return to the point about possible conflicts between audit and non-audit services, which is now being raised by hon. Members on both sides of the House. Does she not see that in sending out rather confusing signals about what may or may not be acceptable in future, she has lost the opportunity to make a clear-cut separation between external audit services, internal audit and consultancy? That distinction could help to create more competition, and to prevent the dangerous possibility of regulatory conflict for listed companies in Britain that also list in the United States.
Ms Hewitt: I entirely agree with my hon. Friend about the importance of that point, but I do not think that we are sending out confusing signals. The report from the combined group is absolutely clear about that, and I have no doubt that the FRC will respond positively to the recommendations. I also stress to my hon. Friend the fact that the steps that we propose should be taken to ensure that there is much greater transparency in relation to where the audit firms get their income from.
All the recommendations about an annual report, about the disclosure of the fees received from a client where those exceed 5 per cent. of a firm's total fees, and about audit firms publishing information on how they manage auditor independence within the firm, together with relevant management and reward structures, will shine a bright spotlight on the practices of audit firms. They will also, I think, ensure that the separation of functions and the preservation of the independence and integrity of the audit, which is at the heart of both my hon. Friend's concerns and my own, will be delivered.
Mr. John Greenway: Will the Secretary of State monitor the growing practice of the qualification of audit certificates, which is having adverse consequences for small businesses? I learned only this week that the Civil Aviation Authority is refusing to accept for the purposes of ATOL—air travel organisers' licensing—bonding accounts that have had a qualified audit statement. We understand why the auditors are doing that, but what is the small business supposed to do when its own auditor says, "I can only give a qualified statement, because that's what my professional body says I must do"? That is very difficult, and I would like the Secretary of State to look into the problem
Ms Hewitt: The hon. Gentleman raises an important point. There is no doubt that since Enron, auditors
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have, not surprisingly, been much more cautious, so there is a much greater readiness to qualify accounts. I have not come across the particular problem that the hon. Gentleman raises concerning small firms that need ATOL bonding; of course I will look into that and also draw it to the attention of my right hon. Friend the Secretary of State for Transport.
Angela Eagle: I congratulate my right hon. Friend on her determination to bring forward quickly these sensible changes in the aftermath of the financial scandals that became apparent in the United States. Will she undertake to keep the new regulatory system under constant review, because ways of getting round regulations often demonstrate much more innovation among the rogues than we would like to see. If my right hon. Friend keeps such matters under constant review, we shall know that we have the best possible protection in this country, and that shareholders and investors can proceed with confidence.
Ms Hewitt: I am grateful to my hon. Friend for her comments. I hope that the new structures that we are putting in place, especially the merger of the Accountancy Foundation and the FRC, will simply be able to settle down and get on with the job. It would be a great pity if we had to change those structures again in just a year or two. Within that framework, however, I agree that we must monitor the impact of the changes that we are making. The new unified regulator and the overarching council that we are establishing will be well placed to ensure that they are constantly monitoring and reporting on the impact of the strengthened ethics and the independent standards that are being put in place, as well as the strengthened and much more proactive enforcement and monitoring system involved.
Mr. Michael Moore: As a member of the Institute of Chartered Accountants of Scotland, I believe that the Secretary of State's proposals for audit and accountancy deserve strong support. In the current climate, however, does she not agree that public confidence in the reforms, particularly in the capital markets, will depend on their having an early statutory underpinning, and a funding basis independent of the accounting profession that is to be subject to the revised regulations?
Ms Hewitt: I am grateful to the hon. Gentleman, with his expertise in such matters, for the welcome that he gives the proposals. Confidence in the system is crucial, and I think that we will achieve that. There is enormous consensus, especially with the regulators—the independent bodies—about what needs to be done, and that this package is the right one. He makes a strong case, as does the combined group, for a statutory underpinning for the new package, and the combined group has sketched out what that might look like. As he will know, there are very different views about which bits of the system should be underpinned by statute. I am sure that the House will groan if I announce yet another consultation—but we do need to take views on the details of what that statutory underpinning should concentrate on; we do not want to legislate

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unnecessarily. We will consult on that, and if we decide that it is necessary, we shall make proposals as quickly as we can.
Mr. Nigel Beard: I congratulate my right hon. Friend on the statement, which I think will make a major contribution to securing the integrity of corporate finance. In the light of what happened with Equitable Life, and other difficulties in the insurance industry, will she consider whether the special risks of insurance require special treatment, both in accounting and in auditing?
Ms Hewitt: That, of course, is a matter for the Financial Services Authority and I understand that it is looking at it already.
Mr. John Bercow: Given that more than 100 companies with a full listing have a market capitalisation of less than £10 million, how does the right hon. Lady expect those businesses to comply with the Higgs requirements on non-executive directors?
Ms Hewitt: As I said earlier, in some cases those companies will not comply with every aspect of the Higgs recommendations, and Derek Higgs makes it very clear that that is what he expects. His recommendations are drafted with proper regard for the fact that they will not fit those smaller listed companies, and the comply-or-explain provision works very well in enabling companies to say, "This particular recommendation"—on the number of independent directors, perhaps—"does not fit our circumstances, for this reason, and this is what we have done to ensure that we still have very strong corporate governance," which of course is what our shareholders expect.
Ross Cranston: I very much welcome the package that my right hon. Friend has announced. It is a sensible and measured approach. However, may I press her on the progress of the company law review? Although one always starts with self-regulation and the improvement of professional standards, at the end of
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the day one needs a modern legal framework to underpin directors' duties and to ensure that auditors' conflicts of interest are properly addressed.
Ms Hewitt: I entirely agree with my hon. and learned Friend about the need for complete reform of our archaic company law, but it is of course a huge undertaking. It is very complicated. I am glad to say that the whole process of drafting the legislation is making very good progress and, as my hon. and learned Friend will be aware, we are consulting on many different aspects of the company law reform package at the moment. I hope that we shall be able to legislate on it just as quickly as possible.
Mr. Mark Hoban: I have a declaration to make in that I am a non-practising chartered accountant. What estimate has the Secretary of State made of the additional costs that companies and auditors will have to bear as a consequence of the proposals? It strikes me that these, in addition to some of the proposals in the company law White Paper, will actually increase the costs of compliance to many businesses, and perhaps the extent to which those costs are disproportionate to the benefit that they bring.
Ms Hewitt: The initial reaction that we have had, particularly from the large companies that are most affected, is that in most cases they are already in compliance with the bulk of, for instance, the Derek Higgs recommendations. I do not believe that the additional compliance costs will be substantial in most cases, if indeed there are additional compliance costs at all, but of course the FRC will be undertaking a proper regulatory impact assessment of the changes that it will be bringing forward.
Mr. John Burnett: In the light of her statement, will the Secretary of State explain her Government's policies towards multidisciplinary professional practices, and does she believe that the description of an individual or a firm as an accountant or accountants should be reserved for those who have achieved professional qualifications, are subject to rigorous rules of practice and have adequate insurance?
Ms Hewitt: As I think the hon. Gentleman knows, there is nothing in law at the moment that prescribes the use of the term "accountant" in the way that I think he is suggesting. This is really a matter for the professional bodies to take forward.

Greenbelt Protection
1.18 pm
Mr. John Baron: I beg to move,
That leave be given to bring in a Bill to require local authorities to provide a designated number of permanent sites for the traveller community; to make additional provision in relation to the powers available to local authorities in relation to unauthorised development of greenbelt and greenfield land; and for connected purposes.
In my constituency of Billericay and district, we are very concerned about the various threats to our green belt. One of the growing dangers is that of unauthorised development, especially by the travelling communities, who buy land and then, very quickly, develop it without planning permission.
A recent example at Sadlers Farm roundabout involved travellers digging a 6 ft earth mound around the perimeter of a field on Friday, laying hardcore on the Saturday and then moving caravans in on the Sunday. By the time that the council reacted with enforcement and stop notices, the development was complete. Consequently, we have now entered a lengthy planning and appeals process. Meanwhile, the illegal development continues. Similar situations have occurred in Hovefields in Wickford and Oak road in Crays Hill. Such unauthorised development often occurs on highly visible areas of the green belt, and causes a good deal of resentment among other residents.
When trying to combat the situation, Basildon council—whether Labour or Tory—has found the existing law inadequate. The Bill attempts to put this right, by giving local authorities additional powers to stop unauthorised development of greenbelt land.
Before I describe my suggested measures, may I first make two things absolutely clear? First, no one is looking to discriminate against a minority, but it is only fair that all those who live in a community should abide by its laws and regulations; otherwise, it is the majority who are discriminated against. Partly because of our historic links with the pilgrim fathers and the Mayflower, as a community we recognise more than most that the mark of a civilised society is the extent to which minority interests are respected. We have no problem with the law-abiding traveller. Indeed, latest figures show that there are more than 100 authorised sites for the travelling and gypsy communities in our district, while some neighbouring districts have none at all.
We believe that it was wrong that the statutory duty on local authorities to provide authorised sites was removed in 1994. It is only right that the way of life of the law-abiding traveller be recognised. However, for reasons that I cannot fully explain, there has recently been an increasingly large number of cases of travellers, new to the area, buying land, speedily developing it without planning permission and subsequently not living in harmony with their neighbours. That is causing much concern and anger not only among the settled community but among the more established gypsy communities.
The second point is that this private Member's Bill is the product of a long consultation exercise in which party politics has played no part. It has included numerous discussions, site visits, public hearings, and
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public meetings with residents, travellers, councillors, the police and Basildon council planning department. Here I should like to pay particular thanks to Councillor David Dadds, Mr. Clive Simpson and Graeme Bloomer of Basildon council. I have consistently stated that the law needs changing, whichever party is in control of the council.
In addition, in an attempt to engage the Government in debate, these suggestions were inserted by way of amendments to the Planning and Compulsory Purchase Bill when it was in Committee.
The Bill has support on both sides of the House and, whatever the outcome, I should like to take the opportunity to thank all sponsors for their support. It is in that spirit that I present the Bill.
Two key problems face local authorities when trying to deal with this issue. The first is that local authorities have difficulty in acting quickly to prevent unauthorised development. If an injunction is granted, it can be difficult to serve on the owner or occupier as they can often be difficult to pin down, particularly if land is being quickly sold on and individuals are being unco-operative.
The second problem is that although local authorities can issue stop and enforcement notices, rights of appeal and retrospective planning applications unnecessarily prolong the issues. The reality is that the planning and appeals process can take many months, if not years. Even when it is exhausted, it is often the case that local authorities have then to resort to the courts to reinstate the land, and that can be a long process that does not necessarily result in the clearance of the land. Some planning departments believe that decisions go against local authorities because there is inadequate provision of sites.
I have three suggestions for the House on specific details. The first is that, to share the responsibility of site provision for the travelling community, the Bill would introduce a requirement for all local authorities to provide authorised sites. The target figure should be identified by central Government in consultation with regional bodies, county councils and local authorities. The allocation would be based on the level of local need, and take into account the generation of new sites, likely immigration, outstanding commitments and the ability of local infrastructure to cope with additional growth. In return, the travellers would pay a fair rent for the time they spend at the sites and use the council's services; otherwise, it would be unfair to local taxpayers.
Secondly, the Bill would introduce powers to enable local authorities more easily to obtain an injunction by allowing it to be served on a landowner whose identity is unknown to the local planning authority. Although a similar power already exists to a lesser extent, it is hardly ever successfully exercised by local authorities because of the heavy burden of proof required. By entirely removing that burden of proof and serving the injunction, in effect, against the land, local authorities will be able to obtain an injunction far more speedily, and so quickly nip in the bud any unauthorised development. The injunction would be registered at the Land Registry as a charge against the land and would give local authorities the power to enforce the injunction against any new owner or occupiers.

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Thirdly, local authorities would have a further power to serve a notice to remedy, the aim of which would be to reinstate the land to its original condition. That would be a discretionary power available to local authorities, the guidance being that it should be used only when, in the opinion of the local authority, significant harm is being caused to green belt or greenfield land under its control. The aim of the guidance would be to ensure that, where a minor breach of planning laws had taken place—for example, Mr. Smith accidentally deviated by 3 ft from planning permission when erecting a garage—the normal planning regulations would apply. But where, for example, a whole field was developed without planning permission, local authorities could consider that to constitute significant harm and would then have the option of instigating a notice to remedy.
Should a notice to remedy be exercised, it would stand apart from the normal planning procedure and have to be complied with. Once the land had been reinstated, the owner and occupiers would be allowed to seek planning permission through the normal planning process. If the land were not made good within the specified time frame, the local authority could arrange to put it right, the costs being reclaimed from the perpetrators where possible.
To conclude, it is important to stress that apart from the provision of authorised sites, the additional powers in the Bill are not mandatory. They would be additional options available to local authorities to choose if they so wish. Local councillors, democratically elected, would make the decisions. I do not deny that I have not covered all the details in the past eight or so minutes. There may well be technical issues to address, but I hope that they will not get in the way of what the Bill's sponsors and I believe are common-sense policies that, if sufficient political will exists, would tackle the problems. By ensuring that a sufficient number of authorised sites are provided and giving local authorities additional powers to combat large-scale unauthorised development, whether or not it is by travellers, I believe that the proposals will create fairness for all, and I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Baron, Mr. Colin Challen, Mr. Jim Cunningham, Mr. Jeff Ennis, Mr. Mark Field, Mr. Chris Mullin, Mr. Kerry Pollard, Hugh Robertson, Mr. Andrew Rosindell, Andrew Selous, Mr. Mark Simmonds and Angela Watkinson.

Greenbelt Protection
  GREENBELT PROTECTION
  Mr. John Baronaccordingly presented a Bill to require local authorities to provide a designated number of permanent sites for the traveller community; to make additional provision in relation to the powers available to local authorities in relation to unauthorised development of greenbelt and greenfield land; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 21 March, and to be printed [Bill 49].

Public Accounts
1.39 pm
Mr. Edward Leigh: I beg to move,
That this House takes note of the 1st to 63rd Reports of the Committee of Public Accounts of Session 2001–02, and of the Treasury Minutes on these Reports (Cm 5393, 5450, 5470, 5477, 5481, 5487, 5512, 5524, 5549, 5600, 5612, 5636 and 5676; and HC 1261, Session 2001–02).
The motion stands in my name and those of the right hon. Member for Swansea, West (Mr. Williams) and the hon. Member for Newbury (Mr. Rendel).
It has been an extraordinarily busy year for the Public Accounts Committee. In the past 12 months, we have produced almost 70 reports—probably more than in any one year in our 140-year history. If I were to devote only five minutes to each report, I would have to give a speech of Gladstonian length—[HON. MEMBERS: "Excellent—go for it!"] That is the bad news. The good news is that I shall take only a few examples.
Our reports have covered almost every part of Government, from the vast Departments of State such as Health, Education, Defence and Revenue, to smaller but very interesting bodies such as the Victoria and Albert Museum and the Maritime and Coastguard Agency. We have examined major defence spending programmes and high-profile health and education topics, as well as some of the behind-the-scenes operations that contribute much to the quality of public services, such as the roles of various regulatory bodies.
The rich and varied range of topics that we examine each year places the members of the Public Accounts Committee in a unique position in the House. Our remit spans the whole spectrum of government, our perspective is comprehensive and our conclusions and recommendations for improvement are pragmatic and, I believe, well founded. That claim is borne out by the fact that the Government accept more than 90 per cent. of those recommendations, which is a record unmatched by any other Committee—in fact, no other Select Committee comes anywhere close. The National Audit Office calculates that the work of the Public Accounts Committee has led to savings of £1.5 billion in the past few years.
Our role is twofold. We exist to hold to account those who are responsible for spending the hard-earned money of taxpayers, and we are bold and outspoken when we find that the expected standards of financial management have not been met. We are also anxious to ensure that lessons are learned and mistakes not repeated, so we cast a retrospective eye over events, but we adopt, we hope, a forward-looking and positive approach, and we are prepared to commend when it is right to do so.
Some senior officials may regard an appearance before my Committee as little preferable to an audience with the Inquisition, but the purpose of our rigorous questioning, which we try to do politely, is to make a difference and provide an effective check on the actions of the Executive. That is surely what Parliament is about. However, we do not stop there. This year, we showed that we are prepared to take on a major company, Imperial Tobacco, by questioning its chief executive and posing severe questions about an aspect of the company's activities.

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I am extremely proud to be Chairman of the Public Accounts Committee, the best and most influential Committee in Parliament. Our work load is staggering, but shouldered with great competence by my colleagues on the Committee. I hope that I am giving nothing away, but when I recently spoke to the Clerk of another Committee who was watching the progress of our work, he said, with some surprise, "But they ask their own questions! In our Committee, we give the Members the questions." In the PAC, we ask the questions and we do the research.
Our success is due to our solid cross-party consensus, which again makes us unique. On my watch, I shall never allow party politics or advantage to influence our work—
Mr. George Osborne: Shame.
Mr. Leigh: It is not a shame at all. It is central to our achievements. As our inquiry into Portcullis House showed, we are prepared to look to our own without fear or favour.
We are well supported by our Clerk and his staff, who also have a vast work load because of not only the number of reports that we issue, but the mountain of correspondence on every aspect of public life that we receive. I pay tribute also to the organisation with which we work so closely, the National Audit Office. I thank Sir John Bourn, the Comptroller and Auditor General, whose reports to Parliament do so much to inform the work of the Committee—indeed, they make the work of the Committee possible.
I shall focus on three themes that have characterised the Committee's work in the past year: improving service delivery to the public; fraud; and improving the quality of public administration. Improving the quality of public services is not a party political issue. The Prime Minister himself has placed great emphasis on the need to make rapid progress in that respect, and the PAC welcomes that initiative. Over the past year, we have looked, from the point of view of service delivery, at a number of different areas. We have found the picture to be mixed; we have found much good practice and staff dedication, but also evidence of major shortcomings and the need for improvement. Let me give some examples.
Perhaps the most visible example of public service delivery is the provision of health services. In our 45th report, we focused on efforts to reduce NHS waiting lists and waiting times. A lot of money is being spent on the problem and we were keen to find out what progress had been made. At the time of our inquiry, over 195,000 people in England and Wales had been waiting for more than 13 weeks for an out-patient appointment, and just over 1 million people were waiting for treatment.
Waiting a long time can be a painful and dispiriting experience, as I found out myself a week ago at the Chelsea and Westminster hospital, where I was kept waiting for more than two hours for a four-minute appointment. It makes people angry that the money that they see being put into the health service is not being used wisely. In addition, over a third of patients stated that their condition worsened while waiting.
Mr. David Rendel: The Chairman of the Committee may remember that the following report was
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about occasions when some parts of the NHS had tried to fudge the waiting lists, and had made people wait inappropriately for that reason. Does he recall the suggestion that the NHS should have told those people if they had been inappropriately put down the waiting list because they might have been due compensation? The NHS did not seem very happy about that. Would he like to take up that point?
Mr. Leigh: I shall deal with that point later, but the hon. Gentleman is right that the NHS could have been more forthcoming about compensating people if their waiting times had been inappropriately adjusted. That is a good point and we shall want to debate it at greater length.
We found some evidence of improvement in waiting lists and waiting times, and we give credit to the efforts of the Government; where credit is due, we give it. But we also found significant variations in waiting lists and times in different parts of the country and in different specialisms. The accuracy of the figures remains uncertain, partly because not all hospitals check their waiting lists often enough. We found that pressure to reduce waiting lists had led to significant numbers of consultants treating less urgent patients before others with higher clinical priority. That was entirely unacceptable and the Department issued clear guidance that clinical priorities must be adhered to. We wanted annual surveys to be carried out to make sure that consultants were observing the guidance that was now being given to them.
The large amount of extra money—there are huge amounts of extra money going into the health service—is to be welcomed, but only if it is spent wisely and effectively. There is no virtue in throwing money around, with no clear idea of whether it reaches desired targets. It will also be necessary to change the culture and working practice of all medical professionals and foster greater co-operation between health and social workers. Ultimately, the public will be convinced that their money is being spent well only when their experience of the NHS improves.
Mr. John Bercow: I am grateful to my hon. Friend, whose industry is matched only by his ingenuity. Following through the train of thought that he has been pursuing, and given that the Government spend approximately £400 billion a year—or £700,000 per minute—can he offer the House any indication of the size of the savings potentially available from the 70 reports issued over the last year?
Mr. Leigh: As I said, we reckon that our work in previous years has saved £1.5 billion. The NAO calculates that, for every pound that it spends, it saves £8. I never quite understand that argument. Presumably, the more the NAO spends, the more will be saved; there must be a limit somewhere. We reckon that our activities help the Treasury; indeed I pay tribute to Treasury Ministers. Our agenda is very similar to theirs. We work closely with the Treasury, but when we find it falling down from its own high standards, we will not be slow to criticise it. We work closely with the Treasury to try to achieve some of the savings to which my hon. Friend the Member for Buckingham (Mr. Bercow) refers.

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A different aspect of service delivery is the opportunity created by the development of electronic services. I am a bit of a technophobe myself, but I accept that this is a very important part of Government, and certainly a high priority. It is clear from our work that Departments recognise the potential, but in several areas we have found a failure to deliver e-services that people in the real world can, and want to, use. The Government aim to have all their services available electronically by 2005. That is fine, but there is little point in having e-services available if the public do not use them.
For example, Customs and Excise has made it possible to submit value added tax returns electronically, but we found that only 2,500 out of 1.65 million VAT-registered traders signed up to do so.
Another timely example for any of us who have yet to complete our tax returns—I hope that everyone here has done so—comes from our 52nd report, which looked at the Inland Revenue's progress in introducing e-services. The Revenue has a target of 50 per cent. take-up of its services by 2005. However, last year fewer than 100,000 out of a potential 9 million people filled their tax forms online. If we are to bring these e-services online, we must be able to complete the process.
My hon. Friend the Member for Tatton (Mr. Osborne) once tried to access the Passport Agency and went through the whole process, but, at the end of the day, he still had to deliver his application by post. There is not much point in that.
The public will see no point in using e-services when new systems fail or are difficult to use, or where there are concerns about system security. It is important to assure people that e-services are potentially quick, easy and secure. More generally, e-services need to be better thought through. Departments will not reap the rewards if they simply convert existing ways of delivering services to electronic applications. They must fundamentally rethink what they are offering.
That was demonstrated by NHS Direct, the subject of our 40th report. NHS Direct has been a real success story for the Government. It provides easier and faster health advice and information to the public and quickly established itself as the world's largest provider of telephone health care advice, handling some 5.3 million calls in the last financial year. It is popular with the public. We felt that other Departments could learn lessons from how that large new service was introduced.
Our praise was tempered slightly by concerns that many callers were waiting too long to speak to a nurse, as I found myself when I called them after suffering from severe headaches—no doubt caused by chairing overlong meetings of the PAC. There is a risk that NHS Direct could be a victim of its own success. The Department should take stock, set a clear strategic direction for the service and plan what impact it will have on other parts of the NHS.
There are few areas where the need to improve the service to the public is more important than health and education. We looked, in our 58th report, at access to higher education. We found that the Government will surely fail to meet their target—that, by 2010, 50 per
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cent of 18 to 30-year-olds will go into higher education—unless universities recruit and retain more students from poorer backgrounds. That is highly topical because a major barrier to increasing participation is the system for funding students. Its extreme complexity and the fear of debt are barriers to increasing participation. We called for the Department to simplify the situation and make it more certain. In response, the Department has already developed proposals radically to streamline funding. That will give students greater certainty over their finances.
One public service that we use daily is the postal service, which I take a particular interest in because I once had responsibility for it. It is true that it still retains a high level of customer satisfaction. Not long ago, the service was regarded as one of the best in the world. In recent years, it seems to have lost its way. In examining the topic, we took evidence from the regulator, Postcomm, and from Consignia, now once again known, thankfully, as the Royal Mail. A key element of the service is the early morning delivery, but this may soon be lost to us, inconveniencing people and damaging small businesses.
We found that the Royal Mail was experiencing major problems. Profitability was affected, and job cuts were proposed. Those difficulties had impacted on the quality of the universal postal service—something that we all support in this House and something for which we have all fought, particularly those of us who, like me, represent rural areas. The Royal Mail had consistently failed to meet its own target of delivering 92.5 per cent of first-class mail the next day. Performance also varied substantially over the country.
Our work showed that something had to be done. Postcomm intends to encourage improvement by rapidly opening up the market, way beyond what the European Commission is planning to do to liberalise the mail markets. We were concerned that Postcomm was making critical decisions that could jeopardise the universal service without the right information to judge the consequences. I believe that competition must be the way, but there is a real risk of throwing the baby out with the bath water. Postcomm needs more information about how changes to the levels and types of service that the Royal Mail provides will affect its customers.
In our 28th and 49th reports, we looked at the variety of initiatives designed to promote better policy making. We had a wealth of examples: some were good and some were not. Those who forget the lessons of history are condemned to repeat them. If we are to avoid a repeat of the millennium dome, the benefits payments card or the state earnings-related pension scheme fiasco, Departments must get better at all aspects of the process of making policy. That has nothing to do with Labour or Conservative Governments: we are all as bad as each other. Dare I say that? I suppose that I can get away with that much. In particular, Departments must carry out sound analysis and consult both potential customers and those who deliver the service properly. That might sound rather obvious—it is rather obvious—but it does not always happen in practice, as we found again and again.
I shall conclude the theme of improving service delivery on an up-beat note. Earlier this month, the Committee took evidence on the acquisition of the London Heart hospital. What is striking about this case

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is the way in which a hospital trust, aware of undercapacity in cardiac treatment, took rapid action to resolve the problem. When the private London Heart hospital came on the market, the University College London Hospitals NHS Trust saw a chance, went for it, slashed through the usual pernicious red tape that can envelope much of Government, broke a few rules in the process and took a risk. The deal to acquire the London Heart hospital was completed in months—a record. The result is a boost to patient treatment, as we saw when we visited the hospital.
The case stands out against the quagmire of bureaucracy that all too often hampers Government bodies. If Departments keep using the same processes, they will achieve the same outcomes, and it is likely that extra funding will exacerbate many of the problems that we encountered. A radical improvement in the standard of service delivery across almost all sectors will require a radically new approach to service delivery. Providing they are managed well, my Committee will welcome innovation and creativity. Although we recognise that they might not always work, we are not trying to create a culture in Whitehall that is averse to risk. We say take a risk, as long as it is a carefully considered risk.
I turn to my second theme—tackling fraud. We are fortunate—we should say it more often—to have very few cases of serious fraud committed by individuals in the public sector. We have a record second to none in the world. That is a tribute to the honesty of our public servants, and the robustness of the systems and controls that are in place. However, fraud against the public purse is a major concern. There is a wide spectrum, from individuals exploiting weak control systems for agricultural subsidies to fraud of epidemic proportions in the benefit payments stream.
One of the most serious individual cases that the Committee considered was described in our 51st report, which examined the activities of a farmer who was found guilty of committing £157,000 worth of fraud against the common agricultural policy. The fraud was perpetrated over a number of years because controls operated by the former Ministry of Agriculture, Fisheries and Food and the former Intervention Board were laughably weak. There was no cross-checking of claims between different subsidies, and the fraudster was able to claim for different crops on the same piece of land. Map references for fields were not always required from the farmer, or checked. His crimes came to light through a chance transfer of a member of staff.
Our hearing on the episode could almost be described as surreal. Notwithstanding the seriousness of the offence, a number of scams were pulled that would make Joe Grundy jealous. It was a case of appallingly lax controls—or perhaps I should say flax controls. The farmer had a particular problem with a series of combustible barns. His losses might have provoked a comment from Lady Bracknell, but they apparently did not evoke any interest in the Ministry. Over a two-year period, three of his barns, together with the crops that he claimed to have harvested, burned down. Indeed, so fond was the farmer of his barns that he even applied to the Ministry for a grant for a barn that had already been built.
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In our hearing, my colleague the hon. Member for Glasgow, Pollok (Mr. Davidson) asked the Department
"There had already been inspections made of this property, had there not, and nobody had spotted that the barn was already there?"
To which the reply was:
"At that stage, no, nobody had spotted that."
Our colleague then remarked:
"It is a difficult thing to spot, of course."
The farmer also had an unconventional approach to geography. To disguise the fact that he was claiming to grow different crops on the same fields, he made up the Ordnance Survey map references for them and claimed for fields in Iceland, Greenland and the North sea. In our view, the Ministry and the Intervention Board did not pursue the irregular claims with sufficient vigour and recovered only £1,325. Clearly, there were a large number of lessons to be learned from the case, and I am pleased that controls have now improved.
Mr. George Osborne: Did not the hearing demonstrate the value of picking apparently small cases of fraud—in that case, £150,000, which is small relative to overall Government spending? By focusing on the issue and getting a permanent secretary to explain why things had gone wrong in that case, we revealed broader lessons about the failure of controls in that Government Department.
Mr. Leigh: That is an important point. It is sometimes tempting for our hearings and NAO reports to cover a whole aspect of better Government policy making, and often the hearings that we hold, though interesting, are less effective than when we focus on a specific subject, possibly involving a relatively small wastage of money. When we focus the spotlight of the PAC on just one small part of a Department, nobody in Whitehall knows whether our spotlight might hit them next. If we were concerned only with value, we could spend all our time dealing with social security and nothing else. We must range widely.
Mr. Richard Bacon: Does my hon. Friend also recall from that hearing the rather strange fact that the Ministry had had recommendations from our Committee four years ago about ways in which it could reduce fraud, and appeared to have taken no notice of them? Indeed, the permanent secretary was unaware of them. The point made sotto voce by my hon. Friend the Member for Tatton (Mr. Osborne) at the beginning stands: it is not enough for the Government to accept the recommendations of the Committee; they must follow through afterwards.
Mr. Leigh: That is an extremely important point. Sometimes we have a tendency to congratulate ourselves on the fact that 90 per cent. of our recommendations are accepted. It would be surprising if they were not, as we do not get involved in policy. We make sensible suggestions for improved implementation of policy. However, there is no point in the Government accepting 90 per cent. of our recommendations if there is no follow-through mechanism, particularly undertaken by the NAO to keep track of those recommendations. One thing that the Committee could do, which we have not

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actively pursued in the past, is to keep an eye on Treasury minutes and come back to them in questions to Ministers over the ensuing months and years. It is important that that aspect of our work is done effectively.
Mr. Bercow: I am grateful to my hon. Friend for generously giving way again. Although I do not in any way argue with claims made for the probity of British Government in general, or for the integrity of the bulk of our civil service in particular, does my hon. Friend recall that, in a series of parliamentary answers in the previous Session, many Members were shocked to discover the scale of theft and fraud from Government Departments, including Government buildings? Is he not as concerned as I am about the scale of the heists that have taken place from the Lord Chancellor's Department?
Mr. Leigh: Yes, obviously we are concerned about that. I shall deal briefly with the Royal Mint, where there was a particularly serious example, to illustrate the point. The trouble is that we can only take examples. We are speaking about raising and spending £650 billion, so it is a vast field to cover.
Geraint Davies: Returning to the case of the farmer, Mr. Bowden, it was suggested that that represented the tip of an iceberg and that there was a systemic problem of fraud. Can the hon. Gentleman confirm that, after our report, the Department looked thoroughly into such activity and found, perhaps as much by good fortune as by judgment, that that was an isolated case, and that the public need not fear that people like Mr. Bowden with lots of fields in the North sea and elsewhere are claiming subsidy?
Mr. Leigh: We must put the matter into perspective. The fact is that farmers are claiming large amounts from the CAP. As I said, the Ministry has now introduced controls, so it is to be hoped that the attempted scam will not be repeated.
Benefit fraud is far more serious. When we examined the level of fraud and error in income support and jobseeker's allowance, we found that welcome progress was being made towards targets to reduce fraud levels. There is still too little information about the scale of fraud across benefits, which is remarkable. Estimates so far suggest that some £2 billion could be lost in fraud and a further £1 billion in customer and official error each year by the Department for Work and Pensions. As some of the Department's fraud estimates were out of date, however, it was impossible to tell what progress was being made across the board.
Large-scale benefit fraud has been around for a long time and will not be solved overnight. The Department's antiquated IT systems are, to some degree, dogging its attempts to improve performance, but it could do more. The Comptroller and Auditor General has qualified his opinion on the Department's accounts for reasons of fraud and error for the past 13 years. In other words, the Comptroller and Auditor General qualifies the Department's accounts every year. A loss of £3 billion each year to fraud and error may not immediately
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amaze the general public, as like me and others, they are phased by arguments about billions, but when we think that that amount would buy us almost 45 new hospitals each year or, more frivolously, allow us to stage an annual Olympic games, the enormities of the Department's losses come home to us—and this is just one Department of State.
Mr. Bacon: Does my hon. Friend agree that the most extraordinary aspect of the issue was that the then permanent secretary admitted to the Committee that she did not even have a target date for publishing a set of accounts that was not qualified because of fraud?
Mr. Leigh: The matter will be dealt with later this week and I cannot reveal to the House what the result will be, although it may well guess that the problem will be ongoing because of the Department's apparent inability to deal with it. We appreciate the problems that it faces. It is in control of a budget of massive complexity and difficulty, but it must surely concern the House of Commons that the independent auditor has, in layman's language, been unable to approve the accounts of a great Department of State for 12 consecutive years. That must be of great concern to the Treasury, just as it is to the Committee and the House as a whole.
We think that better targets are now in place as a result of our work. We hope that the auditor can work closely with the Department to ensure progress, so that we can reduce the amount that is lost on fraud and error. Unfortunately, the fraud cases that I have outlined were not the only ones to come before the Committee.
Mr. Brian Jenkins: Will the hon. Gentleman clarify the situation? I am sure that, like me, he believes that there is no endemic corruption in the British civil service. We are discussing fraud and corruption not among staff, but among members of the public. We are challenging not corruption in the civil service, but competence.
Mr. Leigh: The hon. Gentleman makes his point very well and I agree entirely. I am firmly of the opinion that the problem is not one of fraud or corruption on the part of civil servants, although there will be isolated incidents. Given the complexity of the system, the problem is fraud on the part of those claiming the benefits. Of course, only a small minority is involved, but it is large enough to waste £2 billion a year.
As I mentioned, the other startling case involved the Royal Mint, which one would have thought was a bastion of tight security. Sadly, we found it to be the mint with the hole. Remarkably, for eight months, a safe containing £25,000 in banknotes was left open and unattended during the working day. Unremarkably, somebody—or some people—took advantage of that slapdash security and put their hands in.
My third and final theme is linked to measures to combat fraud, and it concerns improvements in the quality of public administration, in respect of which the Committee makes a significant contribution. We do so on behalf of the taxpayer. I believe that good governance is an essential ingredient of a stable society. Our work provides the public with confidence about the way in which their money is spent. That is why we find it unacceptable when standards are not maintained and insist that lessons are learned.

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I have mentioned aspects of our work relating to NHS waiting lists, and I want to deal with the appalling lapse to which the hon. Member for Newbury referred. Fortunately—we must put the matter into context—a very small number of NHS trusts were involved. The Committee found examples of 10 hospitals where managers and staff had fiddled their waiting lists to hide the fact that they were missing Government targets. That was a profoundly irresponsible thing to do and had very serious consequences for patients. In some cases, those actions will have prolonged the suffering of patients and their condition may have worsened.
The arrangements for identifying those involved and taking disciplinary action fell well short of good practice. In some cases, the inquiries were not rigorous or complete and some of those who were allegedly responsible were allowed or encouraged to resign during the process. Some trusts breached NHS guidelines that ruled out confidentiality deals as part of severance packages. The right hon. Member for Swansea, West has repeatedly pointed out that the Committee does not want to see confidentiality deals. We want transparency. The severance packages cost some £260,000 and some did not include clawback arrangements in respect of working elsewhere in the NHS. As some people had confidentiality schemes, they went to work elsewhere in the NHS and got their money.
The Department of Health has promised to address all those issues. NHS trusts took steps to develop action plans for the 6,000 or so patients who suffered as a result of the adjustments. That includes sending patients to other trusts and to the private sector for treatment. However, the Department could not tell the extent to which patients' health suffered as a result of delays in treatment or whether compensation will have to be paid.
Manipulating public information such as waiting list statistics can have an appalling effect on public trust. The Chancellor has made it clear that the NHS is an absolute priority for him and is compassion in action, as he puts it. I repeat that the manipulation of public information affects the public trust in what is going on. The Department must ensure that pressure to meet targets does not lead the NHS to engage in any more statistical sleights of hand or distortions of clinical priorities.
Geraint Davies: The hon. Gentleman will remember that the manipulation of data was carried out by a small number of people in a small number of trusts. Those people have since left or been thrown out, but is he aware that there is evidence to show that some of them are emerging on the other side in PFI deals? Will he give an undertaking that our Committee will consider that issue so as to chase through the small minority who have been corrupting public statistics and ensure that they do not play any future role in public service?
Mr. Leigh: That is a very important point. We want to consider each PFI deal individually rather than become involved in policy arguments. One is always worried about the problem to which the hon. Gentleman refers and the possibility of gamekeepers who have worked in the public sector turning poachers in the private sector. There is now a far more of a relationship between the private and public sectors, and we and the Treasury must constantly keep that in mind. The issue may not be
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corruption in the accepted meaning of the word, in which people are taking backhanders, but corruption that involves people using knowledge acquired in the public sector for their own private good when they go into the private sector. I give him my undertaking that the Committee will consider that issue.
Criminal justice is another interesting area. Financial penalties are the most common punishment imposed on offenders by Crown and magistrates courts—a subject in which I am interested, as I used to be a practising barrister. Such penalties account for 70 per cent. of all sentences. In 2001–02, the financial penalties imposed totalled £387 million, but the collections amounted to only £228 million, and some of them related to fines imposed in previous years. The crucial point is that, in practice, slightly more than half of financial penalties are collected. It seems to be up to criminals to decide whether they pay fines, certainly in some parts of the country. The effectiveness of the criminal justice system is being undermined and both victims of crime and the taxpayer are being sold short.
Our 57th report from the last Session should be read by every public servant, and certainly by every accounting officer. It concerned the operation and wind-up of the Teesside development corporation. We found that weak financial management and oversight of the corporation may have cost the taxpayer some £13 million in additional costs, leaving a deficit of £23 million that could rise to £40 million. To put it in context, one has to say that the corporation achieved much of lasting benefit to the Teesside area. It helped to attract private investment of more than £1 billion, created 12,000 new jobs and brought 1,300 acres of derelict land back into use. However, we believe that this could have been done with greater regard to the principles of the proper conduct of public business. It is not sufficient to deliver a good in Teesside or anywhere else, while still breaking all the rules of public corporate finance, or enough of them to cause concern.
Explanations for some of the more unconventional
transactions entered into by the corporation were—how shall I put it? —unconvincing. There was evidence of poor risk taking and acting without appropriate authorisation. The Department failed to act when it should have to bring the corporation's regeneration activities into line, despite warning signals from a number of sources, including colleagues in this House.
Mr. George Osborne: The hearing on the Teesside development corporation revealed a weakness in our hearings. Often, we get the accounting officer who is currently in post, rather than those who were in post when the problems arose. As I remember it, the accounting officers involved in that particular case were the then permanent secretary at the Treasury and the Cabinet Secretary, neither of whom we were able to call before our Committee.
Mr. Leigh: That is a weakness. Our Committee has the right—as do all Select Committees—to call any official, and naturally, we normally call the current accounting officer. The principle is: the king is dead, long live the king. The fact that the officer was not in post at the time does not mean that he cannot answer questions. Having said that, Whitehall should take note that our Committee has passed a new resolution that

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makes it absolutely clear that in a case where we believe that we will not get to the bottom of things simply by interrogating the current accounting officer, we will be prepared to summon the former one—in this case, the permanent secretary—even though that person may have moved to another Department or retired. I know that that is controversial in Whitehall: the mandarins do not like it, and I can understand why. However, I am sure that they will appreciate that, if we are to do our work, we cannot simply be presented with someone who has mugged up an argument for that afternoon. There may be long periods when that person was not in control, and we would be unable to question the accounting officer of that time.
Jon Trickett: Some members of the Committee have been irritated by the principle of collective, almost anonymous responsibility that the civil service seems to apply whenever something goes wrong. As with the private sector, our Committee should emphasise the principle of individual responsibility.
Mr. Leigh: We have to accept that in the modern way of doing business, whether in the public sector or the private sector, people must accept a certain amount of responsibility for their actions, and we shall indeed demand that that happens.
Geraint Davies: The hon. Gentleman has mentioned Imperial Tobacco, which set a great precedent for the Committee in the summoning of witnesses from the private sector to bring them to account for the loss of public funds. In that case, the smuggling of cigarettes was involved. Will the hon. Gentleman confirm that the Committee will be prepared to summon private sector witnesses when the public purse is being threatened?
Mr. Leigh: Yes, of course. In that case, we were looking at Imperial Tobacco's exporting billions of cigarettes to Kaliningrad, Moldova and Andorra, where they could not possibly all be smoked. For that to be possible, every inhabitant of Kaliningrad would need to have smoked several hundred cigarettes a day. So they can only have been exported to Kaliningrad in order to be re-imported here as smuggled cigarettes, which clearly affected the public revenues available to Customs and Excise. Interestingly, it was the chairman of Customs and Excise who fingered Imperial Tobacco. In fact, he attended our Committee, although we did not know about this issue. He wanted to use the Public Accounts Committee as a lever to put pressure on Imperial Tobacco, and we have indeed caused it considerable embarrassment, which is a fair and proper thing to do.
The key part of improving the quality of public administration is the need to ensure that the lessons learned are spread widely, and that the savings and improvements identified in one area of government are quickly transferred elsewhere. Here, I shall deal briefly with the private finance initiative, about which there is much debate. We believe that each initiative must be judged and assessed on its own terms. However, in 1999, after we examined and reported on some early PFI
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deals, we issued a report on the experience so far, to help the public sector to get the best possible deal for the taxpayer. We are currently drafting a follow-up report, which will draw on the 15 reports we have published so far. It will tackle recurring themes in our work, such as the quality of contract management skills available in the public sector, and the extent to which risk is really transferred to the private sector. My personal, strongly held belief is that if things go well, the private sector must be allowed to make a good profit, but if they go badly wrong, it must be prepared to lose its shirt.
One area in which our work has already made a difference is in the refinancing of projects. Our work on the refinancing of the Fazakerly prison deal caused the Office of Government Commerce to insist that the taxpayer get a share of refinancing gains. This amounts to a mandatory 50:50 sharing of refinancing gains from new projects, and a 30 per cent. share of refinancing gains on early deals.
So the Committee will look very closely at how robust these new arrangements are. The private sector shoulders the risk of a PFI project, and we do not deny that it is entitled to benefit from refinancing gains, but taxpayers must be able to feel confident that they are also getting the money to which they are entitled. The Government's willingness to accept our views on this again demonstrates the tangible contribution that the Committee can make to the work of the Government.
In summarising the Committee's work, I hope that I have been able to show that we add value in all that we do. We have a distinct role in the House, and we constantly touch on key issues.
Mr. George Howarth: Does the hon. Gentleman agree that, of all the Departments we have interviewed—certainly since I have been a member of the Committee—the one in greatest need of better management is the Lord Chancellor's Department?
Mr. Leigh: That is a Department that could perhaps do a little better. [Interruption.] We must not get involved in personalities. In fact, a National Audit Office report published today shows that the Libra project is probably one of the shoddiest PFI deals ever. It has run completely out of control, costs have risen from £135 million to £400 million, and the basic computer system for magistrates courts is still two years away. I acknowledge the point that the hon. Gentleman makes.
We have a distinct role within the House. We focus on implementation rather than policy, and we are able to stay above party politics. I am always impressed by the way in which my colleagues on the Committee respect that discipline. That is essential if we are to continue to be effective, but we would not be effective without the considerable help of the National Audit Office. In turn, the NAO's effectiveness depends on access rights. I should tell the Financial Secretary that I look forward to the imminent implementation of recommendations stemming from the Sharman report. Nearly two years ago, Lord Sharman recommended, and the Government accepted, that the Comptroller and Auditor General should audit all Executive non-departmental public bodies, and that his access rights

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should be on a statutory basis. Once in place, that provision will represent a significant step forward for Parliament. I very much welcome the Government's response to this, and when the Financial Secretary sums up the debate, she will doubtless be able to tell the House what action she intends to take—hopefully, very shortly.
Before I finish, there are some small gaps to which I must refer. I remain concerned that the BBC is outside the remit of the CAG. I await with interest the Government's response to our recent recommendation that Parliament's ability to scrutinise the BBC would be considerably enhanced were the CAG able to examine its financial management. For just over £2 billion-worth of compulsory licence fees—in essence, a poll tax—to be outside our scrutiny is simply not sustainable, and I urge the Government to act. I am sure that, sooner or later, we will win this battle on behalf of Parliament.
I have a similar concern—here, I may not carry with me everyone on the two Front Benches—about the civil list. I must say, as a monarchist, that the royal family's position is strengthened by greater transparency about their spending. For example, we were able to demonstrate that the cost of royal travel has substantially reduced over time. I therefore repeat, on behalf of the Committee, our long-standing request for the CAG, on behalf of Parliament, to be given access to the civil list.
Mr. Rendel: Is there not a third instance where the CAG could do with further access? When we were talking about tax credits recently, it came to light that the CAG needs to have direct access to the accounts of those private sector firms that are handing out tax credits to ensure that they are doing it properly.
Mr. Leigh: The CAG has asked for access to employers' records, but that is being resisted by the Inland Revenue. I do not know why. The Inland Revenue claims that that would add to the tax burden, but the CAG's staff are skilled in doing their work to ensure that they would not increase burdens on business. In effect, the private sector is a tax collector, so why should there not be such an audit?
Mr. Bacon: Is there not a fourth example? The Financial Services Authority could do with some oversight, judging by its recent performance on split capital investment trusts, when it denied knowing anything about what was going on and later had to admit that it had been informed about what was going on in Guernsey.
Mr. Leigh: That is a bridge too far for the time being, but my hon. Friend makes his point, and we may return to that—perhaps he can do so, when he is Chairman of the PAC in a few years' time.
I am part of a long tradition, established by Gladstone, of Opposition Members chairing the most powerful Select Committee of the House. We are able to consider matters of the utmost political sensitivity, but because we focus on delivery, rather than policy, we sustain the cross-party consensus that is fundamental to our success. Our work reaches into every corner of government and covers every pound of the £650 billion
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that the Government collect and spend each year. Some may argue that our work skims the surface, but our presence alone focuses minds. Our recommendations—by and large, the Government accept them—make a real difference. In my view, government is only as good as the independent parliamentary scrutiny that it receives. I believe that we play our part in that process, and I commend the motion to the House.
2.27 pm
Mr. Alan Williams: I congratulate the Chairman of the Public Accounts Committee, the hon. Member for Gainsborough (Mr. Leigh), on the way in which he has taken up his new role. His speech today echoed the enthusiasm that he shows in Committee, and these 70 reports show the effectiveness with which he and the Committee work. The humour that he has brought to the Committee has been very helpful on occasions, and he has demonstrated that again today.
I was pleased to hear the hon. Gentleman say that he would abstain from any political partisanship. Of course the PAC Chairman is always an Opposition Member, and one of the delights of being its Chairman, which is one of the best appointments in Parliament, is that within about two years of a change in government, one is in the happy position of always questioning the other side. We had a long, long spell of questioning the other side.
I joined the Committee just over 12 years ago, and what impressed me then—it still impresses me now—is that, although the Committee reflects what the Chairman has said, it has an ethos of its own and its job is to get at the facts and to produce reports based on the facts, regardless of which party is behind the Administration at the time.
I wish to join the hon. Gentleman in extending our thanks to the National Audit Office and, indeed, its equivalent in Northern Ireland. That is more than ritualistic; it is important that the House of Commons understand the NAO's importance. With national income and expenditure of more than £700 billion, even with 70 reports a year, we would still not get very far, as a bunch of 15 Members of Parliament, unless we had the quality and depth of research contained in the reports that we receive from the NAO. That tribute is not meaningless; it is important because, without the NAO, financial accountability would not exist in the House.
I should also like to thank the NAO in relation to my role on the Liaison Committee. The NAO is now extending the help that it gives to the other Select Committees by seconding people, where appropriate, to help them with studies. Indeed, as the House has asked the other Select Committees to carry out a more detailed examination of estimates, the NAO is preparing to support them in that work.
It is also important to realise that a review is being undertaken into the back-up for the Select Committees. What depressed me when I became Chairman of the Liaison Committee was the inadequacy—not the low quality—of the support given to the Select Committees. A review is now in hand to examine the support that the Committees need, and the NAO is playing a leading role in it. That should reassure hon. Members, because the NAO will be absolutely objective. When I gave evidence

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to the Modernisation Committee, I recommended that the NAO should be used in that way because I knew that we would get an objective assessment of what is needed.
As the Chairman of the PAC has intimated, we have tried several innovations this year. Once or twice in the past, we have called X permanent secretaries and X accounting officers, but that never became a habit. However, two recent episodes justify our decision to determine who will come before us—not just the current accounting officer, but the previous one or whoever was in office at the time.
One of those instances relates to rail privatisation and goes back a couple of years. We recalled a witness whom we expected to give a very rough time, and we were provided with a good insight, even compared with the NAO report. The man who had sat there dealing with the practical managerial problems of trying to implement the policy, regardless of its rights and wrongs, was able to give us an insight into why some of the decisions had been taken. The hon. Member for Newbury (Mr. Rendel) will remember that occasion.
Although we did not agree with those decisions, we had a better understanding of the motivation and, indeed, the attempts by some of the individuals concerned to do their best. That led to a less abrasive report than we might otherwise have produced, whereas relatively recently—I shall not name the occasion—we had an example where the reverse happened. Very recently, someone who had been made a permanent secretary had to answer on behalf of a predecessor who had been in place for the previous four years. In the end, that person had to say, "I was not there. I don't know." That is our point, and the head of the civil service should understand that, although we know that he is not happy about our decision.
It is an enormous advantage to us if we can have first-hand experience, rather than always having before us a witness who has read the same report as we have read and then been briefed on what the questions might be by civil servants who were previously in that post. There is no substitute for questioning the person who was in post at the time, especially with very important examinations. I know that the head of the civil service and his permanent secretary colleagues are not happy, but they must recognise that accountability to the House comes above their sensitivities and sensibilities.
Our second innovation is in relation to visits—I am not talking about visits to Australia, New Zealand or the United States. We made visits to the Treasury building and the Heart hospital, and a memorable visit to Kensington palace. Because of the sensitivities of one Member who is present today, I shall not go into that in depth, but we can look back on that experience with more than fondness, as the taxpayer had previously been receiving reimbursements of only £69 a week for seven bedrooms and seven living rooms, whereas, in a year and a half, he will be receiving £120,000 a year for that same property. That is a small example, but it demonstrates the advantage of looking at things oneself.
That case—the hon. Gentleman and I may view it from different angles—demonstrated what I found when I first started asking questions. The palace said in its recent statement that the apartment had five
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bedrooms and five living rooms. In a parliamentary answer, the Department said that that same property had seven bedrooms and seven living rooms. I suspect that the truth is that the other two bedrooms and living rooms were for staff and therefore did not count in the palace's version. When I first started asking about grace and favour accommodation, I pursued a series of questions for about 12 months. As a result of the constant changing of the figures that the Department received from the palace, we discovered 100 grace-and-favour apartments that the Department did not even know existed. There is a value in scrutiny, which we may pursue with varying degrees of enthusiasm.
I want to raise the issue of no-go areas. We have produced about 70 reports, but we have been impeded in some ways by the existence of no-go areas, some of which the Chairman has referred to. The BBC is one of the most outrageous examples. I shall discuss that at some length. The National Audit Office is not allowed to audit the BBC, even though it receives £2.5 billion of statutorily raised money in the form of the fee, which, in Sharman's terms, constitutes public money. It should be monitored by the NAO.
As it happened, Mr. Dyke and the permanent secretary appeared before us to answer questions in relation to collecting the television licence fee. In our discussions, he repeated the old standby argument that if the BBC allowed the NAO and the PAC to investigate and audit its resources, its editorial freedom would be undermined. As we cannot consider policy, I do not see how that could arise. In any case, the BBC appears before the Culture, Media and Sport Committee, which can consider policy, to discuss its work, but it cannot appear before us to discuss money. One is left with a clear impression that they are more worried about money than about editorial freedom, because, of course, we audit the BBC World Service, and have done so for many years. In the more than 12 years that I have been on the Committee, I have never been aware of any complaint from the BBC that our monitoring of the overseas service had in any way impinged on its editorial freedom. I thought that we should confirm that, however, so I asked the permanent secretary if she would check with her Department whether there had been any complaints about the role of the NAO and the PAC in relation to the World Service in the previous six years. A footnote to our report states:
"Note by witness: Neither DCMS nor the Foreign and Commonwealth Office has any record of complaints, in the last six years, about National Audit Office access to the BBC World Service."
Thus the argument does not stand up.
It got worse, however. Mr. Dyke displayed a sheer arrogance, verging on contempt for the Committee, which was revealed in his answers to questions. I pursued the issue with him and, in answer to question 223, he said:
"There were quite strong arguments against when we were established in 1982 and those positions have not changed."
I followed up by asking,
"You know what they are, do you, the strong arguments that were against in 1982".

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Mr. Dyke responded:
"I have looked at what the arguments were because I guessed the question might come up."
I responded:
"In that case, you should be well prepared."
Mr. Dyke replied:
"Being prepared and deciding to enter the debate are two different things."
Therefore, according to Mr. Dyke, he had taken the trouble to prepare to answer a question that he was not prepared to answer when he came to the Committee.
I ask my colleagues to cast back their memories: I recollect that from that stage I became somewhat impatient with Mr. Dyke; I called in the Comptroller and Auditor General, and I mentioned the matter of contempt of Parliament. Strangely, there is no mention of that in the minutes. I had the Clerk check the transcripts this morning. I draw that to your attention, too, Madam Deputy Speaker, as responsibility for Hansard rests also with you. In some mysterious way, part of the hearing—it may have been ill-tempered, and I may have been fractious and wrong, in which case I do not deserve to be protected from my wrong-headedness—has not been recorded as it should have been. If my hon. Friends recollect the occasion—
Jon Trickett: indicated assent.
Mr. Gerry Steinberg: indicated assent.
Mr. Williams: I seems that they do, as does the Clerk. I therefore ask you, Madam Deputy Speaker, to find out what went on.
The fact is that the Sharman Committee, the Select Committee on Culture, Media and Sport and numerous Members on both sides of the House—
Geraint Davies: Will my right hon. Friend give way?
Mr. Williams: Let me finish this point, and then I will do so gladly.
All those people—and Mr. Gavyn Davies when he was carrying out a review of BBC finances prior to becoming chairman of the BBC—favoured National Audit Office monitoring. The only one of us who has changed his mind is Mr. Davies, since he changed his job. It is for him to explain why. Up to now, other than stating that we would prejudice or damage editorial freedom, no one at the BBC has given the PAC any evidence or convincing argument to demonstrate that. As I said earlier, one is bound to conclude that what they are worried about is not editorial freedom but impartial external audit and accountability to the House of Commons.
The second no-go area is the Financial Services Authority, where we are talking about £170 million of public money, in Sharman's definition, raised statutorily in the form of levies and fees, in an area of extreme importance to the public. At a time when pension funds are collapsing and there are scandals about the advice that people have received on investments and savings, the FSA monitors banks, building societies, insurance companies, investment
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advisers and fund managers, yet as far as I can determine, it is the only regulatory body of the many that come before us that the Committee cannot investigate. Why? Even powers that were formerly exercised by the Treasury and were thus subject to examination have ceased to be subject to examination because they have been transferred to the FSA. We want to know what is to be done about that.
The Treasury will arrange for value-for-money investigations, but in the case of all other regulators, the NAO determines whether there should be such an investigation and carries it out. The NAO should be given the same powers in relation to the FSA.
I again echo a point made by the Committee Chairman, the hon. Member for Gainsborough. The Committee, Sharman and the NAO have all had a go at the third no-go area. We can look into royal travel, which involves a lot of money, and the cost of the palaces, which takes far more money, but the one thing that we cannot look at is the civil list—all because of a Select Committee recommendation made in 1972.
The PAC found that the real-terms costs of the palaces had fallen to about a third of what they were before—after I had produced a mass of information from a series of parliamentary answers—I persuaded the NAO to carry out an investigation and the PAC to hold a hearing. That was beneficial. The palace told us, "What good boys and girls we are, we're saving all this money."
Seventy per cent. of the civil list goes to pay the salaries of people who support the monarch. There is no problem with that; the monarch must have support. We do not vote against the money, but we want to find out whether it is being used effectively, as we do with other grants of public money.
The Committee was frustrated because for many years it had tried to get access to quangos—a point that was also made by the Committee Chairman. We had access to most but not all of them; we could not look at Government companies. We asked successive Chancellors, but the Treasury seemed to close around them and we lost, so during the last Parliament I made some proposals. The hon. Member for Newbury may remember the occasion. The Government Resources and Accounts Act 2000 was being considered by Parliament, so I suggested that the Committee carry out some political terrorist activity and send a volunteer team to the Standing Committee. The then Chairman of the PAC, the right hon. Member for Haltemprice and Howden (David Davis), the hon. Member for Newbury and I attended the Committee to fight the case for the PAC.
We made such confounded nuisances of ourselves—not by being awkward but by winning the arguments—that, in the end, the Treasury set up the Sharman committee to look into accountability to Parliament in relation to public money. The Government had no problem in giving notional acceptance to Sharman's recommendations, apart from those on the BBC and the civil list. I am delighted about that.
For well over a decade, the Committee had hammered its head against the wall of supplication; the moment that we got awkward, we got somewhere. Accountability to Parliament can be made to work if we want to make it work—if we discover where

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Departments are vulnerable. I am genuinely pleased—as was the whole Committee—that Sharman was almost entirely adopted.
I shall conclude by asking my hon. Friend the Financial Secretary three questions. The first relates to NAO access to bodies receiving public money either from Departments or from non-departmental public bodies, including contractors, subcontractors and so on. I understand that a statutory instrument will be enacted in March. Will my hon. Friend confirm whether it is still on schedule and will be in force by the end of the current financial year?
My second question is about NDPBs that are companies. At the request of the NAO, the PAC took on a case that the NAO strongly believes in and is arguing for in Brussels. It related to how our rights are influenced by European directives. Are the Government giving the NAO full support in those representations and, if so, what form does their support take?
My final question is politically sensitive at present, for obvious reasons. Sharman recommended that the NAO undertake validation of the data systems underlying the public service agreements. Ministers were understandably a bit nervous about that. My understanding is that the NAO is undertaking four trial runs, as it did with resource accounting. It is trying, with four Departments, to devise a system that works effectively. It is hoped that the first reports to the House and to the PAC will go live in 2004. Can my hon. Friend the Financial Secretary tell me whether that is still on target?
I became a Member of the House in 1964. I joined the PAC in 1965 and enjoyed the experience. I then spent 18 years on the Front Bench before returning to my proper position. The first place I headed for was the PAC. I still think that my colleagues and I do some of the most valuable work in the House of Commons. I still find that work rewarding and absorbing, and I hope that all my hon. Friends do, too.
2.54 pm
Mr. David Rendel: It is always a pleasure to follow the right hon. Member for Swansea, West (Mr. Williams), who is, as all its members know, one of the Public Accounts Committee's most effective members. It is always a pleasure to see him come in, often at the end of our hearings, to address the witnesses with that delightful smile on his face. It is so disarming as far as the witnesses are concerned, but we all know that it is the smile on the face of the tiger. His bite is always worse than one expects, and it is certainly effective.
I pay tribute to our Chairman, who has proved to be very effective and has done a great job since the last election. I am delighted that we are working closely across all three parties with him.
The Committee has been expanded so that, for the first time, a colleague from the Liberal Democrat party has been appointed to it. Sadly, however, my hon. Friend the Member for Cheltenham (Mr. Jones) has been unable to with us much as he became rather ill shortly after his appointment. I am sure that we would all want to wish him a swift return to the Committee when his health recovers.
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I pay tribute to Nick Wright, our new Clerk, who has had just over a year in office and has proved to be as effective as his predecessor, Ken Brown. It is a delight to work with him and his staff, and they always give us a very good service, as of course do the staff of the National Audit Office, who are invariably patient with all our demands, however insensitive they may be.
The right hon. Member for Swansea, West was absolutely right to say that this is one of the most powerful, if not the most powerful, and effective Committees of the House. It is a delight to serve on it. I am surprised that some of my fellow Opposition Members and some Government Back Benchers have not yet recognised its effectiveness. It is fun to serve on it and to feel that, once in a while, even as an Opposition Member, one can have real influence over the workings of, if not Parliament, the country as a whole and the way in which civil servants work to make Departments more effective.
I should like to speak about a few of the Committee's reports in order to bring some matters to the attention of the House. One report was on obesity. It was the first time that a collection of senior civil servants from a wide variety of Departments—permanent secretaries, accounting officers and others—had appeared before us. If I remember rightly, there were five witnesses, all of whom held senior office. It was fascinating to see some cross-departmental working—so-called joined-up government—and to have a chance to do some joined-up work in the Committee by asking questions of permanent secretaries and others. It also gave me the chance to get on to one of my hobby-horses—any cling—and to mention that cycling and walking reduce the problems of obesity, which are—dare I say it? —growing.
A report on the Victoria and Albert Museum made it clear that the imposition of charges had been a major reason for the drop in visitor numbers. I am delighted that charges have now been removed, as a result of which the figures have risen very quickly. I like to think that that fact, combined with our report on what went wrong after charging was introduced, means that charging to enter our museums will never be reintroduced.
Another report was on oil pollution at sea. That gave me a chance to use, as members of the Committee often do, some of my experience as someone who worked for a while in the oil industry and therefore knew a little about it. I asked the witnesses whether oil transported by pipeline or oil transported by ship was most likely to lead to pollution. It became apparent that oil companies, which decide whether to construct a pipeline to a new oilfield purely on cost grounds, had done no real research into whether the cheaper solution in terms of their costs of moving oil to and from an oilfield was also cheaper in terms of the long-term costs of pollution. The witnesses agreed that research into which of the two was more likely to lead to pollution would be a good thing. I hope that the Government will try to ensure that it is conducted.
We had an interesting hearing on the Post Office. Some of us with rural constituencies made the important point that rural areas are suffering from a drop in the number of post offices. Small post offices are often the heart and soul of small rural villages; often, when such a post office closes the village dies. The maintenance of

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those post offices is therefore very important to us. It became clear that the threat to rural post offices and to the Post Office in general is likely to grow as competition is introduced. I like to think that it is partly as a result of that hearing that the extent to which and speed at which competition was introduced was somewhat reduced.
It became clear that what has really gone wrong with the Post Office is that it has made very large profits over a long period, all of which have been siphoned into the general Government coffers and not reinvested in technology and services. If the Post Office had made such investments, it might still be making some of those profits and would not be in its current state.
We had an interesting investigation into income tax and the Inland Revenue. The Chairman of the Committee said that people should be encouraged, as much as possible, to submit their income tax returns online. However, he did not mention the ironic fact that Members of Parliament are among the few employees, wage earners or whatever who are unable so to submit their income tax returns online because the special parliamentary form that we must use is not yet available online. If the Treasury wants to set a good example, perhaps it could ensure that something is done to correct that.
I was able to make a bit of fun of the Inland Revenue on that occasion by pointing out that it sends out bills for £0.00 to those who have been fined for sending in their forms late when they do not in fact owe any tax. In subsequent parliamentary questions, the Treasury replied that it was important to send out those bills to warn people that they were late sending in their forms, even if no payment was implied. That merely brings the Inland Revenue into disrepute. I hope that the Treasury will think again about whether that is really the best way to approach Inland Revenue taxpayers.
We also had a hearing on clinical negligence in the health service. One of the issues that was discussed was whether we should move towards a no fault, no blame compensation system, on which I have been keen for a long time. I should explain, as I often have to in our hearings, that I have a direct interest in the health service in that my wife is a general practitioner. There is no question about the amount of concern and distress in the health service as a result of people worrying about being taken to court for decisions made, often in very good faith, but nevertheless in error. Medicine is not a science but an art, and it is often difficult to make the right decision. The fact that people do not always make the right decision should not necessarily lead to their being taken at great length, often over many years, through the courts, with all the stress that that adds to them in doing their jobs. I am sure that that is one of the reasons for people wishing to take early retirement, which is leading to some of the health service's staffing problems. A great deal of stress arises from the difficulties that people get into when they are taken through the courts. We also discovered that the amount of money that is spent on lawyers in many negligence claims is more than the victim of the negligence ever receives. The whole system is a way of putting a lot of money into the pockets of lawyers rather than into those of victims, which is not a good way of spending public money.
The private finance initiative was a much-discussed subject, often as a result of individual cases that came before us. Several issues have been common to many of
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our hearings. First, competition is likely to reduce gradually for PFI schemes, not least because of debt refinancing, which the Chairman mentioned. As we get better at demanding back for the public sector some of the savings that are achieved through debt refinancing, PFI schemes will become less attractive for the private sector. There is a danger, which one or two cases have shown, of few companies competing for PFI contracts. When we reach the stage at which the level of competition is so low, the value of PFI is likely to reduce and it will become more difficult to judge whether such a contract is good value for money when compared with the public sector.
On several occasions, some of us have been worried about the way in which the public sector comparator was calculated. We sometimes wondered whether the figures were fudged to show that the private sector contractor offered better value when, had the figures been calculated differently, the result would not have been so clearly in favour of the private sector.
Many of us have been worried about risk transfer. Often, the risk has not been properly transferred in the expected way. Consequently, the value of the PFI contract has been much less than it was believed to be. The public sector has frequently had to bail out a private sector contractor. In practice, the risk has remained with the public sector, which is no great surprise. The major public services that our Government run simply cannot be allowed to go to the wall. One cannot put out a major health service operation to the private sector so that there is nowhere to treat patients if it goes bankrupt. The public sector must keep the facility going. Genuine risk transfer is difficult in major, important public services.
A further point recently came to light. It has not formed part of our hearings so far but I hope that it may do so in future. There is a growing worry that many major contractors who win PFI contracts transfer large parts of the debt to special purpose vehicles, which are subsidiaries of the main contractor. They may be hiding the extent to which they are getting into debt and putting their operations at risk. We may have to take that up in the Committee. It is not direct fraud, but it hides from the public sector the danger that some of our PFI contracts could pose.
The point is worryingly mirrored by the Government's tendency to treat some of their liabilities as off balance book by trying to ensure that genuine Government liabilities in some privatised contracts are hidden off balance sheet and do not count towards the public sector borrowing requirement. Further questions will have to be asked about where the debt lies, especially in relation to, for example, privatisation of the National Air Traffic Services or the tube.
We had some fun with our investigation of pipes and wires. Controlling the number of holes that are dug in our roads is a subject of enormous public interest. Everybody experiences the congestion that roadworks cause. There is a case for telling regulators that they should insist on private utilities ensuring that they use the same hole in the road and do not dig up the road several times in quick succession. That maddens many members of the public.
I want to consider three reports that have particular topical significance. Prisoners and prisoners who reoffend have featured in the press recently. It became

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clear when we talked to the head of the Prison Service that, if we want to reduce crime, the worst thing that we can do is imprison people for a short time. One of the most likely methods of causing reoffending is to give sentences that are too short to provide the education that prisoners need and could mean that they lead a life free of crime.
The point is difficult to get across to the public, who tend to believe that the best thing to do with prisoners is to lock 'em away for as long as possible and throw away the key. If we want to ensure that a prisoner does not reoffend, and if we are interested not in retribution but in securing the minimum number of victims in future, it is important not to put people in prison for a short time, after which they are more likely to commit more crimes. That happens all too often.
There is a strong case for investing much more money in prison education. When Mr. Narey, director general of the Prison Service, came before us, he said that the return from investment "would be dramatic". He stated:
"I do not believe I am doing much more than playing at the edges".
That makes a strong case for the "spend to save" budget—another subject that we considered recently. Spending a little more on educating our prisoners would give them a chance of leaving prison not for a life of more crime but a useful life in the community.
We could spend a little more on such education now. The report states:
"The Prison Service said that the single action most likely to impact on reoffending was investment in education to enable prisoners to obtain jobs on release."
As I said earlier, that is a difficult view to present to the public. It is easy to follow the tabloid route of claiming that the best thing to do with those who have committed crimes is to shut them away for a long time. However, the worst thing that we can do is to put them away for a short time and leave them to learn more about how to commit crimes in future.
Combat identification is the second especially topical subject that I want to consider. It is topical because of the severe threat of war with Iraq. The war already has comparatively little public support. Many people believe that we should not even consider going to war in Iraq. If many of our troops are killed by friendly fire or many enemy civilians are killed by our fire, public support for a war is likely to reduce. That was apparent in recent conflicts. For example, in Kosovo, the deaths of innocent civilians constituted a major reason for some people's belief that it was not sensible for us to be there.
Mr. Alan Williams: The National Audit Office report made it clear that friendly fire is not a new occurrence and that it has been part of warfare for a long time. One can understand that, on the ground in close battle, friendly fire causes a high proportion of deaths; it is not a new experience. That does not mean that we do not want to stop it, but the hon. Gentleman might inadvertently have given the wrong impression that it was a recent phenomenon.
Mr. Rendel: I accept the right hon. Gentleman's point that it is by no means a new experience. However, the
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extent to which civilians are in danger in modern warfare is new. When armies met on a battlefield in Europe in the middle ages, that was different.
Madam Deputy Speaker (Sylvia Heal): Order. I hope that the hon. Gentleman will not continue with that point for long.
Mr. Rendel: I shall not wander into the middle ages any longer, but one of our reports made the specific point that we should consider whether our armed forces need to pay more attention to the possibility of identifying the difference between enemy forces and enemy civilians.
It struck me as rather odd that the witnesses who came before us on that occasion did not seem to recognise that it was an important point. They seemed to think that the only important point was to identify our forces from the enemy forces, and they had not taken into account the important psychological effects of modern warfare—not just on our armed forces, but also on our civilians back here in this country—and how important it is, if we are to fight a modern war, to have the support of the public behind our armed forces, which they could lose if we do not pay proper attention to this question.
I turn now to what is my own specialist subject, in so far as I have one in this House: higher education and widening participation in it. As the Chairman mentioned, that is another matter of important topical interest.
The NAO report confirmed that people from poorer backgrounds are already significantly less likely than others to participate in higher education. The previous Secretary of State and the current Minister for Higher Education have both confirmed over time on different occasions that the fear of debt is one of the main reasons why young people are being put off going to university.
A report from Universities UK, the joint vice-chancellors' body, is, I believe, to come out in a few weeks' time. Baroness Warwick, chief executive of Universities UK, announced some of its findings to a conference that I attended just the other day. She pointed out that about 84 per cent. of the group of young people that it surveyed who were thinking of going to university—they were either in further education colleges or sixth forms—said that they were concerned about the levels of debt, which were among the problems deterring them from possibly going to university. It also found that 15 per cent. of these young people had decided that they would not go to university, and that 50 or 60 per cent. of them had decided not to go because of the fear of debt.
The Government are rightly determined to get more of those young people who can benefit from university education to do so. They are rightly concerned to widen participation in that sense. As we all accept, widening participation means widening participation particularly among the less well-off sections of our population, those who perhaps do not come from families that traditionally have gone to university.
If we are to achieve that wider participation, it is absolutely clear that we must reduce the fear of debt. Indeed, it was the Prime Minister's recognition of that fact that led to his announcement in his famous

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conference speech immediately after the last election that he would set up the review of higher education financing, and of student financing in particular. The present situation is therefore somewhat ironic. The Prime Minister having decided upon that, because he knew the problems the matter had caused for Labour party candidates on the doorstep in the previous election, as a result of the perception of the debt and the fear of debt at the levels it was then, after the introduction of tuition fees, we now find that as a result of that review the fear of debt will be much greater. Indeed, the debts that students end up with will be much greater.
There is possibly a need for a further National Audit Office investigation of how we have reached this point. The Government knew that they had a major problem over widening participation among less well-to-do families. They set up a review to answer it and ended up with proposals that will make the problem far worse. If that is not some error in the way in which the Government work, I do not know when in the time that I have been on the PAC I have seen a worse case.
3.19 pm
Mr. Brian Jenkins: I am grateful for the opportunity to contribute to this debate.
It is always a pleasure to follow the hon. Member for Newbury (Mr. Rendel). Listening to his contribution, particularly what he said about prisoners, one can readily see why he has the reputation for being someone who does not naturally court popularity.
Following the Chairman of the Committee, the hon. Member for Gainsborough (Mr. Leigh), is always difficult. As a member of the Committee, one realises that he always takes the best shots first, and in his extensive, well-presented opening he covered a wide range. If I repeat some of his remarks, it is only because I feel they need repeating.
Being a member of the Public Accounts Committee is one of the most challenging and rewarding positions to hold in the House. The PAC is unique among Select Committees. No other Committee has the same work load or breadth of remit. No subject is left untouched. One of our great strengths is that we can question different Government Departments; we go across government and can therefore judge the degree of joined-up government.
The Committee's aims are unique compared with those of all the other Select Committees. We do not look at policies; we look at the management, at the effective delivery of the civil service. The intricacies of policy analysis are left to the other Select Committees. We interview permanent secretaries rather than Ministers. Our role is to put a unique spotlight on the operation of the civil service and its relationship with the Government.
We have enjoyed some fine verbal exchanges with the witnesses, at times producing from both sides turns of phrase of which Sir Humphrey would be proud.
The PAC's success rate in being listened to also makes it unique. Over 90 per cent. of its recommendations have been accepted by the Government. Is that because they are so easy and are not challenging enough? No. Working with the National Audit Office we have
926
brought about savings of £1.5 billion over the past few years. My colleagues on the team are well supported and are probably the best briefed in the House, having over 700 members of staff in the NAO to draw upon, as well as the excellent professionalism of the Committee staff.
The PAC can highlight the culture of the civil service. It is worth drawing attention to the present culture. As the Chairman pointed out, the present permanent secretaries have a background in policy rather than management. Yet the Government have expectations of delivery that the civil service will work towards, and different types of individual may need to rise to the higher echelons. Good management makes all the difference to the success of a project. Without those skills being prioritised internally in the civil service and, equally important, in external dealings with private sector suppliers, a project can fail to be delivered on time and in its full scope.
Throughout the past year the PAC has risen in prominence, owing in no small part to its excellent chairmanship and support staff. I hope that that trend will continue. With the commitment of staff, Members and the NAO, I am sure that it will.
Our job as parliamentarians is to ensure that we ask the right questions—the questions that the public demand—and obtain publicity, highlighting both successes and failures in our administrative set-up.
A notable moment for me last year was our visit, an away-day, to Kensington palace to view the accommodation. Regardless of the merits of the present living arrangements, the team on the PAC should feel justifiably proud that it was they who gained access and saw the accounts for the first time and brought into the limelight a sector of public expenditure that should be accountable.
I should like to give the House a quick sample of what it is like for some of our witnesses to appear before us. It is not all bad. We had the Radio Communications Agency before us. On the auction of radio spectrum for the third generation of mobile telephones, we thought congratulations were in order. In fact, that auction was a great success and raised a great deal of money—much more than anyone originally anticipated. But when we put the operation under scrutiny we found that £6.1 million had been spent on advisers who were so out of touch with the market that they were looking for £1 billion in the sale. We raised £22 billion. Was the £6.1 million well spent? Many Departments spend a great deal of money on advisers. Is it always well spent? The £22 billion was, indeed, good news.
Another report that the Committee considered last year was "Giving Confidently: the Role of the Charity Commission in Regulating Charities", on the Charity Commission for England and Wales. As a citizenry, we have a right to believe that the charities that collect on our streets are run effectively and efficiently and are above board. We found that in 1999–2000, 38 per cent. of charities had failed to submit annual accounts on time or at all. We decided that the Charity Commission must improve on that. If it does not and the public believe that the money that they donate does not reach its final destination, their contributions will diminish.
The Chairman referred to Joseph Bowden. That is a classic case. Mr. Bowden was a farmer who claimed money off that well-known Department MAFF—I am

927
not sure whether it stands for the Ministry of Agriculture and the Farmers' Friend—for farming flax. Not only did Mr. Bowden develop a new technique and get paid for planting two crops in the same field, he did even better by claiming for planting crops in the Irish sea. Of course he had some difficulty when he had to collect the flax and send the crop off, so he burnt down the barn.
One would have thought that the insurance company that inspected the barn and paid out would have been efficient, but Mr. Bowden burnt down the barn in January 1996 and, lo and behold, again in December 1996. The insurance company paid out £85,400. There was no problem with him pleading guilty to that deception. But if the MAFF investigation was inconsistent, what about the investigative procedures of the insurance company that paid out twice in one year? We could go so far as to say that Mr. Bowden was a serial abuser of benefits.
The Department for Environment, Food and Rural Affairs has since renewed its operations so that fields are logged. Satellite technology allows us to tell when one crop has been planted in a field and it is not possible to claim for another crop in the same field. We know where fields are located, which is amazing, and the Department has come to grips with one of its major problems.
Many farmers complain about red tape because of the number of forms that they have to fill in. I have much sympathy with them. But they must understand that the only reason for that red tape is to stop fraud and the misappropriation of public moneys. Unfortunately, the Department was not quick enough to impose controls on Mr. Bowden or to get back much of the money that he managed to squirrel away.
Appearing before the PAC can give rise to difficulties. I always think of the PAC members as a pack—an apt term, I think. The way in which we follow each other when questioning a witness can be a tortuous experience for the person giving evidence. That was the case with the 57th report "The Operation and Wind-up of Teesside Development Corporation". The corporation left a large debt of £40 million when it was wound up. We put one or two questions to the chief executive that are a good example of the Committee working well.
The chief executive sold land on behalf of the corporation even after the board had been wound up. He received valuations from a team of valuers on selling the land and advice from a team of lawyers on the wind-up. The lawyers had no other client and advised Mr. Hall to shred the documentation. I said to him:
"If there was an inquiry, you would have extreme difficulty proving the decision you made on the day was in strict accordance with the regulations laid down and the notes on valuation provided to the corporation to uphold your story, would you not?"
The witness replied:
"In so far as those cases refer to files, I am not saying there would be a difficulty in responding to them ultimately, if one had all one's advisers around, but the situation appears to be that the National Audit Office did not find all the files it wished to find. All I can do is repeat the organisation and set-up of the disposal of the files of the Corporation."
When asked
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"You would have difficulty in proving these deals were open honest and above board, would you not?",
Mr. Hall said:
"I am totally satisfied they are open and above board".
However, I pursued him by saying:
"They are not in existence though",
to which he replied,
"It would appear not."
I had to recite to Mr. Hall one of the things that people in public life believe in. I said:
"In public life the one thing we are terrified of, above all things, is not the fact that we are innocent, in that respect",
but that
"we have to prove we are innocent."
If the media are on our back, we have to prove with documents that we have done things correctly and in accordance with the law. Anyone who is told by legal advisers to shred files has received bad legal advice.
When an accountancy officer appeared before the Committee on that issue, we explained that the Department's guidelines were left in tatters, yet he continued to support the corporation, for reasons best known to himself. I asked
"Do you think the corporation was not better controlled because your Department lacked the power, the will or the ability?"
He replied:
"We are trying to improve the way in which it governed itself. We certainly had the power, we had the ability—what was the third one?"
I said:
"The will, the power or the ability?"
The accountancy officer replied:
"We had the power but it was rather a nuclear option. We had the ability and we chose to do it in a non-nuclear way. We did not have the will to throw the baby out of the bath water, by which I mean we decided it was better to soldier on with the existing management, the existing Chairman, the existing Board than to go for some other option."
I countered:
"The question jumps up, why?"
He said that although the corporation was effectively trying to wind down,
"The Department took an active role in doing that. As I said earlier … if we did not succeed"
it was
"because of some pretty amazing behaviour at the very end."
One is left in no doubt that although the corporation ignored the Department's financial guidelines, it was allowed to do so because the Department lacked the will—the political will—to get involved and ensure that things were done in accordance with strictly observed guidelines.
One lesson that any Secretary of State or Minister must learn is that they will be held to account if they start interfering with strict financial guidelines—they will be brought before a Committee to answer for their actions. We get Sir Humphrey answers, but sometimes if we push a little harder, we get more revealing answers. That is the PAC's role. The breadth of subjects that we cover gives us a spotlight on the public sector that few parliamentarians have. I look forward to the challenges

929
that 2003 will bring for the Committee, and I hope that the Government, especially the Treasury, recognise that openness and accountability are essentials of good government. They should join us in insisting that all public expenditure, including that of the BBC, the Financial Services Authority and the civil list, comes under the auspices of the PAC.
3.34 pm
Mr. Nick Gibb: I apologise to the House and my hon. Friend the Member for Gainsborough (Mr. Leigh) for missing the first few minutes of this debate. I had to attend a meeting that was arranged some time ago, and it was difficult to rearrange it. However, I heard most of his excellent speech, which was an enjoyable and important contribution to our debate. I agreed with the three themes that he set out in weaving the year's events into his speech, and I should like to pursue some of them.
It is a pleasure to follow the hon. Member for Tamworth (Mr. Jenkins), as I often seem to do in our twice-weekly hearings. He is right that serving on the PAC gives one a unique spotlight, to use his phrase, on the operation of the civil service. I find particularly interesting the notion of a split between the running of an organisation and policy development. It is echoed in the question of whether a Minister should be held accountable when things go wrong because of poor policy implementation or when the policy itself causes things to go wrong in his Department. Permanent secretaries who appear before our Committee often draw that distinction.
A recent case that starkly illustrates the point is the London Heart hospital, to which my hon. Friend the Chairman of the Committee referred to early in his speech. Mr. Andy McKeon, the director of policy and planning at the Department of Health, appeared before the Committee, and I asked him what experience he had had of running an organisation of 800,000 employees. I would have been happy if he had told me that he had experience of running an organisation of 100,000 employees. He told me that he had no such experience, and added that he was not running an organisation of 870,000 employees. His role was to set a framework for the NHS within which 600 organisations can develop and implement their own plans. In other words, he saw himself merely as the civil service adviser to Ministers on the overall direction of policy in the Department, not as an executive or director of the NHS as a whole. No doubt that is also the view of Sir Nigel Crisp, the chief executive of the NHS. There is therefore no one in charge of the NHS. There are 600 separate organisations, and the Department of Health fulfils its role by sending memos, guidance notes and teams of inspectors to those organisations, cajoling, harassing, targeting, measuring and judging them. But it does not actually run the national health service.
By contrast, in the private sector, there is always one person in charge at the top—a chief executive in the true sense. He runs the operation, and his survival depends on how well he does so and how profitable the company is. That, in turn, is determined by the successful delivery of the company's service. There is no distinction between policy and operation—every failed operation is a failure of the chief executive's management. The most revealing distinction between the operation of the
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private sector and Whitehall is that the person who runs the organisation also sets its policy. In Whitehall, the people who run the organisation are different from the people who set policy. Because of that, the skills required of a permanent secretary in Whitehall are different from those required to run a large organisation, be it the NHS or the education system.
A running theme of the PAC's deliberations—there were many echoes of it in the Chairman's opening speech—is the fact that the successful project manager rarely makes it to the top job of permanent secretary. He may be able to run a successful operation but cannot necessarily craft beautifully written policy recommendations and memos to Ministers.
One of the best witnesses to appear before the Committee in the past year was Mr. Paul Jenkins, to whom my hon. Friend the Member for Gainsborough referred. Mr. Jenkins is the national project manager for NHS Direct. The National Audit Office report was very complimentary about how NHS Direct was established and run, and Mr. Jenkins was widely praised for his achievements by members of the Committee. Even more striking, however, was the way in which he answered questions. He was clearly on top of every aspect of the project, and did not need to turn to the people behind him for extra briefing or notes. I suspect that he had riot even been briefed the previous week in the usual intensive way undertaken by civil servants coming before the Committee. I think that he knew everything anyway.
The contrast between Mr. Jenkins's answers and the answers that we normally receive from permanent secretaries was striking. The difference is that Mr. Jenkins is a project manager who has been in charge of NHS Direct for the past five years. The tragedy is that it is unlikely—although I hope that it is not impossible—that he will become permanent secretary at the Department of Health. PAC members with experience longer than mine have noticed that success at project manager level tends not to lead to promotion to the top positions in the civil service. That is a mistake that may contribute to the problems that Britain has faced over many years. Those problems—which did not begin in 1997, but go back 20 or 30 years—have surfaced in our health and education systems, not to mention in the immigration service, the passport office, and elsewhere.
I want to draw to the House's attention three other PAC reports that I believe are of concern. To an extent, they demonstrate the broader themes that I have just set out. A number of hon. Members mentioned the report entitled, "Improving Student Achievement and Widening Participation in Higher Education in England." The problems in that area were in part attributed, in the report and by witnesses, to poor prior attainment at secondary school level. I focused my questions to David Normington, permanent secretary to the Department for Education and Skills, on that poor attainment.
I was struck by the equivocation in the answers that we received. There seemed to be no clear departmental view about the reasons for the poor performance of many secondary schools. Despite constant questioning, I was unable to extract a departmental view about the ethos that makes a state school successful, and how that would contrast with the ethos that makes a school

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unsuccessful. I felt that there was an alarming complacency about British education, and that it contrasted alarmingly with parents' deep concerns.
The permanent secretary cited the Pisa report from the Organisation for Economic Co-operation and Development. That is an international survey of all 32 OECD countries, and Mr. Normington said that it provided evidence that Britain's education system was fourth in science, seventh in English and eighth in maths. By now, he will be aware that the survey has been widely discredited, because the questions that it used measured aptitude and life skills rather than the education curriculum. The survey is more a test of IQ than knowledge, and French officials have dismissed it as biased in favour of creative skills over knowledge. I had hoped that Mr. Normington would refer to the more authoritative Timms survey, which has been carried out for many years and shows that, in terms of the standard of state education provision, Britain comes 20th among OECD countries.
I am worried about complacency and the lack of understanding of our education system. Above all, I am concerned about the lack of rigour in policy development—a problem to which my hon. Friend the Member for Gainsborough alluded. There appears to be no real understanding of the figures cited to the Committee.
I was concerned when we interviewed the then permanent secretary at the Department for Work and Pensions, Rachel Lomax, who gave one of the worst performances of the year before our Committee. The accounts of what was the Department of Social Security, and is now the Department for Work and Pensions, had been qualified by the National Audit Office for the past 13 years because of the huge and unacceptably high levels of fraud and error, which, as our Chairman said, are estimated to amount to at least £3 billion a year. Personally, I suspect that that is an underestimate.
Our report considers fraud and error in just one benefit—income support. For that one benefit, some £573 million a year is lost through fraud, £154 million through customer error, and a staggering £173 million through official error. The £573 million fraud figure is made up of a staggering 216,000 cases of fraud, in each of which an average of £2,600 a year is fraudulently claimed. Of those 216,000 cases, the Department prosecutes only 11,000 a year—just 5 per cent. of the estimated number.
Leaving aside the difficulties that we had in extracting those figures from the permanent secretary during the hearing—I believe that that demonstrates that tackling fraud was not at the top of her list of priorities—I must emphasise that such a low prosecution rate in itself reveals problems. At first I thought that the low rate was a policy decision, based on the fact that the costs involved in pursuing a prosecution involving only £2,600 fraudulently claimed would be likely to exceed the amount recovered. That, of course does not take account of the argument that prosecuting and obtaining convictions constitutes a deterrent to people attempting fraud, whereas merely repaying fraudulently claimed benefit, even 13 weeks' worth of it, does not.
932
The bulk of the £573 million of fraud does not derive from organised crime, which accounts for only £100 million, but from small-scale fraud. The only way to tackle the massive fraud at the Department for Work and Pensions is to have a policy to deal with small-scale fraud rather than concentrating on organised crime alone.
Mr. Bacon: I am enjoying listening to my hon. Friend' interesting speech. I particularly remember the questions that he asked the permanent secretary at the Department of Social Security; I, too, was unimpressed by her answers. Indeed, I have a videotape of my hon. Friend's contribution on that occasion, and I recommend it to any hon. Member. My hon. Friend finally forced the permanent secretary to admit that what he was saying was correct.
Does my hon. Friend agree that this attitude to prosecution is not confined to social security? Our hearings have produced evidence from various sources, including the Department for Environment, Food and Rural Affairs, the Ministry of Defence, Customs and Excise and others, that in Government generally—I am sure that it was the case when we were in office, too—there is an unwillingness to pursue prosecutions. Does he agree that that needs investigation?
Mr. Gibb: I am grateful to my hon. Friend for that intervention and hope that he continues to enjoy watching that video. He has made a valid point. Across Departments, the decision whether to prosecute is based on detailed departmental guidelines that we need to examine to find whether they are appropriate in today's climate. Like him, I believe that we are not prosecuting sufficient numbers of people, not just in respect of benefit fraud but of tax and customs and excise matters. Prosecution is a deterrent.
Mr. Andrew LoveI have been listening with great interest to the hon. Gentleman. Does he accept that a major contributory factor to the difficulties outlined in the Committee's investigation is the complexity of the benefits regime? Does he agree that there are also major problems in assembling the level of evidence necessary to prosecute cases, and that until we deal with those two issues, we will never get to the bottom of the fraud problem in our benefits system?
Mr. Gibb: The hon. Gentleman makes an important point. Of course complexity is a key reason, particularly for customer error and official error, but the simpler one makes the system, the less fair it becomes. It is a balance between complexity and fairness.
The hon. Gentleman is right that it is difficult to obtain the evidence to pursue frauds. To arrive at an estimate of 216,000 cases of fraud a year, a sample of 30,000 is taken, on which detailed annual reviews are conducted to determine how much fraud there is in the sample. The results are then extrapolated across the whole population. We must do such sampling for real, across a much larger proportion of the population, and then pursue the prosecutions once that review has taken place. The problem is that that is very expensive, but the invest-to-save approach will be well worth while in the long run.

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The Department will not be able to reduce the level of fraud until it invests significant sums in tackling fraud to provide real deterrence against the submitting of false claims. If the only punishment for making a false claim is that the money must be repaid if one is caught, there is no deterrent against submitting one. Because of the complexity of the system and the difficulties in obtaining evidence about whether a person is living with another person—these are terribly intrusive questions—it is necessary to rely on the deterrent effect of prosecutions. Where enough evidence can be compiled to pursue a prosecution, a decision should be taken to go ahead with it. I suspect that the small sums of money involved mean that there is no real desire to pursue prosecutions, even when evidence can be compiled, because the focus of the Department is on organised crime, which causes only a small proportion of the fraud.
Mr. Love: I must declare an interest in that I have written at length to the Comptroller and Auditor General on this issue. Does the hon. Gentleman accept that, in the sample 30,000 cases that he mentioned, a strong element of subjective value judgment is used in deciding whether fraud has been perpetrated? Many people outside the National Audit Office consider that the figures for fraud are vastly inflated.
Mr. Gibb: I do not agree that the figures for fraud are vastly exaggerated, because of what one hears anecdotally. The hon. Gentleman will hear from his constituents of cases where people are claiming benefit while working. The number of times that we hear of such cases from constituents makes us realise that there is a widespread culture in certain parts of our constituencies and in certain sections of society where falsely claiming benefit is regarded as par for the course. We must end that approach to the benefit system, not just because it costs the taxpayer at least £3 billion a year, but because it fosters a culture of dependency, which is not good for society and very damaging to the people caught up in it. We shall inquire into benefit fraud later in the year when we examine jobseeker's allowance, and I hope that the Committee will be presented with evidence that shows that real progress has been made in reducing these unacceptable levels of fraud.
Finally, I mention our report on improving air quality, on which I was particularly dismayed by the lack of rigour in policy making. My hon. Friend the Member for Tatton (Mr. Osborne) was able to extract from Mr. Martin Williams, the head of technical policy at DEFRA, the information that the measures being proposed to deal with just one out of nine pollutants to be dealt with would cost the United Kingdom economy some £1 billion a year. In defence of that very large sum, the permanent secretary said that it was not a trivial issue as we were trying to deal with
"24,000 early deaths a year,"
to use his phrase. On the face of it, a mere £1 billion per pollutant would be very worthwhile expenditure if it were saving 24,000 people a year from untimely and tragic early deaths, but of course it all depends on what is meant by 24,000 early deaths. The correct technical
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phrase that the permanent secretary should have used was, "24,000 deaths brought forward". The definition of "deaths brought forward" is given in a footnote to the NAO report, as
"It is not known to what degree deaths are brought forward … it is more likely to be by days or weeks rather than months or years."
In other words, we are talking not about someone in their thirties struck down in the prime of life, but about losing a day or so over a lifetime. If the cost of that day or so is having to earn an extra £1 billion per year per pollutant divided by the number of people in Britain, generating that extra wealth for the country may cost us all more than a day, or a few days, or a week of our lives. I therefore wonder whether the policy is the right one.
I am especially concerned about the fast and loose way in which facts and figures are bandied about without any focus on rigour. Far more accurate cost-benefit analyses are needed before we pile on to ourselves restrictions and costs that might be far more harmful to us than beneficial. If we are to restore people's faith in the political process, we need to be far more scrupulous in the use of facts and statistics, but in my time on the PAC, I have seen too many examples of an absence of rigour in their use. I hope that the coming year will bring evidence of more intellectual rigour in the development of policy, more integrity in the use of facts and figures, and more professionalism and relevant experience among the people who are charged with advising on policy and direction in our public services.
3.56 pm
Mr. Gerry Steinberg: I am delighted to follow the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb). It was a pleasure to listen to his wise and considered speech—there was a lot of sense in it. I only hope that mine matches his.
I want to place on record my thanks to the staff of both the Public Accounts Committee and the National Audit Office for the excellent work that they carry out in a highly professional manner. I feel especially sorry for the PAC staff, who have to put up with my constant requests for assistance. Perhaps it is because I am getting old and forgetful that I am always searching for my papers—they are never in the right place at the right time—but the staff are always very obliging and make sure that I get them. My thanks go to them and to the NAO staff, who are always ready to give members of the PAC expert advice and the information that we want.
Serving on the PAC is one of the most worthwhile and enjoyable duties that I have as a Member of Parliament, especially here at Westminster. It is easy for a Back-Bench Member in a Government party that has a substantial majority to become very bored and to have to go looking for something to do, but I assure the House that that is not often necessary when one is a member of the PAC with two thick reports a week to digest; there is plenty to do if one can get through those reports.
The beauty of the Committee is twofold: first, we keep it non-political and out of the realms of policy, although members of the Committee occasionally try it on—especially Opposition Members—
Mr. Bacon: Surely not.
Mr. Steinberg: Yes, they do, but the excellent Chairman of the Committee makes sure that the

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Opposition do not get away with it and are soon brought back into line. We all share the same aims: to root out inefficiency and waste, and to seek value for money—and to embarrass the accounting officer, some more than others. The second aspect of the PAC that I like is that it covers so many topics, as we can see from today's Order Paper. When I was a member of the Select Committee looking at education, education was the subject of report after report, week after week, year after year. To be frank, it was extremely boring. With the PAC, we have a different report twice a week and the topics are varied: from defence and social security to smuggling and the royal family. I did not put those two together on purpose. I do not intend to speak about those subjects today, and I am sure that the hon. Member for Bognor Regis and Littlehampton will be delighted to hear that.
For the first two or three years that I was on the Committee, we produced reports on the previous Government, so it was easy to criticise. It is becoming a bit more difficult now that it is the present Government's policies that are being examined and we can see the mistakes that they are making. However, that does not deter us; it is a pleasure to do it.
Another topic on which I do not wish to dwell is the PFI, an issue that will be a constant source of discussion over the next few years. We need more time to consider the PFI and deliberate before we come to any firm conclusions, although I accept that each PFI scheme will be looked at individually. I was very sceptical about the PFI, particularly at the beginning, but I must admit that I am beginning to warm to it a bit more. It will be interesting to see the reports on the present PFI schemes.
On the Order Paper today, we see reference to two reports on PFI schemes: on the Royal Armouries museum in Leeds, which was a bit of a cock-up—if one is allowed to use that expression in the Chamber—and the other on the Treasury building. There will be many more in the future and we will be able to see the success, or otherwise, of such schemes.
Before I refer to the reports, I want to place on record my thanks to the Chairman of the Committee, the hon. Member for Gainsborough (Mr. Leigh), who does an excellent job.
I want to concentrate on three different, but worrying, reports, each of which deals with how taxpayers have to pick up the bill when things go wrong. When a mistake is made, it is our constituents who pick up the bill, which can add up to billions of pounds. We talk about "billions of pounds", but we do not realise how much that is; at least, I do not. It is a huge amount of money.
The first report to which I shall refer was entitled "Tackling Obesity." It seems like an age since we did it, but it still seems to be hitting the headlines now. Although the hearing had its humorous moments, the topic is of immense importance because of the problems of obesity. Most adults in England are now overweight; that includes myself, although I would not go so far as to say that I was obese. One in five adults are obese, which results in about 18 million working days lost because of sickness and about 30,000 premature deaths a year. Those 30,000 deaths are probably not the ones to which the hon. Member for Bognor Regis and Littlehampton referred; obesity cuts people's lives considerably.
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Obesity is costing the NHS about £500 million a year and additional costs mean that the total comes to something like £2 billion. The situation is getting worse year by year. The National Audit Office estimated that, by the year 2010, the cost to the NHS would be something in the region of £3 billion a year.
When I read the report and listened to the evidence, I was—to say the least—a little cynical. There are, of course, people who are obese because of a medical condition but, frankly, most of them are obese because they over-indulge. They eat and drink too much and do not do enough exercise. Were it not for the fact that the taxpayer had to pick up the bill, I would probably say, "Let them get on with it. It is up to them." Unfortunately, the consequences for the rest of us are serious, so we should not allow them to get on with it. We should do something about it.
The vast majority of those who are obese or overweight, including myself—I do not deny that—eat too much, drink too much, eat the wrong food and do not do enough exercise. I am a lot more careful since I was told that I had high cholesterol. I went to see my doctor, who told me that I was too fat. I lost about a stone and a half and I do quite vigorous exercise now, so I feel rather proud of myself. I hope that people will take notice of what I am saying.
Should not every GP automatically advise their patients, as my doctor did? They do not, I am afraid. That does not happen. We found that doctors' attitude towards patients who are very fat or obese is pathetic. Only 40 per cent. of GPs identified those patients as being at greatest risk, and 2 per cent. of GPs did nothing. If they saw a great big fat lump sitting in front of them, they did not even mention it. They just allowed the patient to get up and walk out, without mentioning their weight. That is wrong. Seventy-five per cent. of GPs sent overweight patients somewhere else to do something about it. All they needed to say was, "Look, you're too fat. You need to take some exercise and you have to eat less." but they did not do that. They simply sent the patients somewhere else and brushed over the matter.
I concluded from the report that GPs were failing to tackle the problem, either because they did not take it seriously enough or because they did not have time. It is correct that they do not have time. The report is accurate about that and about the diseases associated with obesity. Doctors are contributing to their own work load, because if they fail to treat obesity, more patients will come back to them with the associated illnesses, so the doctors' attitude is counterproductive.
Targeting schoolchildren and influencing them is the most important way to combat the problem. It is probably impossible to change most adults' way of life. There was an article recently in one of the daily newspapers about a head teacher who, for the benefit of the pupil, had informed the parents that their child was obese, and rightly so. If I were a head teacher, I would have done the same thing. What did the parents do? Far from saying, "Thank you very much. We'll do something about it", they blew their top and went to the press, complaining about the disgraceful way in which the head teacher had picked on their child. If the parents had had any sense, they would not have reacted with outrage but taken notice of the head teacher and done something about the problem.

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We must educate children so that they can educate their parents. Parents must learn that a trip to McDonald's is not so much a treat as a health hazard. I asked why, for example, the Food Standards Agency does not target the unhealthy fast-food outlets or pressurise the food manufacturers to produce cheap, tasty, low-fat, low-salt, healthy food. The FSA does not do that and I did not get the impression in the hearing that it intended to do so.
Geraint Davies: I am listening carefully to what my hon. Friend is saying. Does he agree that schools should reduce the amount of salt and fat-impregnated food on offer and should not have coca-cola machines, and that the Government should think seriously about the possibility of not allowing advertising in the middle of children's programming to induce children to get hooked on salt and fat-impregnated processed food?
Mr. Steinberg: I am always delighted to give way to my hon. Friend. I wondered whether he had written my speech for me, as I shall come to those topics in a few moments. If he will bide with me, he will get the answer.
The increase in fast-food intake, coupled with the huge decline in physical activity, is the main reason why children are becoming fatter. Sport England recently produced some statistics showing that the proportion of young people who spend two or more hours a week in curricular sport decreased from about 46 per cent. in 1994 to 33 per cent. in 1999. In the same period, the number of 17-year-olds walking to school fell from 59 per cent. to 49 per cent. Senior pupils have no excuse for not walking to school. They cannot be worried about what will happen on the way there. The reason is simply pure laziness, which means that they get lifts instead. Indeed, car journeys have doubled over the same period. One of the most frightening increases, however, has occurred in the number of hours spent watching television. The figure rose from about 13 hours a week in the 1960s to 26 hours a week in the 1990s. I suspect that any new research would find that much more time is spent in front of a screen, bearing in mind the development of computer games and so on.
Those powerful statistics demonstrate a reduction in physical activity, but investment in sport and other physical activity has not declined. In the past 15 years, five sports centres have been built in my constituency. People cannot blame a lack of facilities for doing less exercise. I suspect that the problem is that we make too many excuses and that the population is merely becoming lazy. We are lazy in our eating habits—it is very easy to buy something from McDonald's or to fry our food—and our exercise.
Mr. Alan Williams: My hon. Friend is making some interesting comments. I was lucky enough to attend a conference in the United States, which has an even worse child obesity problem than ours, where child psychologists said that children as young as two were now developing brand preference. That is why there are so many jolly little jingles and plastic giveaway toys. Children who do not even know what they are telling their mums and dads that they want are being indoctrinated into brand preference and their parents will unthinkingly give them what they want.
Mr. Steinberg: My right hon. Friend is right. I visited America a number of years ago. The amount of food
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served there—especially meat—was, frankly, disgusting. One could not eat it all. If people eat in that way, it is not surprising that they are getting fat. He is right that television and advertisements are dictating the way in which people lead their lives.
The Government need to take some tough decisions to ensure that lifestyles change. On the points made by my hon. Friend the Member for Croydon, Central (Geraint Davies), I believe that every schoolchild should have at least two hours a week of timetabled and compulsory physical education. On his specific question, schools should be allowed to serve only healthy meals. There should be no chips or crisps. Manufacturers of unhealthy food should be banned from having any involvement with schools. Companies such as McDonald's, Walkers, Pepsi and Coca-Cola should not be allowed to give sponsorship to schools. We should not allow them to have any involvement with schools, let alone through sponsorship.
We could also ban cars from towns, which would make people walk a little more. Car parking should be banned outside schools and moved to, say, a quarter of a mile away. We should make kids walk to school if they have people who can accompany them. I know that those proposals are radical, but there is a reason why: our kids are eating the wrong foods, getting no exercise and suffering the consequences. Such measures need to be taken very seriously, because we are, frankly, killing ourselves.
The second issue that I want to raise is completely different, although it again relates to waste, value for money and even fraud in some cases. The operation and winding up of the Teesside development corporation relates to my area in the north of England. I know that this issue has been mentioned already, but I want to go into it in a little more detail. The TDC, which was the largest corporation of its kind, was set up in 1987 and wound up in 1998. It received some £354 million-worth of grants and generated income of about £116 million.
The usefulness of Members of Parliament is shown by the fact that this particular investigation was initiated by local MPs, who complained to the National Audit Office. They had worries about the corporation's operations, but they had gained little satisfaction from the then Department of the Environment, Transport and the Regions. As it proved, their worries were fully justified. The NAO's report clearly showed that, from an early date, the DETR and the regional government office in the north had had severe doubts about the TDC's financial probity and working, but had done very little about it. The report was highly critical of the lack of control and involvement of board members. They existed but were not used, and they appeared to take no interest in the running of the corporation. They sat back while some horrendous things went on.
The chief executive managed the TDC as a one-man band and was a complete law unto himself. On numerous occasions, he personally handled controversial property deals without the board's approval or even knowledge. In the main, his financial director was not invited to board meetings, even when financial items were being discussed. How on earth that could happen God only knows, but it did. The chief executive ignored and overrode DETR cautions and warnings. The NAO investigated many cases. In two of

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them, the corporation had re-acquired sites from prospective developers for the original sum paid plus £1.6 million, even though none of the developments had actually taken place. In other words, £1.6 million of taxpayers' money was just given away to developers, in return for nothing other than getting the sites back.
The chief executive flouted the TDC's guidebook and his responsibilities as an accounting officer, and he ignored Treasury guidelines for accounting officers. That led to financial losses on transactions of some £11 million. He believed that his actions were justified because his primary role was to foster regeneration, by entrepreneurial means, with the private sector. However, he went far beyond what could be regarded as acceptable, and in doing so he abused his position, knowing full well that, at the end of the day, the taxpayer or the Government would bail him out if anything went wrong. He spent money that had not been approved by Parliament, and in the process he lost the taxpayer millions of pounds.
To make matters worse, when the NAO investigated the TDC, it was unable to find key information such as marketing and disposal files and contract files with developers, which, as we learned, had been shredded. In my view and that of many other Members, the very fact that those documents were missing and had been deliberately shredded shows that the NAO had discovered only the tip of the iceberg.
The worrying aspect of this case was that the then DETR clearly knew that something was not right about that corporation. For more than two years, my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) had tabled parliamentary questions that made specific and general allegations. The same Member met the relevant Minister, and an internal investigation took place. However, it concluded that limited evidence had been found, and that there was little point in investigating what was possibly maladminstration. In my view, nothing was done simply because the DETR knew that it would otherwise disturb a can of worms, and all hell would break loose. The NAO's later investigation did indeed discover a can of worms.
Thus I am very critical of what was, in essence, a failure on the part of the then DETR. In failing, it also failed the taxpayer.
Mr. Bacon: I am enjoying the hon. Gentleman's speech. Does the fact that the permanent secretary who was in charge at the time is now in charge of social security give the hon. Gentleman any cause for concern?
Mr. Steinberg: I am sure that the hon. Gentleman would not expect me to comment on that, except to say that I hope that that permanent secretary's record is a little better in social security than it was in dealing with the fraud that I mention. I had better not go down that line because I seem to remember that that permanent secretary said—what was it again? Perhaps I should not go into that any further. I am sure that, if I did, you would be very cross, Mr. Deputy Speaker, and I do not want that to happen.
When the corporation was wound up in 1998, it estimated that it had left a surplus of about £14.5 million. Again, after investigation, it became
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clear that there was no surplus at all. In fact, there was a deficit of about £23 million, but that could rise even further to as much as £40 million—a sorry state of affairs and, again, the taxpayer has had to pick up the bill.
The final report that I want to comment on is about the handling of medical negligence claims in England. The costs to the taxpayer are entirely different from those of obesity or the Teesside development corporation. I am trying to show that public money can be wasted in a number of different ways. By March 2000, provision to meet likely settlements for medical negligence was £2.6 billion and claims expected to arise from incidents that had occurred but had not been reported were estimated at a further £1.3 billion. Thus a total of £3.9 billion in medical negligence claims is expected. That is staggering. How many hospitals could be built with £3.9 billion, making such claims unnecessary because the hospitals would be in better condition?
Mr. Howard Flight: As has been mentioned, that report goes on to make the point that the legal costs are likely to be just as great as the claims, thus implying that the ultimate costs arising from that source may amount to about £7 billion.
Mr. Steinberg: Not being a mathematician, I will not go into the exact figure, but I intend to deal with that issue almost immediately.
On average, such claims take a long time to settle—about five and a half years. The point is that almost half the claims settled the year before last cost more in legal and other costs than the settlements themselves. For example, the cost of reaching settlements up to £50,000 was greater than the damages awarded in more than 65 per cent. of those cases. That report and the evidence itself make it clear that the whole system is chaotic and desperately needs an overhaul.
I think that all PAC members received a letter from Dr. Anthony Barton, who is apparently a solicitor and medical practitioner. In the letter that he wrote to me, he said:
"Victims of clinical negligence are rightly entitled to compensation; there must be affordable access to justice. Most cases are legally aided and most cases fail. The legal aid system (available only to a minority) is fundamentally flawed:
Funding is granted on the advice of the applicant's lawyer; the system is inherently biased, creating perverse incentives for unmeritorious cases to be pursued. This is amply borne out by the low success rates of these cases."
I have investigated that, and the figure is 24 per cent. He went on to say:
"The usual 'loser pays' rule of litigation does not apply to the legally aided claimant who enjoys costs protection; the claimant is in a no lose position and the health service defendant is in a no win position. Cases may be settled irrespective of merit in order to avoid irrecoverable legal costs (especially in low value claims). The system is inherently unfair.
The problems of clinical negligence litigation are inextricably linked to the flaws of the legal aid system."
He is absolutely right, as became clear when we undertook that report.
The report made it clear that because of the difficulty of pursuing claims, few people were able to do so unless they were getting legal aid. If the legal aid was not

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available, they were excluded from the legal aid process, exactly as has been described. Steps were taken to address the problem by bringing in a no-win no-pay scheme, and claimants' solicitors have been able to add to their charges a success fee of up to 100 per cent. of their costs if the claimant wins—a bonus that is claimed from the loser. That worries me greatly, as I am sure that it will encourage the development of a litigation culture—as we have seen in the United States of America—in which solicitors chase ambulances and patients sue for the flimsiest of reasons.
A short while ago, I visited the hospital that is being built in my area under the private finance initiative, with which I am very pleased. When I came out of the gate, I saw pasted on nearby bus shelters posters advertising a firm of solicitors in Newcastle called Samuel Phillips and Co. The huge headline on the poster encouraged people to contact the firm "If the nurse has made it worse". I do not know what other Members think of that, but I found it very distasteful. I accept that solicitors must advertise for business, but stooping to that kind of campaign is unacceptable.
I do not believe that the new conditional fee arrangements have improved patient access to justice. Indeed, they could have a detrimental effect, because solicitors will not want to take risks and claimants may not be able to get insurance. Between 1990 and 1998, claims rose by about 72 per cent. Is there more negligence, or are the public more aware of the litigation culture? In five years, the cost of claims has risen from about £200 million to £1.5 billion. The report says that the total value of outstanding claims with only a 50 per cent. chance of success in 2000 was about £4.3 billion. Those are staggering figures, which seem to indicate that we should concentrate on the apparent clinical incompetence throughout the national health service.
Obviously, claims are successful only if there has been negligence, and the report indicated that there had been £4.3 billion of incompetence in the NHS. I shall refer to some of the 94 negligence claims examined in a recent report, "Clinical Negligence in the National Health Service in Wales"—I presume that the situation is similar in England; there is no reason why it should not be. The Auditor General for Wales produced the report, so it is very reliable. One of the aspects examined was the frequency of alleged or admitted causes of clinical negligence. Of the 94 claims, more than 30 per cent. were for misdiagnosis by a doctor, 20 per cent. were for technical mistakes during an operation, 18 per cent. were for surgical mistakes during an operation, and fewer than 10 per cent. were for drug complications. To me, that was unbelievable.
The report also notes some of the main alleged or admitted causes of negligence; for example, under misdiagnosis, it lists
"Doctor fails to take an x-ray. Doctor underestimates patient's concerns. Failure to recognise signs of illness."
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What are doctors for if they cannot even do that? Other causes of negligence are listed under the heading "Operation, technical" and include
"Failure to listen to the patient's requests. Failure to perform pre-operative checks. Failure to provide pre- or post-operative explanations. Inadequate supervision of instruments—dislodged or not removed."
Do we really want to go into hospital? The list under "Operation, surgical" includes
"Damage to organs, muscles or nerves. Failure to administer appropriate drugs during operation. Incomplete operation."
The list goes on; it is a horror story.
We need to take drastic action to eradicate that incompetence. The arrogance of many medical professionals needs to be tackled, otherwise we shall continue to pay out millions of pounds in compensation. I have no faith at all in the British Medical Association as a regulator; we need an independent body to look into cases of alleged incompetence.
A pilot study in two London hospitals concluded that about 10 per cent. of patients admitted to acute hospitals experienced an adverse event, but that half those events were preventable. That is appalling and does not give us much confidence about going into hospital.
Patients should be able to check on whether a doctor has a record of negligence. Almost every constituent who comes to me with a complaint about a hospital has experienced a negative attitude from the hospital.
Patients must have clear guidelines on the options open to them, whether for a complaint or a claim. If that occurred, most cases would never reach the stage where solicitors were involved. If trusts were more open and honest, the number of cases resulting in litigation would be considerably reduced and so would the bill to the taxpayer.
The House will be delighted to know that I have almost reached the end of my speech. The examples that I have highlighted from our investigations in 2001–02 show both the importance of the PAC in the fight against waste, inefficiency and incompetence and the need for all Departments to achieve value for money. Government spending needs constant scrutiny if there are to be real improvements. Scrutiny by the PAC has clearly led to improvements. By virtue of the excellent reports that we receive from the NAO and the vigorous way in which my colleagues on the PAC carry out their work, all expenditure is made accountable to Parliament.
4.33 pm
Mr. Richard Bacon: It is a great pleasure to follow the hon. Member for City of Durham (Mr. Steinberg). We have all been delighted and entertained by his enthusiasm for the private finance initiative, especially in relation to his local hospital.
I, too, want to dwell on the PFI. It is a matter of great concern and affects much of what the PAC does, in relation both to central Government projects, such as buildings and computer systems, and to schools, prisons and hospitals.
The work of the PAC is of huge importance and I am privileged to be one of its members. According to figures that the Committee has seen on just three aspects of

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Government—Customs and Excise, health and social security between £16 billion and £24 billion of taxpayers' money disappears in one way or another. I do not say that it is all unaccounted for, as not all the accounts are qualified. Neither do I pretend that it is easy to account for all such money, or someone would have done so by now, but the figures show the large scale of Government expenditure and thus the importance of the PAC's work.
The PFI has been the subject of much comment and debate; it is a matter of some controversy. The Institute for Public Policy Research recently pointed out that only 6 per cent. of PFI projects completed by central and local government were subject to independent value-for-money examination by official audit bodies. I discussed the 6 per cent. figure with the National Audit Office, which suggested that it might be slightly higher depending on how it is calculated. None the less, a substantial proportion of PFI projects have not been independently evaluated. The institute called for a full and independent review of value for money in the PFI to check both that the schemes are expected to deliver value for money when signed and that they deliver the predicted benefits once they are up and running. During last year's conference season, the trade unions called for a moratorium on the PFI until a full assessment had been made, although they got short shrift from Treasury Ministers for doing so.
The Health Committee mentioned the PFI in its recent report on its work over the last Session. It noted that its inquiry, "The Role of the Private Sector in the NHS", was undertaken in the knowledge that there had been a great deal of controversy and debate about the merits and cost-effectiveness of the PFI. The Committee sought to discriminate between polemical evidence that was being advanced by both sides in order to reach a balanced judgment. Its report noted:
"Perhaps the key deficiency identified by the Committee related to the lack of accessibility and clarity in the data used to support PFI decisions."
The Audit Commission recently published a report on the PFI in schools that was critical of some of the early contracts. By measuring PFI projects against a control group of traditionally funded schools, it concluded that the PFI had not yet delivered some of the most important benefits expected of it. I accept that those were early contracts and that lessons have been learned—I am sure that that is what the Economic Secretary would say; that is probably what he is writing down now—but my enduring impression from my time on the Public Accounts Committee is that, across various areas of Government, lessons that should have been learned from experience often are not: they are ignored or forgotten. Regardless of the merits of the case for the PFI, I hope that the Economic Secretary will accept that neither the Treasury nor the Government generally has yet succeeded in building a settled will in
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favour of the PFI. On the Committee, sceptics include left-wing state socialists and right-wing free market chartered accountants.
Mr. Rendel: And one or two Liberal Democrats.
Mr. Bacon: Yes, even one or two Liberals are sceptical about it. If there is a bandwagon going, I guarantee that a Liberal Democrat Member will jump on to it. With that kind of spectrum, who could possibly go wrong?
If the Treasury wants to persuade people of the merits of the private finance initiative, it has to do at least two things. First, it should be much more open and transparent. Secondly, it needs to do much more to allow competition, by which I mean that it needs to allow PFI and conventional procurements to compete with one another on similar projects and to run side by side in the long term.
Let me take those two points in turn. First, the Treasury simply needs to open up more. If it is right about the PFI, what has it got to be afraid of? It can only gain from greater public understanding of the arguments. It should be open about professional fees, about which I shall say more in a moment, and explain more about how an assessment is made, openly acknowledging the other factors that are involved. If it involves using a balanced score card, it should say so, and explain how that works. People understand that value for money does not always involve buying the cheapest—that is why we are not all driving around in Reliant Robins.
An area in which we need complete transparency is that of professional fees. The National Audit Office's report on the PFI contract for the development of West Middlesex hospital states that the cost of the advisers was made up of £967,000 for financial advisers, £803,000 for legal fees, £204,000 for project management, £128,000 for the quantity surveyor, and £237,000 for "Others", making a total of £2,339,000. What it does not say is that those are not the total fees for the project, but only the fees paid by the Department of Health. The professional fees paid by Bywest Ltd., the PFI contractor for the hospital, are separate. When the witnesses appeared before our Committee, I asked them to supply more details about the other fees, and I await their answers with interest.
PFI contractors are in a position to pay their side of the professional fees only because they know that they have a contract with the Government that in the end will entitle them to receive annual unitary payments from the Government. The taxpayer is therefore financing those fees. Hon. Members have a right to know on behalf of taxpayers how much is being spent in that way. The Treasury explicitly acknowledges that in relation to its building in Great George street. I tabled several parliamentary questions about that PFI project. The Economic Secretary is fortunate that he did not hold that position at that time; the current Financial Secretary had the burden or pleasure of answering them.
The answer to my parliamentary questions was that the fees on the Treasury's side were £3.223 million, and that Exchequer Partnership, the PFI contractor for the Treasury building, paid £22.08 million. The total at 27 June 2002 was therefore £25,303,000 in professional fees. Given that the building cost only £118 million to

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construct, according to Treasury figures, it is odd that the professional fees should constitute such a high proportion of the total. Common sense suggests that if one pays £118,000 for a house, one would not expect to pay professional fees of £25,000 to the solicitor and the bank. Even allowing for the higher fees that one would expect for a complex project such as the Treasury building, it is odd that the professional fees should be more than one fifth of the total construction cost.
Sir Kevin Tebbit, who is permanent secretary at the Ministry of Defence, said in evidence last year that the fees in relation to the financing of a typical PFI project should be approximately 1.2 per cent. of its net present cost. The net present cost of the Treasury project is £170 million. Under my preferred COTD—cash out the door—measure, the expected payments for the building in the 35-year life of the contract, including the project's inflation assumption, total £838 million. Again, the former Economic Secretary provided the figures in an answer last year.
If we use Sir Kevin's rule of thumb of 1.2 per cent. for financing costs, one would expect that the total fees for the Treasury building, with a net present cost of £170 million, would be around £2,040,000. However, the actual fees relating to the bond issue for the Treasury building are £6,968,000 for Exchequer Partnership and £2,637,000 for the Treasury. Again, the Treasury provided the figures. That is a total of just over £9.6 million, which is 5.65 per cent. of the net present cost. That is nearly five times more expensive than the figure that one would assume using Sir Kevin Tebbit's rule of thumb.
I asked Sir Kevin whether he knew why the fees for the Treasury building were so high. He assumed a somewhat Delphic appearance and replied that it was perhaps not a good idea for him to tell the Treasury how to do its job. However, I should like Ministers to explain why they appear to be spending so much taxpayers' money all over the City. I wonder whether the Treasury has decided that, after three years of falling stock markets and a rather light deal flow, short of bidding for Safeway it is time to help the City of London through some old-fashioned pump-priming. However, if that is so, hon. Members should know about it.
Will the Financial Secretary explain why I received two replies from her to the same parliamentary question on fees? Both answers were received on 27 January. The code numbers for both are the same. Every reference number is identical, but one answer states:
"I refer the hon. Gentleman to the reply I gave him on 27th June 2002".—[Official Report, 27 January 2003; Vol. 398, c. 619W.],
yet the other states:
"I shall let the hon. Member have a reply as soon as possible."
That suggests that something has been missed, that the information has not yet come out or that further expenditure has occurred. I await the reply with interest.
Treasury Ministers will know that the bond issue by Exchequer Partnership for the financing of the Treasury project was for £127,790,000, and that, with some mezzanine debt and other shares and stock, the total capital involved was £140, 965,000. What interests me is whether the bond that was issued the other day, on 16 January 2003, by Exchequer Partnership (No. 2) plc for £165,145,000 means that there is now a whole new tranche of fees to be paid on top. If so, how much is
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involved? Are all the numbers that I am talking about in relation to the Treasury building only half the picture? Does Exchequer Partnership (No. 2), which covers only the eastern end of the building, mean that all these fees should be roughly doubled?
Why in the new Exchequer Partnership (No. 2) bond issue, in the many crates of documents relating to the new bond that are available for inspection at Allen and Overy, or indeed at the Financial Services Authority, is the financial model not disclosed, contrary to previous practice?
Incidentally, what precisely were the benefits to the public purse in breaking the PFI project for the Treasury building into two parts? Members of the Committee went round the building. I walked all the way round it, and it definitely looked like one building to me.
While on the subject of openness, may I say that when I asked the Ministry of Defence about fees it gave me figures only in relation to its side, and not in relation to the PFI contractor, Modus Services? The Treasury has been admirable in answering these parliamentary questions in relation to both sides, and rightly so, because ultimately it is the taxpayer who bears the cost.
The Treasury professional fees are just over 10 per cent. of the total. On the same basis, given that the MOD is paying out in relation to its PFI building fees of £11,190,000, one might expect roughly another £107 million of fees for Modus Services Ltd., the PFI contractor for the MOD building. I do not know whether that is too high or too low. It is certainly plausible. The fees for the London underground are already around £400 million, although how much has been achieved for that is a subject for another day and a separate debate.
The point is that the taxpayer has a right to know. If the Treasury seriously expects people to come on side in relation to the PFI, we must know the facts. It is no good saying, as the MOD did in its answer to me, that the fees paid by the MOD are available but that the fees for the PFI contractor are not.
Geraint Davies: As the hon. Gentleman is focusing on the PFI, may I ask him what he thinks will be the impact of the change of the Treasury's discount rate on the present value of PFIs from 6 per cent. to 3 per cent. and on the number of PFIs coming forward and their relative value to public sector comparators?
Mr. Bacon: I shall come on to the public sector comparator in a minute. Answers I have received from the Treasury, although how much credence one can attach to them is a moot point, show that the Treasury view would be that the discount rate cannot be seen in isolation. I talked to the National Audit Office about the discount rate. Its view is—and this is a point that I shall come to when I talk about the public sector comparator—that, although one clearly needs to take note of the discount rate, even more important is the question of the risk factor, the way in which capital risk costs and risk factors for a variety of different items that go into the calculation are assessed. I was going to say "manipulated", but I shall leave out such a tendentious word.
If we are to get the public on side, the Treasury must be more open about this matter. As I have said, it is no good the MOD's saying that its professional fees are

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available but that the fees paid by the contractor, Modus Services plc, are a matter for Modus Services plc, as if that is that. We need to make fair comparisons if we are to understand the PFI and weigh it in the balance. The Government have more work to do in selling the PFI. Inadequate and unhelpful replies do not assist their case. Such replies only make one think, rightly or wrongly, that there is something to hide.
The second area I want to address is the question of the Treasury's allowing more competition, by which I mean competing types of procurement. It is all very well saying that the investment programme through PFI is only around 10 per cent. of current Government investment. I attended the seminar held at the Treasury last year, which was very helpful. The then Chief Secretary quoted that figure. I think that he said that £3.5 billion was going through the PFI and about £35 billion was going through conventional routes, but if we look at the current building programmes in our constituencies—schools, hospitals or prisons—it certainly does not seem like that. If one asks my local education authority in Norfolk how much choice it has as to which kind of procurement to adopt, it will reply that the answer is zero choice. It is told "You want some money? This is how you get it." That is hardly the best way to assure ourselves that taxpayers' money is being spent in the most efficient, effective and economical way.
The best test would be a live ongoing test. Procurements could run side by side for different projects in similar areas. For example, one could allow some school contracts to be let under the private finance initiative and others by conventional methods. That would give a better basis for assessing whether the PFI was delivering the claimed benefits and whether mistakes from earlier contracts had been learned. At the moment, we are just assured that that is the case. The fundamental point is that we should subject the PFI to ongoing competitive pressure from other forms of procurement. At the moment, Ministers reassure us that everything is rosy because the project has been compared with the public sector comparator. We are supposed to take that at face value.
On the public sector comparator, which the hon. Member for Croydon, Central (Geraint Davies) mentioned, the Ministry of Defence building report "Redevelopment of MOD Main Building" has an interesting chart on page 24. It shows the public sector comparator broken down by different categories. The left-hand column has a figure of base costs for capital expenditure, replacements, operating costs, legislative change and so on. There is also a risk factor. The middle column has a number and the right-hand column has a percentage. For example, the base cost for capital expenditure is £208.6 million. The risk, as a percentage of the base cost, is 29.5 per cent., making a further £61.5 million. At the bottom of the chart is a total base cost of £643.3 million. If all the risks are added up as a percentage of the base costs, they amount to a further £102.9 million. Miracle of miracles, the total is £746.2 million, which is the public sector comparator. Guess what? The PFI came in at £746.1 million.
Mr. Flight: Not £745 million?
Mr. Bacon: No, the PFI was much closer than that. There was only £100,000 in it.
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I had a pocket calculator with me at the hearing and thought that the sum looked strange. It was almost dodgy: how could it be that close? Having done some calculations, I decided that a bit of jiggery-pokery had been going on. If we reduce the 29.5 per cent. figure, which is quoted as the risk as the percentage of base costs for capital expenditure, by 0.5 of 1 per cent.—from 29.5 to 29 per cent.—instead of the public sector comparator looking £100,000 more expensive, it suddenly looks £1 million cheaper. If instead of going from 29.5 per cent. to 29 per cent. we go down to 25 per cent., it looks £10 million cheaper. If we go down to 20 per cent., it looks £20 million cheaper. The question arises: how was the figure of 29.5 per cent. reached? What is so miraculous about it? What makes it so special? Why is the risk for "legislative change" 4.6 per cent.? Why is it not 3.6 per cent. or 9.6 per cent.?
I share my concerns about the public sector comparator with the hon. Member for Hemsworth (Jon Trickett). He used to be a building contractor. If his clients queried a price, I can only imagine what their reaction would have been had he said, "Don't worry, chum. I've put in this capital expenditure risk factor here of 29.5 per cent. on top of the base costs. Experience shows that this factor varies between 2 and 51 per cent. So if you take the difference between the two, divide it by two and add a little bit for a rainy day—if you really feel like it, divide by two thirds of the square root of the number you first thought of—then the 29.5 per cent. does indeed seem, well, how can I put it, guy, absolutely bang on the nail. You've definitely got the best possible price available." I imagine that had the hon. Gentleman said that, he would have got an answer involving some plain Anglo-Saxon words, possibly mentioning brass knobs.
The plain fact is that the public sector comparator provides enormous scope for manipulation to get the answer one wants by exploiting the inherent uncertainties of any given situation and the complexity of the financial models.
Mr. Jenkins: As someone who has been involved in the public sector, I have made decisions on purchasing and refurbishing contracts. If a contract came that close to the figure, I would have severe doubts about going down the PFI route. The marginal cost of maintaining my staff, expertise and ability to use my staff in future would make me decide firmly in favour of the public procurement route. [Interruption.]
Mr. Bacon: I would be grateful if the hon. Gentleman would rephrase his question succinctly. I did not hear all of it because of undoubtedly incisive and eloquent chuntering on the Front Bench.
Mr. Jenkins: If there was a close decision between PFI and public procurement, as someone who has had experience of such decision making, I can assure the hon. Gentleman that I would go down the public procurement route because it would mean that I could keep my staff, make a contribution to my overheads and be allowed to compare contracts as I would have a control group capable of putting a package together.
Mr. Bacon: I agree that a control group has merits. One does not have to rely on assurances from Ministers

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at the Dispatch Box that all the lessons that could be learned have been learned, and that everything is being done in the best possible way with the possible best motive for the best possible result, as one has something that one can look at. That point was made in a report, not by the National Audit Office, which advises us, but by the Audit Commission. A bit of competition between audit bodies does not seem to do anyone any harm. It may be true that those schools contracts referred to in the Audit Commission report were early phase contracts, but that is no reason why we should not go forward with some new conventional procurements so that we can run different systems side by side.
One worry about the contracts that I mentioned earlier is the fact that they are long term. The contract for the Treasury building, for example, runs for 35 years, as does the contract for West Middlesex university hospital. The contract for Norfolk and Norwich university hospital is for 60 years, with a break at 30 years. A short PFI contract lasts 20 years. The worry is whether it is possible to write a sufficiently flexible contract to allow for huge changes that could occur over such lengthy periods. Meanwhile, of course, annual unitary payments are obligatory. I appreciate the point that the Treasury frequently makes about acknowledging the need to pay whole-life costs, but the rational decision may be to let something decline because the resources are needed for something else. We need to consider whether the PFI allows us sufficient flexibility to do that. Running the two systems side by side would be a great way to check that in real time.
Mr. Frank Field: As I was late arriving for the debate, I may not be successful in catching your eye, Mr. Deputy Speaker. However, as the hon. Gentleman is talking about the Ministry of Defence contract, it is invaluable to have the NAO evaluation, which compares the PFI with a more traditional redevelopment route. Basic questions need to be asked. If we assume that the MOD has more than 700 rooms, the redevelopment contract comes out at more than £1 million a room. Is any redevelopment costing that much sensible, given that the total cost of the contract is three times that for the new parliamentary building?
Mr. Bacon: I have a lot of sympathy with the right hon. Gentleman's point. Asking simple, fundamental questions is an important part of what our Committee does and I am staggered by the extent to which they are oft en not asked in Whitehall. When I asked the finance director of the NHS how much taxpayers' cash he expected to pay out, making allowances for inflation, during the lifetime of the contract for West Middlesex hospital, he did not know. He did not know the answer to that basic question. He did not know how much money he was spending, even though he had come to our Committee to talk about precisely that.
One of the Treasury's own advisers described the public sector comparator as "cretinous". The NAO is usually a paragon of understatement. As a member of the PAC, I have learned to savour its understatements like a fine burgundy. One of my favourite reports was entitled "Inappropriate adjustments to NHS waiting lists"—it was about managers fiddling the figures. Yet
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even the NAO was moved to describe the public sector comparator as "pseudo-scientific mumbo jumbo" which leads to "spurious precision" and
"a temptation to fiddle the figures".
By its elegant and reserved standards, that is little short of apoplectic. Will the Financial Secretary assure us that the public sector comparator will be put out of its misery as a principal tool for decision making on PFI projects? At least, if it is not, I should be grateful for an explanation of how much longer we will have to flog this dead equine, which I am willing to do if required.
Will the Minister acknowledge that, for schemes of the same type, such as school schemes, it makes sense to run some PFI schemes alongside conventional procurements? That would help to measure outputs properly over the long term, and to maintain competitive pressure.
Will the Financial Secretary explain why the professional fees for the Treasury building were so high? How much more is there still to pay? How much cash is the taxpayer going to have to part with in total over the life of the project, including the eastern part of the building? Should I double my figure of £838 million? Why is the financial model for Exchequer Partnership (No. 2) not available for inspection at lawyers' offices and at the FSA? How does that square with the aim of becoming more open, transparent and accountable, which has been central to my remarks?
Finally, it is a huge pleasure to be on the Committee. I should like to thank Sir John Bourn and his staff, particularly the assistant auditors general, especially Jeremy Colman and Caroline Mawhood, with whom I have had close dealings. I also want to thank the NAO press office staff who do a tremendous job in promoting the work of the office and the Committee. Finally, I want to thank the people in the Clerks Office—Nick Wright, Richard Poureshagh and Ronnie Jefferson—who also do a tremendous job. They are very long suffering and hard working.
I look forward to the Committee's work in the year ahead.
5.1 pm
Jon Trickett: It is a pleasure to follow the hon. Member for South Norfolk (Mr. Bacon), whose speech was typically robust and well researched. When he mentioned my contribution, I feared that I would be branded as a left-wing state socialist, rather than as a building contractor. I am not sure whether I would not be proud to be branded as such.
I, too, should like to thank the officers working for the Committee and the NAO. The Committee involves an enormous amount of paperwork. I occasionally misplace documents, and the staff have always been polite and efficient in providing replacements. I usually then find the original documents, and end up with two sets. That is wasteful, but I am grateful for the help that I receive.
It is a privilege to be on the Committee. We meet some of the finest minds in the public sector when we encounter the permanent secretaries and accounting officers who work for the various agencies and Departments. I have learned something about the organisational culture of the civil service. As has been said, things are done in the civil service that would not be done in the private sector.

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The British seem to prefer the dilettante culture. A person who is a good teacher will not necessarily be a good head teacher, nor a good athlete a good sports administrator. A good policy theorist should not necessarily become head of the NHS, but promotion in the civil service tends to go to the policy boffins rather than the managers. The British seem to make less of management as a skill than we should.
Secondly, a curious convention in the civil service is that current accounting officers take responsibility for the mistakes or successes of their predecessors. No doubt that tradition is honourable, but does it not militate against good management? In any other organisation, a person making a colossal blunder or a great success would receive the credit. The PAC often interviews people who are not responsible for the decisions or management functions being investigated. The innovation alluded to earlier by the hon. Member for Gainsborough (Mr. Leigh), the Committee Chairman, is very welcome. It will mean that the person responsible for a decision will appear before the Committee, rather than the current accounting manager.
My third point about the civil service's organisational culture is a curious one. We often discover that apparently criminal acts have been perpetrated—not by civil servants, but by those for whom services are provided. Yet there is a marked reluctance across the whole civil service, in almost every Department, to prosecute. Perhaps the British habit of tolerance is a good one, but to tolerate some of the criminal activities that appear to have taken place is taking tolerance a little too far. The Committee would like to see Government agencies taking a more robust attitude towards such matters than they have done, at least for as long as I have been on the Committee.
Moving away from organisational culture, I want to reflect on partisanship within the Committee. It is fascinating to see how the Committee, although it deals with the most tendentious political and other problems that our country faces, avoids the crime—if crime it be—of partisanship. We seem to be able to approach issues in a non-partisan way. I do not mean that I personally, or any other members of the Committee, have abandoned our politics, or the philosophical and moral underpinnings that brought us to a particular partisan position. I am usually guided in my questioning by a particular philosophical, political or moral perspective, but it is a good and worthwhile tradition that we avoid the crime of partisanship, which would diminish the Committee's work.
I intend to speak principally about the private finance initiative, and I shall illustrate the point that I have just made with reference to the PFI. It seems to me that it would be possible to approach it from an ideological point of view—to say that, for ideological reasons, the idea of a public service being provided either on or off the balance sheet of the public sector is either a bad thing or a good thing. However, we have not taken that line, and the Chair of the Committee regularly reminds us that we ought not to be asking such political and policy questions. When we address PFI matters, the civil servants frequently, almost habitually, say that this is not a question of something being on or off the balance
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sheet, but a pragmatic judgment that has to be made when particular functions, or a particular construction contract, is being taken out to PFI.
The normal argument in support of the PFI is that the Government are simply not very good at handling large-scale capital projects, which is why they are increasingly adopting the PFI. While I have been on the Committee public expenditure has increased substantially, and so has the extent to which the Government have used PFI as a means, or methodology, of achieving their objectives.
Whether or not the Government have not customarily handled capital contracts and building contractors very well, the Government, the Treasury or whoever else makes the decisions has now taken a further step, in saying that not only should building contracts and capital projects be handled externally through private contracts but that the financing of the contracts itself should be undertaken by the private sector.
When we interviewed Sir Andrew Turnbull, he said that the point of privatizing if I may use that word—the financing functions, which are conceptually separate from the building functions, was to use the expertise of private financiers to drive the building contractors hard, and that the leverage that the banks and other funding institutions would exercise over the builders and other main contractors would somehow enhance the private builders' capacity to deliver projects on time.
That is a persuasive argument, but when everything is taken into account I am not entirely convinced by it. Let me examine the way in which the PFI has operated in the schemes that we have considered during the year. We have been talking particularly about the Royal Armouries—in which I declare a marginal interest, because I was the leader of Leeds city council when the project was brought to Leeds—and the Treasury building. We also discussed a more general report called "Managing the Relationship to Secure a Successful Partnership in PFI Projects".
Taking those three papers together, I think there is an overwhelming case for saying that the PFI is not working to the advantage of the public sector. I shall highlight some of my causes for concern, which, as is the nature of the Committee, are pragmatic rather than ideological. It seems to me that, in general terms, the PFI has been biased in favour of the private sector. That has happened in many different ways, as the reports describe. I shall focus on the principles, not the detail.
First, the rate of return that the private sector has achieved from the PFI is substantially higher than that which it would achieve from other contracts. We were told that by the chairperson of the Major Contractors Group—the person who brings together all the building firms that work under the PFI. He told us that the builders were achieving a rate of return on turnover at least 1 per cent. higher than they would achieve on non-PFI building contracts. That is a huge amount of money, given the hundreds of millions of pounds involved. That suggests at the very least a lack of competition between the private contractors.
Secondly, as other hon. Members have said, the discount rate that the Treasury established—6 per cent.—was unusually high and has now been reduced substantially. We were told that it was high because the

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Government wanted to encourage the creation of a PFI marketplace, but the discount rate was extraordinarily biased. It probably cost the public purse tens of millions of pounds.
Thirdly, in the early days at least, PFI contracts had no provision to cover the situation where the financier refinanced the scheme after winning the contract. That produced windfalls of tens of millions of pounds of additional profit. As we all know, if we remortgage our house when interest rates are reduced, we can achieve a windfall. Contractors were doing that deliberately and there was no provision in the Government contracts to claw back any of that money. That has clearly changed now but, in the early days at least, refinancing was a major windfall for the private sector.
Fourthly, the risk that was allegedly being transferred from the public sector to the private sector when we went through the PFI, which has been given a number—millions of pounds of public money were involved—was rarely transferred. It would be unimaginable for a school or hospital to be allowed to go bankrupt; the Government would have to stand behind them as a lender of last resort. Precisely that happened in relation to the Royal Armouries museum; the paper is quite clear, so I need not go through it. Even the Treasury accepts, I think—the Committee certainly did—that the public sector stood behind the risk. In that sense, no risk had been transferred.
I want to mention one or two other points about the way in which the PFI operates. First, it must be said that the skill of the civil service in handling contractors has been lamentable. Hon. Members need not take my word for it; that statement was made to the Committee by the Office of Government Commerce, the official Government body now dealing with PFI contracts.
The National Audit Office conducted an opinion survey of those people in the public sector who were handling the PFI contracts. Mr. Gershon accepted in evidence to the Committee that he was unhappy about the blend of skills that the public sector had in negotiating the contracts. In 17 of 72 contracts there was a wholly inappropriate mix of skills among the people handling the building contract.
Worse, Mr. Gershon accepted that after the contract had been let, a wholly new team of civil servants was brought in to handle the contract. The people handling the contract were usually different from the people who had let the contract. The private sector would not make such a mistake. Mr. Gershon accepted my contention that two thirds of all the contracts being managed by the PFI were being managed by civil servants who had little or no involvement in the procurement of the contract—another fundamental error. It is lamentable that, by having inadequate management processes in the public sector, we have allowed the private sector to drive so much of the agenda.
The way in which the PFI was handled in relation to funding competitions raises many questions. Other hon. Members have said that more detailed analysis of its operation is needed. The Committee supported the statement made by the NAO that public finance would be much cheaper than private finance, and the only way to square the circle and be able to claim that the contract as a whole is cheaper in the private sector than it would
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be in the public sector is—to use a phrase that I have often used—by loading the dice against the public sector.
During our discussions on the PFI, it emerged that the private sector invented an entirely new way of handling contracts through the use of so-called due diligence. It struck me that that use of due diligence, which was invented by the private sector, is a tool that might well now be available to the civil service in its handling of contracts, and that much of the risk that we say we take if we retain contracts in-house could he obviated in that way. Sir Andrew Turnbull and I engaged in what could only be described as a round of shadow boxing on the subject, but I maintain that the use of due diligence by the civil service might well have obviated many of the risk factors that we supposedly handed over to the private sector through the PFI.
When the Committee interviewed the chair of the Major Contractors Group, it came as a surprise to me to learn that the various building contractors who allegedly compete with each other for PFI contracts meet regularly to discuss general matters, though not specific contracts. The fact that such a body exists suggests to me that if they do not discuss such matters at the table, with minutes taken, such discussions may well take place afterwards on the golf course—although I should say that the gentleman we met made some excellent points and I have no wish to impugn his professional integrity.
Mr. Jenkins: The same gentleman—the spokesman for the construction contractors—said that on early PFI contracts, the firms lost on almost every building project. The cost to the companies of building was greater than the money they received. They relied for profit on the rest of the package—the continuing maintenance and operation of the projects. Why did everyone lose on construction but remain eager to take part in the process? That is the worrying question.
Jon Trickett: I thank my hon. Friend for those points. I do not feel that, either in the reports before the House or subsequently, we have come to grips with the operational details of the process.
As I was saying, the possibility of collusion cannot be ignored. Furthermore, the way in which the civil service has operated the tendering process means that often the shortlist of competitors has been reduced to one far too early in the process. Once there is only one person in the ring and that person knows that they are the only one tendering, the capacity of competition to drive down the price to the advantage of the taxpayer is lost. That problem is seen all too frequently in the PAC's reports. The possibility of collusion combined with the practice of reducing shortlists too early in the process make me wonder about the degree of competition.
I make that suggestion because something quite startling emerged from our discussions with the chair of the Major Contractors Group. We were told that the cost of tendering could range from £1 million to £4 million. He told us about a £70-million contract that his company had won, in which the price of entry had been £4 million. The cost of tendering and preparing all the documents that the civil service wanted, was £4 million—in legal fees, quantity surveyors' and

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architects' fees and all the other functions that were required. The number of companies that are capable of stumping up £4 million—or even £1 million, which we heard was often the figure—is limited. Whether or not there is collusion, there must be a strong temptation among the handful of companies that are tendering for such work to say to each other, "Look, we are all spending £4 million, but only one of us will get the contract." I would be tempted, were I in that position—I have been in the building industry—to say that I would make a tight bid on the contract, but not on the next three; £4 million is a lot to risk on a gamble that one's bid might come in the lowest. To be fair to the contractors, such a suggestion was denied, but there must be a temptation. The price of entry to PFI prohibits the small and medium-sized contractors, militating against competition.
In every case, the PFI is supposedly tested against this thing called a public sector comparator. The idea is that the accounting officer will invite tenders from the private sector; as I have suggested, those tenders might have only limited value. The accounting officer will then compare those tenders with a mythical public sector tender, called the public sector comparator. How this is derived is a mystery to the Committee; we have never had it explained or analysed. Even this afternoon, the Treasury has fallen back on the public sector comparator, saying that where it is higher, it leads inevitably to a project being handed to the private sector and becoming a PFI project.
Mr. Bacon: It was a mystery to me, too. Does the hon. Gentleman recall Sir Kevin Tebbit referring to the "Monte Carlo method", which may illustrate the precision with which the public sector comparator is wrought?
Jon Trickett: I bow to the hon. Gentleman's memory. I do not remember that analogy, but I remember phrases such as "mumbo-jumbo" being used by accountants describing the public sector comparator. Accounting officers and permanent secretaries have to rely on something when they hand out £1 billion contracts. I believe that they are exposed to criticism if they do not have a comparative figure because, almost inevitably, we are dealing with a single private sector competitor in the latter stages of the bid. In order to demonstrate value for money, the civil servants have to be able to demonstrate in some way that they are choosing to go down one particular road rather than another. However, the public sector comparator model is riddled with holes and the National Audit Office has told us that it is mumbo-jumbo.
The Committee has agreed to look into the public sector comparator, but suppose the model collapsed, as I suspect it will? We would then be left with the dangerous position in which civil servants were handing out multi-million and sometimes multi-billion pound contracts to the private sector with no demonstration that value for money was being achieved.
If we put that alongside the point that the number of companies in the UK or Europe that are capable of bidding is down to a handful who meet frequently in conclave, we must be concerned about our exposure to
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the allegation that we are not getting value for money; in the mean time, we are putting future taxpayers in hock to the tune of tens of billions of pounds.
I have made these points on the PFI out of a genuine spirit of concern. I am in any event predisposed to believe that wherever possible the public sector ought to be the provider.
5.25 pm
Mr. George Osborne: I apologise for not being present for the whole debate. I missed some contributions because my constituent, Sally Clark, has just had her conviction for murdering her two children overturned.
My work on the Public Accounts Committee is among the most rewarding that I have done in the 18 months that I have been a Member. The right hon. Member for Swansea, West (Mr. Williams) said that he joined the PAC in 1965, which was six years before I was born. That puts my 18 months of experience into perspective. Nevertheless, I have tremendously enjoyed the work. I remember that, when I was a Government special adviser, what the permanent secretary most feared was not his Minister appearing in Parliament or Opposition days, even when we had a majority of only one, but his appearances before the PAC. That struck a chord with me at the time, and I remember saying that, if I ever got into Parliament, I would try and get on the PAC, which I managed to do.
One of the strengths of the PAC is the fact that it does not get involved in the policy debates that dominate this place. That point has been made by a number of hon. Members in all parts of the House. We follow the money, as Woodward and Bernstein would put it. As a result, we uncover cases of fraud and weaknesses in policy. Another strength of the Committee is its Chairman. I must say that, or I will not be called in subsequent hearings. His relaxed style, with the touch of the rapier, is engaging and effective.
I join other members of the Committee in paying tribute to the work of the National Audit Office, which provides us such a tremendous service. I remember Sir John Bourn telling me that many of the people who work in the NAO could find much better-paid work in private sector accountancy, but choose not to because they are motivated by a sense of public duty and public spirit, and enjoy their work. Among the most enjoyable work are the studies conducted on behalf of the NAO that the PAC considers
I welcome the Financial Secretary as an honorary or de jure member of the PAC. I have mentioned to her before that the Tatton Conservative association provides mutual aid to the Bolton West Conservative association. The PAC is supposed to assess value for money and progress against targets. We have totally failed on value for money, because the Financial Secretary's majority seems to increase the more money we put into Bolton West Conservative association, and we have failed in our target to unseat her. I think that we will be twinned with a more marginal seat, so we are off her back. She will probably be there for some time to come.
The debate is wide-ranging because of all the reports. Hon. Members have picked on those that interested them. The Chairman did a good job of drawing out

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some general themes. I shall speak mainly about the private finance initiative, as have other hon. Members, and briefly mention a couple of other reports. I was struck by our work on NHS waiting lists and how targets distorted clinical activity. The right hon. Member for Swansea, West told me that when he was a Minister in the Department of Economic Affairs—which, by the way, is why I think he has a deep suspicion of the Treasury—Tony Crosland told him that Governments spend five years undoing what they do in the first six months. The NHS waiting list targets were an example of that. The work of the PAC showed how distorting targets can be, as they were on air quality, as my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) mentioned, I think, when I was absent.
The work that we did on prisoner reoffending was striking. I know that the hon. Member for Croydon, Central (Geraint Davies) was particularly interested in that. I was struck by the extremely high rate of recidivism and the lack of proper support for prisoners in prison through training and drug rehabilitation. I have in my constituency the second largest women's prison in the country, and it has no proper drug rehabilitation programme, despite the fact that 80 per cent. of the inmates are heroin addicts. That is very striking. It is also striking that 40 per cent. of prisoners are homeless when they are released, so it is hardly surprising when they almost immediately—
Mr. Lindsay Hoyle: On a point of order, Mr. Deputy Speaker. I am very concerned that the right hon. Member for Haltemprice and Howden (David Davis) has been making arrangements to visit my constituency and have his photograph taken outside a brand new bus interchange developed by the Labour authority there, but has not had the courtesy to tell me that he is visiting the constituency. Can you give any ruling on this matter?
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. That is not a matter for the Chair, but I can repeat what has been said from the Chair on a number of occasions: it is one of the courtesies of the House that hon. Members should inform the Member representing a constituency if they are visiting it for a political purpose. Alas, that rule is not 100 per cent. observed, but it would certainly help cordial relations in the House if it were.
Mr. George Osborne: The work that the Committee did on tobacco fraud, which other hon. Members have mentioned, was also interesting. With the protection of parliamentary privilege, I should like to say that I think that the executives of Imperial Tobacco lied to us in saying that they exported billions of cigarettes to Kaliningrad, Latvia and other such countries in the belief that they would be smoked locally, as they clearly knew that they would be reimported into this country illegally. That is the reason why Regal and Superkings, two of that company's brands, account for 50 per cent. of all smuggled cigarettes in Britain.
I was also struck by our work on widening access to higher education and our discovery—it was not rocket science—that student debt is the single biggest deterrent to going university for people from less well-off backgrounds. I hope that that informs the debate in the next couple of years.
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Before I deal with the PFI, I should mention a report whose Treasury minute we have not received, but which is germane. In our work on the Saif Sareea 2 exercise conducted by the Ministry of Defence in Oman, we found that there were serious problems with the equipment used by the British Army in the desert. That included the tanks that would not work because their filters became clogged with sand; the guns that jammed; the boots that melted; and the clothing issued to soldiers that was designed for personnel stopping the Russians on the north German plain in the middle of winter rather than for fighting in the desert. The Ministry of Defence assured us at the time that those equipment problems were being addressed in short order. In the light of current international events, I hope that that has happened.
It is interesting that many hon. Members have picked up on the PFI theme. As usual, the speech of my hon. Friend the Member for South Norfolk (Mr. Bacon) was well informed and intelligent. He always puts me to shame when he turns up at PAC hearings with a mound of extra work and research. That knowledge reveals itself in the hearings, as it did in his speech.
From a different ideological angle, the speech of the hon. Member for Hemsworth (Jon Trickett) was also interesting. I seem to remember that, when I watched coverage of the Labour party conference, one of the rows about the PFI was based on the suggestion that the National Audit Office should conduct an independent study. The Labour leadership negotiated a compromise—this is the way in which it does these things—that involved its asking the NAO to conduct a study. However, it seems to have escaped the notice of the leadership that the NAO has been conducting loads of studies on the PFI and it continues to do so. While it waits for the Government to ask it to do what it is mandated to do by the Labour party conference, it should look at the studies that the PAC has done.
Many studies have been mentioned that deal with specific projects, such as those relating to the West Middlesex university hospital, the Royal Armouries Museum in Leeds and Treasury and MOD buildings, as well as earlier reports on Fazakerley prison and Dartford and Gravesham hospital. Our work on public-private partnerships—a sort of hybrid of PFI—includes our investigation of Airwave, National Air Traffic Services and other such shining successes of the PPP. I should point out for the sake of Hansard that I say that with some irony.
Of course, today the PFI is a major form of Government procurement, and has been adopted with all the zeal that only a convert can muster. For the first time ever, I take the Chancellor of the Exchequer at his word when he says that more than 400 PFI contracts are committing Government Departments to almost 100 billion of expenditure, that 500 of the 550 school buildings built since 1997 have been PFI projects, and that 90 of the 100 major hospital projects have been PFIs.
In theory—I stress, in theory—there is a strong case for PFIs. In theory, by specifying what service it wants rather than how it should be delivered, a public authority—be it a Department or a council—frees itself from the risks and responsibilities associated with the delivery of those services. Again in theory, risks are transferred from the public sector to the party best able

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to handle them. Again in theory, competitive bidding from the private sector discovers the best supplier and finds the best-value approach to delivery, while payment by results should incentivise innovation and excellence.
However, to judge by the work that we on the PAC have done, theory is not being matched by reality in PFI projects. That is partly because transferring risk, incentivising innovation and finding best value are not the principal reasons why public authorities choose the PFI route. The real reason, as any Treasury Minister knows, is that the PFI is often the only way that a Department or council can get the project that they want through the Treasury. Instead of the large up-front investment that would appear on the Government's balance sheets, one gets the projects now and pays later. In the words of Jeremy Colman, the NAO's guru on PFI, it is the "only show in town." So we find that with the PFI, the costs to the public purse are often the same in the long run—indeed, they are often greater—but the Treasury books look good in the short term.
Because that is the principal driving force behind PFI, the Government ignore many of its problems and drawbacks. The PAC surveyed 121 PFI contracts and looked at the lessons to be learned. Several common ones emerged. First, value for money is very hard to prove or disprove. As the previous two speakers pointed out, the public sector comparator is easy to manipulate and only spuriously precise; indeed, the Ministry of Defence building was a classic case of that.
The second lesson is that the innovation promised by the PFI rarely arises in practice. Innovation means risk, and perversely, PFI bidders are very risk-averse, partly because of the costs associated with mounting a PFI bid. For some reason, the exception to that is IT projects, for which the opposite is true. Such projects show a cavalier disregard of risk. In about 10 days, we are to hold a hearing on the Libra project, which is managed by the Lord Chancellor's Department and looks like a classic case of such cavalier disregard. The NIRS 2 benefits computer system was another classic example of a complete lack of forward thinking about the reforms that an incoming Government might make to social security and pension payments, even though many of those reforms were spelt out in the party manifesto of the time. The computer system could not cope with those changes, so the supplier had to be contacted—it was the only supplier that could do the job—and hundreds of millions of pounds were spent on upgrading the system.
The third lesson that I draw from our work on the PFI is that private sector financing costs are very high in relation to the risks involved. In fact, financing is very rarely competed, and there is evidence of market inefficiencies. A classic argument that is used by people who do not like the PFI is that it is more expensive for the private sector to borrow money. That is true, but it need not be that much more expensive. Government-guaranteed bonds for the channel tunnel rail link are significantly more expensive than gilts, although the risk is identical.
The fourth lesson is that PFI deals continue to be costly to negotiate and complicated, even after 10 years of experience. High bidding costs deter bidders and reduce competition. I have lost count of the number of
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hearings in which it emerged that there was only one bidder for the PFI contract at the end of the process. In such cases, the Department handling the negotiation had to pretend that other bidders were involved in the process. I would be amazed if the people bidding did not know that they were the only bidders. Of course all that ends up being paid for by the public sector.
The final lesson that I learned is that risk transfer—again, this point was made by the hon. Member for Hemsworth—is not as extensive as it seems because, ultimately, delivery risk can never be transferred when it comes to Government projects. The Royal Armouries Museum in Leeds is a good example. That prestigious project obviously meant a huge amount to that city. However, visitor numbers were far below those projected, the PFI company got into all sorts of trouble, and the Government had to bail it out: they could not afford to let that brand new museum close because that would have been too embarrassing. At the time, the PAC concluded:
"If a department is unwilling to accept the consequences of risks being borne by the private sector under a PFI deal, it should not transfer these risks in the first place."
Mr. Jenkins: The hon. Gentleman started his contribution on the PFI by saying that he agreed with it in theory, but he then said that its implementation was flawed. Is he saying, with hindsight, that the theory was wrong or does he still believe the theory to be right but that we are failing to get to grips with its practical mechanics?
Mr. Osborne: The hon. Member for Tamworth (Mr. Jenkins) anticipates my concluding remarks. Of course, Tamworth is a historic town for the Conservative party because of the Tamworth manifesto, which I mention for the historians who are present.
While the PFI is primarily seen as a means to get projects past the Treasury, the Government will never realise its true potential or the benefits that I have identified in theory. Indeed, the worst argument for the PFI is, ironically, that advanced by the Chancellor, who says that all those new schools and hospitals could not be afforded otherwise. Even though PFI contracts are substantial, they make up only 9 per cent. of total public investment, so they could be afforded if they were properly structured on the Treasury books. After all, they ultimately appear on the Treasury books.
If the PFI is to bring private sector innovation and expertise to the public sector—I should like that to happen, as it would deliver real risk transfer and value for money—there needs to be a change in mindset in the way that the Government approach the PFI. They need to focus on the outputs, not the inputs. They have to believe that the public get a better service when the private sector is allowed a freer rein in operating projects.
It is striking that the PFI has worked pretty well in prisons. PFI prisons are often much better than public sector prisons—for example, in terms of prisoner reoffending—because they are given a free hand to operate with different staff levels, wage rates, pension arrangements, working rotas and so on. They operate with the efficiency of a private sector employer—not with the inefficiency of public sector employer—but the

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Government find it politically unacceptable to let that happen in the big public services, such as schools and hospitals. They are, frankly, under too much pressure from the public sector unions.
It is striking that the Prime Minister got the biggest applause at the Labour party conference—I watched it on television, although other hon. Members will have seen it in person—when he said that he would "work with you", the unions,
"to end the two-tier work force".
Of course that line got huge applause because it meant that the Government would not allow PFI contractors to have the same freedom in employing people as the private sector.
Mr. Bacon: Was my hon. Friend struck, as I was when we visited the London Heart hospital a couple of weeks ago, that the private sector employees in the hospital were being paid higher rates than the NHS staff?
Mr. Osborne: Although I did not take part in that visit, I was struck by the conclusions that my hon. Friend drew from it.
In conclusion, we still have a long way to go if we want to realise the true potential of the PFI, which is about improving service delivery to the public and saving money for the taxpayer. We have a long way to go until a change in the Treasury mindset allows the PFI's true potential to be realised. We have a long way to go before we break the assumption that public services, paid for by the public, have to be delivered by the public sector.
5.44 pm
Geraint Davies: It is a pleasure, as always, to follow the hon. Member for Tatton (Mr. Osborne). I also extend my great thanks to the Chairman of the Committee, the hon. Member for Gainsborough (Mr. Leigh), and my right hon. Friend the Member for Swansea, West (Mr. Williams), who always gives sterling support to the Committee. I thank the Public Accounts Committee Clerk and, like all other Members who have spoken, the National Audit Office in particular.
The reality is that the National Audit Office, which has in the region of 700 auditors and accountants, is responsible for auditing a third of the country's GDP in terms of all Government expenditure. If we compare the cost of that with the cost of accounting for the other two thirds, which is billions of pounds of private sector money, we get some sort of indication of the value for money provided. It is not simply that for every £1 we spend we get an extra £7 back; we are getting expert people at low cost because they are committed to public service. We should all pay tribute to them today.
I mentioned in one of my interventions on the Chairman of the Committee how pleased I was that we were also beginning to take bites out of the private sector, as it had been insinuated that chunks were being taken out of the public purse. It is a matter of public concern that smuggling of tobacco products amounts to about £3.5 billion of lost income to the Government and, therefore, to the taxpayer, which is equivalent to a penny on income tax. It was of particular concern to hear that some 70 per cent. of Imperial Tobacco's exports of Regal and Superking cigarettes were being
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smuggled back, mainly in massive cargo crates through organised crime, thereby avoiding tax. I am therefore pleased that we have taken a step forward, and I hope that we will not hesitate to do so if such opportunities occur again.
I hope to touch briefly on a number of key reports through which the Committee has added value. Some of our hearings and evidence point to the future of policy development and, indeed, to better value for money from the point of view of the Treasury.
First, I want to focus on our 53rd report, "Reducing Prisoner Reoffending". Basically, every prisoner in our jails costs the taxpayer about £34,000. We have about 73,000 people in our jails the biggest prison population in Europe apart from Portugal—costing about £2.1 billion. The question is: if it costs £15,000 to send a pupil to board at the best public school in Britain and get him or her to be a top-level taxpayer, why are the Government spending £34,000 to generate repeat offenders 60 per cent. of the time, costing enormous amounts? Other than that £34,000, there are costs in terms of extra police, higher insurance, court costs, fear and anxiety.
The Government, of course, have been effective in reducing crime—it is down by about 27 per cent.—especially crimes such as burglary, and vehicle and violent crime. Contrary to public views, they have also taken a tough approach to sentencing. The number of people sent to prison on a first offence is up 50 per cent., and a mandatory sentence of three years is applied to third-time burglars. Despite that, the press talks about Lord Irvine and Lord Woolf saying that we should be soft. In fact, we have an enormous prison population that has grown by 60 per cent. in the past 10 years.
The key question is: how do we stop those people reoffending? Some 60 per cent. of them will go out and reoffend, costing about £11 billion a year. If we look at the profile of those in our prisons, we see that some 75 per cent. of them have been permanently excluded from schools, which was one of the key findings of our hearings. Pupils in those circumstances would often have tuition for one day a week, while, for the other four days, they would wander around, having misbehaved to start with. Consequently, they would start stealing mobile phones and so on. They arrive in jails—universities of crime—with virtually no education, having been on the street committing petty crime, and, before we know it, they are introduced to a new criminal fraternity who teach them how to become better at committing crime. We found that only between £200 and £1,600 a head of the £34,000 that we spend keeping people incarcerated is spent on education. That is not much to get them into a position where they can work again.
As the Committee heard, studies of reoffending over many years have established that the three drivers that prevent it are work, family support and having a home. Prison does not prepare people by giving them education and retraining for integration in the labour market. Furthermore, due to the overcrowding in our prisons, more than 25,000 prisoners are more than 50 miles from their families and 11,000 are more than 100 miles away. New offenders going into institutions have no family support to enable them to study or work for rehabilitation and they are moved around constantly because of the overcrowding problems.

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The situation is much worse for women. Half of women prisoners have children. Two thirds of the 10,000 children affected are under 10 and four in 10 of the families will be permanently broken and lose their home. We need to think carefully about the management of our prisons and our prisoners and its impact on repeat offending, which amounts to an extra million crimes a year, and the costs involved. As the hon. Member for Tatton pointed out, about 40 per cent. of prisoners leave jail and are homeless, which massively reduces their prospects of getting a job or not reoffending.
There are many lessons to be learned from our reports. The Government have responded to some of the issues. For example, the Department for Education and Skills is taking responsibility for prison education. Some prisons have set up links with housing providers, but the situation is mixed to say the least.
Our report is instructive about the provision of small local units, with boarding and intensive education. They could draw on the lessons that we have learned from the use of pupil referral units. In my patch, excluded children are given the opportunity of full-time education in pupil referral units and 70 per cent. of them go on to further education. In the past, many of them would have gone into the prison system.
If such special, intensive education units can be shown to convert people back to the straight and narrow, into the world of work and earning money, they could be options for sentencing in the courts system. People could be given options akin to drug treatment and testing orders, where they are blood tested for drugs for two years and so on and if they breach the order they go to jail. In this case, people could spend a compulsory two years in a centre that would equip them for work instead of spending nine months in a normal prison. Failure to comply with behaviour and learning standards would lead to default of the order and a return to jail. Such reforms of our prison system could convert serial offenders into taxpayers and I hope that the Government will focus on that businesslike approach.
Children who are at risk of ending up in prison could be identified much earlier, during their school life. Initiatives such as sure start and education action zones should be celebrated and built upon. Children who lag behind at school can become misbehaving pupils, minor offenders and then serial offenders. We need to invest in those children early in their lives for the sake of the whole school environment and for society at large.
Our report on access to higher education is obviously topical. Investment in higher education should be a capital item in the national accounts, not a revenue item. If we compare the amount of tax delivered over a lifetime by a graduate and someone with three A-levels, we find that an extra £50,000 comes back from the graduate. As a business proposition—in terms of borrowing money to invest—that recovery of tax revenue provides a strong argument for the Government. Indeed, the Government could also investigate PFI opportunities in that regard. We found in Committee that there are three barriers to access to higher education, the first of which is secondary schools. Some 90 per cent. of those with A-levels go on to
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university. My area of Croydon contains some of the fastest-improving schools in the country. That has been achieved through a combination of things, one being leadership in tackling some of the problems at an early stage through, for example, education action zones. Other studies that I have seen show that social background is a major factor in determining the outputs of schools.
The ambition of students to go to university depends partly on the experience of their parents. Sadly, one in five adults are functionally illiterate and one in four are functionally innumerate. By that, I mean that one in five cannot use the "Yellow Pages" effectively and one in four would have great difficulty in calculating their change if they bought groceries in a shop. Given that starting point, it is difficult for pupils from such backgrounds, which are often dominated by overcrowding, television, no access to books and no history of education, to reach a platform from which to break through into higher education.
When we considered the issue of debt, we found that 46 per cent. of full-time students are already in full-time employment, and that of those giving up their education, nearly 40 per cent. do so for financial reasons. Poorer people are more likely to drop out. Some debates in the House have focused on the idea that the average return of a graduate is about 50 per cent., but I would suggest that the key issue is not the average return, but the marginal return from the marginal group to whom we are trying to provide more access. The current proposal, which I am sure that the Public Accounts Committee will consider, is for 9 per cent. extra in tax on earnings over £15,000, which, with the addition of 22 per cent. basic rate tax and 12 per cent. national insurance, would generate a marginal tax rate of 43 per cent. That compares with the higher band rate of 41 per cent. Some people might think, "It might be worth my while getting three A-levels and not going to university."
Mr. Rendel: Does the hon. Gentleman accept that the Government have been unable to provide any evidence to show that there is a margin between what a graduate earns and what an average person earns that is any different from what that person would earn even if they were not a graduate? The graduate premium is not based on any evidence. All we know is that those who happen to be graduates earn more than those who are not, but that is not necessarily to say that they would not have earned that much in any case.
Geraint Davies: The evidence that I have seen suggests that there is a causal relationship not just a correlation. Some higher-earning graduates pay about £140,000 extra tax in a lifetime, those in the middle pay an extra £30,000 to £40,000, while those at the bottom end may pay slightly less. It is a moot point. Obviously, if one takes certain degree courses, such as medicine, veterinary science or law, which provide added value through knowledge, as opposed to a mere screen for one's IQ, one will get a return from that.
That means that at a time when people are expected to pay for their degree at a later stage, there will be greater demand for degrees that have a perceivable return as opposed to, for example, humanities degrees. Someone might say, "I can get a humanities degree, but I won't

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have the added value of being a medic." It has been suggested that the extra top-up fee will be applied to more popular courses such as medicine. In that case, poor students, who currently have to pay £1,000 in tuition fees, will have to pay £3,000, minus the £1,000 grant. They will have to pay twice as much, albeit that the payment is deferred.
Poorer students may have to jump bigger hurdles if they choose courses that offer higher salaries later. I appreciate that that is a sophisticated point, but it is nevertheless important. Of course, the Government have offered to write off debts if students enter public service. That is good for public service, but market distortions and so on must be taken into account.
There are choices and challenges. I should have liked national insurance to be extended beyond its current level, up to where the 40 per cent. tax starts as a surrogate graduate tax. I attended a large comprehensive school and was the only one to get into Oxford university that year. No one had gone to Oxford in the previous year and no one went in the following year. If I had had to face extra costs of £7,000, I would not have gone.
The Government are clearly chasing an entry target of 50 per cent. for 2010. They want to provide better access. Whether they achieve the target is an empirical question, which the Public Accounts Committee will again consider.
Let us consider the report entitled "Postcomm: Opening the Post". As other hon. Members have said, our impact on the postal service in Britain was significant. Consignia was about to restructure and lose 30,000 jobs and the over-zealous regulator was prepared to enforce liberalisation in the marketplace ahead of our European counterparts. That would have meant that competitors from Germany, and especially Holland, could have come here, cherry-picked, taken the heart out of the postal service and undermined universal service provision.
People in Britain have rightly been used to a postal service that delivers mail anywhere in the country for the same stamp. It was suggested that there was a danger of cherry-picking. The regulator implied that there was no cherry-picking and that the direct costs were covered in rural parts of the country. That is fallacious. Clearly, if an operator takes 90 per cent. of all postal services and simply uses Royal Mail stamps for the other 10 per cent. so that Royal Mail picks up the fixed costs of the deeply rural areas, that constitutes unfair competition.
I am glad that our intense scrutiny and the regulator's lack of rigour, which was shown in our hearings, meant that the arrival of competition is delayed. The regulator claimed that whether the playing field was uneven and other such matters were not in his remit.
Mr. Steinberg: I am sure that my hon. Friend remembers that the regulator objected to the increase of 1p in the price of a stamp. The Post Office suggested that that increase, which it was not allowed to make for many years, would have solved many of its problems. Does my hon. Friend agree that the regulator therefore put the Post Office in a worse position?
Geraint Davies: That is an important point. We found that, in the past five years, although the Post Office's
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turnover had increased from £6 billion to £8 billion, it had moved into negative profitability. The reason for that was that the real cost of a first class stamp had gone down by 8 per cent., because the Post Office was not allowed to raise the price of stamps. Yet when the British public were asked "What do you think about value for money?" nine out of 10 would reply, "It's very good value." The cost of a stamp here was about 30 per cent. less than in Germany and elsewhere.
We were finding that, in essence, the regulator was working against the public interest. The withdrawal of benefit income is causing the widespread destruction of postal services in the rural community. The amount involved is £400 million, which is a penny on stamps, and I believe that the public would agree to pay the extra penny for those extra services. But the public are not given that choice, because of the way in which the Post Office is set up and is commercially run, without factoring in social value as well.
Mr. Steinberg: When I asked the regulator about an increase of a penny on a stamp, he said that it was his ambition to see the price of a stamp decreased. That being the case, I think that the regulator was working against the Post Office rather than for it.
Geraint Davies: It was my experience that the regulator was completely out of touch with the public interest and was acting in a very narrow way. He clearly did not like Consignia or the people in it, and wanted to move forward irrespective of the outcome to the Royal Mail. Luckily, the public mood and the sterling work of our Committee managed to stop that and delay liberalisation.
The final report that I wish to allude to very quickly is the 61st report, on the management of surplus property by the NHS. The NHS is to sell off £700 million worth of land and property by March this year. The difficulty in London is that an extra 800,000 people will move in, requiring health services, which cannot be provided if less land is available. Individual trusts have been selling off individual bits of land and property, without a strategic approach. I believe that in London there should be an audit of all public sector land—highways, health, police, rail, local authorities and so on—with the aim of taking a strategic view on land use over the next 10 years in terms of the public interest. The National Audit office could take a lead in this audit, which would be done not just for health needs, but for housing needs and the like. It would be better than a piecemeal approach, which ultimately would not deliver the best use of land for operational and accommodation needs.
We have been talking about the issue of PFI. Clearly, the arguments for PFI are about risk transfer, added value and innovation, as well as off-balance-sheet financing. But a key issue is the fact that the discount rate that the Treasury now applies has gone from 6 per cent. to 3 per cent. I support that, but it will make for a much more competitive environment in which new PFI ventures will seek to make money. Therefore, I think that fewer will come forward, and accordingly I support the Audit Commission's recommendation that

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we twin-track traditional public procurement ventures, in terms of building hospitals and the like, alongside the newer forms of financing, so that we have a proper test.
Mr. Love: As the National Audit Office and the Public Accounts Committee are supposed to scrutinise public expenditure with a view to value for money, and as the Audit Commission has questioned whether PFI in the education sector provides value for money, I wonder whether either the National Audit Office or the Public Accounts Committee has yet had an opportunity to discuss the Audit Commission's very important recommendations.
Geraint Davies: We have not, but the Audit Commission's report echoes the findings of the NAO, which are that some of the early PFIs provided less value for money, but that the more recent ones exhibit the effects of a learning curve, much of it informed by the work of the NAO and the Audit Commission itself, and are delivering much better value for money.
The point that I am trying to make is not that PFIs have been historically problematic, but that, given the upfront costs of competing PFIs, making them much more competitive, reducing the discount rate, providing clawbacks and so on, may discourage some private sector operators from coming forward, which is fine. We do, however, need to engage public sector comparators and procurement to ensure that there is real competition between both public and competing private sector providers. I am sure we will do that.
In essence, it has been another great year for the PAC. On prisons, the question of whether we can deliver better value for money for taxpayers out of the £34,000 investment should be considered, as should land use by the NHS. There is much thinking to do on higher education and a range of other issues, including PFI. As I said, we can do that because we have an alternative civil service of 700 or 800 accountants supporting us. The work of the PAC in providing financial scrutiny for the House of Commons continues its great tradition as the premier Select Committee of Parliament.
6.10 pm
Mr. Howard Flight: I, too, wish to pay tribute to the enormous amount of useful work that the Public Accounts Committee and its Chairman, my hon. Friend the Member for Gainsborough (Mr. Leigh), have carried out in the past 12 months as they followed the money and investigated the efficiency and quality of those in the public sector responsible for how taxpayers' money is spent. I also pay tribute to Sir John Bourn, the Comptroller and Auditor General, and his colleagues whose reports do so much to inform the Committee's work.
I have spent many hours reading the Committee's conclusions in the nearly 70 reports that have been produced over the year. They are a veritable gold mine of information. I regret to say, however, that most of them constitute a depressing litany of the failings, wastes and inefficiencies of the public sector. I hope that all those hon. Members who seriously care about the effectiveness of public expenditure will read through the reports, even if they have been unable to attend the debate.
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It is a great shame that, except in limited subjects, the media have not and do not, give much coverage to the reports, because they represent the only independent, unbiased investigation of what goes on in the public sector. Some hon. Members may have read what Professor Minford said in December about the national statistics for 2001. According to him, although 8 per cent. more money was spent on public services, the public received only 3.1 per cent. in extra volume in terms of more or better services. After adjusting for 1.9 per cent. inflation, that constituted 6.1 per cent. of real extra spending and 3.1 per cent. of extra volume, so there was an overall shortfall to the taxpayer of 50 per cent. Given that spending on public services is rising at close to 10 per cent. per annum, that implies that about 1 per cent. of gross domestic product has been transferred from the private to the public sector by additional taxes, 50 per cent. of which has been poured into a black hole. The effectiveness of the public sector is crucial if we are to achieve what both sides of the House want to achieve.
I have no doubt that the overwhelming majority of the 7 million people who work in the public sector are conscientious and do their best, but the PAC reports tell a story of money being dissipated ineffectively, of bureaucratic incompetence and of waste, mismanagement and inefficiency—all, dare I say it, the diseases of monolithic state provision and production, which lack customer power. I think my hon. Friend the Member for Buckingham (Mr. Bercow) asked about quantifying waste. I added up what I found and it came to at least £18 billion. I recollect other colleagues placing the figure as high as £24 billion.
The Cabinet Office reports focus on value for money, but find that there is a lack of adequate consultation with customers to identify barriers to effective policies. There is inadequate consideration of the effects of policies by one Department on another, inadequate involvement with those who have to implement policies, and insufficient flexibility to adopt new methods of delivery. They find that Departments lack the confidence and data to terminate policies that are not working or are no longer cost-effective. None the less, £400 million per annum is being spent on policy-related research. On joint working and cross-cutting, the PAC, I am afraid, damningly comments that the civil service does not really know what makes sense.
The Government implicitly recognised the need to seek to achieve value for taxpayers when they set up the system of regulatory impact assessments in 1999. As Members will know, their effectiveness has been criticised in both Whitehall and the business community. In its review of RIAs, the Committee found no adequate Whitehall proposals for improvement, substantial variation in the quality of assessments, insufficient use of RIAs to support the Government's arguments against European Union regulations, and the need for external evaluation of RIAs by, for example, the National Audit Office to improve their effectiveness.
Geraint Davies: The hon. Gentleman said that a significant amount of money was going in, but there was insufficient output in his view. Does he accept that any organisation with a history of massive underfunding that then receives money should first return to normal

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working practices? After more investment, its output or the rate of return increases. The hon. Gentleman's recipe for slashing public investment by 20 per cent. is therefore counter productive.
Mr. Flight: I am surprised that the hon. Gentleman should fall for his party's Goebbels-like misrepresentations. Had he read my article, he would know that I was talking about the scope for cutting waste in certain areas—in central administration, for example, by up to 20 per cent. Similar conclusions fall from the reports of the PAC, of which the hon. Gentleman is a member. He is missing the wood for the trees—the history of the Committee's reports shows that, for a number of years, it has sought to deal with public sector inefficiencies and the reduction of waste. It is strange that some Members should sit back and say that the Committee is doing an excellent job—indeed, it is—while waste and inefficiency continue.
When looking at achieving better value for money from professional services, the PAC found that Departments had not responded adequately to major initiatives and that there was a lack of information on professional services expenditure, and the Comptroller and Auditor General identified a failure to save £65 million. Departments employ more than 3,000 internal economists, statisticians and lawyers, and, in recent years, have spent an estimated £1 billion on consultants. As one report comments,
"framework agreements for the use of professional services should enable discounts of up to 20 per cent. to be achieved".
Those recommendations are all wonderful—similar points have been made today—but why are they not being implemented? The PAC Chairman dwelt at length on several reports on health provision and the NHS. Several Members, particularly the hon. Members for Newbury (Mr. Rendel) and for City of Durham (Mr. Steinberg), focused on the report on clinical negligence. I find that report acutely disturbing. The problem is not new, but it is growing and it is not being tackled. In March 2000, 23,000 cases were outstanding, taking an average of five years to resolve. Provisions for expected payment of outstanding claims amounted to £4.4 billion. As was said earlier, allowing for the associated legal costs, there is a drain on health spending of £7 billion. In addition, the national health service will incur administrative costs to deal with those problems.
Legal costs exceeded the sums paid out in 65 per cent. of settlements. As of March 2000, a quarter of NHS trusts had not achieved even basic risk management standards set by the clinical negligence scheme, and two thirds had not achieved more than the basic standards. If ever there was a territory overdue for major change and reform capable of effecting substantial savings, that is it.
My hon. Friend the Member for Gainsborough and other hon. Members referred to the report on NHS waiting lists. Above all, the report describes the changes in culture and practice that are needed and that go beyond money. It cites doubts about the reliability of the figures, and suggests that they do not truly measure the time between seeing a GP and receiving treatment. As my hon. Friend pointed out, the report confirms that targeting in the NHS is resulting in clinical priorities not always being adhered to. It also states that, in some
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cases, the forced ties between GPs and local hospitals are resulting in increasing waiting lists, and undercapacity elsewhere outside the tied hospitals.
Reference has been made to the fact that staff in 10 hospitals were found to have been engaged in gerrymandering waiting-list data to hide missed targets. It was especially worrying to read that confidentiality deals were wrongly concluded, and that severance packages were paid to people who had departed under a cloud. The report also raised doubts about the ability of 189 trusts to handle complex disciplinary cases.
My hon. Friend also referred to the fraud figures in the Department for Work and Pensions. They are depressing to read. As other hon. Members have noted, not only is more than £3 billion being lost to fraud and errors, but there is no apparent probability that the targets to cut that amount—by 10 per cent. this year, 25 per cent. in 2004 and 50 per cent. in 2006—are likely to be met.
The Committee found what I can only describe as gross inefficiency and mismanagement in the medical assessment of incapacity and disability benefits. Fifty per cent. of cases are appealed; 40 per cent. of the appeals are successful, and 25 per cent. of appeals arise from decision-making failures in the Department. The report found that £40 million a year is lost in paying incapacity benefits to people who are no longer eligible. Worst of all, of 25,000 people called for examination each year, 17,000 are sent home because of over-booking.
The Committee also looked at the implementation of the national probation service information system strategy. It found that, although 49 out of 54 offices had installed the information system, only 16 were making serious use of case records available on it. There was also a lack of knowledge about how to use the system. As other hon. Members have noted, it is a disgrace that more than 40 per cent. of the fines imposed by the courts are not being collected. It is not just a matter of losing £160 million a year; it makes a mockery of our justice system.
Other hon. Members focused on higher education. I shall not repeat what they said, but I noted that it was reported that £725 million had been spent on additional courses at further education colleges. However, that report also states that some 38 per cent. of the additional lessons were rated as at best satisfactory or worse, and that many students left college without achieving qualifications.
The Committee found that losses to the Revenue from excise fraud amounted to between £6.4 billion and £7.3 billion, excluding value added tax, but that the courts had confiscated only £23 million between 1994 and 1998. The relevant report points out that, despite attempts to tighten up, the root of the problem is diagnosed as the excessive differentiation between United Kingdom and continental European duty rates, which represent an ongoing incentive to fraud. The report has found that, as Customs tighten up in one area, fraudsters tend to move to another.
The report also refers to VAT missing trader fraud, which is a major problem. It is unclear whether Customs and Excise started investigations and prosecutions without telling the Treasury, or whether the Treasury

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has been a little economical with the truth as to when it knew the extent of the problems and what Customs officials were doing.
The report on the Inland Revenue appropriation account for 1999–2000 points out that the Comptroller and Auditor General does not have access to employers' records to test the accuracy of tax credit payments, which rose to £4.5 billion last year.
The report on the contract extension for NIRS 2 makes the point that the then Department of Social Security had made a major mistake in not assessing the impact on pensions and national insurance legislation, or the risks and costs involved. It also said that the Accenture arrangements, and the out-performance of its targeted productivity by an enormous margin, suggested that the prices had been far too high. However, the report noted that the Department was locked in, and expressed grave concern about the £4 billion value of the contract to be rolled over next year.
Offenders in prison have already been referred to. Given that so much is spent per prisoner, it is incredibly depressing that six out of 10 are recommitted within two years of their release. As well as the other factors that have been mentioned, breaking the cycle of crime requires, in particular, effective action on drug abuse.
The Committee is virtually the only body monitoring the efficiency of the Ministry of Defence and of defence procurement; I do not think anybody else has commented on that territory. The 2000 report found that up to £102 million had been wasted in pursuing ineffective solutions to the Bowman equipment problem, and £155 million written off in connection with medium-range TRIGAT. It found that with TRIGAT in particular, the MOD took far too long to meet the armed forces' needs: the project took 26 years, and delivery was still not expected until two years after it had been cancelled.
The 2001 report describes progress as a result of smart procurement, but says that project cost control remains weak and performance measures confused. It recommends that the UK follow a more flexible approach, along the lines followed in the United States, to contract for development work more closely with the industry. A separate report on Ministry of Defence property management found that poor practices and weak oversight had left the Department open to the risks of fraud.
The PAC found that Department for International Development targets were also deeply compromised. The Department's fundamental target was to reduce world poverty, but the EU received 55 per cent. of the budget and was doing very little to direct help to poor countries. The Committee also found that, in general, the Department's targets were not well geared to informed decisions on the ground, nor well communicated.
Others have referred to flood risks. The report found that there was too much overlapping bureaucracy, waste and inefficiency. Fortunately, in West Sussex the chief executive used emergency powers and took the necessary measures to stop Chichester flooding. He reported that had he not used those emergency powers,
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it would have taken him more than a year to deal with the bureaucratic barriers that he would have been required to negotiate to implement the necessary measures.
Others have already commented on the report on improving air quality. It says that the targets were limited by gaps in evidence on the health effects of air pollution, and it comments on the absence of contingency plans if the targets were not met. The Department's approach to assessing whether the benefits of further possible improvements in air quality justified the massive costs that would be involved, failed to assess whether reducing one pollutant might increase the levels of others. The report notes that basing financial values on the expected benefits was nonsense. It seems to be saying, in polite language, that the whole exercise was pretty much nonsense.
Another of the Committee's reports has reviewed, over the past year, the scandalous way in which the sale of Britain's gold reserves was effected in the summer and autumn of 1999. It confirms that excessive transparency as regards announcing the sales resulted in hitting the bottom of the market cycle. I also make the point, which the report does not cover, that at the time many or several leading investment banks that had borrowed gold under the Bank of England's gold window were actually short of gold.
There is a report on the landfill tax credit scheme, which it says is administratively too complex, lacks accountability and transparency and has administrative costs of some 9 per cent. per annum.
The report on shifting to resource accounting is also depressing. It says that one third of 12 Departments' accounts are qualified and that, whereas the Home Office and DEFRA made virtually no improvement, 27 Departments failed to meet statutory deadlines for rendering their accounts for audit.
Therefore, right across the board it is a story, by any normal standards, of inefficiency, waste and ineffectiveness. Others have paid special attention to the territory of the private finance initiative and public-private partnerships; I particularly agreed with the conclusions drawn by my hon. Friend the Member for Tatton (Mr. Osborne). Obviously, this area has had some media coverage. The common theme was the need for more post-implementation professional management of PFI projects. Although there was well-recorded criticism of inadequate participation in gains achieved from refinancing, I was pleased to note that 58 per cent. of authorities with performance reviews had made deductions in their payments due to failure to meet particular performance standards. In the example cited of the Treasury buildings PFI, the report stressed the need for third-party competitive funding and the inappropriateness of the 6 per cent. discount rate, which was effectively rigging fair value comparisons. I hope that in future the Committee will look into not just the major MOD building refurbishment, but the drains and urinals project, where more than £20 million has already been spent on legal expenses.
Mr. Love: Down the drain already.
Mr. Flight: Correct; there is a bad smell coming out of it.

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The report on the channel tunnel rail link is perhaps the most damning, because the Government ended up guaranteeing £4 billion and more of bonds, with, in essence, a reward to the equity promoter for having failed. That is the reverse of what the transfer of the operating risk should be about.
Others have mentioned the £700 million NHS property deal. Not much was said, but I read into what was said that the Committee thought that the NHS might have done a pretty bad commercial deal.
We have today's NAO report on the mismanagement by the Lord Chancellor's Department of the Libra magistrates court computer-linking project, which, if I understand what is being said, will waste some £300 million.
No one mentioned the report on the millennium dome, the biggest epitaph of incompetence of the lot, but perhaps it has been commented on in many other places.
Mr. Love: It is a tour de force that the hon. Gentleman has managed to cover so many reports, but is the conclusion that he draws from them that it is still possible to cut 20 per cent. from public expenditure?
Mr. Flight: Perhaps the hon. Gentleman should have a little medical attention to his ears. As the Committee must be well aware, there are many areas in which there is very substantial scope for less waste, and in some areas the potential may be as high as 20 per cent., but no one—certainly not I—has ever said that that was across the board. Indeed, in the report to which the hon. Gentleman is implicitly referring, I twice made the point that there really was not the scope to cut expenditure overall in health or education, two of the main spending areas.
However, I find the contents of the reports disappointing, given the Government's professed keenness to get good and fair value, and look at cutting out waste. I hope that the Financial Secretary to the Treasury will have plenty to say about the pile of reports, because they detail more than enough waste to achieve substantial cuts in expenditure.
Public service agreement targets are mentioned in many of the reports, such as those on the health service, the Inland Revenue's progress, the introduction of e-services, higher education, reducing benefit fraud, and many of the other areas in which our £650 billion in taxes is spent. The Government introduced PSA targets in 1998 with the intention that they would demonstrate to the public that the public services were being run more effectively and that the promises of improvement were being kept. Since 1998, three separate sets of agreements and targets, totalling more than 600 and spanning more than 20 Government Departments, have been issued.
So far, almost 40 per cent. of the targets set in 1998, excluding those that have been rolled over, have been failed or are on course to be; similarly, 75 per cent. of the targets set in 2000, again excluding those rolled over, have been failed. No doubt, those percentages will improve substantially once the rolled-over targets have been included. The latest forecasts for performance against PSA targets were due in autumn last year, but as we approach February 2003, five key Departments have
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not reported. They include the Department of Health, the Lord Chancellor's Department, which seems to be most often in the dock of the PAC, the Crown Prosecution Service and the Foreign Office—all of which are responsible for major spending.
Two things strike me about that: first, to be so late in reporting illustrates great sloppiness in the public sector; secondly, a major improvement on the success achieved to date is needed. Of the Departments that have reported, Customs and Excise stated that one of its targets was crude and selective, and other Departments refer to a considerable amount of out-of-date information and a significant number of targets not met.
While the targets regime is first the responsibility of the Select Committee on Public Administration, I hope that the Public Accounts Committee, in pursuing the three key themes that have characterised its work, will examine the targets system. Evidence has emerged to date that the targeting regime has not improved efficiency, economy or standards of delivery, but has tended to pervert the focus of efforts in the public sector to the satisfying of targets rather than to doing the job well and properly satisfying customers. It also produces entrenched hierarchies in which the checked are subservient to the checkers, which is especially disheartening for staff. Brain power is deflected to setting targets rather than to improving delivery, and in the cases referred to by the PAC Chairman, the regime has led to cooking of the books. I hope that we will have a proper appraisal of targets next year.
6.38 pm
The Financial Secretary to the Treasury (Ruth Kelly): I shall speak more briefly than I intended to, in order to allow the Chairman of the Public Accounts Committee a couple of minutes in which to respond to the debate.
This stimulating and wide-ranging debate has confirmed my view that the PAC continues to make a major contribution to our system of parliamentary scrutiny and accountability. The programme of the Committee in each Parliament is always impressive in scope, and in forensic skills the Committee has few equals. The Committee's effectiveness is greatly assisted by the able chairmanship of the hon. Member for Gainsborough (Mr. Leigh), who ensures both that the Committee performs its task rigorously and that hearings are conducted in a fair manner. In doing so, he has helped to maintain the rich tradition of the Committee, which dates back to the Gladstone era.
The Committee is helped in its task by the assistance provided by the Comptroller and Auditor General, Sir John Bourn, and the staff of the National Audit Office. The independent watchdog has an important role to play in holding the Executive to account. Its financial audit work and value for money studies continue to provide high-quality analysis that helps to raise standards of financial stewardship, efficiency and effectiveness in Government Departments.
The Government certainly share a common agenda with the Committee. We both want to see that public money is used wisely, economically, efficiently and effectively. We want high-quality public services to be delivered, Departments to follow best practice in project management and risks to be identified and managed effectively. These are not party political issues, and some

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of the cases that the Committee has studied over the past year are rooted in the actions of previous Governments in the early to mid-1990s.
Much progress has been made by Departments over the past year on these fronts and I will want to come back to those points later in my speech. First, I should like to reflect on the work of the Committee over the past year. The Chairman's speech reminded us of the broad range of topics that the Committee considers. I know that this important work involves a heavy commitment from everyone concerned. It is immensely to the credit of Committee members that the Committee continues to make recommendations that help to raise standards of performance in Departments and to ensure that past experience is applied in implementing the projects and programmes of tomorrow.
The Chairman highlighted several reports by the Committee and reminded us of their key findings and recommendations. His examples illustrate the importance of the issues that the Committee looked at. I am particularly pleased that he mentioned the hearing on the acquisition of the London Heart hospital. It is good to hear praise for a successful venture, as well as criticism for things that have not gone so well.
One comment that cannot be made about the Committee is that it lacks a human touch. Its findings and recommendations very often hit on issues that impinge on the lives of individual citizens. Let me give two examples to illustrate that. The first is crime, an issue that concerns everyone. In its report on prisoner reoffending, the Committee found that nearly six out of every 10 prisoners are convicted of one or more offences within two years of being released. Breaking that cycle of crime requires action to address drug misuse and offending behaviour, and to improve literacy and numeracy.
For those reasons, the Committee recommended that the Prison Service should develop programmes that meet the needs of short-term prisoners, as well as longer-term prisoners, to lower the risk of their becoming repeat offenders. In response, the Prison Service was able to say that it was setting challenging targets to improve its regimes and to expand the provision of skills training, drug treatment and resettlement activities. The Prison Service pointed to its work with the probation service to develop pilot programmes, specifically for short-term prisoners.
A second example is obesity, and I much enjoyed the remarks of my hon. Friend the Member for City of Durham (Mr. Steinberg) on that subject. The Committee found that most adults in England are overweight, and that one in five—around 8 million in total—are obese. Obesity causes much human suffering by contributing to chronic disease and premature mortality, and it entails a substantial cost to the NHS and to the wider economy.
No single Department can tackle the issue on its own. The Committee sensibly noted that a joined-up approach was needed across Departments and local agencies to tackle this problem effectively. The Committee particularly noted the emphasis that needed to be placed on children and young people leading healthy lifestyles.
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The Committee made a range of recommendations, going right across government and addressing a diverse range of issues, including food labelling and advertising, physical exercise by children and the provision of advice on weight control. This case illustrates the Committee's capacity to grapple with complex issues that are highly relevant to the man in the street. I am glad that my hon. Friend the Member for City of Durham took his comments to heart and instituted a change in his regime.
The Government's response highlighted the steps that the Department of Health, the Department for Education and Skills, the Department for Transport and the Department for Culture, Media and Sport were taking with other partners to improve diet and physical activity levels and the significant investment being made to transform physical education and school club links over the next three years.
Several hon. Members, including the hon. Member for Arundel and South Downs (Mr. Flight) and the Chairman of the Committee, mentioned the report on NHS waiting lists. Its findings make sober reading. Not only had some hospital managers and staff made adjustments to their waiting list data to hide the fact that they were missing Government targets, but in some cases those actions had prolonged the suffering of patients. Such serious findings demanded a serious response. NHS trusts have been advised that clinical priority must be the main determinant of when patients are seen, and that any misreporting of figures will be treated as a matter of great importance. Action has been taken to improve data quality and ensure correct reporting. It is unacceptable for data to be manipulated.
Although I accept the kind words of the hon. Member for Tatton (Mr. Osborne) about my re-election prospects in Bolton, West, I do not accept the charge that he made, and I make no apology for setting those targets in the first place. Targets are an essential part of good performance management; they provide a clear focus for all those involved in delivery. Measuring performance enables success to be rewarded and failure to be corrected.
The Chairman repeated the Committee's continuing interest in the efforts being made by Departments to tackle fraud. As he said, we are fortunate in this country to have very few serious cases of fraud, but that does not provide grounds for complacency. Departments are frequently reminded of their responsibilities to reduce the risks of internal and external fraud and, in those cases where it occurs, vigorously to investigate the cause and the culprits. For its part, the Treasury continues to provide advice to Departments on managing the risk of fraud, and alerts them to cases that have lessons with wider application. We wish to entrench a culture of fraud deterrence in each and every Government Department.
The hon. Member for Buckingham (Mr. Bercow), in his usual trenchant fashion, referred to the Government's record on fraud and asked whether attempts had been made to quantify it. The Treasury publishes an annual report on internal fraud and theft in Government Departments, the level of which has been fairly stable for many years at about 600 cases a year, with a value of about £2 million per annum. Of course, we must always to do more to make sure that the figure reduces further.

977
The Chairman of the Committee mentioned social security benefit fraud, as did the hon. Member for Arundelf and South Downs. The Department for Work and Pensions is working hard to reduce fraud and error in the social security system. I emphasise that not only are the figures very large, involving thousands if not hundreds of thousands or millions of cases, but at present it is impossible to distinguish between fraud and error, so the overall figures capture a rather complex situation. The DWP is working hard to combat fraud and error and is trying to have its accounts accepted in an unqualified way as soon as possible.
The Chairman of the Committee mentioned delivery as one of his key themes. In that context, my hon. Friends the Members for Tamworth (Mr. Jenkins) and for Hemsworth (Jon Trickett) asked whether the skills of senior civil servants were appropriate for delivering public policy. I certainly agree that delivery and the skills of senior civil servants need to be improved. The Government are taking several steps to enhance project and programme skills, and to champion career paths that embrace responsibility for delivery.
Several hon. Members referred to the role of the private finance initiative in improving public services, and I note the close interest that the Committee takes in such deals. The PFI is ensuring that unprecedented new investment in public services is delivered on time and to budget. It has generated £30 billion of investment since 1997. In the right circumstances, the PFI can ensure that the public and private sectors work together to deliver better quality services for the public. Like all innovative projects, some will fail and lessons will be learned.
The Committee's work has been very helpful in that process, but there have also been many very successful projects. I was glad to hear that my hon. Friend the Member for City of Durham had moved from being a sceptic and was starting to warm to the PFI. That is encouraging. Unfortunately, my hon. Friend the Member for Hemsworth is not yet persuaded, but I remind him of the words of an assistant auditor general of the National Audit Office who said:
"The evidence is that on the whole PFI deals deliver to time and to budget. You get what you want, you get it when you want it and it costs you what you thought it was going to cost. Conventional public projects have a very bad record in that respect".
None the less, the Government's approach to PFIs has developed considerably since early contracts were established and there have been many improvements in the system, some of which were made on the initiative of the National Audit Office and the Public Accounts Committee. However, I also remind the House that traditional projects were, on average, almost 50 per cent. over budget between 1975 and 1995. That is not an enviable record.
We welcome the PAC's continued scrutiny and I hope that it will turn its attention to other issues that have been the subject of considerable interest today, such as the use of the public sector comparator and how it can be improved in assessing future projects.
I note the comments of the hon. Member for South Norfolk (Mr. Bacon) and I am aware of his great interest in the Treasury PFI project. I was extremely pleased to hear his comments about the quality of parliamentary answers from the Treasury. He made many detailed points and I shall certainly not try to address them all now, but I shall study Hansard and provide a full reply to each of them.
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On the Sharman report on audit and accountability, I was pleased to hear the warm words of the Chairman of the Committee about the Government's response. Indeed, I think it is fair to say that, when the response to the report was published, the Committee was pleasantly surprised by the fact that it went further in some respects than Lord Sharman had suggested. I pay tribute to the work of my right hon. Friend the Member for Swansea, West (Mr. Williams) and his colleagues on the Committee, who played their part in ensuring that the Government took on board many of the comments that were made.
To remind us of the situation at the time, let me say that the Government had not been opposed in principle to changes in audit and access arrangements. For instance, we had provided the Comptroller and Auditor General with access where he had required it in the past. The Government's policy had been that he should be the auditor of all new non-departmental public bodies established since 1997. However, we had some genuine concerns about how wider access and audit facilities would be used and the impact that they would have on the affected bodies.
For example, would new statutory powers of access to documents held by private sector bodies and individuals lead to big extra burdens on the private sector? We did not, for example, want access powers to prevent small companies from doing business with government or to introduce unnecessary bureaucracy in arrangements for grants paid to small bodies. We also asked whether the NAO would be able to manage the additional work load involved in auditing more non-departmental public bodies without the quality of service suffering, and whether it would continue to provide the range of assurance and services that private sector auditors provide when they audit such bodies.
To his great credit, Lord Sharman fully recognised the need for protocols and assurances from the auditor if greater powers on audit and access were to be given. Following his recommendations, suitable protocols and other practical arrangements were discussed with the NAO. In the light of those assurances and arrangements about the way in which the Comptroller and Auditor General would use his powers, the Government accepted Lord Sharman's main recommendations and, indeed, went further in some respects.
On the specific points raised by my right hon. Friend the Member for Swansea, West, we have consulted the Comptroller and Auditor General on the necessary orders providing him with statutory powers of audit and access. He has said that he is content, and I believe that the orders will be laid before Parliament next week. So I can confirm that, if Parliament agrees, the new powers will be in place in the coming financial year.
My right hon. Friend also asked about access to non-departmental public bodies that are companies. Department of Trade and Industry officials work closely with NAO officials to ensure that the legal position is understood. The Government support Lord Sharman's recommendations, and we certainly would support any change—if it is possible—to take place through the forthcoming companies legislation.
On the CAG's access to the BBC, I do not want to discuss the matter further today, other than to say that I have taken note of the feelings expressed on the Floor

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of the House. The Government are considering the recommendations of the Public Accounts Committee, and we will respond in due course. I also heard the comments about access to the Financial Services Authority. The Financial Services and Markets Act 2000 empowers the Treasury to institute value-for-money studies of the FSA itself, but my right hon. Friend the Chief Secretary to the Treasury has said that he will consider inviting the CAG to carry out such studies if the subject matter is suitable.
This debate has again demonstrated the enormous value of the Committee's work and its enduring contribution to the process of parliamentary scrutiny. It is in the interests of the House and of the ordinary taxpayer that it continues to maintain this proud tradition.
6.57 pm
Mr. Leigh: May I thank the Financial Secretary to the Treasury for her remarks, and in particular for her commitment to introducing the order relating to Sharman next week? That is very welcome news for the Committee. I further thank her, and my hon. Friend the shadow Chief Secretary to the Treasury, for their summing up of this debate. They seemed to reach rather different conclusions about our work. I suppose that that shows that success in policy making is, like beauty, in the eye of the beholder. Perhaps we can all agree that, whichever party is in charge, there is always room for cutting out waste, and that is precisely what we try to do.
I thank the right hon. Member for Swansea, West (Mr. Williams), who leads the Labour group—if I can describe it that way—on the Committee, and the hon. Member for Newbury (Mr. Rendel), who leads the somewhat smaller Liberal Democrat group, for their support in making our work this year such a success. I also thank the right hon. Gentleman for his comments on the BBC, and the hon. Member for Newbury for his comments on prisoner reoffending. The hon. Member for Croydon, Central (Geraint Davies) obviously takes a great interest in that subject, and I thank him for his comments as well.
I thank the hon. Member for Tamworth (Mr. Jenkins) for taking part, and for his comments on agricultural fraud. I thank my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) for
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what he said about the essential need to promote project managers into the position of permanent secretary. I also thank those who took part in the mini-debate on private finance initiatives, which was today's central theme. My hon. Friends the Members for South Norfolk (Mr. Bacon) and for Tatton (Mr. Osborne), and the hon. Member for Hemsworth (Jon Trickett) offered some interesting facts and arguments about the PFI. This debate will run and run, and although it is true that we are getting better at delivering these projects on time and on budget, real concerns remain about transferring risks, about taking these matters off the balance sheet, and about public sector comparators. Anybody who takes an interest in the PFI should study this debate.
Our Committee has had its day in the court of Parliament, and I believe that we have proved today that we are doing a good job in holding the Executive to account. I commend the motion.
Question put and agreed to.
Resolved,
That this House takes note of the 1st to 63rd Reports of the Committee of Public Accounts of Session 2001–02, and of the Treasury Minutes on these Reports (Cm 5393, 5450, 5470, 5477, 5481, 5487, 5512, 5524, 5549, 5600, 5612, 5636 and 5676; and HC 1261, Session 2001–02).

PETITION

  Fireworks
  6.59 pm
  Huw Irranca-Davies: I humbly submit the petition of Tina Griffiths and more than 20,000 of the people of Ogmore in South Wales, who declare that the current controls on fireworks are in need of improvement.
  The petition states:
  The petitioners therefore request that the House of Commons urgently reviews fireworks legislation, and in particular to require all public firework displays to be controlled by licensed pyrotechnicians, to restrict the times of year fireworks can be bought, to restrict the times of day fireworks can be set off, and to license all vendors of fireworks to meet strict safety criteria and to give trading standards the power to revoke the licence of any vendor caught selling fireworks to underage children.
  And the Petitioners remain, etc.
  To lie upon the Table.

  Council Tax (Lowestoft)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Murphy.]
  7 pm
  Mr. Bob Blizzard: It may seem incredible that, more than 10 years since the introduction of the council tax, there is still a major dispute about bandings—not the case of an individual householder, but that of a group of residents who live in homes that form part of an estate. It is the longest-running case that I have on my books. It began even before I was first elected in 1997, and I inherited it from my predecessor. I believe that it has become rather famous in the folklore of the Valuation Office agency and the valuation tribunal service. It has involved a succession of the VOA's senior officials, top regional tribunal staff, the ombudsman, the adjudicator's office, a Minister in the previous Government and, indeed, very briefly, when she first became a Minister in 1997, my right hon. Friend the Paymaster General, picking up correspondence from her predecessor.
  The reason for this long saga is simple: injustices do not go away. The residents of Crestview Drive, Lowestoft feel a strong sense of injustice over their dealings with the VOA. My experience is that most people with a complaint usually give up after a period of time, even if it is not resolved. The fact that these residents have not abandoned their campaign is significant and says much about the case. I have probably spent more time on this case than any other from my constituents, but it is worth taking time in the House today to review what has happened, to draw out the key issues and to suggest a way forward.
  I said that council tax was introduced more than 10 years ago. We know that that was done in a hurry by the then Government to escape from the disaster of the poll tax. But imagine how a group of residents felt when two years after their property bands had been established, they were told by the VOA that they were wrong and that they would be raised from B to C and imagine how they felt when, a year later, some of them were told that their homes were not in fact band C and would be raised even further to band D.
  For those people, most of them pensioners, that was a disaster to rival the poll tax. It gave rise to two reactions. First, it gave rise to the feeling that the VOA was incompetent—and that reaction is not surprising. However, it also made people look seriously at their road and their estate and compare their council tax bands and properties. The irony is that most of the estate was built by the same builder, with standard bungalow types, so it should be very easy to establish broad comparability and therefore a sense of fairness, especially in the eyes of residents, but the VOA has consistently been unable to do that over all these years.
  I must say that the VOA has given over an enormous amount of time to the case, and some of the staff have tried to be as helpful as possible. That the case remains unresolved is due to one or two flaws in the system, but it is predominantly down to the intransigence of one official, the district valuation officer of the East Anglia valuation office. People can eventually accept that a bad mistake happened in the first place, but they cannot
  982
  accept a refusal by officials to adopt a common-sense approach and fairness in the subsequent attempts to rectify the situation.
  In October 1995, the director (east) of the VOA admitted in a letter:
  "It is with very much regret that I have to agree with your comment that the VO has made a complete shambles of banding the properties in Crestview Drive."
  The ombudsman later recognised that there was
  "prima facie evidence of maladministration."
  However, in March 1996, the then Economic Secretary, Angela Knight, declared:
  "the senior official who conducted the inquiry has confirmed that on the evidence available the bandings of the bungalows in Crestview Drive and the adjoining side roads are now correct."
  If only that were the case. Over the next four years, many homes on the estate regularly had their bandings altered, some by the VOA and some following tribunal decisions. Residents could see no consistency and lost confidence in the VOA.
  What angered the residents most of all, however, was that whenever they pointed to comparable properties on the estate that were in bands lower than those to which their homes had been raised, the VOA would never accept that the mistake was with the original properties whose bands were raised, but proceeded to raise the banding of more and more properties on the estate. First, other properties in Crestview drive had bands put up, and then the closes off Crestview drive. The VOA even set about the older part of the estate, but I shall say more about that later. After each stage, the VOA stated that all the bandings are now correct, only to make further changes later. For example, No. 7 Sharon drive was once band C, increased to D, and then reduced to C again, although a director of the VOA later wrote to me and said that it should be a D.
  My constituents have used various means available to them to try to gain redress. They took their case to a tribunal, but at that stage were inexperienced and, significantly, both the clerk and the chairman of the tribunal have told me that it was not a satisfactory hearing. That is why, when I became involved in the case later, the valuation tribunal co-operated with the adjudicator's office in identifying grounds on which an unprecedented second tribunal could be held, which took place in Lowestoft in November 1998. By that time senior VOA and tribunal staff had walked the area with me and could see that it appeared that there were clear discrepancies between the two parts of the estate in comparing properties and their bands.
  The second tribunal was really significant, and revealed clearly the problem that we were dealing with: the district valuation officer for East Anglia. Although the joint appeal by eight residents was dismissed—the residents recognised that it had to be on the narrow grounds on which it was made—the tribunal decision deliberately contained a very important statement that helpfully provided a way forward:
  "The Tribunal has been asked by all parties to comment on the original bandings of the appeal properties".

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  Although the tribunal said that there was evidence supporting the current bandings, it also rejected much of the evidence of the district valuer—a Mr. Bond—and said:
  "The Tribunal has also considered all the sales evidence on the estate as submitted by Mr Bond … This evidence and its associated banding has caused concern to the Tribunal."
  The tribunal concluded:
  "This could question bandings on Crestview Drive being placed purely on sales evidence".
  The tribunal looked at and commented on the case made by the residents that the banding of their properties should be compared and equalised with bandings on the eastern or older part of the estate. It recognised that
  "The Appellants have made this case on the assumption that the eastern area has been correctly banded."
  After all, bands had remained unchanged from the original bands of six years earlier. The tribunal stated:
  "In conclusion the Tribunal does not consider there to be a significant difference in value between the two parts of the estate."
  It therefore upheld what the residents had contended all along. It went on to say:
  "The Regulations make provision for the Listing Officer to correct initial inaccuracies in the Valuation List."
  That seems to be a bit of a steer.
  That clearly paved the way for the VOA to put the relatively small number of Crestview properties into line with the hundreds of properties on the other part of the estate, especially as the tribunal most unusually and deliberately did not confirm the bandings of the Crestview properties as correct—a point that it later repeated in writing. At that stage of the case, I honestly believed that resolution would occur. Everyone seemed to be working towards that, except the district valuer, who, instead of altering the Crestview bandings, proceeded to carry out a review of hundreds of properties on the eastern estate, and eventually proposed to raise the bandings of about 120 of them seven years after they were first established. That was later described to me as "lunacy" by a senior VOA official, whom I shall not name.
  What is worse is that the head of profession of the VOA had written to residents in March 1996 telling them that he had asked Mr. Bond to investigate discrepancies in that eastern estate and to take action to correct any anomaly. No bandings on the eastern estate were altered at that time. After the review, Mr. Bond repeatedly told residents that the bandings on the eastern estate were correct.
  When I challenged Mr. Bond on his action in trying to raise bandings in the eastern estate that he had previously insisted were correct, and which, as Members might imagine, caused anxiety to residents there, he said that he was looking at the bandings because
  "I was invited to do so by the local valuation tribunal."
  That caused outrage at the tribunal service and the president wrote to Mr. Bond pointing out that his statement was not correct and demanding an apology, which he eventually received.
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  That episode demonstrates where the problem lies and is why I used the word "intransigence" at the beginning of my speech. Thankfully, owing to the good work of another VOA officer, the proposed band rises were dropped.
  Another way of trying to resolve the problem was through an independent review of bandings in the Crestview area by another VOA district valuer. Although the VOA argued that the report showed no clear overall case for altering the Crestview bandings as the residents wanted, it none the less produced a different set of bandings from Mr. Bond's for many properties from the same sales evidence.
  That reveals one of the key issues in this case: marginality and how to deal with it. Many of the properties are marginal between bands C and D. In one place there are two absolutely identical bungalows, but one is in band C and the other in band D—apparently because one has a footpath running alongside it.
  Surely, the only sensible approach is to stand back a little and try to achieve broad comparability of properties in an area. It is clear that officials burying themselves in sales evidence can come up with different bandings from each other and indeed from residents' calculations, using their own sales evidence.
  If someone had at an early stage simply tried to "straighten the pack" a little instead of ploughing on, raising bands over a wider and wider area, the case would have been sorted out, but instead the scope of the problem became ever wider. Many appeals were sparked off, with results that created further perceived inconsistencies.
  Throughout this affair, I have been made aware of an apparent flaw in the tribunal process. The published guidance for appellants encourages them to show evidence of sales prices and/or bandings for similar properties. Residents in the area have on occasion taken forward masses of such evidence, but had it ruled out of order. I do not understand that.
  What is to be done? First, will my right hon. Friend the Paymaster General study carefully what I have said today and will she be willing to receive a dossier of documentary evidence from me to support it?
  Secondly, until last year all discussions with the VOA concentrated on trying to get the injustice in the bandings put right because that was what residents wanted. However, last year the question of compensation from the VOA emerged. Residents are now aware that the national review of banding is not too far off. The VOA has said that it will offer compensation, but only for those residents whose properties had their bands raised twice—from B to C and then to D. I certainly agree that those people deserve compensation.
  However, the problem is wider. The crisis sparked off by the original shambles to which the VOA admits affected more residents than those who were twice re-banded. It involved a wider group—more than 20 people—in a great deal of anxiety, stress and inconvenience, owing to their protracted dealings with the district valuer, whose record I have just laid before the House.

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  I note that back in 1995 the director (east) of the VOA wrote:
  "Some very serious errors have been made and these are recognized and I cannot but apologise for the effect that this has had on the residents in general in Crestview Drive."
  I ask the House to note carefully the words "in general" in the admission of the fault. I am also aware of more recent changes to the VOA's code of practice on complaints and compensation, which have given the agency more flexibility.
  Will my right hon. Friend ask the VOA to widen its definition of the people whom it is prepared to compensate? If it can do so, the case will finally be settled; it certainly deserves to be settled.
  7.15 pm
  The Paymaster General (Dawn Primarolo): I congratulate my hon. Friend the Member for Waveney (Mr. Blizzard) on securing the Adjournment debate. Those of us who listened to his speech can sense the frustration that he and his constituents feel on this long-running issue. I have been provided with the explanation of what has happened in his area with the decisions of the listing officer, the role of the Valuation Office agency, the appeals to the tribunal and the results of the tribunal hearings. He referred to the outcome of the tribunal hearing, but it is not always in such hearings that bandings are confirmed.
  In fairness to my hon. Friend and his constituents, I should, rather than adding to the explanation of how we reached this point, move directly to the outstanding issues. I shall explain what can be done to try, as he pleaded in his closing remarks, to come to a sensible conclusion so that a line can be drawn and we can move on to the revaluations that will commence in 2005.
  My hon. Friend's constituents remain concerned about three matters. He mentioned a meeting that he had in January 2002 with the director of council tax, when the full range of difficulties involved in the case were rehearsed. It was agreed that the VOA would investigate the potential for providing compensation under its code of practice on mistakes, and compensation was subsequently made to occupiers where there had been an increase in banding on two separate occasions, which is viewed as an error in the code of practice. As he said, that relates to 10 properties, whereas residents believed that 28 complainants should receive compensation.
  The other outstanding matters are as follows. The residents remain unhappy, first, with the bands applied to their bungalows; secondly, with the bands applied to similar properties nearby; and thirdly, with the conduct of the listing officer and VOA in dealing with the issues that were raised.
  The valuation tribunal system has considered the first issue. The listing officer cannot make the sought alterations, even if he believed that to be the correct course of action. I understand the frustration of my hon. Friend and his constituents. The provisions allow for appeal against the banding of the dwelling to the valuation tribunal and from there, on a point of law, to the High Court. The residents have raised valuation issues that have been aired before the tribunal twice. The appeals system makes no provision for rehearing or appeal in the event of further or better information coming to light.
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  The second issue is whether the other properties in Crestview drive and the nearby roads that are disputed by taxpayers are correctly banded. The residents and the listing officer have a difference of opinion on the valuation of the relevant properties. The valuation tribunal system has considered that. There is no statutory provision for resolving the residents' continuing dissatisfaction.
  The VOA has already accepted the third issue. Apologies have been tendered locally and nationally. There is little to be gained from further apology, but the VOA none the less regrets the handling of the rebanding process and the earlier piecemeal reviews.
  VOA policy on financial redress is to compensate people when a VOA error has caused them financial loss or worry and distress. The VOA believes that the bands in the Crestview drive locality are correct and in line with the valuation tribunal decisions. It also believes that the residents are correctly liable for payments based on the increased bands. However, it will consider making ex gratia payments for worry and distress. It has offered to make such payments, amounting to £650, to each of the residents whose dwellings have been subject to two band uplifts.
  The VOA has reflected further on the matter. It understands, because of the handling of band alterations over several years, why many residents might have lost confidence in the agency's ability to achieve a correct and fair valuation list for the estate. It therefore appreciates that that has caused worry and distress to many residents as evidenced by the correspondence that was sent to the agency directly and through my hon. Friend.
  The VOA has agreed that the handling errors had a significantly adverse effect on the personal lives of several residents, not only those who live in the dwellings that were the subject of the two separate band uplifts. For that reason, it has offered to make an exceptional ex gratia payment of £650 to each of the affected residents.
  The VOA considers it appropriate to make the payments to those who have shown their anxiety by signing a document that expresses their wish to accept such a sum in compensation. My hon. Friend forwarded the document to the agency last year.
  I hope that, having reflected on my comments, my hon. Friend will agree that the matter is closed, on the understandings that I have given the House. I hope that he will agree that, this evening, he, the local residents, the VOA and I can draw a line under the matter, and that we can move forward to the 2005 debate.
  Notwithstanding the fact that the VOA itself has apologised, both locally and nationally, and that I know that the officers in the Department have done all that they possibly can within their statutory obligations to assist in this matter, I too apologise to my hon. Friend and his constituents.
  I sincerely hope that we can now close this matter and move on.
  Mr. Blizzard: May I say on behalf of my constituents that they will be extremely grateful for what my right hon. Friend has said tonight regarding the

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  compensation? On their behalf, I thank her and the VOA for bringing this matter to what I now believe will be a conclusion.
  Dawn Primarolo: I am very grateful for my hon. Friend's comments. His behaviour is a salutary lesson to
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  all hon. Members that we should all persist in advancing a view on behalf of our constituents, whatever the circumstances. I am grateful for the gracious way in which he has responded to what I have said this evening. I therefore hope that the matter is now closed.
  Question put and agreed to.
  Adjourned accordingly at twenty-six minutes past Seven o'clock.

Preamble
[MR. JOHN MCWILLIAM in the Chair]

Gun Crime
Motion made, and Question proposed, That the sitting be now adjourned.—[Gillian Merron.]
9.30 am
Mr. Deputy Speaker: Before I call the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), I draw Members' attention to the fact that we have some problems with the sound system, so if it goes off, there is a contingency plan. I shall suspend the sitting for a very short time to enable the radio microphone to be brought in.
Ms Diane Abbott: As we move into the 21st century, the inner cities of our country are falling under the shadow of gun crime. There is no single aspect of crime and criminality that causes so much fear and anxiety among ordinary people as the use of guns, including air guns. We have recently had the announcement of statistics that show the rise in gun crime nationally. I know that gun crime, including incidents involving air guns, is a big problem in many of our city centres. Some of my colleagues will speak to that fact.
The national figures mask a particularly steep rise in our inner cities. In London in 2000–01 gun crime incidents stood at 2,817, but in the past year gun crime incidents have gone up to 4,192—a rise of 49 per cent. In the Greater Manchester area in 2000–01 gun crime stood at 964, but in the most recent period for which statistics have been collected, it has gone up to 1,361—a rise of 41 per cent. In the west midlands, the site of the tragic shooting of those young girls that was in the papers over Christmas and new year, gun crimes went up from 887 in 2000–01 to 1,289—a rise of 45 per cent. Handguns were used last year in more than 5,871 incidents, the highest number ever recorded. That represents a 46 per cent. increase since the previous year. I remind the Chamber that in the whole of 1954—the year after I was born—there were only four armed robberies in the whole of London. Now, four armed robberies take place in London every single day.
Those are the statistical parameters of the problem, but as a Member of Parliament for the part of London—the Hackney and Tottenham area—which has the highest level of gun crime in the country, I need to draw to the attention of colleagues what it is like for people to live in an area, a residential area, much of it with high value residential housing, where they can wake up in the morning and find that there has been a shooting at the end of their road, where they can look out of the window and see a vehicle with a dead person in it, where people queuing at bus stops have been the victims of drive-by shootings, and where an innocent young person at a club or a party can get caught up in a gun crime incident.
This is not a type of criminality that affects only those who move in criminal circles. As the wave of gun crime engulfs our inner cities, more and more innocent people,
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just like those young women in Birmingham, are being caught up in it, and more and more innocent people are witnessing it on their doorstep, on their streets and in their communities, and feeling terrorised.
It is important to stress that gun crime is not just a black crime. It is certainly the case that 80 per cent. of the incidents reported to the Metropolitan police involve black-on-black crime, but we saw just before the new year a terrible outburst of gang shootings among the Kosovan community in Green lanes in Haringey, we are seeing increasing numbers of Asian-on-Asian gun crime incidents in west Yorkshire connected with the drug trade, and the Albanians are increasingly figuring in gun crime statistics. Where there are hard drugs and a particularly toxic mix of poverty and social alienation, we will find gun crime. We need not think, as a society, that it is confined to particular communities, and use that as an excuse to look away.
I first spoke in the House about gun crime more than a year ago. One of the points that I stressed was the extent to which gun crime in recent times had become almost a lifestyle crime. It is one thing to take out a gun to carry out an armed robbery and then take it home—that is utterly deplorable and very wrong—but what we have seen in recent years is a rise in gun crime as a lifestyle crime. It is worth drawing to the attention of the Chamber that the proportion of robberies involving firearms has remained steady at 4 to 5 per cent. over the past five years.
However, as I have said, there has been an explosion of gun crime as a lifestyle crime—people shooting people because of disputes over territory, people shooting people because of disputes over money owed, people shooting people because of petty squabbles in nightclubs, and people shooting people because of squabbles over girlfriends. In Hackney we have even had people shooting people because they believed that somebody had made a disrespectful remark about their clothes or their hairstyle. What is new about the phenomenon of gun crime as a lifestyle crime that is engulfing London, Moss Side and parts of Birmingham is when a section of young people—it may be a tiny section, but it is still a section—feel that they are not properly dressed for a night out unless they are carrying a gun. Unless we understand that, we cannot understand the importance of combating the problems underlying the phenomenon.
I shall touch briefly on what I believe to be the causes. I begin by saying what I do not think is the cause. With the greatest respect to Ministers, I do not believe that it is helpful to speak about rap music as the cause of gun crime. I find the lyrics of much rap music utterly deplorable. I dislike the misogyny, the glorification of violence, the hatred of homosexuals and so on. I find it all deeply shocking, but the music of young people has always been intended to shock middle-aged ladies like me. If it did not shock middle-aged ladies like me, young people would feel that something was seriously lacking in their culture. To say that we do not like the lyrics, that they are deeply shocking and that things were better when we were young is not the same as saying that that music is the cause of the gun crime. The music is a symptom of the youth culture. What we need to do as politicians is not to give people the benefit of our personal opinion on young people's music, but to identify the underlying causes and the law enforcement issues with which we need to engage.

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I believe that the root causes of gun crime are related to an arms race between gangs and gangsters, to hard drugs, to the huge amounts of money to be made out of hard drugs, which incites people to use the ultimate weapon to protect their profits and their territory, and more broadly to social alienation. Hon. Members will forgive me if I say that I believe that in the long term, one of the underlying causes of the social alienation and the gun crime that we see in our inner cities is educational under-achievement among our young men, especially young black men. This is not a matter for Home Office Ministers, but I would not be doing the subject justice if I did not touch briefly on that.
Nationwide, 42 per cent. of young men aged 16 get five GCSEs at grades A to E, but in Hackney and many other inner-city boroughs, only 9 per cent. of black boys aged 16 get average grades in GCSE. What is happening to the other 90 per cent.? I have long argued that it is not good enough to lump in what is happening to black children with general figures and programmes applying to ethnic minorities. Some ethnic minorities in our inner-city areas are doing better than white children. In particular, however, it is Afro-Caribbean boys who are failing.
As I have said many times, we need to focus on the underlying causes of under-achievement. Those causes are complex and relate not only to young people's attitudes and parenting, but to factors in schools and teachers' expectations. Until the Government have a strategy for black under-achievement in schools that is similar to their strategy on literacy and numeracy, not only will we find it very hard to raise overall standards in inner cities, but social alienation, whose many negative aspects include gun crime, will continue.
Mr. Mark Francois: I have followed the hon. Lady's argument carefully. I believe that educational under-achievement is an important aspect of the situation. However, will she enlighten the House as to which party has for many years been running the LEAs in most of the inner-city areas to which she is referring, where children have been mortally failed by the education system?
Ms Abbott: I am happy to enlighten hon. Members: most of those LEAs are run by Labour authorities, especially in London. The hon. Gentleman may not remember, however, that it was a Tory Government who dismantled the Inner London education authority. Londonwide policy issues such as the underachievement of black children have suffered ever since because of the lack of an overarching strategic focus.
It was inevitable that individual boroughs such as Hackney would struggle when they were left on their own to deal with multiple issues of social deprivation and their effect on education. I welcome the Government's appointment of a London commissioner for education, which may allow us to return to some of the best aspects of the Inner London education authority, which could stand back, consider the issues and support weaker boroughs. It is no good talking about the failings of an individual borough such as Hackney. I am no apologist for what is happening to
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black children in boroughs such as Hackney, but many of today's problems in the area date back to the abolition of the Inner London education authority. In my view and that of many Conservative Members at the time, that was a criminal act of educational vandalism.
Before I deal with Specific issues relating to gun crime, I want to mention a few related questions. I live in a borough that has a very high proportion of public authority housing, and one of the things that my constituents complain about bitterly is crack dens, which are sometimes situated on the same estate, floor or landing as their homes. I ask hon. Members to think about how it must feel to be a young woman struggling on her own to bring up decently two or three children and having every day to take her pushchair across a landing where a flat has been taken over as a crack den. Some local authorities, including Hackney, are doing a lot of work to try to close crack dens and they work closely with the police.
I ask the Government to consider the effectiveness of current legislation. I believe that we have legislation on the books that enables the police to close down the crack dens. When will it be activated? It is illegal to run an opium den, but as I understand it, it is not illegal to run a crack den as such. When the police raid the dens, people drop the crack on the floor and cannot be done for possession, and no individual can be done for running a crack den as such. I stand to be corrected if my understanding of the law is faulty, but that is how I have been briefed by local police. If the legislation is not on the books, we need to introduce it, but if it has not been activated, we need to ensure that it takes effect. In the 21st century, when we know about the menace of crack in our communities, which relates not only to gun crime, but to the robberies that people carry out to feed their habits, it is absurd that the law is not fully effective in helping the police to close down the crack dens.
Drug mules are tied to the same gangs that are using guns to enforce and protect their territory. Hon. Members will know that the largest group of foreign nationals in Holloway prison for women are Jamaican women who were drug mules. I have visited those women, whose situation is tragic. Those who act as drug mules swallow lots of bags of crack and come through customs. They are told that they will not go to prison if they are caught, but that if they do, British prisons are easy. Such women have often left their families in Jamaica, where there are no social services as we know them and they were in a desperate situation.
I know that the Government have acted against the drug mule trade and that the Jamaican Government are co-operating well. For instance, the British Government have helped the Jamaican Government to install special ion scanners to test whether people getting on to planes have handled cocaine. When I discussed the issue with Ministers last year, they told me that every single person boarding a plane in Kingston, whether it was a British Airways aircraft or a Jamaican one, would be tested for handling crack cocaine. I visited Jamaica last year, and although it was a private trip, I made a point of visiting the airport and meeting the Jamaican drug squad, British customs officers and Metropolitan police officers. I stood and watched them testing people as they boarded the planes, but they were doing so at random. We do not need to be criminal specialists or intelligence experts to understand how easy it is to subvert a testing

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regime that works on a random basis. Ministers told me last year that every single person was being tested, but I saw with my own eyes last May, when the system was introduced, that people were being tested at random.
I want to make a very simple point about drug mules: we must work with the Jamaican authorities and the airlines to ensure that every person who gets on a plane in Kingston, Jamaica, is tested for crack cocaine. That will benefit my constituents, who are suffering as a result of the crack trade, the reputation of the island of Jamaica and also the poor girls who act as drug mules and are the victims of the trade.
Mr. James Paice: The hon. Lady is making an extraordinarily important point about the Jamaican drugs trade. Does she also accept that, even if the random nature of the search is not subverted—I think that was the word she used—the fact that not everybody is being tested means that the dealers and traders who are paying the women to be drug mules can build in a wastage factor? In other words, cannot they afford to lose some of the mules, because of all the others who will get through a random test?
Ms Abbott: Exactly. I have worked closely with Operation Trident officers on this issue, so I can describe the process. Heathrow has eight cells and the drug gangs know that that is the case. Early in the week, they send over a certain number of girls. Once they know that all those girls have been held, they flood the flights.
There are ways of closing down drug mule trafficking from Jamaica. They involve testing everybody and establishing more cells and more police activity at Heathrow. I want the practice to be stopped not only for my constituents, but for the island of Jamaica and the poor girls who get caught up in it.
I turn now to specific issues relating to guns. On arms traffickers, we need to consider action to curb the supply of illegal firearms into the UK from countries in the Balkans and central and eastern Europe. Those countries are also the main source of guns entering African war zones. As I said, although the majority of gun crime is black-on-black, other nationalities, notably the Albanians, are entering the market. If we do not act to check the flow of firearms from eastern Europe, we will reap a very bitter harvest.
Most black-on-black gun crime is performed using reactivated replica weapons, but the Albanians and other groups have access to top-class weaponry that is available in eastern Europe and the Balkans. Surely, it is better for Ministers to check the trade now than very shortly to see gangs settling their differences on the streets of London with AK47s and military-style weapons. We need to increase the funding that is given to the police and intelligence services to combat firearm tracking. I believe that the police have been under-resourced in that area.
I applaud the Government for taking steps to ban the possession of replica weapons, but we also need a ban on their sale, importation and manufacture. Action must also be taken against weapons that are not replica weapons as such, but that can be used as firearms. It is a fact that 80 per cent. of black-on-black gun crime is undertaken using replica weapons, and although I applaud the increased penalties for possession, we need to stop such weapons flooding the market; we need to ban their sale, importation and manufacture.
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Perhaps the single most important issue that I want to raise with the Minister is witness protection. In respect of gun crime incidents in London, Birmingham and across the country, the police have a big problem—certainly initially—with community co-operation. The point about the type of gun crime that I am discussing is that it is no secret in the community as to who is committing these crimes. Somebody is washing their shirts and cooking their dinner, and they are boasting about their actions, so people know. The reason why they are not brought to book is not a failure of detective work, but the difficulty in getting people to be witnesses.
Some colleagues may find this point difficult or unacceptable, but in communities such as Hackney, we have to remember the context in which we are asking for community co-operation. Hackney is an east-end borough of London, and I should remind Members that people in the east end do not grass other people up. It is not a black thing—it is an attitude that has characterised the east end since the 18th century. In fact, as accounts of the time show, in the 18th century there was, if anything, a more visceral hatred of the forces of law and order in the east end.
In the recent past, stations such as Stoke Newington have had a very unfortunate record in terms of deaths in custody and assault. However, I give great credit to Stoke Newington's current leadership, and Chief Superintendent Benson in particular. In the 1990s, there was a very serious corruption scandal at Stoke Newington, which was investigated by the Met through Operation Jackpot. The essence of that operation's findings was that the police in Stoke Newington were running their own drug dealers on the street. If they confiscated £10 worth of drugs, they would book—l worth in at the station and give out £9 worth to their own drug dealers. This was not an assertion by the community; this was the conclusion of an investigation, and most of the police involved had to move on. That is the context—it is not an excuse—in which people are reluctant to come forward and give evidence. I am working locally with the black community to encourage them to come forward and work with the police. We need to be aware of that context, and the fact that similar contexts exist in some other inner-city areas.
The real problem is fear. Witnesses are frightened to come forward because they believe that the gunmen and their associates will come and get them. Only two weeks ago, I met a very nice, respectable, church-going, middle-aged black woman at one of my regular advice sessions. She had been one of a number of witnesses to a gun crime, and had gone to court. The guys concerned went down, and since then she has had to move five times out of fear of those gunmen. For someone who is a witness to a high-profile gangland crime, the Metropolitan police lay on a very good witness protection scheme. They can change such people's identity and move them around the country. However, the protection that is available to a witness to a regular gun incident or shooting is not adequate. This is a particular problem in London. In London, a witness to a gun crime who wants re-housing goes to their borough, which re-houses them within that borough. That means that, in boroughs such as Hackney, such a person is perhaps half a mile away from the gunmen and their associates.

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The Home Office, in co-operation with other Departments, needs to consider an intermediate witness protection programme in London that is co-ordinated not at borough level, but, for example, by the Metropolitan Police Authority. Under it, registered social landlords would have to allocate to the authority a certain amount of housing every year. The police could nominate people for that programme, and they could get re-housed as a matter of priority into decent quality housing. We also need a package of counselling and support for witnesses after the trial is over. The same woman to whom I referred told me that, when she telephoned the police station to speak to the sergeant about her housing problem, threats and so on once the trial was over, he refused to come to the phone.
I understand why, once a crime is solved, policemen have to move on to solving the next one, but that example shows why we need a comprehensive witness protection programme. It could be a step down from what is offered to witnesses to major gangland killings, but people must be offered such protection. They are not going to come forward if they believe that, afterwards, they will be in fear of their lives. This practical step does not have massive resource implications. Until the Government do more about witness protection, things will continue to be very difficult for those, such as me, who are genuinely encouraging people in the community to co-operate further.
I welcome the steps that the Government have taken against replicas, and to increase the minimum penalty for the possession of firearms, but there is still further to go. With the support of other Members, I am setting up an all-party Back-Bench committee on gun crime. It will involve MPs from all the inner city areas in which this is an issue, and they will take evidence and make suggestions to Ministers later in the year.
In some ways, gun crime is an endemic and global issue that reflects the culture in which we live, and its materialism and brutality. The associated problems are deep-rooted, and will take a long time to solve, but the law and order elements need to be put in place now. The administration of the system, witness protection and action against drug traffickers can be done in the here and now. In the past, there may have been a sense among certain authorities that, because this was a crime confined to certain communities that involved criminals killing other criminals, they could perhaps afford not to give it their full attention. However, for a year or more some type of gun crime has taken place every weekend in areas such Hackney. I welcome what the Government have done, but there is great deal more to do. I urge Ministers to realise that if a Labour Government in the 21st century cannot guarantee all our communities freedom from fear, we will be failing in our responsibilities to them.
9.57 am
Mr. Mark Field: The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) made a marvellous speech, and I am only sorry that more people were not here to hear it. I congratulate her on drawing our attention to this very important issue, but in a moment I want to talk about gun control, rather than just gun crime.
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As the hon. Lady knows, I am also an inner-London Member of Parliament; indeed, I suspect that at the nearest point our constituencies are only two and a half or three miles apart. I do not wish to extol all the virtues of her constituency—she can doubtless do that—but I want to point out that, although many people will assume that Hackney, North and Stoke Newington is a horrible, inner-city hell-hole, nothing could be further from the truth. For example, one can take a walk along Stoke Newington's historical Church street. Some 400 years ago, when Stoke Newington was a village, much of the rest of the land between the City of London and that area was open fields. Likewise, even today, parts of Stamford Hill are very suburban in outlook. Like much of inner London, it is made up of people who work very hard to make their way in life
What the hon. Lady said, especially on witness protection, was very valuable. I wish I could articulate things in that way—I suspect that she has more knowledge of those matters—but I should like to reiterate my support for what she said, and I hope that the Home Office will pay close attention.
Hon. Members are perhaps lucky; we can go through our day-to-day life without that sense of fear. Perhaps things are even easier for me as a man; when I walk home at night from the House or, indeed, from a tube station in my constituency for five or six minutes in the middle of the night, I do not fear that I will be mugged or attacked in any way. Likewise, in our day-to-day life, there is no fear of who is living across the corridor or whether they might be trying to extort money from us or just making our lives a misery by playing music and causing disruption at 3 or 4 o'clock in the morning, but perhaps all Members of Parliament can appreciate those fears; it is certainly a state of affairs that many of our constituents are unfortunate enough to suffer.
What the hon. Lady said about witness protection, and the context in which she made her remarks, was also valuable. I suspect that those long-standing concerns are true in parts of my own constituency, as it includes parts of Bayswater and Pimlico that would not necessarily be typical in a relatively safe Conservative constituency. Having spoken to my constituents, I am aware that there are certainly some very real problems.
The hon. Lady rightly talked about the drugs problem. She said that drugs were very much at the forefront of gun crime, and she discussed the issue at some length. There seems little doubt—I entirely endorse what she said—that it is not simply a black-on black crime. In my constituency, we have found that gangs of eastern Europeans are fighting turf wars, particularly around Soho and in the vicinity of the Edgware road. It is easy to say that they are Kosovans or Albanians, but there is no doubt that a whole raft of people from eastern and central European ethnic groups have looked to gain in that area—in relation not just to drugs, but prostitution, protection rackets and a vast array of other problems—and they are using guns daily.
However, as I said, I want to say a few words about gun control. The hon. Lady rightly pointed out that the new year started with one of those very brutal acts that still has the capacity to shock the entire nation. The savage gunning down of two teenagers at a party in Birmingham by young men who were armed with automatic sub-machine-guns brought home to many people the growing violence that exists in parts of our

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inner cities—not just in London—and has already expanded into several of our city suburbs and now seems to be threatening, in a minor way, even some of our rural towns.
Since the Government declared a total ban on handguns some six years ago in the aftermath of the Dunblane tragedy, it has become clear that ever more guns are being used by criminals in our society. However much the police in Birmingham or, indeed, London try to make out that that new year incident was somehow an out-of-the-ordinary event, it is clear that it was only the gender of the victims that made it so startling. From speaking to local residents, councils and residents associations virtually every day, I am fully aware that, even on the streets of London, gangs of young men are involved in the illegal drugs trade, prostitution and protection rackets, and they think nothing of brandishing firearms to protect their patch.
Ms Abbott: I want to confirm what the hon. Gentleman says. Just like him, I feel that, tragically, that shooting got on to the front pages because girls were involved. That is very sad because, as he says, such things are happening all the time.
Mr. Field: Drug dealers need to ensure a monopoly of supply in their own districts if they are to maximise their profits—I suspect that that is a basic rule of economics in the drugs trade—and the territory is fought over. Those gangsters have no fear of the police; their only equals are those in other gangs whom they know will be similarly armed. Until we support the police in their endeavours to enforce the law to diminish the power of those gangs, the use of firearms will increase.
Unfortunately, in the immediate aftermath of the new year incident in Birmingham, the response of many politicians and, indeed, many people in the media in Birmingham and beyond was predictable and somewhat illogical. The call for the existing handgun ban to be further enforced by handing out the new mandatory five-year jail sentence to anyone possessing a firearm seems to be just grandstanding. I appreciate that, for the first time, I diverge from the hon. Lady's path. Even a moment's reflection should have persuaded everyone that such a mandatory ban was neither a sensible nor a practical way forward. The police may find it impractical to enforce, and there may be legal problems because it is mandatory and discretion has not been left in the hands of the judiciary.
The fact is that the criminals on our streets are already refusing to obey the existing laws—the total ban on handguns—so there seems little point in passing even more new legislation for them to ignore with gay abandon. Until the current total ban on handguns is properly enforced in this country, we shall continue to see a greater increase in gun-related violence.
In the immediate aftermath of the new year incident, I discussed the entire issue of handgun control and gun crime with a good friend of mine who lives in leafy Hertfordshire. He told me, with an entirely straight face, that he is now so fearful of crime that, if he were living, rather than simply working, in London, he would seriously contemplate procuring a firearm for his family's self-defence, although he has never fired a gun before in his life.
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My great concern is that I am not sure whether that response to such incidents is totally out of the ordinary in what has traditionally been a very gun-adverse society, in great contrast to the United States. We are now very much at a crossroads in public policy on the issue. Obviously, we in politics have to play a part, but it is important that such things are discussed with a cool head, especially in the light of what seems to be an escalating murder rate involving the use of firearms.
In a sense, the problem is straightforward. We have failed to enforce our current, already relatively strict gun laws. We should not stand by and wash our hands of the problem by passing yet more laws. The police already have sufficient powers, and all that is now required is the political and judicial will for them to use those powers properly.
I fear that, all too often in recent years, we have handcuffed our police by removing their ability to stop and search. I appreciate that political correctness considerations were part and parcel of that. In essence, no-go areas have been created in our inner cities, partly as a result of political correctness, but I reiterate that this is not just a matter of black-on-black crime; we are looking at those in a range of different ethnic groups in our society who are playing a part in using guns for the purposes of protection rackets and drugs and prostitution.
I therefore gained little pleasure from listening to community leaders who spoke about the Birmingham incident and said that the police had become too lenient in the area. It was very much an eye opener that a number of those community leaders felt that the police had simply turned a blind eye to a problem that they knew was getting ever worse. All too often, if a vacuum of social order is created, it will be filled by violence, anarchy and the indifferent destruction of human life.
In a way it is fortunate that we can still be stunned by the manner of the loss of those teenagers' lives in Birmingham, but I fear that in a few years' time—perhaps rather like in the United States of America—such things will no longer be headlines but will simply be small pieces on page 3 or 4 of the newspapers, rather than something that shocks the entire nation for days. Unless we reverse the anarchy and social disorder in parts of our nation—in particular, in our inner cities—I fear that such horrors are likely to recur.
I hope that the Minister will be able to take on board the points that have been made about witness protection, as that is very much the way forward in any attempt to address the problems that have already arisen, as well as ensuring that the police have the necessary support and are encouraged to enforce the laws that are already in place. The knee-jerk reaction of introducing a new array of laws does not seem to be a sensible way to try to counter the gun crime problem.
10.8 am
Ms Julia Drown: I congratulate my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) on initiating this debate. This issue is certainly of huge concern to many hon. Members, and I am pleased to be able to make my contribution to the debate. I share all the concerns that she raised and recognise the huge increase in gun crime that she described. Such crime is of immense concern to residents, and not only those in inner cities.

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Swindon—only two hours outside London—is a prosperous town, but it contains areas of deprivation. We have had 280 reports of firearms incidents in the past year, mostly involving airguns and replica guns. However, because it is so hard to distinguish between airguns and replicas and the real thing, a significant number of those incidents have to be dealt with as though they involve real firearms. The police thus have to make a huge effort in terms of resources, risk assessments and so on. They have been called out 96 times in the past year to such incidents, resulting in 28 airguns, pistols and replica guns being recovered.
Animals have been injured in the town. People have been shot at, and one man was almost blinded by an airgun. Bus drivers have come to talk to me about their concerns because they have had guns fired at their buses. That is not only a danger to the people on the bus but a major issue for anybody around that bus, in the street, on the pavement or cycling past. It becomes a major issue of public concern and safety. Not only have bus drivers and residents come to me to raise their concerns but pet owners and wildlife carers—who have seen an increase in injuries to wildlife—say that more needs to be done to tackle this real problem.
I have been most concerned, however, about the police who have come to me regularly to raise their concern that they do not have enough powers to deal with the problem. I have met the police on several occasions to discuss not only proposals for what we can do in Swindon but proposals that we can put to the Government on action at a national level to improve the situation. For example, I have written to a number of local schools to raise with parents the problem of the wide and increasing availability of airguns, pointing out the dangers and encouraging parents to get them out of circulation because of the problems that they can potentially cause to everyone in our communities.
One of my overwhelming and worrying memories is of the police sitting down with me and saying that they have a real fear that, because of the wide availability of replica guns and airguns, one day they will end up having to shoot somebody because they could not tell the difference between an airgun, a replica gun and the real thing; the incident will turn out later to have been not so serious, but they will have had to take that action.
Ms Abbott: I was shown a video by the police in Brixton involving a young teenager who had what turned out to be a replica weapon. He pointed it at a policeman, who took a split-second decision and kicked the gun away. The policeman would have been within his rights, however, to shoot that youngster down.
Ms Drown: That is absolutely right. I am sure that that is of concern to all right hon. and hon. Members, and it demonstrates the real need to address the problem of airguns and replica guns. The police brought to me a case of guns, replica guns and airguns. I looked at them and could not tell the difference between a genuine gun, a replica gun and an airgun. Even an expert would have
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had difficulty distinguishing between them when they were right in front of their eyes, let alone somebody looking at them from 10 m away. That is a real problem.
Ms Oona King: Does my hon. Friend therefore agree that we should consider a ban on the sale, import and manufacture of replica and imitation guns?
Ms Drown: Yes. That is something that is supported by the Gun Control Network and by several members of the police to whom I have spoken in Swindon.
I have talked through with local police the Government's proposals for action so far. They certainly welcome the plans, and want to see them in place as soon as possible. I was not clear whether the hon. Member for Cities of London and Westminster (Mr. Field) was disagreeing with both the minimum five-year sentence and the legislation to ban replica and air weapons in public places. Perhaps he will clarify that.
Mr. Mark Field: Just the former.
Ms Drown: Just the five-year sentence. Obviously, there will be exceptions if there has been a genuine misunderstanding about what was happening, and I would support that. The hon. Gentleman's argument against the proposal was that existing legislation needs to be enforced, and I agree. We need to make sure that existing legislation on handguns is enforced. The problem is that it is so difficult to distinguish between handguns, replica guns and so on, and we will make the job easier for the police if we ban all guns in public places without good reason. The police will therefore be able to stop people without having to assess what sort of gun they have.
Similarly, raising the age limit for using an air weapon will start to address some of the culture change that is needed to show this is not about toys. It is a serious and potentially lethal game, as some might describe it, in which people are getting involved. I am pleased that the Home Office is examining a ban on the sale, manufacture and import of tandem air cartridge systems, such as the Brocock, as they can so easily be converted to fire live ammunition. Those are all welcome initiatives, but I would push for even more to be done, as it is important that we get on top of the problem and that all areas of the country do not become as bad as the picture painted by my hon. Friend the Member for Hackney, North and Stoke Newington. I appreciate her concerns. The level of crime with which she must deal in her constituency is far in excess of what I must deal with in South Swindon; nevertheless, the fact that it also exists in Swindon shows that it will affect all of us across the country unless further steps are taken.
The police made four further suggestions to me about what action should be taken. One proposal that seems attractive, and which I hope the Government will consider, is that all air rifles and air pistols should be kept only in clubs, which will be charged with keeping all the air guns and ammunition at their establishments, with all the necessary associated security. Club members would not therefore be able to take those weapons out of the clubs, and we could be secure in the knowledge that they were not in general circulation. Having

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corresponded with a local gun club, I know that they already keep some people's guns, so why should they not extend that as a general rule?
Another suggested measure is to tighten up on the sale of weapons by restricting sales to registered dealers. Internet sales are a problem, and banning those altogether would be good, but perhaps even they could be registered. If all the guns and ammunition were kept in gun clubs, only registered dealers could deliver those guns directly to the clubs. We could therefore be assured that we were keeping guns out of general circulation.
Mr. Paice: I am listening with interest to the hon. Lady's proposals. However, they seem to be based on the misunderstanding that all airgun users use them solely for target practice in clubs. Does she not understand that, in large parts of this country, airguns and air rifles in particular are used for pest control and other field sport activities, and are not used in recognised clubs or ranges but out in the open countryside, perfectly safely and often by very young people?
Ms Drown: I recognise that, but such sporting activity could be organised only through clubs to keep control of the guns and ammunition. Clearly, pest control and more rare exceptions such as use in film making and theatres would have to be subject to exceptional procedure, licensing and so on to allow that to continue. The wish for sports to continue, however, must be balanced against the real needs of residents whose fear of guns and what can happen as a result of them is increasing daily.
I discussed with local police in particular the complicated existing legislation for firearms. I was shown one of the "easy-to-read" handbooks, which went on for page after page. The more complex the existing legislation, the harder it is for the police to use and implement it. There is a disincentive for them to use it as it becomes more complicated. Again I urge that we completely replace the legislation to make it easier and more streamlined. I know that the Government are keen to reduce bureaucracy in the police service, and this seems to be one area in which that can be done. For example, there is a discussion about whether airguns should be included as firearms, as some people could argue in court that they are not really lethal. Simplifying those issues could be very helpful to police officers whom we entrust to enforce the law.
The police are concerned that they are increasingly tracing the origin of weapons to people's houses and that when they visit those houses they find not just one or two weapons but whole walls covered with replica guns, antique guns and so on. The police ask whether in the face of such huge dangers to our community such displays should be allowed. Of course, some of those guns are, supposedly, decommissioned and the Home Office is reasonably sure that the most recent decommissioning rules allow people to have confidence that once weapons are decommissioned they cannot be brought back into use. However, what are we doing with guns decommissioned under previous rules? I am told that many of those weapons can easily be converted to take live ammunition. That is a huge concern.
My final concern is about the number of weapons on the market that look like pens or cigarette lighters. I realise that if they are actually guns, they are already
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outlawed, but is there any law to stop airguns, which cause the same fear as real guns, being marketed in that way? Perhaps the practice is already illegal, but many of my constituents express concern about it. There is no reason that people should have cigarette lighters that are guns of any sort and we should do what we can to ensure that they are not available.
I very much welcome this debate. The Government are right to take the steps that they have outlined. There is a real problem, not only in our cities but throughout the country. It is certainly clear to me that residents in my constituency, public servants and the police are increasingly concerned and that the problem must be addressed. I hope that my right hon. Friend the Minister for Policing, Crime Reduction and Community Safety will tell us that we shall go even further than the existing proposals so that we can all go back to our constituents and assure them that everything possible will be done to reduce this real and growing fear that affects so many people in our country.
10.22 am
Simon Hughes: I am grateful to the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) for bringing us back to the problem of gun crime, about which she and I have talked often. She has been up-front about confronting the direct issue of how we deal with guns. However, she also knows, because I have told her privately, that one of the most impressive events that I have attended in recent years was the conference that she organised at the Queen Elizabeth II conference centre, which addressed the educational underperformance of young black males. In reality, the two issues go together.
I want to be positive and optimistic. Of course we have to deal with the villains—the criminals and the adults who set bad examples—but if we do not at the same time deal with the youngsters and give them alternative routes to success, we shall never turn them from the directions about which we are so unhappy.
People who have had a formative influence on me include Lucy Cope, who is known to Ministers. She has lived in Southwark for many years and experienced the tragedy of losing two sons during the past few years. One son died a violent death, accidentally, at the hands of his brother. Last year, her second son was involved in a minor disagreement in Southwark one morning and, as a result, was shot and killed in the evening of the same day.
Lucy Cope and people like her who have been through such experiences are members of Mothers Against Guns. She is a white woman, married to a black husband, so the family is mixed race and she understands the background of both communities. We need to listen to such people—as the Government and others are increasingly doing—who have important lessons for us.
We also have to listen to the police. Like the hon. Lady, I, too, recently received an update from the people running Operation Trident, who have done extremely good work. Police forces throughout the country and the National Criminal Intelligence Service all have an important role to play and we must learn from their experience.
One positive result of the tragedy that occurred on new year's eve was that young people from the inner city wrote eloquent and relevant newspaper articles to

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communicate their experience. The next generation are telling us how it is and we need to listen to them. One of those articles was written for the New Nation by Akosa Annobil Dodoo, a 21-year-old woman. We should read the work of such people and listen to them. They are the neighbours, sisters, nieces and friends of people who suddenly find themselves caught up in something that they dislike and about which they are angry but which is often overpowering.
On the day after the tragic death of the detective constable in Manchester, which was not a gun crime, I was at a meeting at my local police station. Afterwards, I had an informal conversation with officers who had not attended the meeting; they were just changing shifts. We need to listen to them, too. They told me that we must be careful not to exaggerate the figures. Indeed, I try never to misrepresent figures.
The figures show that gun crime is a minute proportion of all crime, even though it is growing and unacceptable, but officers are increasingly worried about it. When they are called out to Southwark estates after reports that someone has been seen with a knife or a gun, they often never find the person or cannot identify them. That greater propensity to use weapons is not reported, so although there is significant growth in the number of gun crimes recorded, we must also realise that there is much more that the police cannot manage to tackle.
I want to read from two sets of figures. They are all in the public domain so it would not be helpful to read them ritualistically. According to last year's figures, 2001–02, firearms, including air weapons, were used in 0.4 per cent. of all recorded crimes and in 0.2 per cent. if air weapons are excluded. That gives us some perspective, but the recent growth must give us real cause for alarm. I shall give two figures. In 2001–02, there were nearly 10,000 recorded crimes in which firearms were used—up 35 per cent. from the previous year; and there were nearly 12,500 in which air weapons were used, which is the highest number ever recorded.
I want to share some of the Trident figures with Members as I hope that they will serve to disabuse some commentators of their myths, although it is true that the level of offending was serious in 2001–02. In London, gun-related murders rose from 15 to 24 and other shootings from 35 to 118. Some boroughs are especially badly affected. Sadly, Hackney has the worst problem, with 15 per cent. of gun incidents; 13 per cent. took place in Brent and 12 per cent. in my borough, Southwark. Of course, I am not trying to underplay the problems in places such as Westminster, Birmingham or Manchester.
Contrary to what is often thought, the highest number of gun incidents—18 per cent.—took place inside people's homes, according to the latest figures. The second largest group. 16 per cent., took place on the street and a further 16 per cent. were related to night clubs, bars or pubs. As the hon. Member for Hackney, North and Stoke Newington pointed out, those crimes happen in social contexts where a disagreement or a word or jealousy spark something and people overreact.
The motive for such crime is unknown in the majority of cases. Where the motive is known, 16 per cent. of incidents were gang-related—the highest number; 14 per
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cent. were robbery-related; and 13 per cent. related to drug rip-offs or arguments about drug sales. In 11 per cent. of cases, the motive was disrespect—just an argument about status.
The nationality of Trident victims is important: 58 per cent. were British, 28 per cent. Jamaican, and 7 per cent. Nigerian. However, that is not the perception. We must get the figures clear, right and in the public domain. The figures show that most victims were British, followed by Jamaicans, and then, miles behind, come the other categories. According to Trident, the most common category of violence is British on British, with Jamaican on Jamaican further down the league table. We must be careful to get those messages across.
Saddest of all, if inevitable, is the age profile. The bottom end of the graph of gun crime victims shows 14-year-olds with 19 and 20-year-olds at the peak. That is often the age of people who get shot outside the pub or their house, or in the street. They are the flower of our youth, the next generation, the guys and girls—mainly guys— with energy, strength and ability. On victim injury rates, 45 per cent. of victims involved in such crimes were shot, while 33 per cent. were not.
One important issue that I have discussed with the hon. Member for Hackney, North and Stoke Newington and Home Office Ministers is that of getting people to say what happened. Of 174 offences reported last year, in 115 cases 67 per cent. of victims were willing to substantiate what had happened, but in 46 cases—26 per cent.—the victims were not willing to do so. Where people are willing to substantiate, the clear-up rate is nearly one in four, which is as good as anything in London—the average rate in London is 12.5 per cent.
The police statement of the criminal profile reveals deprived environments, school exclusion, social exclusion, and elder siblings involved in crime. The process starts at a young age, with 10 to 12-year-olds engaged in acquisitive crime, 13 to 17-year-olds beginning to get involved in robbery, "steaming", carjacking and running for drug dealers, then, by the age of 18 and above, gun crime and drugs.
We now have the information and the profiles and we understand the score. I agree with the hon. Lady. I am not trying to make a party political point, because the issue is much bigger than that, and we are all striving for the best solutions. First, we must deal with the dealers, the big guys, the criminals, the drug traffickers, the profiteers and the money launderers who are making money from exploiting other people and getting them involved on their side.
Secondly, the police want long-term initiatives. Trident is beginning to be really successful, but it has only been going for two or three years. I think that in Birmingham or Manchester, the police have just closed down a specialist gun initiative. The police say, "Please don't give us an initiative in January, another one in June, then another one in December." Dealing with this sort of crime is a long, steady process.
Thirdly, we have to be honest, as I have tried to be, about the colour, race groups and backgrounds of those involved in gun crime, because then we can target it. We have to make people understand that it is not exclusive to one group—there are predominant categories, characteristics and backgrounds.

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Fourthly, there is a big glamour issue, but it is marginal. Every American film that I have seen since I was a kid has had guns and violence in it—guns are often part of their cultural background. There is a responsibility not to glamorise violence. The tragedy in Britain is that we have an increasingly violent society. Violence is more acceptable, but it should not be—we have to take it on and pull it down.
My only criticism of the Government is that, having done lots of preparatory work—I pay tribute to the Minister, to the Under-Secretary of State for the Home Department, the hon. Member for Coventry, North-East (Mr. Ainsworth) and to their colleagues—they got into a terrible muddle over the new year. They announced that they were going to make proposals, then the five year minimum sentence, then that they were going to have a summit—which obviously should have come first—then backed off from the five-year mandatory sentence. I hope that that was a lesson in realising that it is less important to go for the soundbites and tough-sounding headlines than to get the policy right having spoken to the right people. I hope that we do not go down that road again.
Where do we go from here? An amnesty is a good idea. There should be a common border force involving much more effective Customs and Excise and police work on controlling guns coming into the country from eastern and southern Europe and elsewhere. At the moment, the situation is very poor. I have been told horror stories about how we are not catching people coming through the system. We need a national policing response through NCIS.
The age limit for airguns should be raised to 17. I share the view about replica guns—we should ban their sale through the internet and mail order so that they are available only through authorised outlets, and introduce an offence of possessing them without authority. At the moment, people do not know whether they are replicas and respond as if they are real.
There should be a presumption of custody for everybody caught on the streets with a gun or a knife without a lawful excuse, but I do not agree with the five-year mandatory sentence, because such sentences never work. There is a huge difference between a 16-year-old holding a gun for 10 seconds for his cousin and a person who is going out for the first time with a machine gun or other serious weapon, intending to use it. Once somebody has been sent to prison, there is no stronger response that can be made, and people do not normally come out of prison less likely to commit crime. That is not the experience of black or white young men, who normally come out more likely to commit crimes.
We need more police, and armed response vehicles in every command unit area in the inner city, so that the police can come quickly. Protective clothing must be worn on all occasions.
We need to encourage communities to speak out. Women will lead the way in that, and thank God that they are now doing so, because it is often up to them to make crime unacceptable to their male colleagues.
We must improve witness and victim protection. Above all, we have to encourage young people to have self-respect and take advantage of opportunities from the beginning.
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There are ways forward—it is not a dire picture—but it is urgent to have a united response that learns the best of the lessons from all of us.
10.37 am
Mr. James Paice: I am anxious that the Minister should have time to respond in depth, so I shall endeavour to keep my remarks brief.
I congratulate the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) not only on attaining the debate—she knows the standard practice on these occasions—but on her whole speech. She showed a huge depth of knowledge and understanding of the issues. With one minor exception, to which I shall come in a moment, I agree with everything she said. She may recall, because I notified her beforehand, that I was in her constituency last week, at the Groundwork initiative. I would not pretend that it gave me a huge insight into her whole constituency, but suffice it to say that I realised that she is dealing with problems that are very different from those that I have to deal with in my constituency: it would be foolish to pretend otherwise.
The statistics on gun crime are well known, and I shall not detain hon. Members by repeating them. Such a statement is usually followed by a "but". I have a short "but", which is simply to reflect on the shift in the types of firearm that are being used.
I have statistics that go back a long way. In 1985, 27 per cent. of firearm-related robberies were committed with shotguns and rifles, although the latter have always constituted a minuscule proportion. That is well below 10 per cent. of firearms offences. However, there has been a compensatory increase in the use of handguns and, sadly, automatic weapons. The ground therefore periodically shifts, and I am sure that the hon. Member for Hackney, North and Stoke Newington is right about the development of gang culture—I shall not say the advent because gangs have always existed; we had them at school—on the fringes of criminality. Gangs often serve as a pseudo-family, especially in areas where family breakdown is rife.
We must reflect on what needs to be done. The hon. Member for Southwark, North and Bermondsey (Simon Hughes) made some suggestions but we need to keep it at the forefront of our minds that a gun lying in the middle of the Chamber would not cause problems until it reached somebody's hands. We should concentrate on ensuring that guns do not get into the wrong hands rather than worrying about all guns.
The Centre for Defence Studies at King's college clearly states:
"The apparent failure of the 1997 handgun legislation to have a positive impact on the use of handguns in firearm related robberies supports the argument that any future initiatives directed at firearm crimes must not rely on legislation designed to impose stricter controls on existing lawfully held firearms. Law enforcement agencies need to identify robust and imaginative initiatives that will positively identify current sources of illegal firearms and provide a defence against the continuation of the present level of firearm crimes".
That is important. The increase in handgun crimes, despite the reaction to the Dunblane tragedy, demonstrates beyond doubt that there is no direct link between removing legally owned handguns and reducing their illegal use for criminal purposes. We

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should learn that lesson to the extent of reversing the legislation on Olympic sports and thus end the absurd position whereby members of the British team have to go abroad to practise.
Most hon. Members referred to replica guns. As the hon. Member for South Swindon (Ms Drown) said, many replicas cannot be distinguished from a real gun. Whenever anyone has considered the matter—that includes Labour and Conservative Governments and the Home Affairs Committee—definition has caused a problem. A replica could be a cigarette lighter that happens to resemble a pistol, a child's pistol, an antique pistol, a starting pistol or an expensive, technical, state-of-the-art object that is impossible to distinguish from a real gun unless one tries to pull the trigger. Some replicas can be converted, as can the Brocock. However, I am worried by the suggestion that we should ban all replicas, their manufacture and import, and even prevent someone from having them on the wall. That is an overreaction. I do not especially want a collection of replica guns, but I understand that some people do. They do not cause a problem of themselves, but we have to ensure that they are not improperly used.
A similar point can be made about airguns. Those who use them illegally almost invariably own them illegally—the level of crime for which a person who legally possesses a gun is responsible is generally low, apart from an extreme tragedy such as Dunblane. That applies to airguns to a lesser extent. The statute book already contains a large number of criminal offences that apply to all sorts of guns. There are 28 criminal offences that involve prosecution for using an airgun. It is an offence for a person under 17 to have an air weapon in a public place, yet in the past few years there has been no change in the number of prosecutions or convictions for such offences. Indeed, a marginal decline has taken place.
That highlights the fact that we need not to create more crimes but to make more effort to find out who uses airguns, deal with the gang culture that instigates their use, and of course, education, about which the hon. Member for Hackney, North and Stoke Newington spoke so excellently. I shall not even try to repeat her words, which are rightly on the record.
A couple of weeks ago, I spoke to a retired black Metropolitan police superintendent. His view was similar to that of the hon. Lady—that the police know who holds many of the weapons, but even when the police know the identity of those who have guns they are impeded by a lack of witnesses. There is no doubt that the Macpherson report played a part, but so has general unwillingness to risk accusations of racism. The police therefore do not harass those who have guns. The superintendent said, "If you go to bed with a gun under your pillow, you should lie awake all night worrying that the police are going to bang on the door." However, that does not happen.
Much more effort needs to be made to discover the source of the guns. The important King's college report states:
"This research project has indicated in a compelling fashion that the UK law enforcement agencies and the relevant government ministries are woefully ill-equipped to monitor and analyse the extent to which the UK is becoming affected … by
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illegal arms trafficking. There is a clear lack of co-ordination between all parties involved in the collection and dissemination of data relating to illegal firearms".
The report continues:
"The inability of the UK law enforcement agencies and the associated government ministries to assess the threat to public safety posed by trends in the availability of illegal weapons highlights a serious failure to devise effective methodologies for data capture."
There is no central record of weapons in this country. Everyone who has a certificate for a firearm or a shotgun registers the weapon. The police have the serial numbers and all the necessary information, but that is where the matter ends.
First, we need to establish a national register of all firearms so that if any police force in any part of the country found a firearm that had been used in a crime, it could immediately undertake the necessary research to ascertain whether it had ever been legally owned in this country. I believe that the 1997 legislation provided for that. It would be a first step towards stamping out the supply. Not only the culture needs to be tackled—although that is a priority—but the supply of illegal weapons. We need to stop them getting into the hands of those who are inclined to use them.
We need to leave alone the very large number of people who use guns regularly for sporting purposes—field sports, target sports, clay pigeon shooting or whatever—who do not pose a risk to the public and who take as a huge offence the implication that they do and that they should be penalised for their own activity.
I hope that when the Government introduce their legislation in the next month or two they will bear that in mind. I also hope that before considering more legislation—I have not reflected today on the specific Government proposals—they will think much more carefully about what we can do to stamp out the supply of guns and alter the mindset of those who would use them.
10.50 am
The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): I congratulate my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) on obtaining this debate. She made an excellent speech, which needs to be reread. I shall think about a number of the issues that she raised, even if I am not able to reply to them all today. I shall respond to as many points as I can.
My hon. Friend was probably the first Member to advocate the mandatory minimum sentence. She will be pleased that that campaign of hers has succeeded. As always, she is now moving on to new issues, which is quite right.
My hon. Friend graphically described the problems experienced in the community that she represents. She rightly stressed that although this has been predominantly a crime that has been seen as black on black it is by no means confined to the black community, and indeed is likely to spread if we are not successful in tackling it.
I agree with the stress that my hon. Friend laid on the long-term need to tackle educational under-achievement to raise aspirations and opportunities for success, in particular among Afro-Caribbean young

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men. That critical issue was raised at the gun crime summit in January. It was stressed in particular by Lee Jasper from the Mayor of London's office, and it is one that we must build into our long-term planning.
Under many of the initiatives, such as excellent schools, the behaviour improvement programme, extended schools and so on, the investment will be concentrated predominantly in inner-city areas and areas with the same type of deprivation. We must make sure that we reach those parts of the community in most need of success.
It has not been touched on a great deal in this debate, but what has also been stressed to us in all the work that we have been doing on this issue—by the police, local authorities and community organisations, and again at the gun crime summit—is the importance of supporting and working with members of local communities who want to stand up to and speak out against gun crime. We have some very good initiatives—the "Not another drop" campaign in Brent, which has significantly reduced gun crime in Harlesden, and the similar initiative being run in Haringey. But I do not think that we can say at present that we are running such campaigns in every community where we need to get across such a strong message.
Mr. Khalid Mahmood: Will my right hon. Friend join me in congratulating the partnership against crime in my constituency, which has done a great deal of work in persuading some of the young people to move away from gangs and drugs back into the mainstream of society?
Mr. Denham: I am very pleased to do so. Indeed, I look forward to discussing this issue with my hon. Friend and members of the local community in his constituency next Tuesday, when I come to Birmingham to discuss these very matters.
We are also very keen to make sure that we can have a more strategic approach to working with local communities and supporting local community organisations, particularly local black organisations, which can work in partnership with the other agencies to tackle gun crime. The Home Office is, for example, looking at ways in which the expanded active communities unit can help us with that work. That is a very important part of the overall strategy to persuade those who are carrying guns at present not to do so.
The hon. Member for South-East Cambridgeshire (Mr. Paice), speaking for the Opposition, said that it was not the gun but the person who used it that was dangerous. I can see his point, although, had there been a gun on the floor and had the hon. Member for Southwark, North and Bermondsey (Simon Hughes) spoken for much longer, I think that the risk presented by that gun would gradually have risen. This is a lighthearted way of making a very serious point. We must not only address the issue of those who carry guns but take very firm action to remove guns from those who might use them not in a planned or organised crime, but in all of the situations that have been described in the debate.
The reason why we have been persuaded of the case for introducing a mandatory minimum sentence for carrying a firearm is precisely to reduce the number of
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those who are carrying guns. We fully recognise that some of those who are going out with organised criminal intent carry guns. It has always been against the law and they have always faced penalties. Armed robbers and the like are likely to continue. We need to send a most powerful message through influential groups in the community to those who have only begun to carry guns in the recent past. We need to make it clear that it is not worth the cost.
The hon. Member for Cities of London and Westminster (Mr. Field) raised a point on which I disagree. He said that the issue was enforcement of the existing laws. When Operation Trident was established by the Metropolitan Police, I think the underlying analysis was that there would be a certain number of people in London carrying guns for criminal purposes, often associated with the drug trade, and that their removal from the scene by effective policing would on its own turn the rising tide of gun use.
The case that the Metropolitan Police has put to us and others is that Trident has been quite successful in the number of arrests and the number of individuals who have been targeted. It has been successful in increasing and improving detection rates, particularly for gun murders and so on. It is a real success, and we should never let the impression be given that nothing has been done. That action, targeted on the hard-core element within gun crime, needs to be supplemented by measures that will reduce the wider number of people carrying guns, which can lead to the type of tragedy that occurred in Birmingham. The two approaches—a mandatory minimum sentence plus the targeting of individuals—go together.
I want to concentrate now on the witness issue, which is very important. We have been working, for example, with Waltham Forest on what we regard as something of a model programme called SafetyNet—a partnership between the London borough of Waltham Forest, the housing association and the Metropolitan Police, to support vulnerable and intimidated witnesses. At the heart of that is the need for fast-track relocation for some witnesses at risk.
My hon. Friend asked whether we can go further than that. We have issued guidance to the police on tackling witness intimidation in the past. In May 2001 we urged the police to prosecute instances of witness intimidation wherever possible. We have also recommended that, in partnership with local authorities, community-based support schemes should be set up for witnesses.
My officials, in conjunction with the Association of Chief Police Officers and leading police practitioners engaged in the highly sensitive area of witness protection, are reviewing the existing arrangements. I do not want to go too much in public into details of what that might be, but I can say that we are planning a conference with chief constables to raise awareness of this issue and to examine ways forward.
My hon. Friend made some very important points about co-ordination and reciprocity between different housing organisations across a wider area. I shall take the opportunity, as part of the review, to ask my officials to look at those issues and see what further can be done, and also to see what can be done to strengthen community-based support and the lower level of support that is on offer—for example, the installation of

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panic alarms, the making available of mobile phones with a direct connection to a police support line, the regular use of police patrols and so on, so that we can increase the number of those willing to be witnesses in gun crime cases by having them feel the support that they deserve for being willing to come forward.
The question of guns from the Balkans was raised. There is no evidence of large-scale trafficking of guns, although there are criminals associated with that part of the world who are undoubtedly bringing guns in. We take this seriously, and my right hon. Friends the Secretary of State and the Foreign Secretary hosted a conference in London in the autumn looking specifically at organised crime issues in the Balkans and their links with this country. It is an issue that we shall continue to work on.
Mr. Deputy Speaker: Order. I ask Members not wishing to stay for the next debate to leave quickly and quietly.

Strategic Rail Authority (Edinburgh)
11 am
Mr. Mark Lazarowicz: I am delighted to have the opportunity to discuss the implications of Strategic Rail Authority plans for Edinburgh. I am pleased that several hon. Members from the Edinburgh area and further afield are in the Chamber.
It has become clear in the past few weeks that financial pressures are starting to have an impact on some of the SRA's work. I am concerned about key projects in the Edinburgh area. I hope that the Minister will give assurances about those and, in a couple of cases, respond to my points at a later stage. I want the projects to go ahead and the Government to provide cash to the SRA and the railway industry to allow the necessary improvements to be undertaken.
The first project that concerns me is the long-awaited upgrading and modernisation of Waverley station. Anyone who uses the station can see that it needs a radical transformation. I am sure that you will have noticed that from your visits north of the border, Mr. Deputy Speaker. The upgrading is important not just for cosmetic reasons, but for the entire transport network of south-east Scotland. It will allow extra intercity trains to go north and to use the east and west coast main lines. Operators want to run those trains to meet the growing demand for services to Edinburgh.
The upgrade will also help to meet the need for suburban services in and around Edinburgh. That will allow areas such as the borders to benefit from Edinburgh's economic prosperity by enabling workers to get into Edinburgh quickly by train rather than by road. The redevelopment of Waverley is important for local transport plans and the community around the station. Most of the station is in the constituency of my right hon. Friend the Secretary of State for Transport, but it is only 100 yd from the border of my constituency, so I have an interest in it. Delays in the upgrading and redevelopment of Waverley would have local implications as well as more far-flung implications for the transport system.
I am pleased that the Scottish Executive, the SRA and the Department for Transport are working together on plans to improve direct rail links to Edinburgh airport. That will be possible only if Waverley is improved to allow the trains to go somewhere on a regular basis. Everything links together and hangs on the early redevelopment of Waverley. Some people in Scotland, including Members of Opposition parties, have mischievously tried to suggest that the scheme is imperilled or will be delayed. I hope that the Minister reiterates the strong Government backing for the plan to put at rest the fears raised in some quarters.
John Barrett: rose—
Mr. Lazarowicz: I do not know whether the hon. Gentlemen is one of those who have been asking mischievous questions about the airport link, but I shall give way to him anyway.
John Barrett: Does the hon. Gentleman agree that the airport link should be constructed as a matter of urgency to avoid gridlock on the west side of the city?
Mr. Lazarowicz: I agree that the provision of direct rail services to Edinburgh airport is a priority. Another

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problem on the west side is the opening of the long-awaited Edinburgh Park railway station, which will affect the entire Edinburgh area.
The second project that concerns me is the improvement to the east coast main line. We expect the SRA to make an announcement any day now—perhaps as soon as tomorrow—about the upgrading of high-speed passenger services from Scotland to England. The word on the railway line is that the SRA will push for a major upgrade to the main line rail network between Scotland and England. That would be excellent news for the economy, tourism and the general leisure travel market.
Major improvements in the frequency of trains between Edinburgh and London will be possible with a new high-speed line, but Government cash will be needed if that is to happen. They must be prepared to put resources into the project. I want them to make it clear that in principle they will back a new high-speed line from Scotland to England. After all, if the French, Germans and Italians can have high-speed railways, why not us? Such an improvement would enable other parts of the country to benefit from the London to Dover channel tunnel extension when it is completed in a few years' time.
Mr. Iain Luke: Does my hon. Friend accept that I welcome and support the fast-speed link between Scotland and England? Although we are talking about improvements in an Edinburgh context, many of us in north-east Scotland who have longer travel times to the south and abroad would argue that the improvement needs to be extended north of the city so that we all benefit from it.
Mr. Lazarowicz: My hon. Friend knows that I am anxious to reduce not only my travel time to London but his travel time to Edinburgh. I hope that the improvements he wants will made in due course.
Dr. Gavin Strang: I congratulate my hon. Friend on initiating the debate. We all agree that the journey time by train from Edinburgh to London is too long. Indeed, most journeys have got longer in recent years. I strongly support what he says about investment in the east coast main line and Waverley station. He will agree that it is vital to get investment in track and signalling because the whole development of the railway network is being held up. In particular, does he support the creation of Parkway station at Musselburgh? That is a major issue because of the new higher education establishment that is coming to the area shortly.
Mr. Lazarowicz: Absolutely. I am glad that my right hon. Friend referred to the fact that journey times between Edinburgh and London are not decreasing but increasing. The SRA's proposals for the future are welcome, but we should not forget that journey times may lengthen in the meantime. Those of us who use that route know that over the past five years or so, apart from the flagship service of four hours one minute, the average journey time has increased. City of Edinburgh council advised me this morning that it has been told that, as part of the SRA's consultation on changes to the
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passenger service requirement for GNER, it has been proposed that instead of 74 per cent. of Anglo-Scottish services achieving a journey time of 280 minutes or less, only 50 per cent. of them will have to meet that target between Edinburgh and London. That would mean that half the services would be allowed to take more than four hours and 40 minutes to get from Edinburgh to London. That would be unacceptable, because it would inconvenience existing passengers and make it much more difficult to attract passengers from the airways to the railway. If we had high-speed trains from Edinburgh and elsewhere in Scotland to London, we could relieve some of the pressure to build extra airport capacity. Unfortunately, we are going in the wrong direction to do that, and I hope that the Minister will be able to give me some assurances that train times from Edinburgh to London will reduce, not increase, and that we can return to journey times that were the norm before electrification.
Earlier in my speech I mentioned the need for TGV-style train services from Edinburgh to London. Some people may have understood me to mean that I wanted to see TGVs running from Edinburgh to France. That would be welcome—and indeed possible, through the channel tunnel—but I am concentrating today on domestic services from London to Scotland. I hope that the Minister will give a general welcome to the idea of an improved high-speed line from Edinburgh to London and also reassure us that the frequency and speed of the present services will not be adversely affected.
I have concerns about two further issues. First, I hope that the Government will take some action to encourage the SRA to restore the cuts in assistance for freight services that were recently announced. Although I understand that those cuts apply only to the SRA's programme in England and Wales and that support for freight facilities is a devolved matter in Scotland, freight trains do not just stop at the border. Their journeys continue. If the welcome expansion of freight facilities in recent years stops in England, freight from Scotland will be less able to travel to England by rail instead of by road. That is an issue of great local interest. I recently learned that the freight facilities provided at Leith—in the constituency of my right hon. Friend the Member for Edinburgh, East and Musselburgh (Dr. Strang) and just across the border from my constituency—allow freight to be taken by rail instead of road from Edinburgh to another facility in Chatham, which is also supported by a freight facilities grant. The rail services are more economic than sending the freight by road and also take heavy lorries off the roads between Edinburgh and Chatham. We in Scotland will also suffer if support for freight facilities is reduced in the long term.
Secondly, I am concerned about the situation with the proposed Edinburgh Park railway station. Although it would be on the borders of the constituencies of my hon. and learned Friend the Advocate-General for Scotland and my hon. Friend the Member for Edinburgh, West (John Barrett), but it would affect my constituency because tens of thousands of people work at Edinburgh Park and have to travel by bus or car through or from my constituency. We would certainly benefit from the proposed new station at Edinburgh Park.
Other hon. Members from Edinburgh will be aware of the long-running saga of attempts to establish that station. In October last year, the SRA announced a

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welcome grant of £2 million from the rail passenger partnership schemes. That is the final part of the funding package, but to make the new station possible the SRA still needs to confirm to the Scottish rail franchise the changes that have been agreed with ScotRail and the Strathclyde passenger executive. I was not able to give the Minister advance notice of this point, because it was brought to my notice only this morning, but I understand that confirmation from the SRA is still awaited. It is now critical, because Railtrack has advised that construction of the station foundations must take place in the winter months if the station is to open as envisaged. If the Minister cannot respond on that point now, I should be grateful if he would write to me with some indication that the SRA will provide the necessary confirmation of the changes as soon as possible. The rail franchise is a matter for the Executive, but SRA approval is required.
All that I have said today should not detract from the general welcome that I give to the extra resources that the Government have put into the rail system and the work that the SRA has done. Before I entered the House, I worked with my local authority to pilot through the reopening of rail services to Brunstane and Newcraighall from Edinburgh Waverley, thanks to a grant from the SRA. That body has now taken much-needed charge of the rail network, and I pay tribute to its current leadership and to the Department for Transport. I recognise that the decisions are difficult, given the funding available and the demands made on it, but the issues involved are important for my constituents, for Edinburgh and for south-east Scotland. I hope that the Minister can provide today some answers that will allay the concerns that hon. Members have raised in this debate.
11.16 am
The Minister for Transport (Mr. John Spellar): I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) on securing this debate on the SRA's forthcoming strategic plan and its implications for Edinburgh. As my hon. Friend the Member for Dundee, East (Mr. Luke) suggested, it will also have implications for those further afield. I also thank my hon. Friend the Member for Edinburgh, North and Leith for his comments about the progress that has already been made. I understand the need for him to make representations about further progress. The strategic plan is expected very soon and copies will be placed in the Library when it is published.
My hon. Friend raised several important issues in his speech and I wish to respond to them, but first I shall make some general comments about the railways. The railways and their customers—passengers and freight, both north and south of the border—have had a difficult time as we deal with the legacy of privatisation and the structural discontinuity it caused, and with the problems caused by decades of under-investment and delayed decisions. The Government are backing the rail agenda and putting in place a structure to ensure that the industry can deliver, and my hon. Friend kindly referred to the role of the SRA in that task.
Over 10 years, we will provide £33 billion of direct public sector investment, backed by £34 billion of private sector investment. The investment is now in
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place and, although we face short-term cost and budget pressures, and difficult decisions will have to be made, we can and will deliver a better quality rail service. It will be better managed, focused on delivery and will provide reliable and punctual passenger services. In short, it will be a railway that puts those who use it first.
The SRA is already getting a grip on projects such as the west coast main line and is taking a much-needed look at how to get the most out of the existing capacity on the railway. Network Rail has been set up to operate in the public's interest. It is getting to grips with the planning and management of projects and, as recent announcements have demonstrated, is taking a hands-on role in maintenance. I am sure that that is both deeply necessary and widely welcomed. The rail regulator is working on his review of access charges as an essential part of dealing with costs and as we move towards the spending review in 2004. Investment is beginning to deliver results. Since April 2001, stock worth more than £1 billion has been introduced and more than 2,000 vehicles are on order.
As my hon. Friend said, the SRA drives the strategic agenda for developing the national railway infrastructure of which the Scottish network is an integral part. Although responsibility for infrastructure and safety is reserved to Westminster, Scottish Ministers can and have issued directions and guidance to the SRA, which form the core of the Executive's agenda with the SRA. The Executive are responsible for funding the Scottish passenger franchise and work closely with the SRA towards the replacement of the current franchise in 2004. The Executive and Strathclyde passenger transport executive, which is responsible for services in the Strathclyde area, have set out what they want the franchise to deliver. A new Scot Rail franchise will allow the SRA and the Executive to make improvements to local and regional services in Scotland.
The competition for the replacement franchise was launched in October. In December, the SRA and the Executive announced a package of investment for Scottish services that will deliver new trains for the ScotRail fleet, and recruit and train additional drivers. The new trains will start to come on stream later this year. That will mean big improvements for passengers using the Scottish network.
The Executive also have power to invest by using funding from the public transport fund. The Executive are investing in several important projects in Scotland, including Waverley station, about which I shall say more in a minute. They are also playing a leading role in the feasibility study for possible new rail links to Edinburgh and Glasgow airports, which my hon. Friend mentioned. Yesterday, we debated the Railways and Transport Safety Bill, which will set up a new, independent railway accident investigation branch. Safety is a key priority and the Bill demonstrates our commitment to it.
The redevelopment of Waverley station is an important project for Edinburgh and the Scottish network as a whole. The station's geographical situation is difficult and means that there are physical constraints on any redevelopment. In railway terms, it is a bottleneck that needs to be unblocked. Current service aspirations exceed the existing capacity of the station, which will also soon need some structural and other renewal. Any redevelopment project for the site will

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need careful planning and consideration. Constraints on the delivery of new capacity include the proximity of other buildings on two sides of the site and the underground tunnels on the other two sides. An additional complication is that the station is a grade A listed building.
The SRA and the Scottish Executive, together with Network Rail, are considering several options for increasing track capacity to allow an increase in train frequencies for local and regional services. Outline development work was carried out for the Executive in 2002. Evaluation of the business cases and engineering requirements for several options for redevelopment will be completed early this year. Affordability constraints apply to Scotland as much as to the rest of the network, but I understand that the SRA remains committed to working with the Executive to make progress on that important project. Network Rail is also continuing with a project to upgrade the signalling network in and around Waverley. That is the largest rail network project being undertaken in Scotland and it will be completed in 2004. It includes the renewal of equipment in the main signal centre at Waverley, which controls the east coast main line.
My hon. Friend reminded the House that the east coast main line is a strategically important route. On an average day, it bears 1,900 passenger trains carrying 200,000 people and 250 freight services with a loading of 20,000 tonnes. Last year, the SRA negotiated a two-year extension to Great North Eastern Railway's current east coast franchise. That secured more than £100 million of private sector investment in the route, including more frequent services to Leeds, from which passengers to Edinburgh will benefit through reduced overcrowding on other services; reliability improvements to all the line's diesel high-speed trains and £20 million to improve the reliability of its electric trains; the replacement of five relatively old recovery locomotives by six new or rebuilt locomotives, to ensure more rapid recovery of failed trains and the swifter restoration of subsequent services; and an improved incentive regime requiring 81 per cent. of trains to be on time from April 2003, rising to 83 per cent. from April 2004. From 2003, the company will introduce passenger refunds of 50 per cent. for trains that are late by more than 45 minutes and full refunds for services that are late by 90 minutes or more. We hope that that will not cost the company too much because the improvements in service will have been achieved.
The primary objective of the proposed east coast main line upgrade is to provide for an increase in capacity. I summarised a moment ago how busy the line is. It is running out of capacity and finding it increasingly difficult to accommodate extra trains for both passenger and freight operators within the existing infrastructure. The SRA's work on capacity utilisation will help, but the longer term solution is likely to require infrastructure improvements. The SRA is continuing the upgrade work in close co-operation with Network Rail.
My hon. Friend mentioned the high-speed rail link. The SRA commissioned a study to compare a range of possible scenarios, including the need for, and viability of, a new high-speed line between London and the north of England and Scotland. The study will include an assessment of the proposal that such a north-south line
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should be connected to the channel tunnel rail link. Last week, I visited the channel tunnel rail link, which hopes to start running services in September. The project will be brought in on time and to budget, which is very encouraging.
Mr. Luke: Does my hon. Friend agree that the extension of a high-speed line from the channel tunnel should include areas north of Edinburgh, so that people who live there can experience the benefits?
Mr. Spellar: Any improvements to the line between Edinburgh and London will benefit those who live further afield. I recognise the desire for further improvements, but we have to address the needs of all parts of the country and choose our priorities. We must also ensure that we obtain value for money from our present work. The right return from that work will free up resources to undertake further work. From my hon. Friend's intervention today and the debate that he has obtained on the issue, I am well aware of his strong campaign on behalf of Dundee and the need for improvements in its rail services.
The study will be used to inform strategic decisions to deal with potential long-term—after 2010—capacity constraints on services between London and Scotland. I ask my hon. Friends to be patient and to await the imminent publication of the SRA's strategic plan. The key findings of the study will be reported there and the SRA will give us more detail about the consultants' work. At this stage, I can give no more assurance other than to say that we will examine the study's findings carefully before deciding on the next step. However, I understand the arguments that have been made on the advantages of a north-south high-speed link.
My hon. Friend the Member for Edinburgh, North and Leith also mentioned the issue of freight. Next year, a further £40 million grant will go to rail freight. Increasing the amount of goods transported by rail remains one of our priorities, because of the environmental advantages and congestion relief. The SRA has to achieve a balance between different areas. but the resumption of discretionary grants will be considered a priority in the event that surplus resources become available to the Department for Transport.
I trust that I have responded to my hon. Friend's points. I hope that he is reassured that rail users in Edinburgh and elsewhere in Scotland can look forward to better services.
11.30 am
Sitting suspended—until Two
o'clock.

Rail Services (London and South-West)
2 pm
Mr. Steve Webb: Good afternoon, Mr. Deputy Speaker. The danger with debates about railways is that they can follow a familiar pattern: a series of weary travellers stand up and tell their favourite late train story; at the end, the Minister agrees that the situation is not all that it might be but adds that things are in hand and that the Government are spending records sums of money; then we all go away and nothing much changes. What I want to do today—although I will allow myself one late train story—is to avoid that familiar pattern.
I was prompted to try to secure this debate by the deterioration in services in recent weeks and months, especially on the First Great Western route. Although the topic of the debate is rail services between London and the south-west as a whole, I will focus my remarks on the London to Bristol routes. I want to challenge what I regard as the fatalism that has slipped into the Government's policy on the railways. I will give an example of what I mean by that. A couple of weeks ago, the Secretary of State for Transport was interviewed in The Observer, and this is what the newspaper wrote:
"Transport Secretary Alistair Darling admits today he cannot say when, if ever, Britain will have an efficient and reliable rail system."
As if reading that was not depressing enough, last Sunday a different journalist wrote in The Observer:
"Major multi-million pound improvements to the rail network have been abandoned amid plans to axe hundreds more services, promising fresh misery for passengers."
The article went on to say:
"High-profile schemes have succumbed to soaring maintenance bills in the wake of the Hatfield crash".
Then came the most chilling sentence:
"The £35 billion rail budget for the next decade is nearing exhaustion in the face of escalating cost."
I wanted to challenge the Minister today because the mood music is fatalistic, saying in effect that we do not know when, if ever, things will be sorted. Most of the money allocated for the next 10 years seems to be spoken for. It seems that we have overspent. Despite that, there seem to be few signs, even after the spending of that money, of real improvement for my constituents and those of the many west country Members of Parliament who are here.
What am I seeking today? I am seeking three things. I seek assurances from the Minister on funding for some specific infrastructure improvements on the routes between London and the west—I am thinking of particular things such as pinch points and areas that are known to be unreliable and to cause problems. I would like some commitments from him that the money will be found to tackle those problems.
The Strategic Rail Authority needs to show more urgency in responding to the ideas that have been put to it about improving the integration of services between London and the west. I am referring in particular to a proposal by First Great Western that went to the SRA last September. The proposal was to bring together the First Great Western and the Thames Trains services.
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The SRA has been sitting on the proposal for four months. The Minister seems to be saying that that is not so, but First Great Western says that the proposal went in last September. Those services could be running next year. I was going to say that, in train times, that is not very long, but I am sure that I should rephrase that. The company needs a prompt response to its proposal and it has not had one.
Brian Cotter: I want to pick up on my hon. Friend's point about the SRA. Does he agree that it would be a good move for the SRA to have a regional office in Bristol and to have regional directors, as the authority has promised?
Mr. Webb: That would be very welcome. The idea has been mooted and it is moving ahead in Scotland and Wales, but, as ever, the English regions are somehow second class. The sooner things move ahead here the better.
Mr. Martin Salter: The hon. Gentleman mentioned the proposal by First Great Western to have a wider franchise area. I think all hon. Members would agree that we have to reduce the number of train operating companies. Has the hon. Gentleman written to the Secretary of State and the Strategic Rail Authority, as I and many of my colleagues have done in support of the proposals of First Great Western? We are entitled to know where he stands on the issue.
Mr. Webb: I am clear where I stand on the issue. I fully support integration, and a letter has been written making that point. I welcome the potential for integration that would follow from, for example, Thames Trains not having an extension to its franchise after 2004 and its being able to integrate services better.
In the four weeks to 4 January 2003, the reliability of the service was 98 per cent. That means that one in 50 trains did not run. The punctuality rate was 72 per cent., which means that one in four trains was late. Those trains could have been 10 minutes, one hour or two hours late. All those figures give us is a crude head count measure of the number of trains that were more than 10 minutes late. One of my worries about the statistics is that they do not distinguish between a train that is 10 minutes late—which is not ideal, but liveable with in some circumstances—and trains that are severely late. There is a big difference between companies whose trains are always 10 minutes late and those whose trains are hours late on occasions. Can some thought be given to that?
I have an appropriate late-train story. When it became apparent that I had achieved time for this debate, I was telephoned by First Great Western, which wanted to talk to me before I spoke. I welcomed the call. I agreed to see its managing director and we thought that Paddington would not be a bad place to meet. It was arranged that I would leave Bristol Parkway at 7 o'clock on Monday evening and that I would meet the managing director at 8.30 pm at Paddington.
I arrived at Bristol Parkway at 6.35 pm. Within a few seconds of my arrival, the information screens went blank. I then received a pager message to ring the

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managing director of First Great Western—if only I always received a pager message whenever trains were to be late! He said that the Severn tunnel was shut, but that he hoped it would open in a few minutes. He asked me to ring him in 10 minutes and said that he would let me know the situation. Ten minutes went by. I overheard a conversation that the London train would be in soon and, sure enough, all was well.
I made it up to the platform at 7 o'clock to catch what turned out to be the 6 o'clock train. It was then agreed that the managing director would get on the train at Reading and travel with me to Paddington. That was fine, except for the fact that the train was stationary between Parkway and Swindon, and the managing director had to wait some time for it to arrive at Reading. Half an hour went by; we finally rendezvoused at Reading. I was tempted to tell everyone in the carriage who was about to get on the train.
The managing director told me enthusiastically about all the plans that First Great Western had for improving the service and, as we rolled into Paddington, someone announced through the Tannoy, "Ladies and gentlemen, we are now arriving at London Paddington two hours late. I apologise. I have run out of complaint forms, but if you go on to the concourse, you can have your money back." I could not help but remark on the contrast between the golden vision that had been set out on the train and reality. Of course, we experience bad journeys and that could have been a one-off, but statistics suggest that the problem is much more general.
Mr. Paul Tyler: Can my hon. Friend explain why my train is the one in four that is always late? He is making an important point about the general strategy, but will he consider a particular sub-text? The way in which the industry has been split up into so many different units means that information among different parts of the industry is now incredibly confused. I give as an illustration the fact that Exeter St. Davids, where I catch trains, often receives information from Swindon, which does not have a clue what is going on in Exeter, so the information on the screen is completely unreliable. Reliability of service is extremely important, but so is reliability of information.
Mr. Webb: My hon. Friend makes a good point. Integration and co-ordination of rail services have suffered since the fragmentation that resulted from privatisation. However, I have good news for him. I have in my hand First Great Western's commitment to improving train performance, page 10 of which sets out the customer service disruption management strategy. In a first for the industry, First Great Western is developing a holistic approach to its service recovery. A system of green, amber and red alert statuses will be activated by pagers to trains and staff to ensure
"a consistent approach to service recovery".
Things will be improving, I hope, although I suspect that if a few of the management consultants were sacked, it would be even better.
Recently, the service has been especially bad. Sometimes it is wonderful, and at its best it is excellent. However, when signal failures affected all trains out of Paddington recently, the scenes there would have disgraced a third-world country. People were locked on
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trains in the station because it was physically impossible to force anyone else on. The hon. Member for Reading, West (Mr. Salter) was locked on the train. [Interruption.] We were all there.
What were the problems? First Great Western prepared a brief for me, outlining all the problems that it had experienced since October. Hon. Members will not be surprised to hear that the list included high winds, heavy rain, flooding, derailments, signal failures, timetabling problems, and rolling stock and infrastructure failures—the usual things. What worries me is that many of the problems, such as strong winds and heavy rainfall, will not go away. When will we see the improvements for which we have been hoping?
I want to make it clear that my comments are not an attack on First Great Western, partly because I want to reflect the fact that many other train operating companies have had similar patterns of performance in recent months. I met Chris Kinchin-Smith. Let us be honest: he was decent enough to spend his Monday evening on a train going into London being nagged by me, even though he lives in Bath and had to get home to his family at 11 pm. He is committed and wants to get things done. This is not an attack on First Great Western and its staff. My point is that the infrastructure and the systems that are in operation are not delivering the quality of service that we have a right to expect.
Mr. Don Foster: My hon. Friend makes a vital point. Will he confirm that at least 50 per cent. of the delays on First Great Western trains are caused by problems with the track infrastructure, rather than by the operating company itself?
Mr. Webb: Absolutely. The figures that I have seen suggest that First Great Western is responsible for a quarter of the overall lost minutes. Clearly, the whole system needs to be sorted out, not one individual train operating company.
Mr. Salter: We are getting to the nub of the debate, which is not the performance of train operating companies but the infrastructure on which they run, as the hon. Member for Bath (Mr. Foster) said. Does the hon. Member for Northavon (Mr. Webb) acknowledge that in Reading, which I represent, the station causes a bottleneck? All hon. Members with a constituency interest in the south and south-west rail network should hope—and, I suggest, pray—that when the SRA announces its 10-year plan tomorrow, it will include a significant commitment to upgrading Reading station. The track infrastructure in Reading is capable of 50 per cent. more traffic than the station can cope with. Many problems mentioned by the hon. Gentleman and others in this debate could be solved by a straightforward upgrading of Reading station.
Mr. Webb: We can all say amen to that prayer.
Station infrastructure is certainly part of the story. Swindon station is acquiring a fourth platform, which will help. Such things are important. However, one cannot help being nervous about another 10-year plan. Obviously, such matters are long term, but we are already some years into a different 10-year plan for which the money may or may not have already run out.

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I wish to stress the urgency of these matters to the Minister rather than the defeatism that characterises the Government's approach.
How does the current performance compare with what happened in the past? I am sure you will recall, Mr. Deputy Speaker, that about a year after I first came to the House, I led a debate about rail services between London and the west country—within a year of being elected, I was complaining. At that time, I complained that reliability was 99.4 per cent. What would we not give for that now? Punctuality was 86.7 per cent. compared with 72 per cent. now. I was unhappy that the service had deteriorated but it is substantially worse now.
Nobody expects instant quick fixes, but we are in the sixth term—[HON. MEMBERS: "What?"] Sorry, that was a Freudian slip. We are in the sixth year of a Labour Government. They will still have a 10-year plan after the sixth term. We are not expecting quick fixes, but things seem to be going backwards. We have not returned to the quality of service that was inherited.
I am worried that at the end of the debate the Minister will say, "We have a plan; there is all this money going in and things are heading in the right direction." I intend no disrespect to the Minister, but why should we believe a word of it? Six years have passed. We have had such assurances before and still we see the service getting worse. I hope that the Minister will give us some convincing reason why we should believe the kinds of assurances that we are likely to get.
What needs to be done? I shall raise some general matters relating to infrastructure work that is needed in respect of particular vulnerabilities and pressure points, but I shall start by raising two matters of local interest. First, will the Minister tell us what is the status of Filton junction? I understand that it still features in the SRA's proposals, but that there is some uncertainty about whether the money will be forthcoming. The status of that junction is important in our local area.
Secondly, the infamous Chipping Sodbury tunnel is a matter of particular interest to my constituents and to me. No sooner does it rain than the tunnel floods and trains are redirected or cancelled. I understand that it might be possible to pump water out of the tunnel on to part of the Badminton estate and create a permanent wetland environment. That is an intriguing and attractive idea. Is the Minister aware of that? If so, has he any thoughts about it? Has he considered what action should be taken to ensure that the tunnel is effectively pumped? When there is heavy rain the tunnel causes a permanent bottleneck.
My hon. Friend the Member for North Cornwall (Mr. Tyler) said that we need more co-ordination between different parts of the rail industry. I spoke to the managing director of First Great Western, who talked about his company setting up common control rooms with Network Rail and said, "We sit down and think about what we would do if we were part of an integrated rail system." They are trying to recreate how it once was and how it might be, but it is bizarre that different companies and organisations have to do that. There is a real chance that if things are co-ordinated they might be improved. Infrastructure is finite and long-term
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investment will inevitably take a while to have an effect. We must make the most of what we have—that means more co-ordination.
Mr. David Heath: My hon. Friend is describing the deficiencies in the infrastructure that he recognises in his part of the world. We all recognise such things in our own constituencies. Does he agree that, in the overall picture, improvements to the west country's rail infrastructure are completely forgotten and that we are doing extremely badly in comparison with other parts of the country?
Mr. Webb: My hon. Friend has better eyesight than 1 thought, since he has anticipated my third point. I will return to that issue. It will, however, be no surprise to him that I agree on that point.
In respect of co-ordination, on which we have already touched, I would support a single operator for Paddington and I would welcome the merger of the Thames Trains and First Great Western franchises. We need an urgent response from the SRA about these ideas. Some of the proposals can be implemented during the period 2004 to 2006, and there is potential for more integration and improvements to the service beyond that date. The routes currently operated by Thames Trains need to be freed up in order to create better coordination on the existing track.
I welcome the fact that First Great Western is working with the SRA and that joint control rooms are being set up. We need more of that kind of thing and I hope that the Government will not delay matters. There seems to be a lot of dither and delay on the issue of refranchising and co-ordination, and I hope that that can be removed.
My final points, which were prefigured by my hon. Friend the Member for Somerton and Frome (Mr. Heath), refer to the sense, which many hon. Members in the Chamber will have, that the wider south-west is neglected in terms of transport infrastructure. The Minister shakes his head at that, but given where he is from he might nod his head were he wearing a different hat.
The south-west seems to be the poor relation in respect of the planned major rail infrastructure programmes. I am told that the SRA has not even been coming to recent meetings in the region that it might have been expected to attend. That is perhaps indicative of the attitude of the SRA and successive Governments to the needs of the south-west—there always seems to be a more high-profile region. I sometimes think that south-west MPs have failed to speak as a region. Some of our colleagues from other regions in the country, speak more effectively as a region than we do. I accept that, in that respect, we have a problem with our Cornish friends. Hon. Members from the south-west should perhaps speak rather more on behalf of their region.
Mr. Don Foster: My hon. Friend makes a critical point about the SRA not involving itself in the region. Sadly, on some occasions it does turn up for meetings. Recently it met with four local authorities in my area to discuss the future of Corsham station. The SRA representatives sat through deliberations on how to

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progress with plans for that station, and three days later it announced that the project was not going to go ahead. Presumably, the SRA had known that all along.
Mr. Webb: My hon. Friend makes an important point. I have not spoken at length about the withdrawal of Bristol to Oxford services, which is linked to the Corsham decision. The south-west often suffers when changes of this sort are made, and perhaps it is time that it stopped being the sleeping giant and demanded its fair share of infrastructure investment, and a decent infrastructure. The south-west area multi-modal study advocated particular infrastructure investment, but from what we have been told, there is no money for it.
We could all moan about the railways ad nauseam, and I am sure that the Minister hears a lot about the matter, but I do not apologise for that fact. Some constituents e-mail me on the subject. E-mail is wonderful, because commuters copy me in on First Great Western's reply to their complaints and on the dialogue between them. My constituents are getting angrier and angrier, because investment is not being made; we have been promised great things, but the train service is failing to deliver them. If anything, we are going backwards.
There is a certain fatalism about the Government's approach. They have given up on telling us when, if ever, we can expect a decent, high-quality, reliable rail service. I hope that the Minister will tell me that I am wrong, but I fear that I am not.
2.21 pm
Mr. David Drew: I am delighted to take part in the debate, and I apologise in advance for the fact that I have to attend a meeting of the Select Committee on Environment, Food and Rural Affairs this afternoon and shall not be able to listen to the summing up. However, I look forward to reading it in Hansard. I will try not to make this a rerun of the debate that the hon. Member for St. Ives (Andrew George) and I were involved in a couple of weeks ago; it became known as the Virgin debate, because most of us did not have much to say in favour of Virgin. However, one hopes that things have moved on.
I should like to concentrate on some of the plus points, as the hon. Member for Northavon (Mr. Webb) has made a pretty damning indictment of some of the problems that have been experienced. Anyone who uses the trains regularly—and I think that all the Labour Members present are regular rail users—will know that there have been significant problems since November. The service did surprisingly well after the Paddington rail crash. Given all the problems that were bound to occur, it is disappointing that we should come out of a long tunnel only to find more problems. However, in the past few weeks, the service has been much better, and I hope that that is a sign of things to come.
It is pleasing that the fourth platform at Swindon is coming back into use because that will bring about a significant improvement in the passage of trains through the town. Although my hon. Friend the Member for Reading, West (Mr. Salter) says that Reading is the centre point for problems, there are difficulties at either end of the line. There are problems at Paddington, which is clearly in need of major infrastructure development, and at Swindon, although the latter is being catered for, and that is good news.
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I am glad that we are in dialogue with the rail operating companies. To be fair to those companies, my spies in Network Rail can honestly say that nearly all the problems in recent months have been to do with infrastructure, rather than the companies themselves. That is not helped by the way in which the companies have to interlock with the infrastructure, but let us put the blame where it belongs, and let us hope that Network Rail is beginning to get to grips with that issue.
Mr. Salter: Will my hon. Friend join me in welcoming the recent announcement that Network Rail is taking back in-house responsibility for significant elements of track maintenance? Does he agree that one of the consequences of the disastrous privatisation of the railways is the pre-eminence of contractor culture in the British Rail network? Although many Labour Members would welcome the complete renationalisation of the track infrastructure, at least Network Rail's action is a move in the right direction.
Mr. Drew: My hon. Friend has always been provocative. I could talk about historical lessons, but I have a great deal of sympathy with what he said. Anyone who knows anything about railways knows that contractualisation has been a menace, but the situation is more serious than that. I know from talking to people in the industry that the real problem is that we do not have expertise in the industry any more because there are insufficient numbers of railway engineers. That is a safety issue; in our part of the world the number of people who are able to react to emergencies is sometimes pretty minimal.
Mr. Tyler: May I endorse the point that was made by the hon. Member for Reading, West (Mr. Salter)? Neither he nor the hon. Member for Stroud (Mr. Drew) were in the House when the Labour party was in opposition. I was then the Liberal Democrat transport spokesman and I stressed the need to prevent further fragmentation under the previous Government's privatisation proposals. I urged the Labour party and the Liberal Democrats to make a firm statement that either or both parties would buy back Railtrack if they were in a position to do so following an election. That would have prevented the sale of Railtrack and the fragmentation to which the hon. Gentlemen referred. I know that, like many of us, they have suffered in recent weeks from the chaos in Slough caused by the lack of infrastructure and investment.
Mr. Drew: A benefit of not being around at that time is that I was not privy to such discussions. I hope that we are reaching a more sensible arrangement but there is a need for more co-ordination, which leads on to my next point.
Although we see the sense of refranchising and repackaging parts of our railways, that is causing short-term worries because we are not sure what decisions will result from the discussions. We desperately need to consider a more integrated service. I always make a plea for my own line—the Cheltenham to Swindon line—and we want to be included, which is why we are happy that First Great Western is putting on more trains. However, there was the bombshell of Virgin pulling out. We have lost Wales and West services so we have gone back to the

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Wessex Trains arrangements, but we are not sure where we fit into the great refranchising arrangement. Will the Minister get a move on and get decisions taken through the Strategic Rail Authority? Will he examine the best integrated outcome, because that will give certainty, which is what the rail system needs more than anything?
I could read out many statistics about the investment that is required. The figures relating to the south-west are fairly stark: 450 miles of track need refurbishing or replacing; many units for switches and crossing equipment need replacing; and many temporary speed limits are in operation. Those of us who travel on the railway know all about that.
The title of the debate gives away one of our rail system's problems. The hon. Member for Northavon is right to talk about the rail system between the southwest and London, but part of the problem is that, although it is not the sum total of the system, it completely dominates all decision making. That is why Virgin dropped out. It could not get places in Paddington and had to pull out all other services because of the knock-on effect. That shows short-term, contradictory thinking.
There are many ways in which we must start to rebuild our local network. I cannot speak from experience because I do not often travel to Bristol by train. We could re-establish local stations. We have examined carefully how that could be done and suggestions have been made about my line. I should declare an interest because I live nearby, but Stonehouse Bristol Road station, one of two stations in Stonehouse, could be reopened. That would allow people to travel from Gloucester to Bristol on a train that stops at several stations, making localised commuting possible. At present, a person who wants to go to London can commute, although it may be rather expensive—we could do something about that. However, anyone who wants to commute can travel nowhere apart from London.
Mr. James Gray: The hon. Gentleman is quite right about new stations. One of the problems in Corsham in my constituency is that although there may be the money and the plans to open the station, there are no trains; there have to be trains. The recent announcement from the SRA makes the situation even more difficult.
Mr. Drew: I do not know much about Corsham, but that seems similar to what happens in my part of the world. One can get the infrastructure but not the trains, or one can get the trains but they cannot stop at the appropriate times. We need much more joined-up thinking. My plea is that we should think about how to use refranchising not only to reconstruct the system but to re-energise it. The situation could be improved by linking the trains and the bus network; in some cases, train operators also run bus franchises.
However, that is a local issue, and it does not affect people who commute to London. Although we need to improve the service to London—and in some cases to hold on to it—we must also consider genuine alternatives to the car, to enable people to move around locally. The SRA has many proposals to consider. I urge
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it to get on with the refranchising and to consider issues on their own merit rather than measuring everything according to its relevance for people travelling to London. I fear that by the time we have waited until Paddington is right, and then we have waited until Reading is right, some of us in the south-west will be able to get to London, but we will not be able to get anywhere else. That is not what the rail network should be about.
2.31 pm
Mrs. Angela Browning: I should like to mention some matters that affect the railway further to the south-west than the areas mentioned by the hon. Member for Northavon (Mr. Webb). He rightly focused on the part of the track between Bristol and Swindon and then on to Reading. That has had an impact on my constituency in Devon, in particular, over the years, on Tiverton Parkway station. Parkway stations are good; this one services not only mid-Devon but north Devon and parts of Somerset. However, it has had problems.
Each year, when the timetables have been revised, trains going through to Paddington have been removed from the schedule. When I have inquired about that reduction in the stopping services at Tiverton Parkway, I have been told that it is because of congestion further up the track, between Bristol and Swindon. All indications are, as has been said, that putting the franchising agreements in place as soon as possible—particularly if there is to be a link between First Great Western and Thames Trains—will make a difference not only to those served by that part of the track but to us, further down.
It would be remiss of me not to remind the Minister, who does not need reminding as he hears from me regularly on the matter, about the parts of the line to the west of Bristol where there are still problems. One is the long-standing issue of the flooding of Stafford's bridge at Stoke Canon in my constituency which means that people have to be bussed from Tiverton Parkway to Exeter St. David's. Not only does that have a huge, detrimental effect on the local community, it does not augur well for businesses that want to locate in the further south-west or for our tourist industry. As we know, it occasionally rains in the summer as well as the winter. I know that work has been done on Stafford's bridge, and I am grateful for the information that I have received about the engineering work. However, we have not completely resolved the problem, and while it remains, it affects the main route from Penzance to London.
I should also like to flag up to the Minister the fact that I took a close interest in the south west area regional multi-modal study exercise last year. It looked at the overall strategic importance of rail, road and other interrelated links. He should take fright at it as much as I did, not least because he represents a Plymouth seat. The SWARMMS report concluded that one of the key problems was the lack of competitiveness of the rail link, particularly west of Exeter.
If there is ever any question of the railway's being deemed not important further west of Exeter, I am sure that both the Minister and I will champion the railway. That exercise was carried out for the SWARMMS

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report and overseen by the regional assembly. During that process, I, as a Member of Parliament, had the humiliation of being allowed to observe the deliberations, while others who had little knowledge of the locality made profound pronouncements. I hope that the Minister will bear it in mind not only that such comments are depressing for business, but that no hon. Member from the west of Exeter would countenance such events in future. I am sure that I have cross-party support on that point.
Mr. Drew: I am sure that the hon. Lady will remember, but I got the SWARMMS people to the House, because I thought that it was important that they had a dialogue with us. I hope that the Minister will take on board the idea that SWARMMS should work with hon. Members, not disregard them as seems to have happened.
Mrs. Browning: I could not agree more. I was allowed to go and observe, but not to sit round the table and talk about the issues in my constituency, something that was difficult for me, as the Minister will appreciate.
If we are talking about rail links between the southwest and London, I must mention the Exeter to Waterloo line. That is not the issue that the hon. Member for Northavon raised initially, but it is equally important. The fact that the new franchises are being issued is important. Railtrack wrote to me in August 2001, further to my inquiries about dualling the track on the line. It said that various train operator bidders for the new Wessex franchise covering that area had considered the suggestions, taken them on board and anticipated that dualling certain parts of the track would feature in their proposals. There are huge problems with that line, but it should not be forgotten, because it is an important alternative to the main Paddington link. It is useful not only to my constituents but to those further up the track.
In conclusion, I realise that there are difficulties at the moment, because of what has happened recently to the structure of Railtrack and the Strategic Rail Authority. However, I should appreciate it if Ministers personally kept hon. Members informed on such matters, rather than leaving that to the train operators and those who obtain the franchises. Those briefings are useful, but I would be grateful if we could hear more regularly from Ministers about their thinking and their realistic expectations of timetabling for the strategic overview of rail transport in the south-west.
2.37 pm
Mr. James Gray: There are three subjects that most Englishmen like to talk or complain about: cricket, weather and the awfulness of the rail services. That has been the case under all regimes, from the very beginning of the railways. I congratulate the hon. Member for Northavon (Mr. Webb) on calling the debate, and wholeheartedly agree with most of his remarks about the general dreadfulness of the service. "Delays, discomfort and disgraceful cost" is a reasonable summary. It is not necessary for me to expand on that. Everyone present knows what the matter boils down to, and I stand with them in complaining to the Government, to First Great Western and to others.
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I want to speak in this debate because of the announcement a few weeks ago of the withdrawal of the Bristol to Oxford service via my constituency. That announcement has an unintentional and regrettable consequence: the likely failure to reopen Corsham station. Corsham is a town of 10,000 or 15,000 people and is growing rapidly. The station has been planned in all but its final stages. There has been a slight hiccup recently over the cost involved, but the £2.5 million that was originally proposed seems to be enough. A consultant recently proposed that it would cost £2.5 million to reopen the station, and the trains from Bristol to Oxford were going to stop there.
Corsham is largely a commuter area, from which people tend to commute to Bath, Bristol, Chippenham, Reading and London. A survey carried out 10 years ago found that, of the 1,500 or so people commuting from Corsham, more than 1,000 were doing so in the local area and a total of only 48 commuted to London. The service that was offered from Corsham to Bath, Chippenham and Swindon would have been heavily used. In addition, a new development has been proposed in the Pockeridge lane to Peel circus site, which would create 595 new houses within a 100 yd or so of the new station. That development is being built not least because the new station was expected.
Following last week's announcement by the Strategic Rail Authority of the withdrawal of the Bristol-Oxford service, it now looks as if the rail passenger partnership will not be an option for Corsham station. The Corsham station programme may well collapse, in which case the station will not be reopened. Incidentally, that would mean that other projects for which we have been fighting, such as the Wootton Bassett station, are equally unlikely to occur. In these days of sustainable transport and all the brave words used by the Government about trying to persuade people off the roads and on to railways, it is extremely regrettable to see a project such as the one for Corsham station disappear.
I want to ask the Minister two things. First, is there a way in which he can delay the withdrawal of the Bristol-Oxford service? It has been announced that the service will be withdrawn in May, but if he could delay that until after refranchising, it is just possible that the new franchisee might find some way to run the present service or provide another service that will stop at Corsham station.
Even if the Minister cannot go that far, will he take an early opportunity—I have written to him on this matter—to welcome to his office representatives of a broad consensus, consisting presumably of those from Wiltshire county council and North Wiltshire district council, myself and Other interested persons? The civic society at Corsham is very active on the matter, as is Councillor Peter Davis, a Liberal Democrat who has been campaigning on the subject for 20 years, to whom I pay tribute. If the Minister would be so kind as to meet us to discuss the matter, I should like to find a way of allowing the project to go ahead.
Mr. Tyler: I am listening carefully. There is a more general point. The Minister's influence in the matter would, of course, have been much greater had the

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industry not been fragmented by privatisation. Will the hon. Gentleman say whether he would have voted for that legislation had he been a Member at the time?
Mr. Gray: I am here to fight the corner of the people of North Wiltshire, including the people of Corsham. I am not interested in entering into petty party political dialogues of that sort. We are here to talk about Corsham station.
Another disadvantage that has resulted from the announcement is that the money earmarked to turn Chippenham station into a transport hub has been withdrawn. There was to be a bus link from Chippenham to west Wiltshire, especially to Devizes, Calne, Melksham and Trowbridge. That is to be cancelled. Both those developments are extremely regrettable.
I am grateful for the Minister's nod, which I understand to mean that he will welcome a delegation of the sort that I have described. I look forward to discussing the matter further with him in the privacy of his office.
2.43 pm
Mr. David Heath: I congratulate my hon. Friend the Member for Northavon (Mr. Webb) on securing the debate.
It may appear to an innocent observer that Members are making competing claims on the Minister, but I do not see it that way. All that we are saying is complementary in that we are trying to establish a viable and integrated rail infrastructure for the south-west. If we are serious about moving people from our overcrowded road system and the over-congested A303 and M4, we must have a rail network capable of meeting their needs. In order to meet those needs, the service must be economical, efficient and convenient for those who want to use it. At the moment, it is none of those things.
I have serious concerns about the level of investment in the west country, as I said during an intervention on my hon. Friend. We are losing out as a region, as we so often have on such a wide range of issues over the years. We do not speak sufficiently forcefully and we do not speak with one voice. I hope that we are beginning to rectify that omission today. Other infrastructure programmes, equally important in their own way, do nothing for the people whom we represent in the west country. The west coast main line seems to be gobbling up all the available cash at the moment.
At Transport questions yesterday there was a bizarre competition to offer to buy the Minister more and more drinks in order to secure his support for various rail schemes. The bidding for Somerset was left with a commitment from the Minister to come down to Yeovil junction to have a pint of cider with my hon. Friend the Member for Yeovil (Mr. Laws) and me while discussing the Waterloo to Exeter line. I do not intend to enter that auction, today. I simply want to express my concerns about the three main lines and then deal with local services.
My hon. Friend the Member for Northavon talked about the first main line—London to Bristol. It is the main link for many of my constituents in Frome and the
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surrounding area. As we have heard, there are huge deficiencies in that line at the moment. It is an essential arterial route, not only for the west of England but for Wales. I tend to badger the Secretary of State for Wales on the ground that sometimes I can put a question to him when I cannot put one to the Transport Minister. Our desire for an effective rail service should cross the Bristol channel.
The second main line is the service that runs out of Paddington through Westbury and Frome in my constituency. It does not stop at Frome, however, which is a longstanding grievance. Frome is the largest town in England with a mainline station where the trains do not stop. The line then runs through Castle Cary—a very important station—and down to Taunton and beyond. We are concerned about the level of investment in that track and in the rolling stock that is used on that line, and about the future of the line as a whole. The hon. Member for Tiverton and Honiton (Mrs. Browning) spoke about that too.
The third main line is Waterloo to Exeter, near to what I rather archaically refer to as the Southern region line, which serves my constituency via Temple Combe. A programme to dual that track could be implemented but is now on hold. There is no sense in talking about improving the public transport infrastructure in the area without addressing that issue.
Mr. Adrian Sanders: Would not dualling that old Southern region line and increasing the speed of journey times between London and the south-west open up the very competition between routes that privatisation was supposed to promise? It is the lack of investment in infrastructure that has turned it into such a disaster.
Mr. Heath: My hon. Friend is absolutely right. The biggest nonsense of all was when the dual-bed bridge at Temple Combe was taken up and replaced with a single-bed bridge. That was the height of myopia.
Mrs. Browning: In the spirit of cross-party consensus on this issue, may I point out that the hon. Gentleman and I are hit by a double whammy? Not only will those involved not dual our railway line between Exeter and Waterloo, they will not dual our road—the A30/303—either.
Mr. Heath: The hon. Lady must not lead me down that route, because otherwise I would talk about the Sparkford to Ilchester section of the A303, which I hope is to be dualled in the very near future.
Mr. Adrian Flook: Does the hon. Gentleman agree that for many years there has been great concern about the Reading, Westbury, Taunton element of the track? Is he convinced that the SRA will help maintain the present level of services, or is he worried about what it has been doing in Corsham and elsewhere?
Mr. Heath: I would be extremely worried. There seems to be a blind spot about the major arterial route to the west country. The hon. Member for Reading, West (Mr. Salter) is right to say that one of the deficiencies is the bottleneck at Reading. That is outside our region, but affects all our people.

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I shall say a few words about local services. I agree with the point made by the hon. Member for Stroud (Mr. Drew) that it is no good having the best express trains in the world if there is no way of getting people from their localities to them. One way of achieving that is via parkway stations, which are suitable in some circumstances, but a better way is to have good, connecting local services. As a result of Dr. Beeching's policies many years ago, there are huge gaps in the services available on the line from Westbury to Taunton.
One of my long-term intentions—it really is long term, as I started discussing it in 1985 on the county council—is to see the reopening of local stations. Stations such as Langport and Somerton, Castle Cary, Bruton, Witham Friary Junction—in which I declare an interest, because I live there—and Frome, could provide a useful component of the local public transport infrastructure. The reopening of those stations was being considered as a feasibility scheme under Railtrack, but now that has disappeared. I cannot tell my constituents whether there is any possibility of the reawakening and reinvigoration of that very enlightened and sensible scheme. It is a great opportunity missed.
I do not understand why we in Somerset cannot have the same sort of infrastructure that is taken for granted in other parts of the country. Why do we always have to get into our battered cars and drive to places, rather than use the railway that runs past the end of our garden but speeds its way down to Cornwall or up to London without stopping? I make a plea to Ministers. Let us deal with the main thoroughfares—the trunk routes, as it were—of the railway system, but let us also recognise that railways could perform a very valuable local public transport function. In the west country, at present, they fail to do that.
2.51 pm
Mr. Laurence Robertson: I rise to speak in the debate without declaring an interest, as I am not a regular rail user. That is because the service between Cheltenham, Gloucester and London is appallingly bad. I support all hon. Members who have commented to that effect.
I congratulate the hon. Member for Northavon (Mr. Webb) on securing the debate. I know that his intentions are genuine, and that he would not have raised the subject had it not been so important.
What is wrong with the Cheltenham service? Cheltenham and Gloucester are a main town and city and therefore deserve much better rail services than they have. The frequency is poor and the reliability is poor.
The direct service between Cheltenham, Gloucester and London is limited. Many trains require passengers to change at Swindon and the quality and safety of the train that takes them from Cheltenham to Swindon is questionable. One would struggle to find a bus that was worse or more antiquated.
The length of the journey is another problem: it can take well over two hours, and it is easy to drive to London in that time. If one then adds in the length of time it takes to get to the initial station and the time to travel across London, that is at least another hour. That is why so many people drive, because they cannot
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depend on the trains to get them to London on time or even to get them there at all. Nor can they depend on having refreshments when they are on the train.
The whole service is a disaster, and I want to bring it to the attention of the Minister, if he is not aware of it already, and to the House. I am being far less polite and measured in my terms than the hon. Member for Northavon was, but that reinforces my point—the service is dreadful.
The situation has been made worse and possibly more frustrating by the fact that, some while ago, I attended a meeting with First Great Western, which runs the trains from Cheltenham to London, and was promised that better services were on the way. I cannot remember the exact date of that meeting, but it is long enough ago to suggest that there should be some difference by now. I am not, however, aware of any sign of a difference.
On top of that is the quality of the station at Cheltenham, which for a mainline station is appalling. Some time ago, we were promised an hourly service to London from a small station called Ashchurch, which is near Tewkesbury. I do not expect the Minister to be aware of that station or the situation, but I would appreciate it if he examined the matter and wrote to me about it. That promise was made to people in the area, and just before today's debate started, I spoke to the parish council, which is concerned about the station's current viability.
Time is short. I would like to say a lot more, but I cannot. I will say only that it is a cop-out to blame privatisation, as it avoids examining the real issue. We hear that fragmentation has been the cause of the problem, but I cannot think of a transport industry that is more fragmented that the airline industry. Not all airports are owned by the same company and there are goodness knows how many air operators, but the quality of the service is far better, and it is safer and more reliable.
The fragmentation argument is nonsense. If there is any problem in that regard, it is that there are not enough rail providers. We do not have the choice that privatisation perhaps should have brought, and competitive rail services would improve the situation. If we are saying that British Rail should be the model for every industry, it is no wonder that people have no faith in politicians.
2.56 pm
Mr. Don Foster: I congratulate my hon. Friend the Member for Northavon (Mr. Webb) on securing this important debate, in which he has rightly raised the concerns of all rail users in the south-west. Indeed, he has gone further and challenged Members of Parliament of all parties from the south-west to work harder together to get a better deal for our rail users.
My hon. Friend raised several specific local issues, as have other hon. Members, and the Minister will have made his traditional list of the questions to answer. My hon. Friend asked about Filton junction and Chipping Sodbury tunnel. Other hon. Members have asked about station improvements at Reading, problems of flooding at Stafford's Bridge, the Chippenham transport huh and the dualing of the Exeter to Waterloo line or what my hon. Friend the Member for Somerton and Frome (Mr. Heath) described as the Southern region line. Rightly.

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the hon. Member for North Wiltshire (Mr. Gray) raised the vital question of Corsham station, to which I will return in a few minutes.
My hon. Friend the Member for Northavon also talked about how the region has been neglected and is seen as a poor relation. Sadly, it is worse than that, because for certain rail and transport purposes, the south-west region does not even exist. Hon. Members will be aware that in 1999 the Deputy Prime Minister announced a new all-singing, all-dancing public information system. It was to be a "Travel Direct" along the lines of NHS Direct. At a research seminar organised by the Institute of Public Policy Research in December 1999, he said:
"I see no reason why you should not in the future be able to buy a single ticket on the phone, allowing you to go long distance, door-to-door, with a cab picking you up at home and taking you to the train, and another cab or bus taking you right to the door at the other end. The service should also be available on the internet, giving you the chance to buy your ticket and plan your journey at home or the office. New technology, modern transport will offer a brand new service for passengers."
Knowing my hon. Friend lives in the beautiful village of Olveston, I decided to check out how good that service, which was established in 1999, was in 2003, and he will be delighted to know that the all-singing, all-dancing system that was supposed to help integrate transport does not operate in the south-west. When I entered the name "Olveston", the system said that no results were found and that it could find not find any places that matched the inquiry for Olveston. I was surprised, but thought that it was perhaps because Olveston was too small for the computer. I thought that I would try my own wonderful constituency of Bath and was more generous by putting in the name of my local authority, Bath and North-East Somerset council. Unfortunately, it said that there was no journey planner covering Bath or Bath and north-east Somerset. So much for taking note of the transport needs of the southwest. My hon. Friend is right; we have been neglected. He was right to draw attention to the fatalistic approach adopted by those who are supposedly in charge of our over-fragmented railway system.
Tomorrow, the Strategic Rail Authority will announce its new, updated, strategic plan, to which we look forward with great interest and, I fear, resignation. A year ago when the first plan was announced, the Secretary of State told us there was a line in the sand—there would be a new dawn for the railways, and at long last there was long-term planning for the future. Tomorrow, that plan will be torn up, and many of its exciting projects—the schemes that hon. Members on both sides have referred to—will not go ahead.
The south-west loses out in many respects. There are signalling problems in many parts of the region—from Castle Cary to Taunton, Totnes to Plymouth, and Bristol to Swindon—and problems resulting from the failure to install a dual track in many areas. We have discussed the Exeter to Waterloo line; my hon. Friend the Member for St. Ives (Mr. George) referred to the need for dualling in the Probus and Burngullow area in Cornwall.
There are overcrowded trains in many parts of the system, and even the new rolling stock is sometimes inappropriate. I am unhappy with the Adelante trains
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introduced by First Great Western, and many people who have to use Virgin services are concerned about the Voyager train. When there are cutbacks in train services it is crazy to run shorter trains, with less room for passengers, rather than longer ones. More space should be available on the overcrowded Virgin Voyager and the Adelante trains. I was surprised that the Minister yesterday in the Chamberߞat column 706 of Hansard— described the Virgin Voyager trains as "a considerable improvement". That view is not shared by many people.
There are all sorts of problems in my region. In common with everyone else, we suffer increasing delays and cancellations. Since the Government came to power, delays have increased by 100 per cent. and cancellations by 50 per cent. Services in the south-west are part of those statistics. That is not solely the fault of the train operating companies; much of the problem results from the failure, over many years, to invest in railway infrastructure and from the problems caused by the fragmentation introduced when the railway system was privatised.
The south-west loses out in other ways, even when the Government decide it is important to look at the overall system. The hon. Member for Tiverton and Honiton (Mrs. Browning) referred to the south west area regional multi-modal study. Many of us were unhappy about its proposals but the study at least made an effort to consider the integration of road and rail. But what happened? As soon it was presented we were told that the road schemes might go ahead but there was no funding for the rail projects.
The notion of integrated, joined-up thinking on transport seems to have gone out of the window. The hon. Member for North Wiltshire gave as an example the cuts to the Bristol Temple Meads to Oxford line and its implications for Corsham station. That will be a disaster for rail travellers, and it will put many more cars on the roads, which means more congestion. We are being offered jam tomorrow for our railways, but jams today on the roads.
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I do not want to stem the hon. Gentleman's flow, but he talked about infrastructure improvements and listed several substantial improvements that he wanted. Would he tell the Chamber whether the Liberal Democrats plan to put more money into transport? If not, how will they bring about improvements?
Mr. Foster: Yes, it is, in part, about more money. If the hon. Gentleman will wait just a few more days, we will present a detailed alternative Budget. I ask him to be patient.
However, it is also a matter of making more effective use of money. We all accept that rail costs are massively over the top, but I raised questions a very long time ago about the way in which money was wasted on the railways. Even the Minister's Government accepted that part of the problem was that there were far too many contractors and subcontractors on the track, all taking a share of the profits. The former Secretary of State for Transport accepted that more than 12 months ago—action is long overdue.
There are far too many train operating companies, and there is a need to address the fragmented nature of the railway. Some developments are simply not

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affordable because everyone is concerned about the safety regime on the railway and thus not moving forward. If the Government were to take up suggestions as to how such problems might be managed, we would be able to make better use sooner of existing resources.
Mr. Laurence Robertson: As the hon. Gentleman is talking about safety, would he comment on the fact that there are far more airline companies than there are train companies, yet the safety record in the air is infinitely better?
Mr. Foster: We had that debate in the Chamber only yesterday. Comparisons between a fragmented monopoly and a fragmented competitive situation are totally false. In reality, people have little choice about which trains they take, whereas they have the option of not flying on an unsafe plane. Competition can drive up safety in a way that a fragmented monopoly cannot.
Much can be done. It is regrettable that there will be significant reductions to the big schemes that were planned by the Strategic Rail Authority. The Minister heard from Members from all parties today, and will continue to hear from Members from the south-west and elsewhere, that many pinch-point problems can be resolved by relatively small, relatively low-cost schemes on different parts of the network. Bringing in a passing-loop line to allow a fast train to overtake a slow one and a bit of dualling here and there could make a huge difference. I urge him to review the rail passenger partnership programme, because it offers opportunities. Local people can suggest local solutions to how improvements can be made on the network.
Let me conclude by speaking briefly in support of what the hon. Member for North Wiltshire said about the Oxford to Bristol Temple Meads line. I accept that it may be sensible to reduce the number of trains in some pinch-point areas to achieve improved reliability. I would not deny that for a minute and have said so publicly several times.
However, each service must be considered much more carefully than it has been to date. The impacts on other aspects of the transport network and on long-term future planning of the rail network must be considered in the round. The cancellation of the Oxford to Bristol Temple Meads train is an example of a bad mistake about to be made. It will mean not only more cars on our roads but almost certainly cancellation of the Corsham station plans. Frankly, that would be a disaster for the area.
I hope that the hon. Member for North Wiltshire will urge the Minister not only to meet a group of people with an interest in the matterߞthe affected area is much wider than the immediate north Wiltshire area because, as other hon. Members have said, an impact in one area can spread a very long way—but also to take a personal interest in the issue and try to delay the decision.
This has been a very important debate. We look forward to the response from the Minister but above all to his assurance that the south-west will not continue to lose out in the provision of a rail system.
3.9 pm
Mr. Christopher Chope: I, too, congratulate the hon. Member for Northavon (Mr. Webb) on introducing the debate. We heard important
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contributions from my hon. Friends the Members for Tiverton and Honiton (Mrs. Browning), for North Wiltshire (Mr. Gray) and for Tewkesbury (Mr. Robertson). It is notable that, with the exception of the hon. Gentleman who introduced the debate and his hon. Friend the Member for Bath (Mr. Foster), who has just replied from the Front Bench, the Member for Somerton and Frome (Mr. Heath) is the only Liberal Democrat with the staying power to listen to the debate throughout. By coming into the Chamber to offer a sound bite and then disappearing, the Liberal Democrats quite typically show that they do not take the issues as seriously as they should. This matter needs more than a short contribution; it needs sustained involvement. That is why I am delighted that I have four of my hon. Friends with me.
Mr. Heath: Will the hon. Gentleman give way?
Mr. Chope: No, I will not give way at the moment.
Nobody has dealt with a significant issue that affects the part of Dorset that includes Christchurch, Bournemouth and Poole. The Strategic Rail Authority announced in December that it would reduce the number of trains a day on the line between Southampton and Bournemouth by no fewer than 30 with effect from May. It used the extraordinary justification that
"the purpose of these particular reductions is to make more productive use of capacity on an overcrowded network."
People in my constituency recognise that there is pressure on the network further to the east of Southampton, but there is not the pressure on the network between Bournemouth and Southampton to justify that enormous cut in service. That is another example of the SRA being rather disingenuous.
Another big issue for my constituents is the uncertainty generated by the delay in deciding on the new franchise for South West Trains. When South West Trains became the preferred bidder, it put its money where its mouth was and invested heavily in new rolling stock, which will come on stream in the next two or three years. In return, it has received delay and indecision from the Government, and the franchise, which expires next month, will be extended for a year while a new three-year deal is negotiated. One adverse consequence is that investment in infrastructure that South West Trains has been willing to commit to as part of a longer-term franchise will no longer be available. That money will be clawed back by the SRA, and we will not know until tomorrow's announcement whether the authority will invest in the infrastructure to the extent that South West Trains would have been willing to do, had it been given a longer franchise. We may find that the reduction in the lengths of the franchise will be to the detriment of the travelling public, particularly in Dorset.
Several hon. Members referred to the SRA's announcement. It is extraordinary to have a debate when there will be a major announcement on the following day, and it is extraordinary that we cannot have the debate the day after the announcement so that we can comment on it. There is plenty of scope there for conspiracy theorists. We are likely to hear tomorrow that there will be a substantial reduction in investment in railway infrastructure because of the extraordinary

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overspending and waste that has been identified. I hope that the independent rail regulator, who is still in office, Mr. Tom Winsor, will consider very carefully what the SRA intends to do and will see whether it will be evenhanded in its investment in various parts of the country.
Mr. Anthony Steen: I apologise for not having been here for the whole debate. I have been serving on an inquiry team, and I am sure that the House—particularly Liberal Democrat Members, because they are never here when such things are being said—will understand why I have not been here until now.
I do not understand why we cannot catch a train from Paddington to Plymouth without such a fuss. Anywhere else in Europe, people simply get on a train. I cannot believe that we are having a debate about the lines and the rolling stock. What is the problem with this country that means that we cannot just get on a train, get off it at the other end and arrive on time? What has gone wrong with Britain and our rail services?
Mr. Chope: My hon. Friend, as always, puts his finger on the core issue, which is that the people who are responsible for running the railways are not able to deliver the common-sense results that both he and I want. I feel strongly about rail travel between Cornwall and the south-east, particularly between Cornwall and my constituency. My mother lives in Cornwall and depends wholly on the railways when she wants to see her family. She is not alone in Cornwall in feeling isolated, and the Government's failure to deliver improved services on the railways, and on the roads to Cornwall, increases that feeling of isolation.
I refer to the point made by my hon. Friend the Member for Tiverton and Honiton and others about the south west area regional multi-modal study. What a waste of time that was. We were suspicious when it was set up. We thought that it was a delaying tactic by the Government to get a lot of people chattering among themselves and becoming involved in enormously complicated evidence gathering, evidence giving and playing one group of people off against another. At the end of that elongated process, a report was produced, which made it clear-that if there is a west country voice on such matters, it should be that the railway line to the east of Exeter should be dualled.
How did the Government respond? They ignored the report and thereby insulted everyone who had been involved in its preparation. If he does nothing else this afternoon, the Minister should apologise to those people who, in good faith, embarked on that consultation exercise, only to have the Government press their faces into the mud.
3.17 pm
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I am pleased to follow the temperate remarks of the hon. Member for Christchurch (Mr. Chope).
I congratulate the hon. Member for Northavon (Mr. Webb) on securing this debate and making the points that he has done. I shall put on my south-west hat for a
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moment. He was right to say that there is considerable advantage in Members of Parliament and local authorities speaking with one voice. If I have a criticism of my region, it is perhaps that it has not spoken with a unified voice in the past, as some other regions have. Let us consider the lobbying of the Welsh or the Scots—not as regions, but separate nations—and of some parts of the north. Perhaps we have lost out in that respect.
Two years ago, we had a lively debate on the subject, occasioned by my hon. Friend the Parliamentary Secretary, Privy Council Office. The hon. Member for Northavon also referred to a debate that he initiated in 1998 on the subject. He relayed the usual horror stories. There is no difficulty in finding such stories, and I accept that every one of them is an inconvenience to the people involved. However, I travel from London to the southwest and the majority of my journeys have been successful. The trains have been on time. They have not always been as clean as I would have liked, nevertheless my experience of the service generally has been very good. That has also been the case in trains that I have used when carrying out ministerial duties. The operators had not known beforehand that I would be using the trains. Not all journeys are bad. The hon. Gentleman is right to say that there are sufficient bad journeys to cause concern. However, to suggest that the whole service is poor paints a false picture. Although it is fraught with problems, there are also many successes in our rail system.
Like the hon. Gentleman, I want the rail service to improve. For years, under British Rail, the rail industry was widely regarded as being in gradual decline. There was never a golden age, some 50 years ago, when the rail service delivered everything that people today say that they would like. Then the industry was privatised. The emphasis was on reducing subsidy rather than on looking for growth or improving passenger and freight services. For the first time in generations, the industry started to grow—just as the private sector took over. An additional problem has been caused by there being considerably more people in employment: since 1997, 1.5 million more people have been travelling by train to work or for pleasure and leisure, putting additional strain on the system.
Following privatisation, there was no strategic leadership. The Strategic Rail Authority was therefore set up to provide that leadership and to take a new strategic approach to providing rail services. The hon. Gentleman said that he did not want to be fobbed off with references to the SRA. However, the authority's objectives, as set out by the Secretary of State, are to provide clear leadership and the co-ordination that the hon. Gentleman talked about, to improve performance across the network, and to provide a clear and focused approach to franchising. I think that the hon. Gentleman would welcome those objectives. If he thinks that 50 years of neglect can be turned around in six years, I have to tell him that it cannotߞalthough there are many signs of improvement.
In contrast to the previous fragmented approach, the SRA is getting to grips with the problems that rising prosperity has brought. Since 1997, passenger rail journeys have increased by just over 20 per cent. The increase in the amount of freight on the network has been similar. The hon. Gentleman did not have time to mention that, but I am sure that he would join me in

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welcoming it. Use of the rail network is now much higher than before, but for decades the network has been deprived of necessary investment.
All of those pressures threaten the drive to improve performance. We have made the structural changes that are necessary to achieve that improvement. The SRA has a clear plan and a clear strategic direction. Network Rail is now working in the public interest—working to overcome the legacy of Railtrack. We have to remember that the handover to Network Rail was very recent.
Mr. Steen: Will the hon. Gentleman give way?
Mr. Jamieson: No, I will not. The hon. Gentleman has not been in the Chamber long and many hon. Members who have been here would like their questions to be answered.
I shall comment on the performance of First Great Western and South West Trains, the main providers of rail services between London and the south-west. The latest statistics that the SRA has published, for April 2002 to October 2002, show that the operators' performance in the quarter from July to September was an improvement on their performance in the corresponding quarter in 2001. However, late last year a considerable number of problems arose. In this country, we like to laugh about certain problems, but some of the weather and flooding was exceptional. Not only did that upset the rail system, it flooded houses and roads. As we know, the famous Dawlish problem was prominent again last year for Virgin trains. As the hon. Gentleman will know, it can take only one train being delayed to have a knock-on effect throughout the whole system.
The hon. Member for Bath (Mr. Foster) said that Virgin Voyagers were not all they were cracked up to be. Those trains are considerably better than the rolling stock that was used before. They are much more reliable and comfortable. If the hon. Gentleman does not believe that, he should go and sit first in one of the old trains, then in one of the new ones, to test which is better. I can only think that he has not used one or other type of train.
The hon. Member for Northavon talked about the failure to deliver the service that the passengers have a right to expect. That is sometimes true, but not always. Lamentably, it is true too often. That is the reason for our current level of investment in the infrastructure. The hon. Gentleman will know that central and local government budgets for improvements are finite. However, he must admit that no other Government in the past 50 years have put the type of investment into the rail system that we have done, or invested at the same level.
The hon. Gentleman wants various projects to be brought forward. Given that funds are finite, I challenge him to decide which of the projects currently being undertaken he would not proceed with. Would he put a stop to some of the investment that is being made in the west coast main line? That has an effect on the whole of the south-west. If trains from Bristol to Birmingham and further north are delayed, there will be a knock-on effect in the south-west region.
I notice that the hon. Member for Bath was extremely coy when we talked about more funds. I look forward to his proposals in the next few days. He has said that he
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will announce extra funding. Only a short time ago—the hon. Gentleman will not like this—the hon. Member for Truro and St. Austell (Matthew Taylor), who is the Liberal Democrat Treasury spokesman, told his colleagues in a confidential paper that they could no longer assume that spending pledges could be funded unless they satisfied five conditions. One of those was that the pledge could be funded within current budgets. Previously, when I have asked in this Chamber how much extra money the Liberal Democrats would make available, I have been told that there would be no extra funding. I was also interested in something that the hon. Member for North Cornwall (Mr. Tyler) said.
Mr. Don Foster: Will the Minister give way?
Mr. Deputy Speaker (Mr. John McWilliam): Order. The Minister is clearly not giving way. Hon. Members must not heckle.
Mr. Jamieson: I will not give way to the hon. Member for Bath. As the Liberal Democrats do in this Chamber, he took longer for his speech—nearly 13 minutes—than I have been allowed and longer than the hon. Member for Christchurch. There are other people we need to listen to.
On the question about Filton junction, the scheme is being developed, and once the SRA knows the costs and benefits of the project a decision will be taken. We are aware of the problems at the Chipping Sodbury tunnel, which are causing considerable difficulty. A pumping system is in place, but I am told that the difficulty is where to pump the water once it comes out. I think that a problem with creating wetlands is the possibility that flooding might result. The matter is being given careful consideration because of its importance to the whole network.
The hon. Member for Tiverton and Honiton (Mrs. Browning) stressed the importance of the line going west from Exeter and I agree, of course. That is a part of the Government's view of the matter. Good-quality links in that direction are vital, particularly as the lines run through Devon into Cornwall—which has, after all, objective 1 funding.
Several hon. Members mentioned the Exeter to Waterloo line. We shall be considering what improvements can be made to capacity utilisation, to make better use of the existing track. I also take the point about keeping Members of Parliament better informed. I shall consider devices for that. If the hon. Lady has any suggestions I shall be happy to take them forward.
The hon. Member for North Wiltshire (Mr. Gray) talked of the Oxford to Bristol service. I know that he will be disappointed—as I think we all are—at the prospect of the service being withdrawn. I should be happy to meet a delegation, but we should need to consider how to increase the use of the service. At the moment, only 43 people, on average, use a large train. That is a low level of use. If we can increase it, a case for improvement may be made. I am, of course, happy to talk to the hon. Gentleman about the matter if that is helpful.
With the little time that I have to sum up, I have not covered many hon. Members' questions. However, if they want me to take up particular points and are happy to do so by correspondence, I shall, in the usual way, try to answer them most thoroughly.

Policing (Cornwall)
3.30 pm
Andrew George: I am delighted to have secured this important debate on local policing for my constituents and those of other hon. Members in Cornwall and the Isles of Scilly.
I emphasise first my strong support for the work of the police in Cornwall in particular. I keep in close contact with the district commanders on my patch and with the chief constable—we now have a new one—because policing is a matter of concern to many of my constituents. I regularly visit local police stations to discuss issues of local concern and I join police from the local constabulary on night patrols and other occasions to see their work at first hand. I am grateful to the local constabulary for enabling me to do that.
The purpose of the debate is to raise a number of policing matters that concern my constituents. I was advised by the Table Office—I am sure correctly—that many policing matters are the responsibility of the constabulary rather than the Home Office, which is why I specifically requested a debate on Home Office responsibilities for policing in Cornwall. I am sure that the Minister, in replying to my questions, will know far better than I do where the constabulary's responsibilities end and the Home Office's begin, and will advise me on that.
I have informed the Minister's office of the three issues that I intend to raise in the debate: the first is the clarity needed when defining an offence, particularly with regard to replica guns, knives, extending police batons and so on; the second is how to contact the police if one fears that an offence has taken place or is likely to take place; and the third is how the police can fund their responseߞin other words, their budget.
What is an offence? I want to reflect the deeply felt and widely expressed public concern about a shop that recently opened in Penzance. Two weeks after it opened there was a peaceful protest outside its front door, and on an extremely wet Saturday afternoon in December, one of my constituents, Mrs. Lucy Duveston, collected more than 700 signatures. I have the petition here and will happily give it to the Minister after the debate. It expresses the deep concern felt by local people about the laws relating to the sale of replica guns, knives, police-style extending batons and drugs paraphernalia, which are now being sold openly on the high street in Penzance. The petition calls into question where the boundaries of the law lie and whether it is being made to look an ass in this respect.
I asked the local constabulary for a briefing, and before Christmas a local police constable, PC John Fahy, provided me with a briefing on the situation. I wrote to the Home Secretary seeking further clarification. Although I appreciate that the matter raises many complex issues, I look forward to receiving a response in due course. I have also had a further meeting with the chief inspector, Mike Fowkes, the district commander for Penwith and the Isles of Scilly, at which I raised these issues. The local constabulary needs to know when the police can act and whether the regulations can be tightened to make it clear where they can intervene.
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The kind of baton being sold at the shop is one that is extended by being simply flicked out, in the same way as a police baton. I understand that if a baton is extended by means of a button, spring or other mechanical device, it is illegal to sell it. As the local police have pointed out to me, it does not matter how the baton is extended—the fact that it can be extended and that it is a potentially lethal weapon is a matter of deep concern. There is another aspect of the law that needs to be considered. Once the baton is out on the street, it is an offensive weapon no matter how it is opened. Why allow it to be sold in the first place? There is no good reason. Why would someone want to have it?
There is also an issue with knives. The shop sells a large selection of knives and swords, many of which have very long blades and some of which can be concealed on a person in the street. They can be sold quite legally because the shop does not suggest that they are fighting knives or suitable for combat in any way. The fact that they are not sold as combat knives means that they can be sold to a person in a shop. As I understand it, the law relating to carrying offensive or dangerous weapons acknowledges that there are reasons why someone might be carrying knives and swords publicly. For example, one can do so if one is a chef or for ceremonial and national costume purposes. Apart from such instances, it is an offence to carry such weapons. Again, why sell the weapons if there is no good reason to have them? One cannot use them publicly, other than for ceremonial or other specified purposes. Clarification on that would be helpful.
I understand that the issue of replica guns was raised in the debate on gun control this morning. In the shop in question, many of the replica guns for sale are so close to the originals that even experts cannot tell the difference. Local policemen have made the point that a toy should be made to look like a toy and that the police should be empowered to seize anything that looks like a real weapon. There are serious issues here, and I am sure that the Minister takes that on board.
On drugs paraphernalia, it is argued that section 9 of the Misuse of Drugs Act 1971 is out of date and that it is perfectly reasonable to come to a conclusion that eight-inch cigarette papers, huge rolling machines, sets of scales, mouthpieces, bongs and various other paraphernalia, all carrying a cannabis leaf design, will be used to prepare and smoke drugs, rather than tobacco. Those things are openly on sale in the local shop and many of my constituents are very concerned about that. It would be extremely helpful to have some clarity in relation to that area of the law. Do the Minister and his Department propose to review such matters and tighten up the law on the sale of such items?
I will move on to the issue of how the police can be contacted when there is a suspected offence, but it is not an emergency. As the Minister knows, I am raising the issue of the non-emergency police phone number, which is 0870 577 7444. Many of my constituents, local authorities, parish councils and neighbourhood watch groups have complained about the system. Many responsible citizens who fulfil their public duty to the community by reporting matters to the police are deeply frustrated by their experiences.
Mr. Anton Barkhuysen from Stithians, which is just outside my constituency, sent me a copy of a letter relating to a recent incident. His letter says:

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"this week's West Briton carries a report of thieves who are targeting houses locally, and a statement from a PC Wheeler as to their possible technique. Yesterday my rather isolated house was visited by a couple who exactly fitted the description, and I noted the registration of the car which they had driven onto my property. On reporting this to your Crimestoppers hotline, with a request for PC Wheeler to phone me for the details, I was told to phone your inquiry line, where I was eventually told I was number eleven in the queue. As this would have involved at least a half hour call at national rates to your non-geographic number, which cannot be accessed by discount network providers at the reduced rate, I gave up."
I am afraid that that is the experience of many of my constituents. Waiting times are unacceptably long. The police are aware of that—they have accepted the criticisms and have attempted to reduce waiting times. However, the latest figures that the constabulary gave me in November—for September 2002—show that, of those calls that the switchboard answered and put through to the call-handling centre for inquiries, 46,328 were connected. Of those, 34,139 held on until their calls were answered. However, almost a quarter of those who phone are unable to get through or simply give up because of the expense.
The issue is about long waits and people simply not wanting to hang on because they feel uncertain. They have no confidence in the system and are concerned about the cost. As I understand it—and I recently sought clarification from the constabulary on this—the police can make a small profit by using an 0870 number—chatlines use the same system—so a call not only costs people money, but additional money goes to the constabulary. Indeed, it profits the constabulary to keep people waiting.
That is not a satisfactory system. I understand that the Minister's Department is looking at a national call number, which is to be piloted from April 2003. Although the constabulary is aware of the problems with its call-handling system, which severely dents local people's confidence, it would be helpful if the Minister set out the timetable for the roll-out of the national number. The constabulary might go to great lengths to improve or change its system at great expense only to find out that there is a national number, so some co-ordination would be helpful.
Once a person has decided that an offence has taken place and has managed to get through to the police, the police must be able to respond. There was a great deal of trumpeting at the proposed settlement for the local constabularies at the end of last year. However, the police have additional costs that perhaps the Home Office does not fully appreciate.
In the far west of Cornwall, it is quite clear that if the constabulary is providing an emergency service and there is a severe emergency, it cannot call on support from the north, west or south, because all there is is sea. The cost of ensuring that the panoply of services is available to respond to serious issues in a place such as the far west of a long peninsula in a constituency such as mine will be an additional cost that other constabularies do not have to meet.
The proposed settlement is due to be confirmed on 3 February. I urge the Minister to review whether the settlement is adequate for the constabulary of Devon and Cornwall. Government funding represents a 3 per cent. increase, which is equivalent to £4.7 million. However, that leaves a considerable shortfall when
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compared with the unavoidable increase in costs, which the chief constable has told me is £4.2 million for police reform impact. Inflation costs are £5.7 million and national insurance increases amount to £1.2 million. Those and other costs can be funded only by a significant increase in council tax. That excludes funding for additional police officers over and above the crime fighting fund allocation. The police authority has set an aspirational target of 3,500 officers by 2006, but that would require a further £2.6 million in 2003ߝ04, making a total additional cost for the next financial year of £13.7 million, compared with the proposed increase of £4.7 million.
At this stage, it is obligatory to brandish a copy of the Western Morning News. The Minister will notice that it points out that the police authority estimates the increased cost of local tax payers' contribution to the local constabulary at between 30 per cent. and 40 per cent. Clearly, the question that Maria Wallis, the chief constable of Devon and Cornwall, is asking is, having broken the figure down to a weekly rate, are people prepared to make that additional contribution in the future?
We want people to support their police. However, in his response, the Minister must recognise that, in low-wage areas, the Government have obligations. Although many of the improvements are welcome, if they impose additional costs on constabularies, those should be reflected in the announcement of funding support on 3 February.
3.46 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): I thank the hon. Member for St. Ives (Andrew George) for securing this debate and for his obvious involvement with and support for his local police force. I am sure that that is appreciated by his constituents and by the police themselves. They need to see that politicians support their work on behalf of the communities that they seek to protect.
I acknowledge the hon. Gentleman's comments about problems relating to call handling within the Devon and Cornwall constabulary. It is encouraging that in the past three months the force has achieved its 90 per cent. target for handling 999 calls within the required response time. The number of non-emergency calls answered by the switchboard has also increased over the past couple of months. The force has achieved a target of answering 90 per cent. of those calls within 30 seconds.
I agree, however, that waiting times after the switchboard has received the call remain unacceptable, and I fully understand why the management of call handling within the force has caused concern to some members of the local community, the police authority and the command team. I am confident that the establishment of the call management and communications department will improve performance. The hon. Gentleman may know that a review of the supervisory structure within Devon and Cornwall's control rooms is being completed. I hope that it will ensure that the resources allocated are used efficiently and that real improvements to the services offered in that area will result.

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We must ensure that the police service is properly funded. It will remain a top priority for the Government. The settlement announced for 2003–04 continues that commitment and builds on substantial investment over the past three years. As the hon. Gentleman knows, the Devon and Cornwall constabulary has been provisionally allocated £164.4 million in general grant for 2003–04—an increase of £4.7 million. All police authorities were guaranteed at least that level of increase. The force also benefits from continued funding from the crime fighting fund of £6.37 million, and £3.13 million goes to Cornwall from the rural policing fund. That is 10 per cent. of the overall pot, so it is not true that we do not recognise or try to address some of the problems that sparsity and geography impose on the police service. Continuing the £30 million allocation for rural policing through the rural policing fund demonstrates our commitment to addressing those issues properly.
Specific initiatives also provide funding for Devon and Cornwall, including £390,000 towards the cost of Airwave. Forces have been invited to bid for further funding for community support officers, and funding has been provided for this year. The force has also been invited to pilot the detention powers for CSOs. We await a reply as to whether we shall receive a bid for CSOs for future years.
Matthew Taylor: The increases in the past two or three years have been very welcome, and police numbers, as I am sure the Minister will point out, have finally reached record levels. However, the chief constable is specifically warning that this year's increase of £4.7 million is substantially short of the amount that she needs to find for the nationally agreed pay rise and national insurance and pension costs. Short of people in this low-wage area being asked to pay even more on their council tax bill, above the amounts that the Government have allowed for, she will have to cut police numbers.
Will the Minister at least accept that there is a financial problem this year, in that there is a difference between the amounts needed to meet the nationally agreed pay rise and so on, and the amounts that Cornwall is receiving?
Mr. Ainsworth: I am glad that the hon. Gentleman at least acknowledges that there is an agreement at national level as to the necessary funding for the enhancements and the introduction of the police reform agenda. A funding level has also been agreed through the machinery of the police negotiating board.
A legitimate debate is taking place in Devon and Cornwall about what level of precept there should be. Currently, because of the priorities in the area and decisions that have been taken locally, Devon and Cornwall's precept is 13 per cent. below the national average for shire areas. The new chief constable has obviously triggered that debate. Whether or not the local community wants that to be changed or the force should be given an opportunity to increase the precept, I hope that the Liberal Democrat party and Members locally consider that there must be a local element to
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such decisions. They cannot all be taken at national level and imposed on local areas. The level of precept is not a matter for the Home Office, as the hon. Gentleman recognises.
Quite rightly, the discussion is taking place in the locality. Do we want to continue, because of the specific problems, with a below average precept for policing in Devon and Cornwall, or is there an argument for a substantial increase up to the national average or even beyond?
Andrew George: Irrespective of whether the precept should be set at the average level, or above or below it, the fact is that it would be helpful for the Minister to state clearly whether he believes that it is the responsibility of Government at least to attempt to fund those elements in the police budget that are the result of Government decisions. I am referring to increases in salaries and pensions, and other improvements in standards that are Government-driven, not locally driven.
Mr. Ainsworth: Is the hon. Gentleman suggesting that we place outside each area the machinery that has been established to decide what funding level is necessary to pay for all those initiatives and improvements that we want to see? He accepted that there is machinery through the police negotiating board, and that a level of funding has been agreed. There ought to be a residual debate about what level of precept should be set for the people of Devon and Cornwall. I do not fully understand what he is saying. Is he saying that, quite separately from that discussion, additional payments ought to be made to areas, and that those nationally agreed systems of setting funding should be abandoned? [Interruption.] He seems to be indicating that he does not agree with that. He must articulate exactly what he is asking for. If he or his party wants to make some suggestions as to how the methodology can be changed, we shall be more than happy to listen. However, we cannot have hon. Members making demands for an area that are completely outwith what they then agree ought to be a national framework for taking such decisions. The hon. Gentleman needs to come clean about what exactly his position is.
The force will also receive a share of both the £50 million pot for basic command unit funding and the £38 million pot for the special priority payments element of the PN B agreement.
The hon. Gentleman also mentioned our serious concerns about the sale and use of imitation weapons, airguns, real guns, and other items. We have recently made announcements about discouraging people from carrying illegal weapons. The Home Secretary has announced the introduction of a minimum sentence of five years for those who carry illegal weapons in a public place. That will be enshrined in legislation as soon as possible. We intend to give the police the power to challenge people on whether they have a reasonable or lawful excuse for carrying either air weapons or imitation weapons, and where appropriate to arrest people and confiscate those weapons.
We have not gone down the road of a total ban on imitation weapons—there is a constant debate on that in the House—because of problems of definition. I am

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more than happy to continue considering that issue, but unless there is a legal definition that bans imitation weapons of the type that the hon. Gentleman talked about but does not impinge on toys, there will be serious problems with a total ban. By doing what we are doing, we are giving a power to the police and relying on the good sense of a constable to use that power appropriately. Where someone is carrying an imitation weapon in a public place without good reason or lawful excuse, they can be challenged, the weapon can be confiscated and they can, if necessary, be arrested. That avoids some of the definitional problems and gives us a tool to use. We are also planning a long-term review of all the firearms legislation. We cannot rush that or do it immediately.
Andrew George: I appreciate that response. However, outside the replica weapon issue is the issue of lethal weapons such as knives and extending batons. That is a serious matter, and it would be helpful to have some indication that the Minister would be prepared to clarify the law to help the police.
Mr. Ainsworth: Let me just say to the hon. Gentleman—I am not sure that there is confusion on the matter, but we can obviously consider it if the local police say that there is—that flick knives are offensives weapons. It is illegal not only to carry them but to sell them. Other items, such as batons, swords and knives, including hunting knives, are not illegal and it is not an offence to sell them. However, it is illegal for people to carry such items in a public place, and they could be arrested for carrying an offensive weapon. There is a problem. Exactly what do we want to ban and what do we not want to ban? Items are often sold for legal and proper reasons, and sometimes they are sold totally inappropriately, as the hon. Gentleman said.

Northern Cyprus
4 pm
Mr. John Lyons: First, I put on record my appreciation of having been given time for this Adjournment debate. I confess that I am not an expert on the missing in Cyprus. In fact, the matter was first brought to my attention when, like millions of others, I visited the island as a holidaymaker. I was shocked to see in Nicosia mothers parading every day with photographs of the missing around their necks. When I first heard about the numbers involved, I thought that they must be exaggerated and that the story could not be exactly right. However, it is important that we consider the human, personal and humanitarian consequence of the missing in Cyprus.
It is a long time since 20 July 1974, but that does not diminish the horror of the situation and the nightmare that relatives and friends of the missing must have gone through. When the Turkish army invaded, Cyprus was a sovereign, independent state and a member of the United Nations and of the Commonwealth. After the cessation of the war between the invading Turkish army and the civil population, about 1,600 people were taken and made prisoner. The 1,600 included some 900 reservists and soldiers, and more than 500 civilians, including men, women and children, some of them United Kingdom citizens. I could not believe that when I was told.
Many of the missing were taken from their homes or places of work—that was confirmed by eye-witnesses who saw all these events. Those people were taken to Turkish concentration camps and prison. Relatives and friends have gone so long without knowing what happened to the missing, and it is no exaggeration to say that a despicable, cruel crime was foisted on the people of Cyprus.
Since the Turkish army invaded Cyprus, the UN has said much about the situation. It has passed six resolutions relating to missing persons, all of which sought an early solution, and it understands the humanitarian scale of the problem. The UN also set up bodies, including the Committee on Missing Persons in Cyprus, to look into the matter. Those bodies tried to unlock the problem of Turkey approaching Cyprus and discussing what had happened. Kofi Annan and others thought that that might bring out some truth in the matter.
The matter of the missing in Cyprus has also been referred to the European Court of Human Rights. In a judgment of 10 May 2001 in Cyprus v. Turkey, the Court stated that Turkey was guilty of a denial of the right to life, a denial of the right to liberty and a denial of the right of citizens not to be subjected to inhumane and degrading treatment. That was a proper and important decision.
About 1,600 Greek Cypriots are missing men, women and children—among whom are British citizens. There is indisputable evidence that most of those people, who will never return, were detained by Turkish soldiers and/or armed Turkish Cypriot elements under the command and control of the Turkish army during the invasion. There is evidence that captured Greek Cypriots were held in concentration camps, and even the Turkish authorities do not dispute that. They have

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issued lists of Greek Cypriot prisoners of war, but some of those people were never released and Turkey gave no explanation of what happened to them thereafter. People who were on the International Committee of the Red Cross list as prisoners of war or enclave persons in Turkish-occupied areas of Cyprus were not released. Greek Cypriot prisoners who sent messages to their families over the illegal radio systems are still missing.
The UN has taken a sharp and focused view on the matter. The General Assembly passed resolution 3450 in 1975 and expressed concern
"about the fate of a considerable number of Cypriots who are missing as a result of armed conflict in Cyprus".
It reaffirmed the basic human need for those people's families in Cyprus to be informed about their fate.
Despite repeated attempts by the Government of Cyprus, relatives of the missing and international organisations, the Turkish Government have refused to provide information about the missing in Cyprus, which is contrary to international law. Turkey's insistence that it knows nothing about the fate of the missing persons has been proven internationally as nonsense—it is a lie. Turkey does know what happened, but is unwilling to reveal it.
David Hamilton: Does my hon. Friend agree that, given that Turkey is trying to join the European Union, progress would be made if the new Turkish Government started to find people and bodies in order to identify them and put people's minds at rest after nearly 30 years?
Mr. Lyons: I am grateful to my hon. Friend, who knows much about Cyprus. He makes an important point.
Even after so much time, the international community wants Cyprus to take the initiative and come forward with information on missing persons, and wants the relatives, friends and family of the missing to do the same. As we hope to move towards resolving the outstanding issues, it would be a major plus if Turkey told us what happened. The time is right for the Government to say to the new Turkish Government, "We, as part of the international community, want some explanation about the missing persons. We have to be told exactly what took place and what the circumstances are."
The UN Assembly has taken a keen interest in the missing persons in Cyprus, as have international organisations. It questioned the Turkish authorities at length on several occasions, and even the European Parliament has taken a keen interest by discussing, debating and concluding on the matter.
Some of the 1,600 people were reservists and civilians, and accounts say that they were taken from their homes and workplaces. They were not involved in military activity. They were nothing more than citizens going about their daily work and normal activities, but there has been no explanation of why such people were caught up in the conflict, apart from the fact that they were prisoners of the Turkish army.
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The question of the missing in Cyprus has been brought to international organisations' attention, and I quote a presentation made by the Cypriot Government when it came before the European Court of Human Rights:
"In the present case, the relatives of the missing persons have been left without information about the latter's fate for a period of 25 years. In view of the circumstances in which these persons disappeared following a military intervention during which many persons were killed or taken prisoner and where the area on which the disappearances took place was subsequently sealed off and became inaccessible to the relatives, the latter must no doubt have suffered the most painful uncertainty and anxiety. While their state of distress was most acute in the first period after the 1974 events, it has not vanished with the passing of time."
Of course, it will not pass with time.
I shall give a simple example. We have all lost either a child, a relative or a friend temporarily, even if only for five or 10 minutes. When someone loses a child, even for such a short time, their sense and logic disappear completely, and they go into a fearful state—a panic. We all know that feeling, and we would never want to recreate it. Imagine, then, the nightmare experienced by someone whose relative has been taken from them for all those years, and imagine not knowing whether that person has been imprisoned, tortured or killed.
We need to find some way to assist the Cypriot Government and international organisations in coming forward, and we should put more pressure on the Turkish Government to say exactly what happened. The relatives need to know the truth; they need closure after so long. We should not allow the passing of time to result in the relegation of the issue. It must be kept at the forefront. It is up to us—the humanitarians, the democrats and those who are interested in people—to raise the matter at every opportunity, within and without Parliament. That is a responsibility on us all.
I do not intend to discuss at length the presentation made at the European Court and its decision, which I have already mentioned. However, I quote from page 234 of the report:
"Turkey has not conducted either a prompt, or an efficient, investigation. Turkey's duty cannot be discharged through the Committee on Missing Persons, a body which in any event does not function due to a pre-condition imposed by her local administration."
It is, of course, the Turkish Government who have imposed that condition in Cyprus. The quote continues:
"In any event, the Committee's scope of investigation is too limited to satisfy Article 27".
We should take every opportunity to insist that international organisations step up the pressure on the new Turkish Government.
The evidence before the court is extensive, and compulsory reading for those interested in the matter. We should make sure that people read it, because the case is about not what the Turkish Government think, but what the European Court thought after listening to the evidence. It based its judgment on the tragic tale that it heard.
David Hamilton: Does not my hon. Friend feel that the British Government have a special role in the matter, as they are the third party in Cyprus? We still have bases there and, irrespective of the fact that humanitarian and European organisations rightly argue for disclosure of

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the whereabouts of the people concerned, Britain alone should take up the matter, because of its special relationship and links. Our country has a specific responsibility.
Mr. Lyons: That is an important point, and that is why I want the British Government—regardless of other considerations—to tell the Turkish Government that we held a special responsibility for the island, and so bear a special responsibility for the missing. For that reason alone, we should approach the Turkish Government. We should also ensure that the Cypriot Government know what we are doing about the matter.
Finally, I want to refer to the Dillon report for the United States Congress. It extensively considered the question of the missing and came to the same conclusions. The truth must be told and the Turkish Government are the only people who can do that. I urge the British Government to put additional pressure on them.
As I said earlier, we all understand the panic of losing a child. Fifteen hundred families, relatives and friends want to know what happened to the missing of Cyprus. It is incumbent on us all to ensure that the case is publicised every day and that every assistance is given so that we can discover what has happened to them.
4.15 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell): I warmly congratulate my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) on securing this debate on Cyprus and on the passionate and articulate way in which he put his arguments. The issue concerns many of us in the House, and it is right to draw attention to it.
The debate comes at an apposite time, as negotiations under United Nations auspices intensify for a settlement of the long-running Cyprus problem. Talks between Mr. Clerides and Mr. Denktash, which restarted in January 2002, are now nearing the endgame. On 10 December, the UN Secretary-General tabled his proposals for a comprehensive, just and lasting settlement in Cyprus. He rightly urged the two leaders to reach agreement, based on the proposals, by 28 February. The British Government fervently hope that that will be possible.
However, as my hon. Friend so effectively reminded us, the issue of missing persons in Cyprus, known more commonly as simply "the missing", is a particularly human one. It is not about structure of government, percentages of territory, treaties, protocols or any of the other matters that we are used to discussing in government or dealing with as politicians or diplomats, but a very real human issue. It is about people and their families and bringing some relief to a human tragedy.
I wish to point out that people are missing from both communities. Significant numbers of Greek and Turkish Cypriots fit the category.
Mr. John MacDougall:Will my hon. Friend comment on the effectiveness of the United Nations Committee on Missing Persons in Cyprus? Does he believe that it can make effective progress in improving the situation? What measures should be
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taken? Would he also comment on the fact that support is weak and must be strengthened? We must get more people involved and committed to tracking the issue.
I congratulate my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) on securing the debate and on the way in which he presented this very important case.
Mr. Rammell: I shall deal specifically with the role and practice of the UN Committee on Missing Persons in Cyprus. The fact that the issue has not been resolved suggests that it has not made progress, but I believe that it is the appropriate vehicle for resolving the matter. I shall later discuss some of the ways in which we can help the process.
People have gone missing from both communities since the events that first wracked the island soon after its independence in 1960. As my hon. Friend the Member for Strathkelvin and Bearsden made clear, the missing are sons and daughters, brothers and sisters, uncles, fathers and grandfathers, none of whom has come back and all of whom leave behind loved ones who grieve their loss but are unable to mourn the dead. As my hon. Friend so eloquently made clear, they are unable to have closure. It is a genuine tragedy.
The issue is a reminder, if one were needed, to politicians, diplomats, mediators and others of the human cost of this political problem and of the imperative for an early solution. Every conflict bears a human cost, and Cyprus is no exception. Many thousands lost their lives as intercommunal fighting first erupted between 1963 and 1974, when extremists on both sides sought to destroy Cypriot independence. Then, in 1974, many more died in a nationalist coup backed by Greece, which sought to overthrow the elected President; and fierce fighting following Turkish military intervention some days later. Once the dust had settled on the events of 1974, Cyprus faced a division that still haunts it, and people from both communities remain missing to this day.
For the relatives of the missing, there is no respite. When one speaks to them, they say that they know, 30 and 40 years on, that their loved ones are almost certainly not coming back; but they do not know for sure. They are haunted by the thought that they may look up one day and see a familiar face again. That underlines the fact that it is a human tragedy and not a political issue.
There is growing evidence that that is now recognised in Cyprus. Indeed, at a meeting in January 2002 that was dedicated to the missing in Cyprus, Mr. Clerides and Mr. Denktash agreed that it should be regarded as a humanitarian issue—that was progress—and that it should be addressed separately from, but in parallel with, the political talks.
Unfortunately, it has not always been treated as a humanitarian issue. For too long it was treated by some, but not all politicians, on both sides of the line in Cyprus as an opportunity to score political points. That is not right. No one should seek to make political capital out of the pain felt by the families and relatives. The Government firmly believe, as do Mr. Clerides and Mr. Denktash, that the issue should be dealt with urgently as

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a humanitarian matter. We believe that all outstanding cases—they are real people who are missing—should he resolved quickly and with dignity, without recrimination and away from the public eye. Some people may have reservations about that, but that is the only realistic way that the issue can be resolved.
A forum has been established for dealing with these cases in that way—the United Nations Committee on Missing Persons in Cyprus to which my hon. Friend referred, which is based in Nicosia. That three-person committee was established in 1981 to address impartially the issue of the missing, while retaining an international humanitarian focus. Both sides in Cyprus have referred cases to the UNCMPC, so that it can fulfil its remit in establishing what happened to the missing, and finally bring their families that much-needed closure. The committee is not part of the talks process or of any political movement or process. It is scrupulously independent. I take the opportunity to send the Government's—and, I hope, the House's—warmest appreciation for the many years' work done by Mr. Pierre Guberon as the third member of the committee.
Unfortunately, as we heard earlier, the UNCMPC has not been able fully to fulfil its remit. The committee has been able to work on only a small number of the cases referred to it. Procedural complications have dogged progress, as have political disputes, I am sorry to report. The Government call on all concerned to put aside such political and procedural concerns and to show the will necessary to resolve the outstanding cases. That is what my hon. Friend and the Government call for. In answer to my hon. Friend, I believe that the committee remains the best forum for fully addressing those concerns. I urge all to co-operate fully with the committee. There are no good reasons not to do so—only political ones.
There has been some progress, albeit limited, and I welcome the unilateral initiatives taken over the last few years to bring closure to the families affected by the tragedy. In particular, exhumations and DNA testing have enabled a number of families to afford their loved ones a proper burial, and have relieved the anguish of others by removing names from the list of Greek Cypriot missing persons. I urge all concerned to take this important work forward and to implement the agreement made on 31 July 1997 by Mr. Clerides and Mr. Denktash, which was that the two sides would exchange full information on the missing. That important point needs to be registered.
Although the issue is a poignantly humanitarian one, I believe that the political pressure of the UN settlement process, under which the two sides are in the final stages of intense negotiations, can help provide the impetus needed finally to resolve it. The UN settlement process, which is nearing its conclusion, provides the pressure and the impetus that we need finally to resolve the issue. I am pleased that the issue is being addressed in that UN settlement process. We understand that Kofi Annan's proposals of 10 December 2002 state that the two
328WH
leaders shall, without delay, make every effort to resolve the issue of the missing persons by co-operating fully with the UNCMPC, exchanging full information on the missing, as agreed in July 1997, and completing any necessary inquiries, including exhumations.
My hon. Friend asked about our attitude and stance towards the Turkish Government. We can and will urge the Turkish Government to do all that they can. We must also be clear that the major responsibility for resolving the problem lies with the Greek Cypriots, the Turkish Cypriots and the United Nations—the three parties to the committee of the missing. We will make those representations to the Turkish Government. I also believe that the issue should be specifically referred to in the proposals of the UN Secretary-General, which my right hon. Friends the Prime Minister and the Foreign Secretary have urged the two parties to accept as a basis for agreement. That is important because while the issue can and should be resolved outside the political process, the political process could none the less have a huge impact on the ability of both sides to resolve the issue. After decades of division there is an historic opportunity to heal old wounds.
Negotiations are under way to create a new state of affairs in Cyprus, which will lead to Greek and Turkish Cypriots bringing an end to their longstanding differences and joining once more as equals in a reunited Cyprus. There is clearly tremendous pressure at the moment for a settlement in Cyprus. Hon. Members will be aware of the march two weeks ago by approximately 50,000 Turkish Cypriots in favour of the plan. That is about one quarter of the population of Northern Cyprus. With that degree of support the chances of a settlement are greater than they have been for an awful long time.
Just as it is vital that the issue of the missing, which has haunted Cyprus's past and divided Greek Cypriots and Turkish Cypriots, is resolved, so it is vital that the future security of the two sides is assured. The Secretary-General's proposals provide for the physical and political security of both sides. That has been missing for a long time. Local—Cypriot—forces would be demilitarised and Greek and Turkish forces on the island would be scaled down. A new UN force would help to ensure that the implementation of the settlement talks takes place peacefully. The treaties of guarantee and alliance, to which the United Kingdom is a party, would continue. I am pleased to be able to tell the House that talks on the security aspect of the settlement between Greece and Turkey will take place on 5 and 6 February. I am sure that I am joined by all hon. Members in sending our strong support to both Greece and Turkey and our hope that they will finally be able to reach a settlement.
That bizonal solution for Cyprus set out in the UN proposals would ensure that Greek Cypriots and Turkish Cypriots would be masters in their own houses with control over day-to-day issues that really matter to voters. The distrust and conflict of the 1960s and 1970s would finally be allowed to heal. We firmly believe that the United Nations proposals are fair and balanced and provide for a just and lasting settlement in Cyprus. Securing a settlement by 28 February by accepting the

329WH
UN Secretary-General's proposals of 10 December as a basis for agreement would allow a reunited Cyprus to sign the treaty of accession with the EU on 16 April, enabling all Cypriots to enjoy a more prosperous and peaceful future. We should not miss that opportunity. We have a real opportunity not only to take a divided Cyprus forward, but finally to bring
330WH
closure to those families who have been waiting far too long to see the problem resolved. I hope that we, and everyone concerned with the Cyprus problem, can take that opportunity.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Four o'clock.

CABINET OFFICE

  Entertainment
  Mr. Laws
  To ask the Minister for the Cabinet Office what his estimate is of the total spending of his Department on entertainment in each year from 1994–95 to 2002–03; and if he will make a statement. [92365]

  Mr. Alexander
  Details of my Department's spend on entertainment in each year from 1997–98 to 2001–02 can be found below.

  £000s

  Entertainment expenditure

  1997–98

  192

  1998–99

  170

  1999–00

  276

  2000–01

  277

  2001–02

  254

  Information prior to 1997–98 is not held on the Department's accounting system and is therefore available only at disproportionate cost.

  The estimated spend on entertainment in 2002–03 is £216,000.

  External Consultancies
  Mr. Laws
  To ask the Minister for the Cabinet Office how much(a) his Department and (b) each agency and non-departmental public body spent on external consultancy in each year from 1995–96 to 2002–03 (planned); and if he will make a statement. [92226]

  Mr. Alexander
  I refer the hon. Member to the answer given in another place to the noble Baroness Wilcox by Lord Macdonald on 27 November 2002, Official Report; column WA42.

  Expenditure by the Cabinet Office on external consultants is estimated to be £9,493,000 for 2002–03. The figures for the Central Office of Information (COI), the Government Car and Despatch Agency (GCDA) and the only non-departmental public body sponsored by the Cabinet Office with such spend are as follows:

  COI

  GCDA

  Committee on standards in public life

  1997–98

  66,395

  n/a

  0

  1998–99

  30,972

  n/a

  0

  1999–2000

  17,468

  33,997

  0

  2000–01

  48,980

  21,715

  0

  852W

  COI

  GCDA

  Committee on standards in public life

  2001–02

  52,170

  53,385

  35,056

  2002–031

  18,886

  58,000

  7,400

  1Estimated

  The figures for earlier years, and those for GCDA for 1997–98 and 1998–99, could be provided only at disproportionate cost.

  Government Policy (Online Access)
  Mr. Allen
  To ask the Minister for the Cabinet Office what plans he has to extend the opportunities for members of the public to contribute to the development of government policy by online scrutiny and discussion of proposed initiatives. [93387]

  Mr. Alexander
  The Government have recently consulted on e-democracy which included issues concerning online scrutiny. A report on the consultation, entitled "In the Service of Democracy: Your Response", along with individual responses, has been posted on the Government's e-democracy website,www.edemocracy.gov.uk

  The majority of the responses are supportive of the Government's efforts to develop an e-democracy policy although many important and serious issues were raised that will require detailed analysis and consideration.

  We are very grateful to all those who took time to consider the issues raised in the consultation document and we will, of course, keep the House informed as policy is developed on e-democracy.

  Heritage Assets
  Mr. Laws
  To ask the Minister for the Cabinet Office what sales of heritage assets and antique assets have been made by his Department since May 1997; if he will list such assets; and if he will estimate the total sales proceeds. [92366]

  Mr. Alexander:
  The Cabinet Office has not sold any heritage assets and antique assets since May 1997.

  Public Suggestions
  Mr. Allen
  To ask the Minister for the Cabinet Office what plans he has to improve the analysis by Government Departments of suggestions from the general public. [93389]

  Mr. Alexander
  The Government are committed to making use of more diverse methods of involving the public and to engaging a broader range of people. The "Code of Practice on Written Consultation" provides guidance to Departments on written consultations with the public. To help policy-makers improve policy design through undertaking public involvement initiatives, the Cabinet Office has also published "Viewfinder: A Policy Maker's Guide to Public Involvement". Viewfinder is available on the Policy Hub Website www.policyhub.gov.uk. Viewfinder includes examples of good practice, features a wide range of involvement techniques (including e-consultation) and describes how effectively to plan public involvement activities,
  853W
  including analysis and evaluation. It informs policy-makers how to ensure that involvement includes different groups and individuals within society. It also addresses issues such as how to manage high volumes of responses and how to weight responses from different groups.

  The Office of Public Services Reform in the Cabinet Office has developed five principles of good customer feedback to guide Departments in consulting on public services.

CULTURE, MEDIA AND SPORT

  2012 Olympics
  Mr. Greenway
  To ask the Secretary of State for Culture, Media and Sport if she will place in the Library the results of the opinion survey undertaken by ICM on behalf of UK Sport on a London bid for the 2012 Olympics. [93376]

  Mr. Caborn
  I will arrange for a copy of the full results of the ICM survey of public opinion on a London 2012 Olympic Bid to be placed in the Library.

  A summary of the results of the survey were published by my Department and presented to the Select Committee on Culture, Media and Sport on 15 January. The full results were published by ICM on their website at www.icmresearch.co.uk on 16 January.

  Ministerial Travel
  Mr. Laws
  To ask the Secretary of State for Culture, Media and Sport what her estimate is of the total expenditure by her Department on ministerial travel(a) in the UK and (b) abroad, in each year from 1995–96 to 2002–03 (estimated); and if she will make a statement. [92466]

  Dr. Howells
  I refer the hon. Member to the answer given by my hon Friend the Minister of State for the Cabinet Office on 22 January 2003,Official Report, column 334W.

DEFENCE

  Air Traffic Contract
  Mr. Goodman
  To ask the Secretary of State for Defence whether a risk assessment was made in the first assessment of the Nottingham Air Traffic (ATC) contract. [93693]

  Mr. Ingram
  [holding answer 28 January 2003]: I assume that the hon. Member is referring to the Wattisham air traffic contract. A risk assessment was included during the bid evaluation process for the first competition of the Wattisham air traffic contract, and that process identified areas of concern in all bids. The resulting contract with VT Aerospace (contract CS 4D/ 2017) was, however, terminated by mutual consent and the competition was re-run between the other bidders, leading to a contract with Serco (contract CS 4D/2027).

  Accommodation Blocks (Portland)
  Jim Knight
  To ask the Secretary of State for Defence how much money has been received by his Department in exchange for the sale of the Hardy accommodation blocks at Portland. [93617]

  Dr. Moonie
  The freehold of the Hardy accommodation blocks at Portland were owned in part by the Ministry of Defence and in part by the Crown Estate. The sale was on the basis of a shared receipt pro rata of those freehold areas. The Ministry of Defence received £300,000 for its part of the accommodation blocks site.

  Blood/Plasma
  Adam Price
  To ask the Secretary of State for Defence pursuant to his answer of 20 January (ref. 91885), what the expected requirements for blood and plasma are. [93594]

  Dr. Moonie
  I am withholding the information requested in accordance with Exemption 1 of the Code of Practice on Access to Government Information.

  Challenger II
  Mr. Keetch
  To ask the Secretary of State for Defence whether the desertification of Challenger II tanks will be completed(a) before they are loaded for transport to the Gulf and (b) before they arrive in the Gulf; and if he will make a statement. [93937]

  Mr. Ingram
  The improvement in the performance of Challenger II tanks in desert conditions is achieved through the combined effect of a number of modifications. The first modification was completed prior to the tanks being loaded for transportation. The remaining modifications will be completed after they arrive in theatre.

  Cluster Bombs
  Mr. Keetch
  To ask the Secretary of State for Defence if cluster bombs are part of the ordnance package on its way to the Gulf. [93938]

  Mr. Ingram
  I am withholding this information in accordance with Exemption la of the Code of Practice on Access to Government Information, which relates to defence.

  Depleted Uranium Munitions
  Llew Smith
  To ask the Secretary of State for Defence whether(a) British forces and (b) United States forces deployed to the Gulf have depleted uranium munitions available as part of their armoury. [91974]

  Mr. Ingram
  I can confirm that British Forces deployed to the Gulf will have depleted uranium munitions available as part of the armoury. The deployment of depleted uranium munitions by US Forces, is a matter for the US Government.

  Financial Dynamics
  Jim Dobbin
  To ask the Secretary of State for Defence pursuant to his answer of 7 January 2003,Official Report, column 45W, on Financial Dynamics, when the

  855W
  two meetings which his Department's official attended with Financial Dynamics took place; and whether Financial Dynamics were authorised to represent his Department in liaising with the press. [92057]

  Mr. Hoon
  The two meetings took place on 10 and 12 December 2002. Financial Dynamics' role was to advise the Government on likely media perspectives of the market implications of the discussions between the Ministry of Defence and BAE Systems. The Ministry

  Naval Service

  Army

  RAF

  Officer Intake

  Graduate Intake

  %

  Officer Intake

  Graduate Intake

  %

  Officer Intake

  Graduate Intake

  %

  1995–96

  222

  173

  78

  650

  492

  76

  421

  274

  65

  1996–97

  374

  290

  78

  616

  493

  80

  471

  284

  60

  1997–98

  346

  276

  80

  718

  555

  77

  639

  346

  54

  1998–99

  376

  283

  75

  635

  480

  76

  694

  340

  49

  1999–2000

  367

  275

  75

  598

  461

  77

  776

  370

  48

  2000–01

  398

  273

  69

  719

  593

  82

  675

  354

  52

  2001–02

  386

  268

  69

  727

  559

  77

  767

  336

  44

  Figures for all services are not available prior to 1995–9696

  Human Centrifuge
  Mr. Gerald Howarth
  To ask the Secretary of State for Defence if he will make a statement on progress towards the procurement of a human centrifuge; and what discussions his Department has had with AMST of Austria on the matter. [93990]

  Mr. Ingram
  AMST is one of two companies currently in competition for the contract to provide a new human carrying High G Centrifuge for the RAF. An announcement on the award of this programme is planned for August 2003.

  Military Forces Deployment
  Mr. Jenkins
  To ask the Secretary of State for Defence what UK military forces are(a) deployed and (b) in the

  January to March

  April to June

  July to September

  October to November

  40 Commando

  15

  10

  10

  5

  42 Commando

  15

  20

  10

  5

  45 Commando

  15

  10

  10

  20

  Notes:

  1 The data for the final quarter of 2002 are not fully available, and do not therefore include December applications.

  2 All figures are rounded to the nearest 5 to protect against individual identification, and data are presented quarterly due to small monthly numbers involved.

  3 Data includes RM Officer and Other Ranks, but excludes small numbers of RN personnel assigned to the Commando units.

  4 The data indicate the periods in which the PVR application was recorded, which may be slightly later than the date of submission, due to managerial or administrative delays.

  Publicity and Advertising
  Mr. Laws
  To ask the Secretary of State for Defence how much(a) his Department and (b) each agency and non-departmental public body sponsored by his Department spent on (i) publicity and (ii) advertising in each year from 1995–96 to 2002–03 (estimated); and if he will make a statement. [92257]
  856W
  Of Defence press office continued to represent the Department as usual in dealing with media inquiries on the issue, and continues to do so.

  Graduates
  Dr. Murrison
  To ask the Secretary of State for Defence what proportion of(a) Naval, (b) Army and (c) RAF officers received in each year since 1990 were graduates. [93657]

  Dr. Moonie
  Details of the graduate intake to the Officer Corps in the Armed Forces in recent years are as follows:

  process of deployment in the Gulf and Middle East region, setting out how many personnel of which unit and service are (i) stationed and (ii) due to be stationed in each location in the region. [92340]

  Mr. Ingram
  [holding answer 21 January 2003]: I will write to the hon. Member and a copy of my letter will be placed in the Library of the House.

  Premature Voluntary Release
  Mr. Jenkin
  To ask the Secretary of State for Defence how many applications there have been for Premature Voluntary Release from(a) 40,(b) 42 and (c) 45 Commando in each month of the past year. [93653]

  Dr. Moonie
  RM Commando PVR applications recorded during 2002:

  Dr. Moonie
  Details of Ministry of Defence expenditure on advertising and publicity are contained in the annual MOD Performance Reports. For 1995–96 the information is shown on page 32, Cm 3448; for 1996–97 the information is shown on page 49, Cm 3781; 1997–98 the information is shown on page 49, Cm 4170; for 1999–2000 the information is shown on page 60, Cm 5000; for 2000–01 the information is shown on page 68, Cm 5290 and for 2001–02 the information is shown on page 71, Cm 5661.

  Copies of these reports are available in the House.
  857W
  Figures for 1998–99 were not provided in the annual performance report and are as follows:

  £million

  Category

  Expenditure

  Recruitment

  Royal Navy/Royal Fleet Auxiliary

  6.65

  Army

  11.77

  Royal Air Force

  10.17

  Civilian

  3.27

  PR, Marketing and Business Support Services

  0.84

  Chief of Public Relations Expenditure

  2.39

  Sales Promotion

  1.06

  Scholarships

  0.38

  National Employers Liaison Committee

  (Territorial Army)

  1.05

  The expenditure for advertising and publicity is spread among many different budgets and budget holders. The Department thus does not have a central advertising and publicity budget and forecast information—in this case for financial year 2002–03—could be provided only at disproportionate cost. However, as in past years, information on the outturn figure is collated and is expected to be included in the 2002–03 performance report, when that document is published.

  The breakdown of expenditure on publicity and advertising by agencies and non-departmental public bodies sponsored by the Ministry of Defence is not held centrally and could be provided only at disproportionate cost.

  Reserve Forces
  Mr. Swire
  To ask the Secretary of State for Defence what recent discussions he has had with employers of reservists currently on the reserve list; and how many reservists have been called up to date. [93869]

  Dr. Moonie
  As at 21 January 2003, 1,816 reservists had been sent call-out notices in support of Operation TELIC. Single Service Adjudication Officers have been in contact with reservists' employers to consider applications for revocation, exemption or deferral of employees' call-out and applications for financial assistance to cover the additional costs resulting from call-out as defined by the Reserve Forces Act 1996 (RFA 96).

  In addition, the Ministry of Defence has been conducting a long-standing campaign designed to win and maintain the support of Britain's employers for the volunteer reserve forces, which was re-launched in September 2002 as the SaBRE (Supporting Britain's Reservists and Employers) campaign. Its purpose is to explain to employers not only the benefits of employing reservists, but also the attendant rights and obligations that employers have in respect of those of their employees who are also reservists.

  Mr. Swire
  To ask the Secretary of State for Defence what measures he will take to prevent breaches of the Reserve Forces (Safeguard of Employment) Act 1985. [93870]
  858W
  Dr. Moonie
  The Ministry of Defence has been conducting a long-standing campaign designed to win and maintain the support of Britain's employers for the volunteer reserve forces, which was re-launched in September 2002 as SaBRE (Supporting Britain's Reservists and Employers). Its purpose is to explain to employers not only the benefits of employing reservists, but also the attendant rights and obligations that employers have, including the requirement to reemploy reservists who have been called-out in accordance with the Reserve Forces (Safeguard of Employment) Act 1985. In addition, when a reservist is called-out, a letter is sent to their employer reminding them of their obligations under the Act.

  Mr. Swire
  To ask the Secretary of State for Defence what measures he will take against companies in violation of the Reserve Forces (Safeguard of Employment) Act 1985. [93871]

  Dr. Moonie
  Under the Reserve Forces (Safeguard of Employment) Act 1985, an employer must take into his or her employment, under the same conditions of service as they were previously serving, those former employees who have been called-out as reservists who make a written application at the end of a period of called-out service. If this is not reasonable and practical, the reservist must be reinstated on the most favourable terms of service available.

  Under the Act, where an employer fails to reinstate a reservist, the reservist may apply to a reinstatement committee. These committees, appointed by the Secretary of State for Trade and Industry, have the power to compel an employer to reinstate an employee and/or order the employer to pay appropriate compensation. Failure to comply with an order of a reinstatement committee is a criminal offence and an employer may be fined on conviction.

  The Act confers no powers on the Ministry of Defence to take measures against employers who fail to re-instate a reservist.

  Mr. Swire
  To ask the Secretary of State for Defence what financial and legal support he will give to reservists sacked by companies in violation of the Reserve Forces (Safeguard of Employment) Act 1985. [93872]

  Dr. Moonie
  The Reserve Forces (Safeguard of Employment) Act provides for reinstatement and/or compensation for reservists dismissed from their jobs whilst called out. Reservists who feel they have been unfairly dismissed by their employer may apply to a reinstatement committee to hear their case.

  Any decision to seek legal advice is a matter for the individual, and the Ministry of Defence is not in a position to offer legal advice in individual cases. However, The Forces Law Network, an association of solicitors with experience of the needs of service personnel, can provide independent legal advice. Advice on how to apply for reinstatement, and what to do if any employer fails to honour his/her legal obligations, is available to reservists at both unit and regional level. In addition, the SaBRE (Supporting Britain's Reservists and Employers) campaign can answer general queries about the provisions of the Act.

  Reservists' Pensions
  Mr. Jenkin
  To ask the Secretary of State for Defence what arrangements are in place for reservists to continue with company pensions when they are called up; and if he will make a statement. [93651]

  Dr. Moonie
  The Reserve Forces (Call-out and Recall) (Financial Assistance) Regulations 1997 (Statutory Instrument 1997 No 309) allows Reservists to continue payments into their civilian employers' pension scheme while they are called out. Under the regulations, the Ministry of Defence has powers to pay the employer's pension contribution, provided that the reservist continues to pay any employee's share required by the scheme. Pension scheme administrators must accept the MOD's payments for this purpose.

  Service Personnel (Gulf)
  Llew Smith
  To ask the Secretary of State for Defence what his estimate is of the cost of the deployment of troops and tanks to the Gulf announced on 20 January. [93900]

  Mr. Ingram
  The information requested is not yet available. When it is, I will write to my hon. Friend and a copy of my letter will be placed in the Library of the House.

  Mr. Keetch
  To ask the Secretary of State for Defence from which units the personnel in BARTs and RESTs under operation FRESCO are drawn; how many of them are due to be deployed to the Gulf and from which units will personnel be drawn to replace them; and if he will make a statement. [93936]

  Mr. Ingram
  Breathing Apparatus Rescue Teams (BARTs) and Rescue Equipment Support Teams (RESTs) have been assembled by withdrawing individuals from almost every unit of the Royal Navy and Royal Air Force. Recognising the important contribution the teams have played during the national firefighters dispute, every effort is made to preserve the capability of BARTs and RESTs. Recently, six RAF and 124 Royal Navy personnel have been withdrawn from Operation FRESCO as a direct consequence of deployments to the Gulf. During the course of the industrial action, the Ministry of Defence has maintained a programme of replacing personnel who needed to be withdrawn for various reasons, including the Gulf deployment, in order to ensure that the overall fire and rescue capability remains broadly constant. As this is a rolling programme, there is no direct correlation between those personnel stood down from Operation FRESCO due to their deployment to the Gulf and those personnel (or their parent units) from across the Royal Air Force and Royal Navy being trained as replacements.

  Services' Protective Clothing
  Mr. Paul Marsden
  To ask the Secretary of State for Defence what tests have been conducted to ensure the reliability of(a) gas masks and (b) protective suits worn by services personnel. [93566]

  Mr. Ingram
  Both the S10 respirators ('gas masks') and Nuclear, Biological and Chemical (NEC) suits ('protective suits') are manufactured to required 860W
  specifications (including stringent quality assurance) to ensure that a high level of reliability is achieved. The respirators have routine inspections covering fit, damage, distortion, wear and component life and are subject to periodic tests (normally annually) in a gas environment to confirm their operational effectiveness. The NBC suits, which are vacuum-packed by the manufacturer prior to dispatch, are subject to exacting quality assurance control. The integrity of the packaging is checked prior to issue to personnel.

  Mr. Paul Marsden
  To ask the Secretary of State for Defence what the procedure is for repairing damaged protective suits used by service personnel to protect them from(a) chemical, (b) nuclear and (c) radiological attack. [93567]

  Mr. Ingram
  Due to the nature of the item, damaged nuclear, biological and chemical suits are replaced and not repaired.

  Software Procurement
  Dr. Julian Lewis
  To ask the Secretary of State for Defence if he will make it his policy to mandate companies tendering for the supply of future software systems for the Royal Navy to use Open Source Software for the engineered operating systems. [86480]

  Mr. Ingram
  While the Ministry of Defence is examining the benefits of using Open Source Software in some areas, it is not envisaged that its use will be mandated to Project teams. The appropriateness and benefits of Open Source Software for any given project will be assessed against a range of criteria, on a case by case basis.

  Dr. Julian Lewis
  To ask the Secretary of State for Defence what estimate he has made of the potential financial savings for the Royal Navy of the adoption of Open Source Software for the operating systems of its future software packages. [86481]

  Dr. Moonie
  Software used in the Ministry of Defence is selected on its ability to meet business and operational needs, taking full account of value for money, long-term viability, security and interoperability. The Ministry of Defence currently has no explicit policy on the use of Open Source Software, but does follow the Government Open Source Software policy published and announced in Parliament on 22 July 2002. This policy is available on the e-Envoy website (www.e-envoy.gov.uk) or the Office of Government Commerce website (www.ogc.gov.uk).

  Dr. Julian Lewis
  To ask the Secretary of State for Defence what assessment he has made of the security implications of adopting commercial off-the-shelf instead of made-to-measure operating systems for future software systems for the Royal Navy. [86483]

  Dr. Moonie
  It is recognised that, increasingly, systems which include commercial off-the-shelf software will be offered to the Ministry of Defence by potential contractors for defence applications. This can be beneficial in reducing development times and costs, but can give concern as off-the-shelf software may be of uncertain origin and not stringently tested prior to release. Projects are therefore treated on a case by case basis. The security requirements of each system will be specified in the design documents. When a commercial
  861W
  off-the-shelf product (e.g. an operating system) is to be used with specified security features, it is required to undergo security evaluation.

DEPUTY PRIME MINISTER

  Council Housing
  Mr. Hopkins
  To ask the Deputy Prime Minister when he expects to receive the National Audit Office report on council stock transfers; and whether his review of council housing finances will be published before he has received the report. [93773]

  Mr. McNulty
  The timetable for the National Audit Office's report has yet to be finalised. However it is scheduled for consideration by the Public Accounts Committee of this House on 31 March. The NAO research has been helpful in the broader review of the vehicles available for the delivery of the decent homes target.

  The statement by my right hon. Friend the Deputy Prime Minister on the Government's comprehensive long-term programme for sustainable communities, including housing, will be made shortly.

  Firefighters Dispute
  Hugh Robertson
  To ask the Deputy Prime Minister if he will make a statement on recent progress in resolving the industrial action by firefighters. [93774]

  Mr. Barnes
  To ask the Deputy Prime Minister, if he will make a further statement on the firefighters' dispute. [93779]

  Mr. Raynsford
  My right hon. Friend the Deputy Prime Minister made a statement to the House on this issue yesterday.

  John Barrett
  To ask the Deputy Prime Minister how many armed forces Breathing Apparatus Rescue Teams and Rescue Equipment Support Teams were on fire cover during the 24-hour strike by members of the Fire Brigades Union on Tuesday 21 January. [93775]

  Mr. Raynsford
  There were 331 Breathing Apparatus Rescue Teams and 59 Regional Equipment Support Teams providing emergency fire cover in the United Kingdom for the 24-hour strike on 21 January. This is the same number of teams as for the previous 10 days of strike action.

  The number of red appliances in use by the military continues to increase. The armed forces are now able to deploy 177 red engines, 90 more than at the start of the last 8 day strike.

  The military now also has a number of aerial water towers to provide additional cover in extreme situations.

  Mr. Flight
  To ask the Deputy Prime Minister how many days were lost to industrial action by firefighters in each of the last 12 months. [92764]

  Mr. Raynsford
  In the year up to 23 January 2003, eleven days were lost to national industrial action by firefighters. Ten of these days were in November 2002, and one day from the 21–22 January 2003.

  New Deal for Communities
  Mr. Mahmood
  To ask the Deputy Prime Minister, if he will make a statement on the progress of the New Deal for Communities. [93776]

  Mrs. Roche
  Our New Deal for Communities Partnerships have a wide range of projects underway and are developing agreements with those who provide public services to make them more accountable to local people. Many partnerships can now point to important successes in reducing crime, improving the quality of the local environment and engaging with local people. Some of our partnerships do face challenging circumstances, but all are striving for success.

  Key Workers
  Jonathan Shaw
  To ask the Deputy Prime Minister what steps he is taking to increase the number of houses and flats available to key workers. [93777]

  Mr. McNulty
  Under the Starter Home Initiative, the Office of the Deputy Prime Minister aims to help 10,000 key workers to buy homes in areas where the high cost of housing is undermining recruitment and retention. In addition, the Housing Corporation's Challenge Fund in 2003/04 will provide some 2,800 new homes for rent or home ownership for key workers in the South East of England.

  Next week's announcement by my right hon. Friend the Deputy Prime Minister will outline our future approach to key workers housing.

  Local Government Finance
  Dr. Pugh
  To ask the Deputy Prime Minister in which year the ceilings and floors arrangements in the local government settlement 2003–04 will finish. [93778]

  Mr. Leslie
  We expect floors and ceilings to be part of the system for the foreseeable future.

  Capita Group
  Mr. Burstow
  To ask the Deputy Prime Minister if he will list the contracts that have been awarded to the Capita Group by his Department. [89972]

  Mr. Leslie
  The Office of the Deputy Prime Minister has awarded the following contracts to the Capita Group:

  (1) Housing Employment Mobility Services

  (2) Neighbourhood Renewal—recruitment of advisors

  (3) Staff recruitment. A former DTLR call off contract for the external recruitment of staff below the senior civil service.

  The Capita Group are also working on the Local Government on-line website development and implementation. This contract was awarded to the Cathedral Consortium, who then sub contracted this work to Capita Group.

  Departmental Expenditure (Newsprint)
  Mr. Bercow
  To ask the Deputy Prime Minister what the total expenditure of his Department was on newspapers, magazines and periodicals in 2002. [90541]

  Mr. Leslie
  The Office of the Deputy Prime Minister was established as a separate department on 29 May 2002. From its formation until 31 December 2002, Office of the Deputy Prime Minister expenditure on newspapers, magazines and periodicals is estimated at £144,000, (including Government Offices). This figure is rounded to the nearest £1,000.

  East Riding of Yorkshire Council
  David Davis
  To ask the Deputy Prime Minister what measures he will take to ensure the East Riding of Yorkshire Council receives enough funding to guarantee the provision of nursery school places from April 2004. [93837]

  Mr. Raynsford
  In anticipation of the duty to secure universal provision for three-year-olds from April 2004, the new education formula, announced in the provisional local government settlement, allocated funding through Formula Sending Shares based on the greater of the number of pupils in the latest applicable (January 2002) count and 85 per cent. of the resident three year old population.

  Ministerial Meetings
  Mr. Pickles
  To ask the Deputy Prime Minister what meetings(a) he, (b) other Ministers and (c) officials of his Department have held with (i) Sir Jeremy Beecham, (ii) other Local Government Association Executive members and (iii) representatives of the Fire Authority employers since 1 December 2002; on what dates the meetings were held; and what was discussed in each case. [91632]

  Mr. Raynsford
  Ministers and senior officials meet with Sir Jeremy Beecham and other members of the Local Government Association Executive on a regular basis to discuss many issues. The last meeting took place at the Central-Local Partnership on 22 January.

  Ministers and senior officials have also met representatives of the Fire Authority employers since 1 December 2002. Subjects discussed have included the proposals contained in the final report of Sir George Bain's Independent Review of the Fire Service, and how the Government intends to take them forward.

  Planning Appeals
  Helen Jones
  To ask the Deputy Prime Minister what advice he plans to issue to(a) regional planning bodies, (b) local authorities and (c) the planning inspectorate on the implementation of PPG3, following the decision in Rowlinson v Warrington Borough Council. [92352]

  Mr. McNulty
  Planning Policy Guidance Note 3, 'Housing', introduced a series of tough new measures designed to meet the country's future housing needs in the most sustainable way possible, including a sequential approach which gives priority to re-using brownfield sites in urban areas in preference to developing greenfield sites. The Office of the Deputy 864W
  Prime Minister is not convinced that it is necessary to issue further advice in the light of the decision in Rowlinson v. Warrington Borough Council, which was determined on the facts of the case.

  Helen Jones
  To ask the Deputy Prime Minister what assessment he has made of the impact on the Government's regeneration policies of the decision in the case of Rowlinson v Warrington borough council. [92351]

  Mr. McNulty
  The Office of the Deputy Prime Minister has no plans to make such an assessment. The judgment in Rowlinson v. Warrington borough council was made on the facts of that specific case, and the Office of the Deputy Prime Minister is not convinced that they are of wider or general application.

  Thameslink 2000
  Mr. Dismore
  To ask the Deputy Prime Minister when he received the planning application for Thameslink 2000; what associated applications have been submitted, and on what dates; what progress has been made in relation to the(a) planning and (b) associated applications; when he expects to make a decision; and if he will make a statement. [93073]

  Mr. Leslie
  Railtrack have, at various stages, made 47 separate applications in regard to the Thameslink 2000 project, many of which replaced or varied earlier ones. They first applied in November 1997 for an Order under the Transport and Works Act (TWA) and for planning permission, together with applications for listed building consent (LBC) and conservation area consent (CAC). These proposals were modified by further applications in 1998 and 1999 for LBC and CAC and, in September 1999, for an amending TWA Order and related planning permission. In October 2000, while the public inquiry was underway, Railtrack submitted a further tranche of amending planning and LBC applications. The position concerning the applications is therefore a complex one which has involved many changes.

  The inspector who held the public inquiry provided a report in January 2002, followed by supplementary reports in May and June 2002. These were published in July 2002. In summary, he concluded that whilst the scheme would bring very substantial transportation, regeneration and economic benefits, there were three key deficiencies in the scheme—at London Bridge and Blackfriars stations and in the Borough High Street area—which required resolution before a decision could appropriately be made on the scheme as a whole. The Office of the Deputy Prime Minister has since been giving careful consideration to the inspector's conclusions and to the many representations which have been received since the inquiry closed. These include a letter of 31 October 2002 from the Strategic Rail Authority who proposed that the scheme be split into two phases and asked for approval to be granted subject to conditions to deal with the outstanding issues identified by the inspector.
  865W
  We are today informing Railtrack that a decision on the scheme is to be deferred pending the submission and consideration of fresh applications aimed at addressing the deficiencies identified by the inspector, an amended Environmental Statement and a proper examination of the SRA's proposal to split the project into two phases. This will require a re-opening of the earlier inquiry.

EDUCATION AND SKILLS

  PFI (Schools)
  Mr. Flight
  To ask the Secretary of State for Education and Skills if he will make a statement on the findings of the Audit Commission report, "PFI in Schools". [92769]

  Mr. Miliband
  The Audit Commission's report found that whilst teaching staff and pupils were generally pleased with their new schools, there had been some difficulties in the procurement process and some design aspects were less than ideal. However, the report focused only on a small number of very early PFI pathfinder schools. Since those early days, as the report itself made clear, we have continuously refined and improved the schools PFI process in the light of experience. Over 500 schools are now covered by PFI deals, representing over £1.3 billion of private sector investment. Another 400 PFI schools are in procurement or provisionally approved. This is a major programme by any standards and many schools are now receiving substantial investments to help provide high quality accommodation, raise educational standards and transform working conditions for pupils and staff.

  Mr. Flight
  To ask the Secretary of State for Education and Skills what assessment he has made of the merits of funding the building of schools through the Private Finance Initiative. [92771]

  Mr. Miliband
  The Private Finance Initiative (PFI) has significant merits. For example, it allows for risk sharing with the private sector. The public sector does not pay anything until construction work on the school building is complete and the school is receiving the contracted service. New schools are generally completed on time and are then maintained to a high standard over the whole life of the contract. This prevents the deterioration of the schools estate which has been so common in the past. Also, teaching professionals can focus on teaching without the distractions of facilities management and poor accommodation.

  Using the PFI to fund the building of schools has so far meant that an extra £1.3 billion has been invested to provide better conditions for pupils and teachers in over 500 schools. Transforming school accommodation is helping us to raise educational standards.

  As far as individual PFI projects are concerned, each one is assessed at the outset to ensure it will provide best value over the whole life of the contract. Further checks are made at various points during the procurement process to ensure that value for money for the public sector is delivered. Once the project is operational and transactions appear in the local authority's accounts,
  866W
  the authority's auditors will give an opinion on whether these have been compiled in accordance with the relevant accounting standards.

  Annual Report
  Norman Lamb
  To ask the Secretary of State for Education and Skills how much producing his Department's latest Annual Report cost; how many copies were printed; how many copies of it were sold at its cover price; to whom copies of the report have been provided free of charge; and how many copies were provided free of charge. [90880]

  Mr. Charles Clarke
  The Department pays for the design and typesetting of its departmental Annual Report. The costs of printing are met by the publisher, The Stationery Office (TSO). The Department buys in copies from the TSO at a discount to distribute to Ministers, Ofsted, the Education and Skills Select Committee, DfES and House of Commons Libraries, senior managers and some of our partners and stakeholders.

  At the time of this answer, 1,166 copies have been sold, including 750 purchased by the Department.

  The cost to the Department of typesetting and design was £42,346 and buying in copies from ISO cost £16,773. The total cost to the Department was therefore £59,119.

  Class Sizes
  David Davis
  To ask the Secretary of State for Education and Skills if he will list the class sizes of(a) primary and (b) secondary schools in Haltemprice and Howden for the current academic year. [92852]

  Mr. Miliband
  In January 2002, the average class size (taught by one teacher) in primary and secondary schools in Haltemprice and Howden parliamentary constituency was 27.2 pupils and 22 pupils respectively. This compares with the average class size (taught by one teacher) in primary and secondary schools in England of 26.3 pupils and 21.9 pupils respectively.

  Class Sizes (Kirklees)
  Ann Taylor
  To ask the Secretary of State for Education and Skills if he will list the class sizes of(a) primary and (b) secondary schools in Kirklees in each of the last five years. [93788]

  Mr. Miliband
  The information requested is shown in the table.

  Maintained primary and secondary schools1, average class size2,

  Kirklees local education authority

  Position in January each year

  Primary

  Secondary

  1998

  29.3

  22.3

  1999

  28.5

  22.8

  2000

  27.6

  23.0

  2001

  26.8

  22.6

  2002

  27.0

  22.9

  1 Includes middle schools as deemed.

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

  Source:

  Annual School's Census.

  GCSE Results
  Mr. Brady
  To ask the Secretary of State for Education and Skills if he will list the secondary modern schools that achieved better results at GCSE than the average for all-ability comprehensive schools in 2001. [88938]

  School

  Town

  County

  Percentage of 15-year-olds achieving 5 or more GCSE grades A *-C or GNVQ equivalent

  Hillview School for Girls

  Tonbridge

  Kent

  75

  Tolworth Girls' School and Centre for Continuing Education

  Surbiton

  Surrey

  73

  St. Benedict's Catholic High School

  Alcester

  Warwickshire

  73

  Waddesdon Church of England School

  Aylesbury

  Buckinghamshire

  69

  Pensby High School for Girls

  Wirral

  Merseyside

  67

  Upper Wharfedale School

  Skipton

  North Yorkshire

  67

  The Holy Cross School

  New Malden

  Surrey

  65

  St Bernard's Catholic School

  High Wycombe

  Buckinghamshire

  65

  Bowland High School

  Clitheroe

  Lancashire

  64

  Richard Challoner School

  New Malden

  Surrey

  62

  The Misbourne School

  Great Missenden

  Buckinghamshire

  62

  Ribblesdale High School Technology College

  Clitheroe

  Lancashire

  62

  Blackfen School for Girls

  Sidcup

  Kent

  61

  Stratford-upon-Avon High School

  Stratford- upon Avon

  Warwickshire

  61

  Alcester High School Technology College

  Alcester

  Warwickshire

  60

  Coombe Girls' School

  New Malden

  Surrey

  59

  The St George's College of Technology, Sleaford

  Sleaford

  Lincolnshire

  59

  John Colet School

  Aylesbury

  Buckinghamshire

  58

  Holmer Green Upper School

  High Wycombe

  Buckinghamshire

  56

  Henley-in-Arden High School

  Solihull

  West Midlands

  56

  St. Edmund's Church of England Girls' School and Sports College,

  Salisbury

  Salisbury

  55

  Caistor Yarborough School

  Market Rasen

  Lincolnshire

  55

  Studley High School

  Studley

  Warwickshire

  55

  Wellington School

  Altrincham

  Cheshire

  54

  Bilton High School

  Rugby

  Warwickshire

  54

  The Gartree Community School

  Lincoln

  53

  The Monks' Dyke Technology College

  Louth

  Lincolnshire

  53

  The Maplesden Noakes School

  Maidstone

  52

  Ashton-on-Mersey School

  Sale

  Cheshire

  51

  The Chalfonts Community College

  Gerrards Cross

  Buckinghamshire

  51

  Glenmoor School

  Bournemouth

  51

  Great Marlow School

  Marlow

  Buckinghamshire

  50

  The Astor of Hever Community School

  Maidstone

  50

  Avonbourne School

  Bournemouth

  49

  Wrotham School

  Sevenoaks

  Kent

  49

  The Bradbourne School

  Sevenoaks

  Kent

  48

  The Hayesbrook School

  Tonbridge

  Kent

  48

  Press Releases
  Mr. Laws
  To ask the Secretary of State for Education and Skills how many press releases have been issued by his Department in each(a) year and (b) quarter from 1995–96 to 2002–03; and if he will make a statement. [92447]

  Mr. Miliband
  We are unable to provide the quarterly figures for the number of press releases dating back to 1995 without incurring disproportionate costs.

  The total number of press releases issued each year between 1995 and 2002 is set out in the table.

  Total number of press releases

  1995

  472

  1996

  443

  1997

  447

  1998

  598

  868W
  Mr. Miliband
  The secondary modern schools which achieved better results at GCSE than the average of 47 per cent. for all-ability comprehensive schools in England in 2001 are as listed:

  Total number of press releases

  1999

  605

  2000

  538

  20011

  395

  20021

  210

  1 Employment issues were transferred to the Department for Work and Pensions in 2001 as part of the machinery of Government changes. This saw a reduction in the number of press releases issued.

  Press releases dating from 1998 can be accessed via the Department's website, www.dfes.gov.uldpns/newsiist. Press releases prior to 998 can be accessed via the Government News Network (GNN) website www.nds.coi.gov.uk.

  School Playing Fields
  Jane Griffiths
  To ask the Secretary of State for Education and Skills what his policy is on the disposal
  869W
  of a school playing field site for development, where the school has ceased to exist as a result of merger with an adjoining school. [93947]

  Mr. Miliband
  A local authority, governing body or foundation body must obtain the Secretary of State's consent before disposing of any playing field that has been used for the purposes of a maintained school within the preceding 10 years. This applies to both continuing and closed schools.

  Applications to dispose of school playing fields are assessed against three main criteria. These are:

  (i) schools' needs: that playing field provision and curriculum requirements at the school making the disposal, and at other schools in the local area, will be met;

  (ii) community needs: that community use of school playing fields is taken into account, with alternative facilities made available if necessary; and

  (iii) finance: that any sale proceeds are re-invested to provide new or improved sports facilities at schools, or are used otherwise to help raise standards by providing better educational facilities.

  The criteria are set out in the Department's Guidance 0580/2001: The Protection of School Playing Fields and Land for City Academies. The criteria enable the Secretary of State to take into account the team game playing field provision at other local schools. This is to ensure that where there are surplus fields at one school, other local schools are given the opportunity to use those surplus fields. The School Playing Fields Advisory Panel provides advice on the extent to which applications meet the published criteria. The Secretary of State has no influence over what happens to a school playing field once consent has been given to its disposal. Any future development is a matter for the local planning authorities.

  Selective Secondary Schools (Torbay)
  Mr. Sanders
  To ask the Secretary of State for Education and Skills (1) how many and what percentage of Torbay Unitary Authority primary school pupils have gained selective secondary school places in the last three years for which figures are available; [92932]

  (2) how many selective place secondary school pupils from outside the Torbay Unitary Authority attended (a) Churston, (b) Torquay Boys' and (c) Torquay Girls' Grammar Schools in each of the last three years; what percentage of the school roll this represented; and how many pupils and what percentage of the selective stream entry came from outside the Torbay Unitary Authority attending Westlands School in each of the last three years. [92933]

  Mr. Miliband
  The information requested is not held centrally.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Sulphur Dioxide Emissions
  David Davis
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list UK sulphur dioxide emissions in each year since 1997. [94292]
  870W
  Alun Michael
  The following table shows estimated UK emissions of sulphur dioxide (SO2) from 1997 to 2000 (the latest year for which data are available). Data since 1970 on UK emissions of air pollutants, including sulphur dioxide, are published annually in the National Atmospheric Emissions Inventory (NAEI), which can be found at the NAEI website, http://www.naei.org.uk.

  Year

  SO2 emission(thousands of tonnes)

  1997

  1,665

  1998

  1,588

  1999

  1,210

  2000

  1,165

  Source:

  National Atmospheric Emissions Inventory

  "Living Places: Powers, Rights and Responsibilities"
  Mr. Lidington
  To ask the Secretary of State for Environment, Food and Rural Affairs what arrangements her Department has made to consult(a) town, (b) parish and (c) community councils about the proposals contained in the document "Living Places—Powers, Rights and Responsibilities". [92654]

  Margaret Beckett
  The consultation paper Living Places—Powers, Rights, and Responsibilities was sent to 370 local authorities, 97 police authorities and constabularies, 17 Government Departments, 23 Government related agencies, 114 public bodies and non-government organisations and 168 companies.

  The launch of the consultation at the Urban Summit received wide-spread high profile press coverage in all the major daily publications. 1,400 copies were given out at the summit and the consultation document has also been available since its launch free of charge from DEFRA publications and through the DEFRA website.

  Agriculture and Fisheries Council
  Mr. Hood
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her answer of 7 January 2003,Official Report, columns 81–84W, concerning the Agriculture and Fisheries Council on 16 to 19 December 2002, what the Government's stance was on each of the 11 key features of the Council's conclusions, embodied in the three new regulations on the common fisheries policy. [91774]

  Mr. Morley
  We exerted strong pressure to secure the ending of subsidies for building new vessels at the earliest opportunity; retention of the coastal limits for a further period with a clear indication of expectation that they would continue beyond that; continuation of Hague Preference; and Regional Advisory Councils. On the rest of the key features we, with like-minded member states, generally gave steady support without which the points might not have been secured.

  Bioterrorism
  Tim Loughton
  To ask the Secretary of State for Environment, Food and Rural Affairs what discussions
  871W
  she has held with the Home Office about strategies for safe handling of domestic pets in the event of bio-terrorist attacks. [92523]

  Mr. Morley
  Discussions are being held with the Home Office and other Government Departments on a number of different aspects, including those relating to animals.

  Birds
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs how many(a) farm birds and (b) wild birds have been spotted on (i) special projects and (ii) non-special projects land in each region in each of the last 10 years. [93744]

  Mr. Morley
  There is no routine year-on-year monitoring of birds on Countryside Stewardship special projects. However, there are some data available regarding those special projects that are specifically targeted at particular bird species. For example a report published by RSPB in 2001 showed cirl buntings had increased by 83 per cent. on land under Countryside Stewardship scheme agreements, compared with an increase of only 2 per cent. on non-agreement land.

  At present, only provisional results for regional bird data are available. Indicators have been developed based on on-going research by RSPB/BTO on behalf of DEFRA. These provisional estimates show that between 1970 and 1999 the Woodland species population index increased in the North East, North West, Yorkshire and the number, East Midlands and the West Midlands. The woodland species population index declined in the East, South East and South West regions. For the five regions where estimates are available, the Farmland species population indices decreased over the period. More detailed information is available on the Government's sustainable development website http://www.sustainable-development.aov.uk/indicators/reaiona1/2001/h13.htm

  Cattle Passports
  Mr. Wyatt
  To ask the Secretary of State for Environment, Food and Rural Affairs how many cases of non-compliance with the cattle passport rules are being investigated. [93726]

  Alun Michael
  There are currently seven cases of breach of the Cattle Identification rules being pursued by Defra's investigators as a result of referrals by the British Cattle Movement Service. A further 27 cases are being considered for referral by BCMS. Local authorities also investigate cases independently of Central Government Agencies.

  Civil Servants
  Mr. Laws
  To ask the Secretary of State for Environment, Food and Rural Affairs how many civil servants have been employed by(a) her Department and (b) each of its agencies and non-departmental bodies in each year from 1994–95 to 2002–03; and if she will make a statement. [92388]
  872W
  Alun Michael
  I refer the hon. Member to the answer given by my hon. Friend the Minister of State, Cabinet Office (Mr. Alexander) on 22 January 2003,Official Report, column 333–34W.

  Civil Servants (Psychometric Testing)
  Mr. Flook
  To ask the Secretary of State for Environment, Food and Rural Affairs how many civil servants have(a) been tested and (b) will be tested using psychometric testing. [92592]

  Alun Michael
  (a) This information is not held centrally by the Department, (b) The inclusion of psychometric testing is being considered as part of the senior managers' development Programme, which will cover approximately 560 people. We are awaiting advice from the consultants recently appointed to design and deliver the programme on the role of psychometric testing within it.

  Flooding (Insurance)
  Mr. Lidington
  To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the number of homes in England and Wales that are uninsurable against the risk of flooding. [89626]

  Margaret Beckett
  No such estimate has been made. Some properties have always been uninsurable against flooding.

  Compost
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs whether mechanically separated municipal solid waste organic matter used as a compost feedstock will be treated in the same way as source-separated feedstocks under the amendment to the Animal By-products Order. [93275]

  Mr. Meacher
  Waste that has, or may have, come into contact with meat or meat products will be classified as catering waste and will need to be treated as catering waste, in line with the requirements of the Animal By-products Order. As it may be difficult to demonstrate that household waste collected unsorted and then mechanically separated has never been in contact with meat or meat products, this is that it has been kept apart from meat and meat products may be more straightforward, if that cannot be done, then source separated waste must also be treated as catering waste.

  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will publish the standards required for compost derived from mechanical separation of municipal solid waste organic matter for use on land. [93276]
  873W
  Mr. Meacher
  There are no statutory standards for compost, although by virtue of Best Value Indicator BV82b, compost counts towards local authority statutory targets for recycling and composting. The Waste and Resources Action Programme (WRAP), in close co-operation with the Composting Association, has developed a BSI Publicly Available Specification (PAS) for compost. The delivery of this PAS for compost should help to create markets for organic waste derived products by creating confidence in the product. Achieving the PAS will depend on, for example, the suitability of the feedstock and the composting process used. We expect the EU Commission to issue a proposal for a Bio-waste Directive later this year; this should contain harmonized EU standards for composting.

  Departmental Running Costs
  Mr. Andrew Turner
  To ask the Secretary of State for Environment, Food and Rural Affairs what the running costs of(a) the Department and (b) each of its sponsored agencies were in (i) 1997 and (ii) the most recent year for which figures are available. [90713]

  Alun Michael
  Detailed information on administration costs for Defra and its agencies, going back to 1998–99 and with projections to 2003–04, is set out in Table 5.5 of the 2002 Departmental Report (Cm 5422). Data for years before 1998–99 are not available on the same basis. Provisional outturn for gross and net administration cost limits were published in Public Expenditure 2001–2002 Provisional Outturn (Cm 5574), Tables 4 and 5. Updated information, with plans to 2005–06, will be published in the 2003 Departmental Report in the spring.

  Equine Passports
  Mr. David Cameron
  To ask the Secretary of State for Environment, Food and Rural Affairs what estimates she has made of the costs of administrating equine passports. [93363]

  (2) what steps her Department is intending to take to minimise the costs to horseowners of introducing equine passports. [93366]

  Alun Michael
  At present there are 56 organisations approved in the UK to issue horse passports. The administration costs to them will vary according to their own requirements and the number of passports they each issue. We have not therefore made any estimate of the costs of administering horse passports.

  Current costs to horseowners of buying horse passports is expected to decreasedue to economies of scale which will occur when every horse is required to have a passport.

  Flooding
  Mr. Key
  To ask the Secretary of State for Environment, Food and Rural Affairs which(a) agencies and (b) authorities are responsible for (i) flood prevention, (ii) flood management and (iii) remedial action in respect of the village of Pitton in Wiltshire; what their functions are; and if she will make a statement. [92758]

  Mr. Morley
  The Department of Environment, Food and Rural Affairs has policy responsibility for flood defence in England while operational responsibility for delivering the service falls to the 'operating authorities': the Environment Agency, local authorities and Internal Drainage Boards. The Environment Agency has a general supervisory duty over all matters relating to flood defence and they are also responsible for flood forecasting and flood warning arrangements. In respect of Pitton, Salisbury district council and Wiltshire county council have responsibilities as flood defence and highways authorities respectively.

  I understand that flooding in Pitton is due to a combination of high groundwater and springflows. The Agency has exercised its supervisory power by producing reports into the flooding that occurred in 1995 and 2000. Following the 1995 report, Salisbury district council undertook some works with Defra grant aid. I understand that all the authorities have signed up to an action plan following the 2000 report.

  Patrick Mercer
  To ask the Secretary of State for Environment, Food and Rural Affairs what the total estimated financial cost of flood damage in Nottinghamshire was for 2002–03 [92856]

  Mr Morley
  The Environment Agency does not hold data for total financial cost of flood damage for all flooding events in all locations.

  Fraud and Theft
  Mr. Laws
  To ask the Secretary of State for Environment, Food and Rural Affairs how much money has been lost by her Department and its agencies and non-departmental public bodies through(a) fraud and (b) theft for each year since 1996–97. [92461]

  Alun Michael
  The Department has only been in existence since June 2001. Information covering earlier periods is therefore not available, and could be constructed retrospectively only at disproportionate cost. Annual reports, which the Treasury prepares on fraud, covering returns from both the former MAFF and DETR, are deposited in the House of Commons Library.

  However, annual returns of fraud submitted by DEFRA, including its Agencies to HMT covering the financial years 2001/2002 show the total cost of theft and fraud to the department to be as follows:

  Fraud(£)

  Theft(£)

  Core-DEFRA

  61,066

  38,678

  Agencies

  —

  226,111

  Non-departmental bodies

  N/a

  N/a

  Horticulture Research International
  Mr. Paul Marsden
  To ask the Secretary of State for Environment, Food and Rural Affairs how much the mailshot on the Horticulture Research International, dated 20 January 2003, cost broken down into(a) postage, (b) publication and (c) envelopes. [93018]

  Mr Morley
  The Government announced its response to the Quinquennial Review of Horticulture Research International to Parliament on 20 January 2003. A copy of the statement has been made available on DEFRA's website: www.defra.gov.uk. reference: News Release 24/03 of 20 January. The Department has also written to more than 150 individuals or organisations who made representations about the Review to alert them to the statement. The cost of this exercise has not been identified separately but is estimated to be less than £50.

  In-farm Slaughter
  Mr. Swire
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what discussions she has had with the Food Standards Agency about in-farm slaughter; [93873]

  (2) what plans she has to devise a procedure which would allow in-farm slaughterers to continue to operate within the law; [93875]

  (3) what her policy is on in-farm slaughter. [93874]

  Mr. Morley
  There have been no recent discussions with the Food Standards Agency regarding on-farm slaughter. The on-farm slaughter of animals is permitted under the 'Welfare of Animals (Slaughter or Killing) Regulations 1995'. The hygiene regulations covering the on-farm slaughter of animals are a matter for the Food Standards Agency.

  Landfill
  Mr. Lidington
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) how many hazardous waste landfill sites operate in the United Kingdom; how many of these are in-house sites; and if she will make a statement; [89753]

  (2) how many landfill sites have submitted applications to deal with hazardous waste after July 2004; how many of these are in-house sites; and if she will make a statement. [89754]

  Government funding per year (£1,000s)

  Region

  1993

  1994

  1995

  1996

  1997

  1998

  1999

  2000

  2001

  2002

  Total

  East Midlands

  44

  49

  82

  90

  72

  109

  67

  120

  154

  109

  894

  Eastern

  36

  27

  15

  9

  21

  6

  24

  15

  15

  25

  186

  Greater London

  1

  1

  10

  2

  1

  26

  1

  1

  7

  1

  52

  North East

  3

  1

  8

  9

  18

  13

  26

  15

  6

  93

  192

  North West

  17

  16

  42

  4

  18

  42

  31

  25

  72

  170

  437

  South East

  17

  62

  42

  52

  57

  234

  196

  159

  284

  546

  1,648

  South West

  15

  51

  147

  81

  173

  333

  360

  390

  395

  595

  2,541

  876W
  Margaret Beckett
  The information that is available on landfill sites relates to England and Wales and comes from a conditioning plan exercise conducted by the Environment Agency. The figures requested are set out in the table, broken down by region:

  Hazardous

  Hazardous

  Region

  (post 2002)

  Of which in-house1

  (post 2004)

  Of which in-house1

  Anglian

  47

  8

  9

  7

  Midlands

  42

  4

  4

  2

  North East

  39

  10

  11

  6

  North

  West

  27

  6

  8

  5

  South West

  16

  1

  2

  1

  Southern

  13

  0

  1

  0

  Thames

  19

  1

  0

  0

  Wales

  15

  6

  3

  3

  Total

  218

  36

  38

  24

  1 In-house is defined as those landfill sites owned and operated by a company for disposal of its own waste.

  Minimum Wage
  Pete Wishart
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will estimate the impact of increasing the minimum wage(a) in line with average earnings, (b) to £4.17 per hour, (c) to £4.87 per hour, (d) to £5.00 per hour and (e) to £5.30 per hour, on the cost of salaries of departmental employees (i) in total and (ii) for each nation of the United Kingdom in the next financial year. [90604]

  Alun Michael
  There would be no impact to the cost of salaries to core Defra employees by increasing the national minimum wage by the amounts quoted, either nationally or across the Department in total. The minimum salary for a Defra employee is already above the rates quoted. This is a national salary payable to Defra employees across the United Kingdom.

  Special Projects
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs how much has been spent on special project schemes in each region in each of the last 10 years. [93743]

  Alun Michael
  The amount of Government funding for Countryside Stewardship Special Projects1, in each Government Office region over the last 10 years has been as follows:
  877W

  Government funding per year(£1,000s)

  Region

  1993

  1994

  1995

  1996

  1997

  1998

  1999

  2000

  2001

  2002

  Total

  West Midlands

  2

  23

  16

  7

  93

  57

  74

  65

  120

  212

  670

  Yorks/

  Humberside

  2

  10

  25

  5

  15

  52

  54

  126

  127

  175

  590

  Total

  138

  241

  386

  258

  456

  887

  816

  924

  1,179

  1,926

  7,211

  1 These figures include two types of Countryside Stewardship special projects: projects for land management (e.g. overwintered stubbles for cirl buntings) where the payment is made annually for 10 years and capital works projects (e.g. restoration of traditional buildings) where the payment is made in one year only.

  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to rationalise the special projects scheme; and if she will make a statement about her plans for its future. [93745]

  Alun Michael
  We are carrying out a wide-ranging review of English agri-environment schemes, including the Countryside Stewardship scheme, under which special projects are available.

  The review has now reached the second consultation stage, within which views have been invited regarding the Agri-environment Framework document. This document contains a proposal that a higher tier scheme should:
  …include provision for special projects, focussing particularly on encouraging group applications aimed at tackling localised environmental problems requiring collective or co-ordinated management, especially where this falls outside the standard menu of options".

  Responses to this consultation should be received by 28 February 2003.

  Statutory Instruments
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs how many statutory instruments were issued by MAFF in each calendar year from 1979 to 2001; and how many have been issued by her Department since June 2001. [89837]

  Alun Michael
  The number of Statutory Instruments issued by MAFF in each calendar year from 1979 June 2001 is as follows:

  Number

  1979

  95

  1980

  128

  1981

  110

  1982

  119

  1983

  108

  1984

  82

  1985

  88

  1986

  102

  1987

  127

  1988

  96

  1989

  135

  1990

  158

  1991

  111

  1992

  145

  1993

  150

  1994

  115

  1995

  138

  1996

  162

  1997

  139

  1998

  130

  1999

  116

  878W

  Number

  2000

  127

  20011

  —

  1 To 7 June 297 (of which 259 related specifically to the Foot and Mouth Disease outbreak)

  Defra was created on 8 June 2001. The number of statutory instruments laid by Defra in 2001 was 219 of which 159 related specifically to the Foot and Mouth disease outbreak, and seven were on topics previously the responsibility of DETR.

  The figure in 2002 was 127 of which 29 were on topics previously the responsibility of DETR and 6 related to the aftermath of the Foot and Mouth Disease.

  Teleworking
  Mr. Miller
  To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the effects on the environment of the level of teleworking(a) now and (b) over the next five years. [91541]

  Mr. Meacher
  Any measure which reduces the need to travel and leads to reductions in emissions of local air pollutants and greenhouse gases would generally have a positive effect on the environment, but no quantification has been undertaken to measure this.

  Thames (Dredging)
  Mr. Goodman
  To ask the Secretary of State for Environment, Food and Rural Affairs when the Environment Agency or other Government body last dredged the Thames in the Marlow and Medmenham area. [93210]

  Mr. Morley
  [holding answer 27 January 2003]: The Environment Agency last dredged the River Thames in the Marlow and Medmenham area in 1995.

FOREIGN AND COMMONWEALTH AFFAIRS

  Chechnya
  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations Her Majesty's Government has made to the Russian Government about renewal of the OSCE's mandate in Chechnya; and if he will make a statement. [93135]

  Mr. Straw
  [holding answer 28 January 2003]: I discussed the issue with the Russian Foreign Minister on 27 December 2002, and sought an extension to the

  879W
  OSCE Assistance Group's existing mandate to allow further negotiations about the future of the mission's presence in Chechnya.

  Mr. Menzies Campbell:
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken by Her Majesty's Government to ensure that human rights monitors from the OSCE remain in Chechnya; and if he will make a statement. [93136]

  Mr. Straw
  [holding answer 28 January 2003]: With our EU and international partners, we have repeatedly pressed the Russian Government to agree a new mandate for the OSCE Assistance Group in Chechnya, which includes the monitoring of the human rights and humanitarian situation as one of its key responsibilities.

  Health and Safety Strategy
  Mrs. Helen Clark
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has collated on the application to his Department and its agencies of the checklist, circulated by letter by Sir Richard Mottram, referred to under Action Point 12 of the Revitalising Health and Safety strategy statement; and if he will make a statement. [89495]

  Mr. Mike O'Brien
  The Foreign and Commonwealth Office will be issuing a revised health and safety policy statement which outlines the responsibilities of all staff. This also gives clear guidance on how to access the arrangements to ensure the health and safety of staff, visitors and contractors and provides contact details of the health and safety advisers employed by the FCO. Staff are involved in health and safety issues through health and safety liaison officers and consultation with the Trade Unions.

  The FCO's health and safety experts report quarterly to the Administration Board, chaired by the FCO's health and safety champion, on the incorporation of health and safety awareness in the Department's work. All new staff in London receive health and safety induction training. The health and safety team regularly review the training provision to ensure its suitability.

  Iraq
  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with EU partners in advance of the General Affairs and External Relations Council on 27 and 28 January on the subject of Iraq, with particular reference to the formulation of a common position; and if he will make a statement. [93625]

  Mr. Straw
  [holding answer 28 January 2003]: I have had frequent discussions with my EU counterparts and other Foreign Minister colleagues on Iraq in the run-up and in the margins of the General Affairs and External Relations Council on 27£28 January; I shall continue these contacts.

  EU Foreign Ministers were united on Iraq at the General Affairs and External Relations Council on 27 January. We reaffirmed our view that UN Security Council resolution 1441 represents a final opportunity for Iraq to resolve the crisis peacefully. We urged Iraq to engage in full and active co-operation with the weapons inspectors and provide them, without delay, with all
  880W
  additional and complete information on questions raised by the international community. The question of an EU Common Position did not arise.

  The full conclusions of the Council on Iraq are as follows:
  "The Council, deeply concerned about the situation in Iraq, reaffirms that its goal remains the effective and complete disarmament of Iraq's weapons of mass destruction. The Council fully supports the efforts of the UN to ensure full and immediate compliance by Iraq with all relevant resolutions of the Security Council, in particular with UNSCR 1441 of 8 November 2002. The resolution gives an unambiguous message that the Iraqi government has a final opportunity to resolve the crisis peacefully.
  The Council therefore urges the Iraqi authorities to engage in full and active co-operation with UNMOVIC and IAEA. The Iraqi authorities must, as an imperative, provide the inspectors, without delay, with all additional and complete information on questions raised by the international community. The Council expresses its appreciation for the work accomplished by the inspectors so far and reiterates its confidence and full support for Dr. Blix and Dr. El Baradei to complete their mission in accordance with UNSCR 1441. It welcomes their intention to continue and intensify their operations.
  The Council recalls that it stands ready to engage all necessary efforts to answer the needs of UNMOVIC and IAEA in personnel and practical means.
  The Council underlines the fundamental importance of preventing the proliferation of weapons of mass destruction in accordance with the relevant international instruments. The Security Council has a key role to play in these endeavours.
  The Council reaffirms the role of the UNSC in the implementation of UNSCR 1441. The responsibility of the UNSC in maintaining international peace and security must be respected."

  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what powers member states of the United Nations Security Council have to offer political immunity to Saddam Hussein in inviting him to go into exile. [93894]

  Mr. Rammell
  The powers of the Security Council are set out in the Charter of the United Nations, Chapter VII of which provides that the Council shall decide what measures are to be taken to maintain or restore international peace and security.

  Nuclear Weapons
  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will set out the direct and indirect trade, barter or other form of exchange that has taken place since 1973 between the United States and the United Kingdom on nuclear weapons, nuclear weapons components or nuclear weapons materials under the provisions of the 1959 amendment to the 1958 US-UK Agreement on Mutual Defence on Atomic Energy Matters. [92307]

  Mr. Hoon
  I have been asked to reply.

  Exchanges of information between the United Kingdom and the United States on nuclear weapon matters take place only under the auspices of the 1958 Mutual Defence Agreement, and its amendments.

  There have been no transfers of nuclear weapons between the UK and the US. The UK is a member and a Depositary state for the Treaty on the Non-Proliferation of Nuclear Weapons (1968) and our

  881W
  actions, including under the Mutual Defence Agreement, are in compliance with that treaty. I am withholding other details under Exemption 1 of the Code of Practice on Access to Government Information.

  Pakistan
  Mr. Gordon Prentice
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many people applied from Islamabad for(a) visitor visas and (b) permanent settlement in the UK in each year since 1997; and if he will make a statement. [93427]

  Mr. Rammell
  The number of settlement and non-settlement applications received in Islamabad since 1997 is given below:

  Settlement

  Non-settlement

  1997

  9,183

  23,828

  1998

  10,837

  38,250

  1999

  10,279

  40,537

  2000

  9,956

  54,390

  2001 1

  2,595

  13,256

  April 2001 to March 2002

  10,271

  65,149

  April 2002 to December 2002

  2,005

  37,774

  1 These figures are for the period January to March 2001. During 2000 UK visas changed to collecting annual statistics over a financial year period.

HEALTH

  General Practioners (Training)
  Mr. Paterson
  To ask the Secretary of State for Health how many places are available for the training of GPs in England and Wales; and what percentage of trainee places have been filled. [84492]

  Mr. Hutton
  [holding answer 2 December 2002]: Information on the places available for the training of general practitioners in England are collected by the Directors of Postgraduate General Practice Education. The information is shown in the table and indicates an increase of 14.9 per cent., since 1999.

  Year

  Number available to provide G P training

  1999

  2,111

  2000

  2,235

  2001

  2,264

  2002

  2,425

  From the latest figures it is estimated that 90 per cent. of trainee places were filled.

  Information in respect of Scotland and Wales is the responsibility of the devolved administrations, whilst the institutions in Northern Ireland are dissolved, responsibility rests with Ministers in the Northern Ireland Office.

  NHS IT Projects
  Chris Grayling:
  To ask the Secretary of State for Health if he will list IT projects with a total contract value of more than £5 million which are being undertaken by the NHS. [86038]

  Ms Blears:
  The Department of Health, only approves National Health Service Information Management and Technology business cases that exceed £20 million whole life cost. This category currently consists of one case, the Swindon and Marlborough NHS Trust electronic patient record scheme (whole life cost £25.3 million). The remaining cases are dealt with at various intermediate levels in the NHS; previously by regional offices and now strategic health authorities. We do not maintain a central list of cases approved in the NHS.

  Acute and Primary Care Trusts
  Hugh Bayley:
  To ask the Secretary of State for Health if he will state for each NHS acute trust and each NHS primary care trust for the latest year for which figures are available (a) the national reference cost index (Market Forces Factor adjusted), (b) the increase or decrease in funding which the trust would require if its costs were the national average and (c) the trust's surplus or deficit that year. [93081]

  Mr. Hutton:
  The information is available in the Library in the Reference Cost Index 2002.

  It is not possible to identify the potential increase or decrease that each trust would require if costs were moved to the national average at this point. Approximately 11 per cent. of services are still excluded from reference costs and national average costs do not yet exist for these services. This does not allow a full analysis and assessment of the overall impact on an individual organisation's income flows.

  Information on National Health Service trusts' surplus and deficits have been placed in the Library.

  Asthma
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will list for each year since 1997, broken down by ethnicity, the percentage of children suffering from asthma. [91987]

  Jacqui Smith
  The information requested is not collected centrally. The table shows the number of hospital episodes by age where the primary diagnosis is asthma. The International Classification of Disease 10 codes J45–J46 has been used. The data is for 1997–98 to 2001–02.

  Information on the number of hospital episodes where the primary diagnosis is asthma is collected by age. This is shown in the table for the years 1997–98 to 2001–2002.
  883W

  Ordinary admissions and day cases combined: completed episode primary diagnosis 493 (ICD9 code) diagnosis asthma J45–J46 ICD10)

  Number of admissions within the year in NHS hospitals

  Age

  1997–98

  1998–99

  1999–2000

  2000–01

  2001–02

  0 to 4

  21,061

  19,431

  17,493

  14,580

  15,253

  5 to 14

  12,885

  11,896

  11,703

  11,147

  11,796

  15 to 44

  21,271

  20,245

  18,796

  17,993

  17,084

  Unknown

  13

  10

  20

  57

  69

  Asylum Seekers
  Mr. Rosindell
  To ask the Secretary of State for Health what recent guidelines he has issued to general practitioners on accepting asylum seekers; and what assessment he has made of the effect on existing patients. [92843]

  Ms Blears
  The most recently published guidance is Health Service Circular 1999/018. This explains that refugees or persons applying for asylum in the United Kingdom are regarded as ordinarily resident. They are therefore eligible to register with a general practitioner or personal medical services pilot provider for national health service primary care services.

  Primary care trusts are responsible for securing all health services for their populations. In doing this they will continually assess whether or not the current configuration of primary care services matches the need of the current population. This will include assessing the local impact of asylum seekers.

  Bio-terrorism
  Patrick Mercer
  To ask the Secretary of State for Health what measures are in place to prevent contamination in the event of a terrorist attack using biological agents. [88386]

  Mr. Hutton
  Emergency service personnel will play a central role in dealing with any possible contamination, in the event of a potential attack using biological agents. To this end all the 'blue light' emergency services have been provided with suitable personal protective equipment to protect them against the effects of contamination in the event of a bio-terrorism attack. Protocols for washing down and decontamination of emergency service and national service personnel, the public and premises have been developed with the fire service. The NHS already has in place sound working procedures to deal with biological agents, the spread of infectious diseases and to deal with contaminated equipment and premises. The advice of the Advisory Committee on Dangerous Pathogens will be sought on how to tackle any new risks from dangerous pathogens should they emerge.

  Patrick Mercer
  To ask the Secretary of State for Health what recent training has been provided to NHS personnel to deal with a terrorist incident involving biological agents. [88395]

  Mr. Hutton
  Public health guidance was issued to regional directors of public health in October 2001. General guidance "Planning for Major Incidents: The NHS Guidance" issued by the Department is now openly available on the Department's website www.doh.gov.uk/epcu/cbr/intro.htm with links to complementary guidance on dealing with key biological
  884W
  agents and investigating unusual illnesses on the Public Health Laboratory Service website www.phls.co.uk/ topics az/deliberate release/menu.htm. In addition, four specialties have been targeted for immediate training in dealing with the deliberate release of a biological agent: consultants in communicable disease, infectious disease physicians, clinical microbiologists/virologists and accident and emergency (A&E) physicians. Training has started and is being developed further. The Department has consulted with the relevant royal colleges concerning the training it is doing and with the British Infection Society. Training programmes have been devised for primary care trusts and general practitioners and are due to be piloted in Eastern region in early 2003.

  Specific training materials such as videos and information packs have also been prepared for occupational health physicians and other clinicians involved in implementation of the national smallpox plan which is available on the Department's website.

  Patrick Mercer
  To ask the Secretary of State for Health what advice he is giving to the public on action in the event of a terrorist attack using biological agents. [88398]

  Mr. Hutton
  Advice about key biological agents is available to the public on the Department's website www.doh.gov.uk/epcu/cbr/intro.htm with links to complementary guidance on the Public Health Laboratory Service website www.phls.co.uk/topics az/ deliberate release/menu.htm. Information leaflets concerning the deliberate release of smallpox, plague, anthrax, tularaemia and botulism have been prepared and will be made available to the public in the event of any outbreak. The Department is working across government to develop further public information. A wide range of techniques is being considered to find the most effective way to convey information to the public, such as posters and the internet, to help people maintain vigilance and prepare for the consequences of terrorist acts.

  Cancelled Operations
  Dr. Richard Taylor
  To ask the Secretary of State for Health how many planned operating lists at(a) the Alexandra hospital, Redditch and (b) the Worcestershire Royal infirmary were cancelled due to staff shortages between 23 December 2002 and 3 January 2003. [93252]

  Mr. Lammy
  No planned lists were cancelled at Worcestershire Royal hospital, and only two operations from the 23 planned were cancelled during this period at the Alexandra hospital. These were
  885W
  cancelled as a result of an outbreak of diarrhoea and vomiting resulting in a loss of bed capacity, not due to staff shortages.

  Chiropody
  Mr. Gardiner
  To ask the Secretary of State for Health what response the Department has made to the Society of Chiropodists and Podiatrists' report of 6 December. [86984]

  Mr. Hutton
  The Department has not issued a formal response to the document "NHS Chiropody/Podiatry Services—Cause for Continuing Concern, Time for Government Action", issued by the Society of Chiropodists and Podiatrists.

  However, I wrote to the chairman of the Society on 27 January, a copy of which has been placed in the Library.

  Civil Servants
  Mr. Laws
  To ask the Secretary of State for Health how many civil servants have been employed by(a) his Department and (b) each of its agencies and non-departmental bodies in each year from 1994–95 to 2002–03; and if he will make a statement. [92382]

  Mr. Lammy
  I refer the hon. Member to the reply given by my hon. Friend the Minister of State at the Cabinet Office (Mr. Alexander) on 22 January 2003,Official Report, column 334W.

  Computer Misuse
  Mr. Webb
  To ask the Secretary of State for Health how many cases of computer misuse there were in his Department in each of the last five years, broken down by each category of misuse; and how many of those cases resulted in disciplinary action. [93042]

  Mr. Lammy
  The Department takes any misuse of its information technology systems very seriously. All staff are regularly reminded of the Department's policy on misuse of IT, with detailed guidance contained in the document Acceptable Use of Information Technology available on the Department of Health Intranet.

  The table shows the total recorded cases of computer misuse within the central Department of Health. A more detailed breakdown of these figures is not available. Management checks indicate only a small number of the breaches involve inappropriate content.

  Type of misuse

  1998

  1999

  2000

  2001

  2002

  Totals

  Internet

  20

  21

  15

  —

  1

  57

  E-mail

  1

  2

  9

  4

  10

  26

  Internet and e-mail

  2

  —

  2

  —

  —

  4

  Total number of cases

  23

  23

  26

  4

  11

  87

  Disciplinary Action Taken

  22

  22

  26

  4

  11

  85

  Correspondence Protocol
  Mr. Burstow
  To ask the Secretary of State for Health what advice he will provide to health authorities and NHS trusts on observing the requirements of the protocol of the administrative court that public bodies must reply to all correspondence over disputed matters in 14 days. [87547]

  Mr. Hutton
  [holding answer 17 December 2002]: The Pre-Action Protocol for potential judicial review claims stipulates that public bodies exercising a judicial function should respond to letters before action in an instance where judicial review is threatened within 14 days. National health service organisations' duty to follow the Protocol requires no further guidance from the Department, and as statutory bodies, they will need to consult their own legal advisers on how to proceed in each case. However, compliance with the Protocol and with other statutory bodies forms part of the requirements set out in 'Improvement, Expansion and Reform', the NHS planning and priorities framework for 2003–06.

  Departmental Offices (Running Costs)
  Dr. Fox
  To ask the Secretary of State for Health what the running costs were of his Ministers' private offices, separately identifying expenditure on staff, in each financial year from 1997–98 to 2001–02. [80954]

  Mr. Lammy
  The running costs for Ministers' private offices for the financial years 1997–98 to 2001–02 are shown in the table.

  £000

  Year

  Staff

  Non staff

  Total

  1997–98

  1,385

  464

  1,849

  1998–99

  1,564

  580

  2,144

  1999–2000

  1,983

  670

  2,653

  2000–01

  2,323

  624

  2,947

  2001–02

  2,242

  634

  2,876

  Note:

  Private Office Expenditure

  An additional Minister was appointed during 1999–2000. The data is taken from the Department's Accounts system and is in cash terms. The salaries of Ministers themselves are not included.

  Employment, Social Policy, Health and Consumer Affairs Council
  Mr. Hood
  To ask the Secretary of State for Health what the outcome was of the Employment, Social Policy, Health and Consumer Affairs Council held on 3 December; what the Government's stance was on the issues discussed, including its voting record; and if he will make a statement. [87251]

  Ms Blears
  My right hon. Friend, the Secretary of State for Health represented the United Kingdom for the Health element of the first day of the Employment, Social Policy, Health and Consumer Affairs Council in Brussels on 2 December 2002; the consumer affairs items were also taken on that day.

  The main health business of this Council related to tobacco. The Council reached qualified majority on a First Reading Deal on the Tobacco Advertising Directive. He emphasised that the UK supports

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  European Union legislation on tobacco advertising, having strong domestic legislation in place. He made clear the Government's determination to ensure the legal victories secured by the tobacco companies over previous European legislation would not be repeated with this Directive. He therefore voted against the Directive because he did not think that the drafting of some provisions was good enough or that it went as far as it could in some areas (for example by not covering cigarette papers).

  A Council Recommendation on the prevention of smoking and on initiatives to improve tobacco control was adopted by a qualified majority, with support from the UK. The Commission also gave an update on the World Health Organisation Framework Convention on Tobacco Control.

  Member States set out their positions on the pharmaceuticals reviews with a discussion on three key outstanding issues in the European Medicines Evaluation Agency (EMEA) Regulation. There was no vote on this item. On scope, the UK was amongst several Member States who spoke out against extension of the centralised procedure for human medicines, and in favour of a choice for companies. Others supported the Commission. Most felt that Member States should appoint at least one member to the management board. Many were willing to consider also accepting representatives of patient groups or the European Parliament. A majority of Member States and the Commission were able to accept the Presidency compromise of a single renewal of an authorisation after five years.

  Council adopted a Recommendation on the prevention and reduction of risks associated with drug dependence. Council Conclusions on action against obesity were adopted unanimously. The UK voted in favour of both of these items.

  The Presidency presented a progress report on negotiations on a Directive setting standards of quality and safety for the donation, procurement, testing, processing, storage and distribution of human cells and tissues. The Commission said that they would look carefully at the changes in scope the Council was proposing in relation to the medicinal products and medical devices Directives.

  The Commission updated the Council on the high level process of reflection on patient mobility and health care development, and on the programme of cooperation on bioterrorism and health security. The Commission will be tabling a proposal to set up a network centre for disease control in May 2003, to be set up in 2005. The aim is to enhance the EU capacity to prevent the spread of communicable diseases, working closely with Member States' own institutions.

  The Commission reported that it had established a working group, to consider the quality of information on internet sites in the health sector. The group, consisting of representatives from government, Non-Government Organisations and industry, has reported
  888W
  and agreed actions including measures on transparency, privacy and accountability. The Commission will monitor work through the E-Europe 2005 ActionPlan.

  Items under any other business included an information paper from Ireland on post-polio syndrome. There was also a brief discussion on the follow-up to the G10 initiative on the pharmaceutical industry. A Commission communication, was under preparation, and should issue in May 2003. Italy announced they would have an Informal Ministerial meeting on this during their Presidency. Finally, there was a presentation from Belgium on their candidate for the Director-Generalship of the WHO, Peter Piot.

  The consumer part of the Council met with minimal discussion over a short agenda.

  The Council adopted a Resolution on Community consumer policy strategy 2002–06 without debate, endorsing the aims and objectives of the Commission's strategy as published in May 2002, namely a high common level of consumer protection, effective enforcement and the involvement of consumer organisations. The UK voted in favour, as did all other Member States.

  The Council and the Commission endorsed the Presidency's conclusions on a joint Commission-UK seminar held in November on using consumer statistics to inform and prioritise consumer policy. In accordance with the conclusions, the Commission will take forward technical work on definitions and the comparability of consumer statistics.

  As an information point only, the Council took note of a Commission presentation on the preliminary results of the European Extra-Judicial Network (EEJ-Net), the EU network of clearing houses designed to facilitate and resolve cross-border, out-of-court consumer disputes.

  Finally, Greece informed the Council that it wanted to contribute to the consumer agenda during its forthcoming Presidency by strengthening its involvement in the internal market. It highlighted in particular a seminar on the Commission's Green Paper of 2003, and a Ministerial conference on unfair trading to be held on 7 May 2003.

  Empty Homes
  Mr. Clifton-Brown
  To ask the Secretary of State for Health how many empty homes his Department(a) had five years ago and (b) has now, by region; if he will establish an empty homes strategy within his Department; and if he will set a target for reduction in empty homes. [92915]

  Mr. Lammy
  The Department has no residential accommodation on the administrative estate, empty or otherwise.

  Five years ago, the Department was in the process of disposing of the St. Charles Youth Treatment Centre, Brentwood, which included nine houses and eight flats

  889W
  that were empty. The site, including the housing, was eventually transferred to the Home Office for re-use within Government.

  No information about residential accommodation owned by National Health Service trusts or primary care trusts in England is currently held that could answer this question, although a database of residential accommodation available for NHS staff in London has been built.

  A survey of the NHS residential estate was last conducted in September 1998, which showed that there were 895 houses and flats vacant at that time. This was however a snapshot in time, and does not take account of units being held back for occupancy within a short time, as might be expected in a managed portfolio in periods of high staff turnover.

  NHS Estates produced 'Sold on Health' (2000), which highlights opportunities to improve management of the NHS healthcare estate and new ways of driving out surplus estate and getting best value from the whole asset lifecycle.

  The NHS housing initiative was established in April 2000 to tackle the problem of a lack of affordable accommodation for health workers on moderate incomes.

  The NHS Plan announced, in July 2000, a target to deliver an additional 2,000 units of affordable accommodation for nurses in London by July 2003.

  The initiative extends to cover the south east of England and other areas of high property prices throughout the country.

  Green Minister
  Mr. Gray
  To ask the Secretary of State for Health which Minister in his Department is the nominated Green Minister; how often he has attended meetings of the Green Ministers; and which official has responsibility for the DEFRA rural proofing check-list in his Department. [88458]

  Mr. Lammy
  My hon. Friend the Parliamentary Under-Secretary of State for Public Health (Ms Blears) is the nominated Green Minister in the Department of Health.

  It is established practice under Exemption 2 of Part II of the Code of Practice on Access to Government Information not to disclose information relating to the proceedings of the Cabinet and its committees-such as Ministerial attendance at committees.

  Officials in the Department's policy and planning directorate have lead responsibility for co-ordinating rural proofing activity in the Department of Health.

  Homeless People
  Mr. Paul Marsden
  To ask the Secretary of State for Health what assistance is given to homeless people to have access to a nutritionally balanced diet. [87421]
  890W
  Ms Blears
  The Homelessness Directorate within the Office of the Deputy Prime Minister are working with the Department of Health and the clinical practitioners and health visitors association to improve access to and raise awareness of the benefits of a healthy diet.

  Mr. Paul Marsden
  To ask the Secretary of State for Health what action his Department takes by way of partnership agreements with other Departments to improve the health care needs of homeless people. [87448]

  Ms Blears
  Vulnerable groups—including homeless people—have been identified as a key priority in the Government's cross-cutting review on health inequalities. In the review, Departments across Government gave commitments to take action where their programmes, policies and resources can make an impact on inequalities, including for vulnerable groups. A forthcoming All-Government delivery plan on health inequalities will set out how Departments' commitments will translate into action; the Department will drive forward the implementation of that plan.

  Hospital Food
  Ms Shipley
  To ask the Secretary of State for Health if he will make a statement on the nutritional standards of hospital food for(a) adults, (b) children and (c) vulnerable elderly people. [83346]

  Ms Blears
  The Better Hospital Food programme has been designed to improve both the quality and availability of food for all patients through, amongst other things, the introduction of a 24–hour catering service and the provision of additional daily snacks.

  Hospitals should have available to them expert dietetic advice, which should be called upon when designing hospital menus to ensure they meet the need of all patients. Additionally the essence of care, issued by the Chief Nursing Officer in 2001, highlights the importance of nutritional screening to identify patients who are at risk.

  The National Health Service recipe book, issued in May 2001, sets out the minimum standards to be provided by hospitals and also provides additional guidance on meeting the nutritional needs of children, elderly and long stay patients as well as those requiring food with modified consistency. There is additionally guidance on common therapeutic diets.

  A guidance document on providing catering services to children and young adults is due to be issued to the NHS shortly.

  Hospital Fractures
  Lynne Jones
  To ask the Secretary of State for Health how many people experienced bone fractures while being cared for in NHS hospitals in each of the last five years; and how many of the injured persons died while still in hospital. [93100]

  Mr. Lammy
  The Department does not collect this information centrally. In-patient central records monitor why a patient has entered a hospital, but do not necessarily record subsequent changes to the reason they are being cared for in hospital.
  891W
  However, the Government are concerned about national health service patients affected by adverse events, including bone fractures. It established the National Patient Safety Agency in July 2001 to improve the safety of NHS patient care by promoting an open and fair culture and by introducing a national reporting and learning system for adverse events. It is planned for the system to be rolled out across the NHS from summer 2003. The reporting and learning system will, in time, enable us to understand the nature and extent of adverse events in the NHS, including bone fractures and take action to prevent them being repeated.

  In addition, the national service framework for older people requires the NHS to take action to prevent falls and reduce resultant fractures or other injuries to older people.

  HPA
  Chris Grayling
  To ask the Secretary of State for Health what discussions are taking place about the future pension situation for HPA employees after 1 April; and when he expects these to be concluded. [90052]

  Ms Blears
  The intention is for transferring staff to be able to retain membership of their existing pension scheme. As a special health authority, the Health Protection Agency will be able to admit existing and new staff to the NHS occupational pension scheme.

  The current Transfer of Undertaking (Protection of Employment) Regulations 1981 statutory regulations do not cover occupational pension schemes. If for any reason it were not possible for individuals to retain their membership of their existing pension scheme, all necessary steps will be taken to ensure that staff retain broadly comparable pension arrangements in the future. Advice is being sought from the Government Actuary's Department and if appropriate to seek a certificate of comparability.

  Inequality Review
  Mr. Hinchliffe
  To ask the Secretary of State for Health what steps he intends to take to address the community development aspects of the Tackling Inequality 2002 Cross-cutting Review. [84886]

  Ms Blears
  [holding answer 9 December 2002]We will shortly be publishing an all Government delivery plan for tackling health inequalities. This will set out priorities for action across Government including local Government and in the national health service, in partnership with the community, voluntary and business sectors and will address the community development aspects of tackling health inequalities.

  Kava-kava
  Chris Grayling
  To ask the Secretary of State for Health (1) if he will place in the Library(a) the discussion paper that the Medicines Control Agency used to provide the framework from which risk management options have been considered regarding kava-kava, (b) the information used to assess the economic impact of the various regulatory options considered by the Medicines Control Agency regarding
  892W
  kava-kava and (c) the Medicines Control Agency risk analysis for kava-kava on the viability risk management options other than banning kava-kava; [91471]

  (2) if he will place in the Library data used by the Medicines Control Agency in considering the safety of kava-kava that relates to potential enzyme induction caused by (a) kava-kava and (b) registered medicines in association with kava-kava in adverse reaction case reports; [91472]

  (3) if he will place in the Library the Medicines Control Agency's (a) risk benefit analysis in relation to kava-kava, (b) supporting documents and (c) expert advice; [91474]

  (4) if he will place in the Library correspondence and submissions (a) sent to and (b) received by the Medicines Control Agency regarding the regulating of kava-kava. [91473]

  Ms Blears
  I am placing in the Library of the House copies of the following documents: the Medicines Control Agency's letters to interest groups about kava-kava; a summary of the responses received in response to the Agency's public consultation (MLX 286); copies of responses to the consultation received where permission has been received from the author; papers considered by the Committee on Safety of Medicines (CSM) and by the Medicines Commission; minutes of the meetings of the CSM held on 12 December 2001, 10 July 2002 and 16 October 2002; minutes of the meeting of the CSM's working group held on 12 March 2002; the final regulatory impact assessment (RIA).

  Some of the papers considered by the advisory committees have been anonymised under the Code of Practice on Access to Government Information, as have parts of the minutes of meetings, under exemptions 10, 13, 14 and 15 of the code.

  Minutes of the Commission's meeting of 7 November 2002 will be placed in the Library once the minutes have been formally ratified by the Commission. This is expected in February.

  We will review all other documents sent and received by the MCA relating to kava-kava to assess what, if any information is subject to non disclosure under the code and seek permission for disclosure from external parties where necessary. The main categories into which these additional documents fall include: factual advice sought from and given by the MCA following inquiries from a wide range of external parties, including members of the public, about the regulatory position of kava-kava and the progress of consideration of safety issues; legal advice sought by and given to the MCA; factual information exchanged between the MCA and the Food Standards Agency, other Government Departments, regulatory authorities elsewhere in the European Union, papers reflecting policy advice to and discussion with Ministers. Some of these categories of information will be exempt from disclosure under the code.
  893W
  In relation to kava-kava medicines with a marketing authorisation, exemptions 10, 13 and 15 of the code apply. This information remains confidential and publication would be premature while the issues are still under consideration; however, the advice will be published (some papers may be anonymised) once a regulatory decision has been made.

  MMR
  Mr. Evans
  To ask the Secretary of State for Health what regulations and restrictions apply to the import of the single(a) rubella, (b) measles and (c) mumps vaccine; and what the licensing arrangements are for each. [93419]

  Ms Blears
  Single rubella vaccine and single measles and mumps vaccines are licensed in the United Kingdom. However, the pharmaceutical companies that hold the UK marketing authorisations for single measles and mumps vaccines do not manufacture the products for, or market them in, this country and the vaccines being prescribed and administered are imported unlicensed medicines. Licensed single rubella vaccine is currently available in the UK. However, unlicensed rubella vaccine may also be imported on occasions when the licensed vaccine is unavailable.

  An unlicensed medicine, such as a single vaccine, may only be imported in accordance with The Medicines (Standard Provisions for Licences and Certificates) Amendment Regulations 1999 No. 4. An importer must hold the appropriate Wholesale Dealer's or Wholesale Dealer's Import Licence issued by the Medicines Control Agency (MCA), and is required to notify the MCA on each occasion that they intend to import such a product. Importation may proceed unless the importer has been informed by the MCA that it objects to importation. The MCA may object and prevent importation if it has concerns about the safety or quality of the product, or if there is an equivalent licensed medicine available. The maximum quantity that may be imported per notification is defined in the regulations.

  NHS (Private Sector Treatments)
  Dr. Richard Taylor
  To ask the Secretary of State for Health what the Worcestershire Acute Hospitals NHS Trust's expenditure on NHS patients treated surgically in the private sector was between 23 December 2002 and 3 January 2003. [93253]

  Mr. Lammy
  Approximately £100,000 was spent by the Worcestershire Acute Hospitals National Health Service Trust on treatments for NHS patients in private hospitals in Halesowen, Droitwich and Worcester during the period.

  NHS Hospitals (Tendering)
  Dr. Richard Taylor
  To ask the Secretary of State for Health which of the private companies on the Government's register of expertise for tendering to run NHS hospitals have experience in managing emergency services; and what safeguards are in place to prevent these firms recruiting the best managers from the NHS. [93251]
  894W
  Mr. Lammy
  The independent panel set up by the National Health Service Appointments Commission assessed the general ability of each private sector organisation to run a hospital trust. The expertise and experience of every organisation which tenders for a NHS franchise will be thoroughly and rigorously assessed before any contract is awarded. The Government's aim is for the best managers from either the public or private sectors to be put into franchised hospitals to help turn around their performance.

  NHS Hotmail System
  Chris Grayling
  To ask the Secretary of State for Health if he will place in the Library the specification for the NHS hotmail system being developed by EDS. [91590]

  Ms Blears
  A copy of the output base specification for email and directory services has been placed in the Library.

  NHS Trusts (Powers of Direction)
  Ms Drown
  To ask the Secretary of State for Health what direction he has given to NHS trusts in the last three months; and if he will make a statement on his powers of direction to(a) NHS trusts and (b) foundation trusts. [88240]

  Mr. Hutton
  There have been no instances over the past three months where my right hon. Friend the Secretary of State has used his powers of intervention to give direction to a particular trust.

  As set out in A Guide to NHS Foundation Trusts (paragraph 1.11), national health service trusts will not be subject to Secretary of State powers of direction.

  Parking Charges (Hospitals)
  Tim Loughton
  To ask the Secretary of State for Health how many NHS hospitals in England charge for parking for(a) visitors, (b) medical staff and (c) medical staff at discounted rates. [89926]

  Mr. Hutton
  This information is not held centrally. It is a matter for individual hospitals to decide whether or not to charge for car parking and the cost of such charges in the light of local circumstances. Where charges are introduced, patients who are eligible to claim reimbursement of travelling expenses under the hospital travel costs scheme may have the charges reimbursed.

  Patients (Homelessness)
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many patients in NHS hospitals were homeless in each year between 1997–98 and 2000–01, broken down by health authority. [93371]
  895W
  Jacqui Smith
  [holding answer 27 January 2003]Information on the total inpatient admissions to national health service hospitals in English health authorities for 1997–98 to 2000–01, where the address is classified as 'no fixed abode' has been placed in the Library.

  Pregnant Women
  Jim Dobbin
  To ask the Secretary of State for Health what provision(a) has been made and (b) is planned to support pregnant mothers engaged in (i) alcohol and (ii) substance abuse and to protect their unborn children from such abuse. [93216]

  Ms Blears
  Midwives provide the majority of care for pregnant mothers as well as advice and support on healthy lifestyles including alcohol and substance misuse. Specialist staff may also be attached to antenatal clinics.

  The Department produces health promotion resources which are targeted at pregnant women to reduce drinking and increase awareness of risk to the unborn child, e.g., Drinking for two. A recent survey indicated that 30 per cent. of women gave up drinking during pregnancy and around 70 per cent. of those who did drink, drank less than one unit per week on average.

  Specialist alcohol treatment services provide support and treatment for people with more serious alcohol problems, including pregnant women. There are around 475 specialist alcohol treatment services in England, providing treatment worth approximately £95 million per year.

  Obstetric and substance misuse services exist throughout the country. The Department of Health's Drug Misuse and Dependence—Guidelines on Clinical Management (Clinical Guidelines) recommends different approaches to deliver care to pregnant drug misusers, such as specialist midwives, or drug dependence staff attached to the antenatal clinic. The type of service in each area will depend on local circumstances, the number of pregnant drug misusers presenting for care, expertise of the obstetric and primary care services, and availability of specialist or shared-care support. Further information is available at http://www.doh.qov.uk/druqs/pdfs/dmfull.pdf

  Primary Care Trust Chair Salaries
  Mr. Burns
  To ask the Secretary of State for Health (1) what the average salary was for chairs of primary care groups in England in the year to 31 October 2002; [93968]

  (2) what the average salary is of (a) primary care group and (b) primary care trust chairpersons in England. [93262]
  896W
  Mr. Hutton
  [holding answer 27 January 2003]There are no longer any primary care groups in existence. The current average annual remuneration for primary care trust chairs is £12,600. All non-executives on PCT boards receive £5,294 per annum.

  Primary Care Trusts
  David Davis
  To ask the Secretary of State for Health if he will make a statement on the extent to which the new national health service funding formula for primary care trusts is governed by rural factors. [92902]

  Mr. Hutton
  The new national health service funding formula takes account of a wide range of health and socio-economic factors associated with the need for health care.

  In calculating health need in rural areas the new formula takes account of the effects of access, transport and poverty.

  The new formula provides a better measure of health need in all areas.

  Private Health Schemes
  Sue Doughty
  To ask the Secretary of State for Health pursuant to his answer of 2 December 2002,Official Report, column 619W, on private health schemes, if it would interfere with the duties of an NHS body if it allowed the use of beds by private health care funded patients for operations for which there is a waiting time longer than three months for NHS patients. [93150]

  Mr. Hutton
  It is for national health service bodies themselves to determine whether it is permissible and appropriate to offer private patient services in the light of relevant local circumstances.

  Residential Care Homes (Top-up Fees)
  Mr. Rosindell
  To ask the Secretary of State for Health if he will make a statement on the Government's policy towards top-up fees for patients in residential care homes. [90785]

  Jacqui Smith
  When a local council supports individuals in care homes, it should provide and fund accommodation sufficient to meet resident's assessed needs. Residents should only contribute to care costs according to the National Assistance (Assessment of Resources) Regulations 1992 and neither they nor third parties should be asked to make top-up payments in addition to the resident's assessed contribution in order to meet assessed needs.

  Furthermore, council supported residents may not top-up from their own resources for more expensive accommodation than the council would normally pay for to meet assessed need unless they have a deferred payment agreement or are subject to the 12-weeks property disregard.
  897W
  Otherwise, a resident can still opt for more expensive accommodation as long as they have a third party such as a friend or a relative who is willing make up the difference on their behalf. In order to agree a third party top-up agreement the local council needs to be satisfied that the third party has sufficient resources in order to continue to make the additional contribution on behalf of the resident.

  Silicone Cosmesis (Artificial Limbs)
  Dr. Julian Lewis
  To ask the Secretary of State for Health pursuant to his answers of 7 November 2002,Official Report, column 542W, and 27 November 2002, Official Report, column 356W, on NHS funding of silicone cosmesis for artificial limbs, if he will list the sums allocated to individual (a) health authorities and (b) primary care trusts in (i) 2001–02 and (ii) 2002–03 out of the £0.5 million and £1.5 million baseline allocations made respectively for those years. [92884]

  Mr. Lammy
  [holding answer 27 January 2003]Allocations to individual health authorities and primary care trusts in 2001–02 and 2002–03 did not separately identify sums for silicone cosmesis.

  Smallpox Vaccinations
  Patrick Mercer
  To ask the Secretary of State for Health (1) what advice he is giving to the public regarding smallpox vaccinations; [88397]

  (2) what plans he has to make smallpox vaccinations available to the public. [88508]

  Mr. Hutton
  There are no plans to vaccinate the whole population as a contingency measure against the threat of a bio-terrorist incident involving smallpox. Mass vaccination of the population could be justifiable if there was a smallpox attack or outbreak but it would not be acceptable to expose people to the risk of vaccination in the absence of any possible exposure to the smallpox virus. This is consistent with the approach recommended by the World Health Organisation.

  Smallpox vaccine has a much higher rate of serious complications than vaccines that are in regular use today. Certain groups are at even higher risk, such as those with weak immune systems or with severe eczema.

  We have already announced that a small number of key frontline national health service staff and a small number of military personnel who would provide the first response in the event of a confirmed, suspected or threatened release of smallpox will be vaccinated shortly. We are discussing with other Government Departments how to identify key workers in the emergency services and agreeing circumstances and timing under which they might be vaccinated.
  898W
  Our contingency plans for dealing with smallpox are detailed in the draft guidelines on smallpox available on http://www.doh.gov.uk/epcu/cbr/biol/ smallpoxplan.htm.

  Speech Therapists
  Mr. Jim Cunningham
  To ask the Secretary of State for Health (1) what the ratio of speech therapists to population is in(a) Coventry, (b) the West Midlands and (c) the UK as a whole; [93137]

  (2) how many speech therapists are working in Coventry. [93138]

  Mr. Lammy
  [holding answer 28 January 2003]The latest available information is shown in the table. Figures for the United Kingdom are not available, so England figures have been used.

  NHS hospital and community services (HCHS): qualified

  scientific, therapeutic and technical staff rates per 100,000

  population within the speech and language therapy area of work

  for Coventry health authority, West Midlands regional office area

  and England as at 30 September 2001

  Numbers of staff

  Rate per 100,000 population

  Whole-time equivalents

  Headcount

  Whole-time equivalents

  Headcount

  England

  4,207

  5,685

  8.6

  11.6

  of which:

  West Midlands

  446

  576

  8.5

  10.9

  of which:

  Coventry HA

  33

  41

  11

  13.6

  Statutory Instruments
  Mr. Bercow
  To ask the Secretary of State for Health how many statutory instruments have been issued by his Department in each calendar year since 1979. [89844]

  Mr. Lammy
  The Department of Health was formed in July 1988. Information for the period between July 1988 and December 1998 could be provided only at disproportionate cost, but is available on the website of Her Majesty's Stationery Office at www.legislation.hmso.gov.uk/stat.htm and in the Library.

  Information for the years 1999–2002 is shown in the table.

  Number of Statutory Instruments issued

  1999

  170

  2000

  216

  2001

  399

  2002

  392

  Tuberculosis
  Tim Loughton
  To ask the Secretary of State for Health pursuant to the answer of 10 December 2002 ref: 83330, how much his Department spent on
  899W
  educating the public about prevention and awareness of turberculosis in each year since 1997; and what form this year's Awareness campaign took. [87577]

  Ms Blears
  Approximately £43,000 was spent annually on tuberculosis awareness campaigns between 1997–98 and 2000–01.

  In 2001–02, £309,178 was spent on a campaign which incorporated press, television and radio advertising as well as the distribution of leaflets and posters throughout England in English, Gujarati, Hindi, Bengali, Punjabi, Urdu, Somali and Russian. £80,821 has been spent so far in 2002–03 in support of this campaign.

  Worcestershire Health Economy
  Mr. Luff
  To ask the Secretary of State for Health what assumptions were made in the service and financial framework for the Worcestershire health economy for 2002–03 in terms of(a) anticipated additional allocations from the Department of Health during the financial year and (b) the uplift for GP prescribing budgets; if these assumptions were in line with the external advice available to those preparing the framework; and who approved the final service and financial framework. [93007]

  Mr. Lammy
  Worcestershire health authority received an increase of £34.630 million to its revenue resource allocation, a 9.68 per cent. increase on the total 2001–02 allocation, in 2002–03.

  The assumptions made in the 2002–03 service and financial framework by Worcestershire health authority (HA), which co-ordinated the process, were:
  There were no anticipated additional allocations from the Department of Health during the financial year. However, there was an assumption made of slippage in-year of £2.5 million, i.e., allocations received in 2002–03 but against which expenditure would not be incurred recurrently until future years. This forecast slippage was at the same level as previous years.
  The uplift for primary care prescribing costs assumed by Worcestershire health authority was 11 per cent. on the 2001–02 forecast outturn of these costs. This was in line with national guidance. The HA also proposed making efficiency savings of 3.6 per cent., giving a net increase of 7.4 per cent. As required by national guidance, where prescribing costs efficiency savings were planned, this was supported by an action plan prepared by the HA.

  The chief executive designate for the new strategic health authority (StHA) played an active part in the local discussions and agreements with primary care groups and national health service trusts, and agreement of service and financial frameworks (SaFFs) was an important element of the franchise plan for the chief executive of the StHA.

  In addition the Department of Health, both at regional office and national levels, had an overseeing role for the whole SaFF process in particular and to ensure that all key targets were planned to be met.

  Working Time Directive
  Chris Grayling
  To ask the Secretary of State for Health what estimate he has made of the cost to each acute trust in the NHS of the introduction of the European Working Time Directive; how many extra staff he estimates will be required as a result of the application of the directive; how many have so far been recruited; and if he will make a statement. [88356]

  Mr. Hutton
  The European Working Time Directive (EWTD) has applied to the majority of national health service staff since October 1998. The EWTD will be extended to doctors in training from August 2004, initially with a maximum of 58 hours per week, reducing to 48 in 2009.

  The Department has not collected figures on a trust-by-trust basis, as work force planning of this kind is the responsibility of local trusts. However, the Department's guidance makes clear that compliance with the EWTD will be achieved only by trusts employing a wide range of solutions and maximising the skills and experience of their whole workforce. This is part of the bigger challenge of modernising the NHS and the guidance will help contribute to finding solutions that work in different specialties, in different hospitals.

  The guidance also makes clear that changes to the working practices of both medical and non-medical staff, and building on the increases in consultant and specialist registrars, will allow trusts to meet their objectives under the Directive.

HOME DEPARTMENT

  Asylum (Ports of Entry)
  Tony Worthington
  To ask the Secretary of State for the Home Department what steps he is taking to increase the percentage of applications for asylum at ports of entry. [92728]

  Beverley Hughes
  [holding answer 23 January 2003]In order to give advance publicity to the implementation of section 55 of the Nationality, Immigration and Asylum Act 2002, I made a Ministerial Statement on 28 November 2002 and issued a press release on the same day. The press release was issued to foreign media in this country and those abroad in countries where we receive a high number of asylum applicants. A further press release was issued on 7 January 2003, and this triggered extensive media coverage here within the UK.

  In addition, posters advertising the change in policy have been displayed in the arrivals hall at the major ports and airports since 10 December 2002. Copies of the posters have also been displayed in Voluntary Sector Offices, such as Migrant Helpline and the Refugee Action Project.

  Asylum Appeals
  Simon Hughes
  To ask the Secretary of State for the Home Department how many asylum appeals(a) between 1 April 2001 to 31 March 2002 and (b) since

  901W
  1 April 2002 have been (i) lodged and (ii) heard; how many of these appeals have been refused; and, in relation to these refusals, how many applications for judicial review have been lodged. [93334]

  Asylum appeals determined by adjudicators of the Immigration Appellate Authority, excluding dependants,

  April 2001 to September 20021

  Number of principal appellants

  Appeals determined by adjudicators

  Allowed4

  Dismissed4

  Withdrawn4

  Appeals received by Home Office2

  Appeals received by IAA3

  Total determined 3

  Total

  As % of total dismissed

  Total

  As % of total dismissed

  Total

  As % of total

  April 2001 to March 2002

  63,9005

  51,730

  47,015

  9,640

  21%

  36,365

  77%

  1,010

  2%

  April 2002 to September 2002

  24,1005

  32,500

  33,785

  7,385

  22%

  25,540

  76%

  855

  3%

  1Provisional figures rounded to the nearest 5. Numbers might not add up due to rounding.

  2Appeals received based on electronic sources.

  3Based on information supplied by the Lord Chancellor's Department. Determinations do not necessarily relate to appeals received in the same period.

  4Based on data supplied from the Presenting Officers Unit within the Home Office.

  5Estimate. Figures rounded to the nearest hundred, and subject to later revision.

  In the calendar year 2001 there were 2,210 applications for leave to move for judicial review. 13 per cent. of the 2,300 decisions in the calendar year 2001 granted leave to move. Information is unavailable for the periods requested. Applications for leave to move for Judicial Review do not necessarily relate to appeals refused by the Immigration Appellate Authority in the same period. The figures exclude further appeals to the Tribunal and the House of Lords.

  Asylum statistics are published quarterly. The latest published figures give information up to and including September 2002. The next publication giving figures up to and including December 2002 will be available from 28 February 2003 on the Home Office Research Development and Statistics Directorate website at http://www.homeoffice.gov.uk/rds/immigration l.html.

  Simon Hughes
  To ask the Secretary of State for the Home Department how many applicants under the expedited appeals process have received(a) legal advice and assistance in preparing their asylum appeal and (b) legal representation at the appeal hearing. [93335]

  Beverley Hughes
  The expedited appeals process commenced in August 2002 and ended when the Nationality, Immigration and Asylum Act 2002 was

  Initial asylum decisions in the United Kingdom1 by year 1997–2001

  Number of principal applicants Cases considered under normal procedures3

  Backlog clearance exercise4

  Initial decisions2

  Granted asylum

  Granted ELR

  Refused

  Granted asylum or ELR under backlog Criteria

  Refused under backlog criteria5

  1997

  36,045

  3,985

  3,115

  28,945

  —

  —

  1998

  31,570

  5,345

  3,910

  22,315

  —

  —

  1999

  33,720

  7,815

  2,465

  11,025

  11,140

  1,275

  2000

  109,205

  10,375

  11,495

  75,680

  10,325

  1,335

  20016

  119,015

  11,180

  19,845

  87,990

  —

  —

  1Figures rounded to the nearest five, with * = one or two.

  2Information is of initial decisions, excluding the outcome of appeals or other subsequent decisions.

  3Cases considered under normal procedures may include some cases decided under the backlog criteria.

  4Cases decided under measures aimed at reducing the pre 1996 asylum application backlog.

  5Includes some cases where the application has been refused on substantive grounds.

  6Provisional data.

  902W
  Beverley Hughes
  The available information is shown in the table. Appeal outcomes in any given time period do not necessarily relate to appeals lodged in the same period.

  commenced in November 2002, and non-suspensive appeals came into force for the 10 EU accession countries.

  Over 160 (rounded to the nearest five) appeals were dealt with under this process. All expedited appeal claimants passed through the Oakington fast track process and had access to on site legal advice from the Refugee Legal Centre or Immigration Advisory Service. Procedures were put in place to ensure the availability of legal advice once the claimants left Oakington and were detained pending determination of their appeal.

  Asylum statistics are published quarterly and are available on the Home Office Research and Development and Statistics Directorate website at: http://www.homeoffice.gov.uk/rds/immigration 1. html

  Asylum Seekers
  Mr. Clappison
  To ask the Secretary of State for the Home Department how many applications for asylum were refused in an initial decision in each year since 1997; and how many of these were subsequently allowed on appeal. [93325]

  Beverley Hughes
  The tables show the number of asylum applicants refused in an initial decision in each year from 1997 to 2001 and the number of appeals allowed in each of those years.
  903W
  Not all initial decisions to refuse an application result in an appeal. It is estimated that around 77 per cent. of refusals of applications made in 2001 resulted in an appeal, and that around a fifth of those appeals were allowed. The appeals allowed figures given in the following table do not necessarily relate to the refusals in the same year. These could be obtained only at disproportionate cost by examination of individual case records.

  Appeals determined by adjudicators

  Total

  Allowed As % of total determined5

  Total

  Dismissed As % of total determined5

  Total

  Withdrawn As % of total determined5

  1997

  1,180

  (6)

  18,145

  (86)

  1,720

  (8)

  1998

  2,355

  (9)

  21,195

  (84)

  1,770

  (7)

  1999

  5,280

  (27)

  11,135

  (57)

  3,050

  (16)

  2000

  3,340

  (17)

  15,580

  (80)

  475

  (2)

  20016,7

  8,155

  (19)

  34,440

  (79)

  825

  (2)

  1Figures (other than percentages) rounded to the nearest five. Numbers might not add up due to rounding,

  2Figures for 1997 to 2000 are based on manual counts of data received in Appeals Support Section of the Home Office. Some cases are received elsewhere in the Home Office before being forwarded to ASS and so may be counted in a later month than when they arrived in the Home Office.

  3Figures for 1997 and 1995 represent the number of appeals sent to the IAA by the Home Office.

  4Based on information supplied by the Lord Chancellor's Department. Determinations do not necessarily relate to appeals received in the same period.

  5Percentages based on total determined excluding without foundation appeals referred to Secretary of State for further consideration. Based on data supplied by the Presenting Officers Unit within the Home Office (October 1999–December 2001).

  6Appeals received by the Appeals Support Section based on electronic sources.

  7Provisional figures.

  Asylum statistics are published quarterly. The latest published figures give information up to and including September 2002. The next publication giving figures up to and including December 2002 will be available from 28 February 2003 on the Home Office Research Development and Statistics Directorate website at http://www.homeoffice.gov.uk/rds/immigration 1.html.

  Mr. Rosindell
  To ask the Secretary of State for the Home Department (1) how many asylum seekers have been denied asylum in the UK in the last 12 months; and what percentage have been deported; [92838]

  (2) how many asylum seekers from Algeria have been denied asylum in the UK in the last 12 months; and what percentage have been deported. [92839]

  Beverley Hughes
  In the period October 2001 to September 2002, 84,625 initial decisions were made on asylum cases, of which 1,185 had been lodged by Algerian nationals. In this period, 56,025 cases were refused asylum and exceptional leave to remain (ELR), of which 1,125 were Algerian. This information relates to cases and therefore excludes dependants.

  Information on the number of these cases that were removed within the same period is not available except by examination of individual case files at disproportionate cost. However, 10,300 principal asylum applicants were
  904W

  Appeals received by the Appeals Support Section 2

  Appeals received by the IAA 3

  Total determined 4

  1997

  20,950

  22,385

  21,090

  1998

  14,320

  15,440

  25,320

  1999

  6,615

  7,775

  19,460

  2000

  46,4190

  28,935

  19,395

  20016,7

  74,365

  47,905

  43,415

  removed in this period. Estimates of principal asylum applicants removed show 110 Algerian nationals removed in the period October 2001 to June 2002. Corresponding data for the period July to September 2002 will be available following publication of the next quarterly asylum statistics.

  The number of asylum applications from Algerians increased between 1993 and 1995 from 275 to a peak of 1,865.

  Information on the number of asylum decisions and removals is published quarterly on the Home Office website at. The next publication will be available from 28 February and will cover the final quarter of 2002.

  Mr. Jon Owen Jones
  To ask the Secretary of State for the Home Department how many Afghan nationals sought asylum in Britain in the last five years for which data is available; and were(a) accepted and (b) rejected in each year; and how many were returned to Afghanistan or third countries. [92981]

  Beverley Hughes
  The available data on applications and initial decisions are included in the table. However, data on initial decisions are independent of applications data, and do not necessarily relate to applications made in the same period.
  905W

  Applications received for asylum in the UK, excluding dependents, and initial decisions, for nationals of Afghanistan, 1997 to 2001 and January to September1

  Year

  Applications2

  Total initial decisions3

  Cases considered under normal procedures4

  Backlog clearance exercises5

  Grants of asylum

  Grants of ELR

  Total refusals

  Granted asylum or ELR under backlog criteria 6

  Refused under backlog criteria

  1997

  1,085

  730

  20

  635

  75

  1—

  1—

  1998

  2,395

  1,600

  35

  1,500

  65

  1—

  1—

  1999

  3,975

  1,295

  15

  1,180

  90

  10

  1—

  2000

  5,555

  2,590

  375

  695

  1,515

  10

  1—

  2001

  9,000

  12,155

  2,260

  7,370

  2,530

  1—

  1—

  2002

  6,035

  6,910

  80

  4,565

  2,265

  1—

  1—

  1Figures rounded to the nearest 5 with "—" = 0.

  2May exclude some cases lodged at local enforcement offices between January 1999 and March 2000.

  3Information is of initial decisions, excluding the outcome of appeals or other subsequent decisions. Decision figures do not necessarily relate to applications received in the same period.

  4Cases considered under normal procedures may include some cases decided under backlog criteria.

  5Cases decided under measures aimed at reducing the pre 1996 asylum application backlog.

  6Includes cases where asylum or Exceptional Leave to Remain has been granted under the backlog criteria.

  The latest available data on removals of Afghan nationals who have sought asylum at some stage are given in the table.

  Removals and voluntary departures of Afghan principal asylum

  applicants, excluding dependants1

  Number

  1997

  40

  19983

  15

  1999

  n/a

  2000

  n/a

  20012,3,4

  125

  January to June 20023,4

  234

  1Includes persons departing "voluntarily" after enforcement action has been initiated against them, persons leaving under Assisted Voluntary Returns Programmes run by the International Organisation for Migration, and removals on safe third country grounds.

  2Figure may include a small number of dependants leaving under Assisted Voluntary Return Programmes.

  3Data have been estimated due to data quality issues.

  4Provisional data.

  Note:

  Figures are rounded to the nearest five.

  Data on applications in the period October to December 2002 and removals by nationality in the period July to September 2002 are due to be published at the end of February 2003 on the Home Office website: www.homeoffice.gov.uk/rds/whatsnewl.html

  Mr. Philip Hammond
  To ask the Secretary of State for the Home Department if he will exclude Silverlands at Chertsey, Surrey from consideration for accommodation for asylum seekers. [92999]

  Beverley Hughes
  Chertsey is not within a designated dispersal area for asylum seekers requiring accommodation. Similarly for the trial of accommodation centres we are looking to provide accommodation away from London and Kent.

  All adult asylum seekers will be required to attend an induction centre irrespective of whether they require support including accommodation. We are proposing a national network of induction centres and it is envisaged these will be up and running by the end of 2003. The
  906W
  National Asylum Support Service (NASS) is currently considering options for accommodation to support the Induction Centre to meet the needs of asylum seekers arriving in London and the South East.

  Mr. Paul Marsden
  To ask the Secretary of State for the Home Department what plans he has to use(a) hotels, (b) hostels and (c) country homes in Shropshire as induction centres to house asylum seekers. [93017]

  We are intending to have a national network of induction centres which are being introduced on a phased basis. To date we have opened one induction centre in Kent and are in the process of negotiating contracts for accommodation to support an induction centre for asylum seekers making their claim in London and the south east. The third phase of the project is to provide induction centres in regional areas. The National Asylum Support Service (NASS) has invited expressions of interest from each regional consortium. The West Midlands consortium, which includes Shropshire, has expressed an interest but has indicated to NASS that it is not currently considering using any properties in Shropshire.

  Tony Worthington
  To ask the Secretary of State for the Home Department how he intends to monitor the impact of the withdrawal of asylum support for in-country applicants on asylum seekers in the UK. [92726]

  Beverley Hughes
  [holding answer 23 January 2003]Under section 55 of the Nationality, Immigration and Asylum Act 2002, those people who make their asylum claim as soon as reasonably practicable on arrival in the UK, will continue to receive the support they need. The Home Office is working in close consultation with local authorities and voluntary sector organisations to establish the best way in which the impact of the changes may be monitored on the ground.

  Tony Worthington
  To ask the Secretary of State for the Home Department what impact he estimates the withdrawal of asylum support for in-country applicants will have on the numbers of homeless people living in the United Kingdom; and if he will make a statement. [92727]
  907W
  Beverley Hughes
  [holding answer 23 January 2003]Section 55 of the Nationality, Immigration and Asylum Act 2002 prevents the provision of support to asylum seekers who do not make their asylum claim as soon as reasonably practicable on arrival at a port in the UK. The purpose of the new policy is to ensure that those wishing to seek asylum do so at the earliest opportunity. If this purpose is fulfilled, there is no reason to suppose that there will be an increase in the number of homeless people. Since 8 January 2003, when the new policy was introduced, there has been no indication of increased homelessness.

  Cases of computer misuse

  Department

  1998

  1999

  2000

  2001

  2002

  Home Office

  1—

  2

  9

  34

  77

  Disciplinary Cases

  1—

  2

  8

  30

  274

  Prison Service Agency

  1—

  1—

  2

  1—

  3

  Disciplinary Cases

  1—

  1—

  2

  1—

  3

  UK Passport Agency

  1—

  1—

  1—

  1—

  1

  Disciplinary Cases

  1—

  1—

  1—

  1—

  1

  Forensic Science Service

  1—

  8

  6

  2

  343

  Disciplinary Cases

  1—

  5

  1

  2

  5

  1Indicates that no comprehensive figures are available.

  2Figure includes some cases dealt with by local management.

  3Includes cases in which informal local action taken.

  Criminal Records Bureau (Checks)
  Mr. Burstow
  To ask the Secretary of State for the Home Department what research was undertaken by(a) his Department and (b) Capita to determine the (i) likely level of demand for Criminal Records Bureau checks and (ii) Criminal Records Bureau customers' preferred means of submitting applications for checks. [89984]

  Hilary Benn
  Original research into the likely level of demand for Criminal Records Bureau (CRB) checks was undertaken by the Home Office and CRB. Two comprehensive market research studies were carried out by Coopers Lybrand (1996) and Accent Market Research (March 2000) to determine who would use the service and what likely levels of take up were anticipated. These studies were validated by the Labour Force Survey carried out between September and November 1999. A telephone survey with existing checkers was carried out to validate the baseline information created from the above research. In December 2001, Capita Account Managers conducted their own research to determine which Registered Bodies were likely to be major users of the service and there is ongoing joint Capita and CRB forecasting work based on latest actual demand and outputs from a forecasting model.

  An analysis of legislation and its likely impact on CRB demand was also undertaken. The analysis looked at whether or not legislation would increase the number of sectors eligible for CRB checks or whether or not the impact would be neutral. It was determined that the outcome was likely to be neutral.

  The original concept for the CRB was based on a call-centre, telephone-based and online application route, with capacity to deal with individual paper applications. That arrangement was expected to be convenient for applicants and would reduce errors. It was also in line
  908W

  Computer Misuse
  Mr. Webb
  To ask the Secretary of State for the Home Department how many cases of computer misuse there were in his Department in each of the last five years, broken down by each category of misuse; and how many of those cases resulted in disciplinary action. [93046]

  Hilary Benn
  The figures, so far as information is available in the form requested, are as follows:

  with the Government's e-government objectives. Market research was undertaken by Rosslyn Research in 2000 to establish employer's requirements in terms of service standards.

  However, during extensive consultation with registered bodies and employers from January to June 2001, there was strong pressure from them to introduce a full-scale paper-based application. Consequently, in May 2001, the CRB agreed to introduce more extensive capacity to deal with paper-based applications.

  Departmental Expenditure (Newsprint)
  Mr. Bercow
  To ask the Secretary of State for the Home Department what the total expenditure of his Department was on newspapers, magazines and periodicals in 2002. [90527]

  Mr. Blunkett
  The total expenditure for the Home Office and Agencies during 2002 was £45,292.81. This does not include expenditure by non-departmental public bodies (NDPBs). Collection of this data could be achieved only at disproportionate cost.

  Departmental Performance Report
  Tony Wright
  To ask the Secretary of State for the Home Department when his Department's autumn performance report for 2002 will be published. [93158]

  Mr. Blunkett
  I refer my hon. Friend to the reply I gave to the hon. Member for Arundel and South Downs (Howard Flight) on 21 January 2003,Official Report, column 302W.

  External Consultancies
  Mr. Laws
  To ask the Secretary of State for the Home Department how much(a) his Department and (b) each agency and non-departmental public body

  909W
  spent on external consultancy in each year from 1995–96 to 2002–03 (planned); and if he will make a statement. [92232]

  Hilary Benn
  The information is not available in the format requested. Total expenditure figures on consultants by Non Departmental Public Bodies (NDPBs) for the period in question and also planned expenditure by core Home Office Directorates and its Agencies in 2002–03 is not held centrally. Total expenditure on external consultants in each year from 1995–96 to 2001–02 for the core Home Office and its Agencies.

  £

  Consultancy expenditure by the Home Department and Agencies

  Expenditure

  1995–96

  10,200,000

  1996–97

  11,804,984

  1997–98

  7,627,016

  1998–99

  4,588,445

  1999–2000

  10,302,672

  2000–01

  27,877,286

  2001–02

  21,147,058

  The increase in expenditure on consultancy in against them. financial years 2000–01 and 2001–02 is primarily due to

  Principal asylum applicants removed from the UK1

  1997

  1998

  1999

  2000

  20012(p)

  January to September 20023(p)

  Total number of principal asylum applicants removed4

  7,165

  6,990

  7,665

  8,980

  9,285

  7,780

  Of which:

  Assisted voluntary returns programme5

  —

  —

  50

  550

  980

  640

  1Persons who had sought asylum at some stage, excluding dependants.

  2Removal figures exclude 1,495 dependants of asylum seekers removed in the period April to December 2001, of which 230 left under the assisted voluntary returns programme; data on dependants removed have only been collected since April 2001.

  3In the same period 1,825 dependants of principal asylum seekers departed, of which 185 left under the assisted voluntary returns programme.

  4Including persons known to have departed "voluntarily" after enforcement action had been initiated against them.

  5Persons leaving under the assisted voluntary returns programmes run by the International Organisation for Migration. May include some on-entry cases and some cases where enforcement action has been initiated.

  Family Visitor Appeals
  Lynne Jones
  To ask the Secretary of State for the Home Department when he plans to publish the final report of the inter-departmental review of family visitor appeals. [93094]

  Beverley Hughes
  The report of the interdepartmental review group and the report of the research commissioned by that group have been delayed by unforeseen circumstances They will be published shortly. A copy of the report will be placed in the Library as promised.

  Foster Deportation
  Mr. Letwin
  To ask the Secretary of State for the Home Department at what times on(a) 1 December, (b) 2 December and (c) 3 December 2002, members of the press office at 10 Downing street held conversations with members of the press office at the Home Office regarding the deportation of Mr. Foster; which officials
  910W
  a major investment programme in the modernisation of the Home Office and in particular on IT related modernisation and also the cost of setting up the National Probation Directorate.

  Extradition Cases
  Simon Hughes
  To ask the Secretary of State for the Home Department how much was spent on each extradition case in the last five years, broken down by individual case. [93337]

  Mr. Bob Ainsworth
  The information requested is available only at disproportionate cost.

  Failed Asylum Seekers
  Mr. Clappison
  To ask the Secretary of State for the Home Department how many failed asylum seekers left the UK in each year since 1997, broken down by those(a) deported and (b) who left voluntarily. [93324]

  Beverley Hughes
  Information on the number of failed asylum applicants(a) removed; and (b) known to have left the United Kingdom voluntarily since 1997 is given in the table. It is not possible to separately identify the number of principal applicants who departed 'voluntarily' after enforcement action had been initiated against them.

  in the Downing street press office and in the Home Office press office took part in these conversations; and what the duration was of each such conversation. [91364]

  Mr. Blunkett
  [holding answer 20 January 2003]: The Home Office press office has regular daily contact with their opposite numbers at Downing street press office. Records of these conversations and their duration are not kept.

  Full-time Equivalent Staff
  Mr. Andrew Turner
  To ask the Secretary of State for the Home Department how many full-time equivalent staff are employed in(a) the Department and (b) each of the agencies it sponsors; and what the figures were for 1997. [90672]

  Mr. Blunkett
  Home Office staff figures in each region and nation of the UK are published in "Civil Service Statistics" year on year and placed in the Library.

  Health and Safety
  Mrs. Helen Clark
  To ask the Secretary of State for the Home Department (1) whether his Department and its agencies have met the commitment arising from Action Point 13 of the June 2000 Strategy statement on revitalising health and safety to summarise health and safety performance and plans in annual reports from the year 2001 onwards; [89496]

  (2) what information he has collated on the application to his Department and its agencies of the checklist, circulated by letter by Sir Richard Mottram, referred to under Action Point 12 of the revitalising health and safety strategy statement; and if he will make a statement [89498]

  (3) which senior officials within his Department and its agencies take responsibility for health and safety at board or equivalent level; and where their names are publicised. [89497]

  Hilary Benn
  I refer my hon. Friend to the reply given by my right hon. Friend the Minister of State for Work and Pensions (Nicholas Brown) on 20 January 2003,Official Report, column 85W.

  Immigration
  Mr. Andrew Turner
  To ask the Secretary of State for the Home Department what manpower complement is allocated by immigration services to each of the south coast ports; what his estimate is of how many persons entered through each port in the last year for which information is available; and what coverage is available for non-canalized ports of entry. [91252]

  Beverley Hughes
  The latest data on passenger arrivals that is available for public use is for 2001.

  For a meaningful comparison, a snapshot taken on 31 December 2001 shows the actual number of staff in post at the south coast ports of Dover East, Dover Hoverport, Felixstowe, Folkestone, Newhaven, Plymouth, Poole, Portsmouth and Southampton on that date was 404 full time equivalent officers, comprising of 356 immigration service staff and 48 administrative staff.

  The total number of passenger arrivals at south coast ports was 9,924,100. This figure is broken down as follows:

  South Coast Port

  Number

  Dover East

  6,340,000

  Dover Hoverport

  944,000

  Felixstowe

  55,200

  Folkestone

  28,900

  Newhaven

  169,000

  Plymouth

  328,000

  Poole

  140,000

  Portsmouth

  1,620,00

  Southampton

  299,000

  Note:

  Figures rounded to the nearest three significant digits.

  The UK Immigration Service conducts regular risk assessments of small ports not routinely staffed and there is continuous monitoring of arrivals including spot checks. The details of passengers subject to immigration
  912W
  control arriving at small ports, which are not routinely staffed by the Immigration Service, are still checked against the Warnings Index system.

  Mr. Malins
  To ask the Secretary of State for the Home Department pursuant to his answer of 19 December 2002,Official Report, column 988W, on immigration, whether the Reporting Line is still in operation; and when he will publish the evaluation of the trial.[93834]

  Beverley Hughes
  The trial of the confidential hotline ran from May to July 2002. I have remitted the recommendations of the evaluation back to officials for further details on cost and application. I undertook, in my response to the hon. member's most recent question on this subject, 20 January 2002,Official Report, column 183W, to write to the hon. member once these details have been considered. I will do so as soon as this consideration has taken place.

  Ministerial Travel
  Mr. Laws
  To ask the Secretary of State for the Home Department what his estimate is of the total expenditure by his Department on ministerial travel(a) in the UK and (b) abroad, in each year from 1995–96 to 2002–03 (estimated); and if he will make a statement. [92442]

  Mr. Blunkett
  I refer the hon. Member to the answer provided by my hon. Friend the Member for Paisley South (Douglas Alexander) on 22 January 2003,Official Report, Column 333W.

  Nationality, Immigration and Asylum Act
  Mr. Dismore
  To ask the Secretary of State for the Home Department when he plans to bring into effect section 4 and section 76 of the Nationality, Immigration and Asylum Act 2002; and if he will make a statement. [93258]

  Beverley Hughes
  [holding answer 27 January 2003]: Section 4 will be brought into force as soon as administrative arrangements for giving effect to the new appeal rights have been put into place. Section 76 will come into effect on 10 February.

  New Prisons
  Mr. Gibb
  To ask the Secretary of State for the Home Department if he will make a statement on his Department's proposed spending plans on new prison building in 2003–04.[91897]

  Hilary Benn
  Existing funding is being used to deliver a programme to increase prison capacity. This will conclude in 2003–04 when 450 places will become available at Birmingham prison. This completes a programme that planned to increase capacity by 2,660 places.

  Following the outcome of the recent Spending Review (SR 2002) the Government have committed further funding to increase prison capacity. By the end of 2003–04 it is intended that this will provide another 740 places across the prison estate.

  Roma People
  Dr. Tonge
  To ask the Secretary of State for the Home Department how many central and eastern
  913W
  European Roma he expects to migrate to the UK following the accession to the EU of (a) the Czech Republic, (b) Slovakia, (c) Hungary and (d) Poland. [93439]

  Beverley Hughes
  [holding answer 27 January 2003]: Research conducted by University College London for the Home Office, which will be published soon, suggests that the numbers of people who will migrate to the UK from the new member states will not be significant. This research corroborates a number of other independent studies which have looked at the scale of migration flows after enlargement. These have been summarised in reports by the European Commission in 2000 and the former Department for Education and Employment in 1999. None of this research has been able to predict exact numbers expected from specific countries or ethnic groups to the UK.

  Whole-time Equivalent Staff
  Mr. Cousins
  To ask the Secretary of State for the Home Department what the distribution of his Department's whole-time equivalent staff was, including the staff in agencies and other bodies reporting to him, in each Government office region and nation of the UK(a) in 1996 and (b) at the most recent available period. [90470]

  Mr. Blunkett
  Home Office staff figures in each region and nation of the UK are published in "Civil Service Statistics" year on year and placed in the Library.

LORD CHANCELLOR'S DEPARTMENT

  Departmental Performance Report
  Tony Wright
  To ask the Parliamentary Secretary, Lord Chancellor's Department when her Department's autumn performance report for 2002 will be published. [93154]

  Ms Rosie Winterton
  I refer the hon. Member to the written answer I gave to the hon. Member for Arundel and South Downs (Mr. Flight) on 20 January 2003,Official Report, column 200W.

  Grandchildren (Access)
  Mr. Wray
  To ask the Parliamentary Secretary, Lord Chancellor's Department what rights grandparents have regarding access to their grandchildren. [93549]

  Ms Rosie Winterton
  The Children Act 1989 requires that the court's paramount consideration must be the welfare of the child. Judges are guided by a list of factors set out in section 1(3) of the Act, known as the 'welfare checklist'. The court has the discretion to take into consideration all the facts and circumstances of the individual case when deciding any question concerning the child, including issues of contact and residence.

  Any person (including grandparents) may, provided that the permission of the court is obtained, apply to the court for an order for residence or contact with a child. This requirement is designed as an early filter for those applications the court feels would not to be in the best interests of the child. Experience suggests that grandparents (or other interested relatives) do not
  914W
  usually experience difficulty in obtaining permission where their application is motivated by a genuine concern for the child.

  Mr. Wray
  To ask the Parliamentary Secretary, Lord Chancellor's Department what proposals she has to ensure that grandparents have increased legal rights of access to their grandchildren; and what other rights grandparents have in the event of family breakdown. [93550]

  Ms Rosie Winterton
  The current requirement is for grandparents to obtain the leave of the court to issue an application for contact with grandchildren. Experience has shown that grandparents, or wider family members, do not usually experience difficulty in obtaining leave when the application is motivated by genuine concern for the child. Consequently, there are no plans to amend the Children Act 1989. In the event of a family dispute, any person, including grandparents, with a contact order can apply to the court to determine the implementation or variation of the existing order.

  Magistrates Courts
  Mr. Hawkins
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many magistrates courts have closed since May 1997. [87644]

  Yvette Cooper
  Decisions about magistrates court closures are made by independent Magistrates Courts Committees (MCCs). MCCs are not required by statute to inform the Government of court closures.

  The best information indicates that the number of court closures is as follows:

  Number

  1996

  21

  1997

  121

  1998

  25

  1999

  7

  2000

  13

  2001

  33

  2002

  5

  1Five before May and 16 after May.

  Details are in the following table:

  Date

  Bromley (South Street)

  28 February 1996

  Mansfield (Commercial St)

  28 February 1996

  Hornsea

  31 March 1996

  Howden

  31 March 1996

  Market Weighton

  31 March 1996

  Old Street

  12 July 1996

  Halstead

  31 August 1996

  Biddulph

  30 September 1996

  Cheadle

  30 September 1996

  Kidsgrove

  30 September 1996

  Tonbridge

  31 October 1996

  Amlwch

  31 December 1996

  Colwyn Bay

  31 December 1996

  Bedale

  31 December 1996

  Blaenau Festiniog

  31 December 1996

  Easingwold

  31 December 1996

  East Dereham

  31 December 1996

  Ingleton

  31 December 1996

  Leyburn

  31 December 1996

  Llangollen

  31 December 1996

  Thirsk

  31 December 1996

  915W

  Date

  Ellesmere Port

  31 March 1997

  Hampstead

  31 March 1997

  Marylebone (185 Marylebone Rd)

  31 March 1997

  Otley

  31 March 1997

  Seaham

  31 March 1997

  Bromsgrove

  31 May 1997

  Ledbury

  31 May 1997

  Hebburn

  5 June 1997

  South Shields (Kepple Street)

  5 June 1997

  Chippenham (Market Place)

  30 June 1997

  Ashton under Lyne (Manchester Rd)

  31 August 1997

  Duckinsfield

  31 August 1997

  Thorne

  31 August 1997

  Pontardawe

  9 October 1997

  Braintree

  31 December 1997

  Stokesley

  31 December 1997

  Clacton on Sea

  31 October 1997

  Bargoed

  31 December 1997

  Monmouth

  31 December 1997

  Pontlottyn

  31 December 1997

  Pontypool

  31 December 1997

  Malton

  6 February 1998

  Marlborough Street

  31 March 1998

  Bishop's Stortford

  31 March 1998

  Hatfield

  31 March 1998

  Hitchin

  31 March 1998

  Market Rasen

  31 March 1998

  Chertsey

  31 March 1998

  Farnham

  31 March 1998

  Oxted

  31 March 1998

  Lutterworth

  31 July 1998

  Ripon

  1 August 1998

  Barnard Castle

  31 December 1998

  Clerkenwell

  31 December 1998

  Sheerness

  31 December 1998

  West Mailing

  31 December 1998

  Lytham

  31 December 1998

  Diss

  31 December 1998

  Corwen

  31 December 1998

  Felixstowe

  31 December 1998

  Haverhill

  31 December 1998

  Saxmundham

  31 December 1998

  Stowmarket

  31 December 1998

  Newmarket

  31 December 1998

  March

  31 December 1998

  Saffron Walden

  31 December 1998

  Christchurch

  31 March 1999

  Abingdon

  31 March 1999

  Henley on Thames

  31 March 1999

  Windsor

  31 March 1999

  Morley

  31 March 1999

  Pudsey

  31 March 1999

  Stow on the Wold

  30 June 1999

  Apmthill

  1 January 2000

  Biggleswade

  1 January 2000

  Dunstable

  1 January 2000

  Leighton Buzzard

  1 January 2000

  Lichfield

  31 March 2000

  Keighley

  1 April 2000

  Keswick

  30 April 2000

  Windermere

  31 May 2000

  Wigton

  31 May 2000

  Appleby

  31 May 2000

  Gravesend

  9 June 2000

  Wootton Bassett

  2 October 2000

  Abergele

  31 December 2000

  Alfreton

  1 January 2001

  Ashboume

  1 January 2001

  Bakewell

  1 January 2001

  Matlock

  1 January 2001

  Leigh

  31 March 2001

  Middleton

  31 March 2001

  Leek

  31 March 2001

  Worcester

  31 March 2001

  916W

  Date

  Warrington Patten Hall

  1 April 2001

  Macclesfield Park Green

  1 April 2001

  Bideford

  30 April 2001

  Exmouth

  30 April 2001

  Kingsbridge

  30 April 2001

  South Molton

  30 April 2001

  Teignmouth

  30 April 2001

  Tavistock

  30 April 2001

  Axminster

  4 May 2001

  Tiverton

  4 May 2001

  Newquay

  30 June 2001

  Southampton (Commercial Road)

  31 August 2001

  Womborne

  1 September 2001

  Gillingham

  30 September 2001

  Bridlington

  9 November 2001

  Brough

  9 November 2001

  Driffield

  9 November 2001

  Hull (Guildhall)

  9 November 2001

  Hull (Lowgate)

  9 November 2001

  Pocklington

  9 November 2001

  Withernsea

  9 November 2001

  Evesham

  1 November 2001

  Droitwitch

  1 November 2001

  Arundel

  1 December 2001

  Bridgenorth

  31 January 2002

  Leominster

  31 January 2002

  Fakenham

  1 May 2002

  Tunbridge Wells

  2 June 2002

  Beaconsfield

  1 July 2002

  Buckingham

  1 July 2002

  Fakenham

  1 May 2002

  Tunbridge Wells

  2 June 2002

  Beaconsfield

  1 July 2002

PRIME MINISTER

  Al-Qaeda
  Llew Smith
  To ask the Prime Minister what his assessment is of the likelihood that(a) Al-Qaeda, (b) other terrorist groups and (c) Iraq might carry out an attack on the United Kingdom. [93897]

  The Prime Minister
  The terrorist threat remains real, and serious. As recent events have shown, no country is immune from attack, and it simply is not possible to guarantee against more attacks in the future. However, this Government are resolute in their determination to defeat terrorism regardless of its source.

  External Consultants
  Mr. Laws
  To ask the Prime Minister how much(a) his Department and (b) each agency and non-departmental public body spent on external consultancy in each year from 1995–96 to 2002–03 (planned); and if he will make a statement. [92224]

  The Prime Minister
  I refer the hon. Member to the answer given to him by my hon. Friend the Minister for the Cabinet Office today at column 855W.

  Heritage Assets
  Mr. Laws
  To ask the Prime Minister what sales of heritage assets and antique assets have been made by his Department since May 1997; if he will list such assets; and if he will estimate the total sales proceeds. [92417]
  917W
  The Prime Minister
  I refer the hon. Member to the answer given to him by my hon. Friend the Minister for the Cabinet Office today.

  Terrorism
  Llew Smith
  To ask the Prime Minister what independent advice he has received on the terrorist threat to the United Kingdom. [94037]

  The Prime Minister
  Advice on any terrorist threat to the UK is the responsibility of the Security Service. The Director General of the Security Service is responsible to my right hon. Friend the Home Secretary for this advice, which is provided on a continuous basis. Strategic assessments about terrorist threats to the UK are provided to the Government by the Joint Intelligence Committee.

SCOTLAND

  Broadband
  Malcolm Bruce
  To ask the Secretary of State for Scotland (1) when she last met the Regional Broadband Unit to discuss the rollout of broadband services in Scotland. [91737]

  (2) if she will make a statement on her Department's role in how the money awarded to Scotland from the UK Broadband Fund is to be spent. [91740]

  (3) if she will make a statement on her Department's policy on the development of broadband services for the benefit of (a) small businesses in rural areas and (b) consumers in rural areas. [91739]

  Mrs. Liddell
  The Scottish Executive is taking forward the rollout of broadband in Scotland with its strategy, 'Connecting Scotland our broadband future—Making it Happen', for accelerating and widening access, and for increasing take up across Scotland. Both the small business sector and rural consumers are recognised priorities.

  Scottish interests on the UK Broadband Taskforce, previously the Regional Broadband Unit, are represented by the Executive, which also negotiates directly with the Department of Trade and Industry on awards to Scotland from the UK Broadband Fund.

  Electronics Industry
  Mr. Peter Duncan
  To ask the Secretary of State for Scotland what assessment she has made of the future viability of the Scottish electronics industry. [92291]

  Mrs. Liddell
  Despite the global downturn in the electronics sector, Scotland retains a number of key competitive advantages which can give confidence that the sector will continue to play a key role in the Scottish economy. We have a skilled workforce, investment in world class science and technology and an innovative business base.

  Ferry Services
  Mr. Peter Duncan
  To ask the Secretary of State for Scotland what plans she has to provide further financial support for ferry services between(a) Campbell town and Ballycastle and (b) Rosyth and Zeebrugge. [90390]
  918W
  Mrs. Liddell
  Decisions on financial support for the Campbeltown to Ballycastle ferry service are a matter for the Scottish Executive. I have no plans to provide financial support for the Rosyth-Zeebrugge ferry service. The Scottish Executive provided funding by means of a Freight Facilities Grant to the port operator, Forth Ports plc, for improvements to the port infrastructure at Rosyth.

  Industrial Action/Illness
  Mr. Roger Williams
  To ask the Secretary of State for Scotland how many working days have been lost in her Department due to(a) industrial action and (b) illness in (i) 1997–98, (ii) 1998–99, (iii) 1999–000, (iv) 2000–01, (v) 2001–02 and (vi) 2002–03 to date. [93574]

  Mrs. Liddell
  The Scotland Office was established in its present form on 1 July 1999. No days have been lost due to industrial action. Details of working days lost due to illness are given in the following table:

  Dates

  Working days lost due to illness

  1 July 1999 to 31 March 2000

  396

  1 April 2000 to 31 March 2001

  662.5

  1 April 2001 to 31 March 2002

  601.5

  1 April 2002 to 30 November 2002

  479

TRADE AND INDUSTRY

  Infant Mortality
  Ms Walley
  To ask the Secretary of State for Trade and Industry what future funding plans the Medical Research Council has announced for research into reducing the number of baby deaths through(a) miscarriage, (b) premature birth, (c) still birth and (d) obstetrics. [93162]

  Ms Hewitt
  The MRC does not, as a rule, earmark funds for particular topics. Research proposals in all areas compete for the funding available. When appropriate, high quality research in the areas MRC is promoting may be given priority in competition for funds, but research excellence and importance to health continue to be the primary considerations in funding decisions. The MRC has not announced any future funding plans for research into reducing the number of baby deaths, but it always welcomes high quality applications for support into any aspect of human health.

  The MRC spent an estimated £19.1 million in 2001–02 on its Reproductive health portfolio. Reproductive health research includes normal and abnormal fetal and placental development and growth, as well as conditions affecting pregnancy and childbirth.

  Advisory Group on Nanotechnology Applications
  Matthew Taylor
  To ask the Secretary of State for Trade and Industry how many times the Advisory
  919W
  Group on Nanotechnology Applications has met since April 2001; what its budget is for financial years 2003–4 and 2004–5; and if she will make a statement. [91957]

  Ms Hewitt
  The Group met on four occasions and also communicated between these meetings. The Group has now completed its work and has no budget.

  DTI is currently finalising its policy on Nanotechnology and one of the steps will be to establish a Nanotechnology Strategic Advisory Group as a formal non-departmental public body.

  Agency Workers Directive
  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry what research her Department has conducted into the potential(a) financial impact and (b) impact on employment of the implementation of the agency workers' directive in its present form. [93398]

  Alan Johnson
  The Department of Trade and Industry held a 16-week public consultation into the proposal for a directive, and has published a regulatory impact assessment of the proposal which provides an assessment of the potential costs and benefits for the UK. I have placed a copy of this in the Library of the House.

  Business Environment Simplifications Taskforce
  Dr. Cable
  To ask the Secretary of State for Trade and Industry who have been members of the Business Environment Simplification Taskforce since its inception; what(a) expenses and (b) salary each received; and if she will make a statement. [91662]

  Mr. Wilson
  The members of the European Commission's Business Environment Simplification Taskforce were as follows:

  Prof Chris Evans (Chairman)(UK)

  Dr Wolfgang Krebs (Austria)

  Ms Kathy Vanhoorne (Belgium)

  Mr Bjrn Meier (Denmark)

  Mr Risto Suominen (Finland)

  Mr Jean Prada (until 17/2/98) and Mr Andre Gauron (from
  17/2/98) (France)

  Mr Dieter Philipp (Germany)

  Ms Antigone Lyberaki (Greece)

  Mr Dominic Ellickson (Ireland)

  Mr Carlo Borgomeo (Italy)

  Mr Armand Berchem (Luxembourg)

  Dr Elisabeth Steyger (Netherlands)

  Mr Rui Gomes (Portugal)

  Mrs Elisa Sainz Ruiz (Spain)

  Mrs Camille Forslund (Sweden)

  The Taskforce operated from October 1997 to April 1998, when it reported to the Commission. Details of whether the members were paid and the level of their expenses are not readily available from the European Commission.

  I refer the hon. Member to my statement of 13 July 2000, Official Report, column 620W in response to the then hon. Member for Southport, in which I welcomed the Taskforce's recommendations. My right hon. Friend the Member for Derby South, who was President
  920W
  of the Board of Trade at the time they were published, had also welcomed the recommendations, which addressed improving the business environment in public administration, education and training, employment and working conditions, finance and research and innovation. Those recommendations have helped Member States and the Commission in their continued endeavours to promote enterprise and ease burdens on companies, particularly small- and medium-sized enterprises.

  British Energy
  Paul Flynn
  To ask the Secretary of State for Trade and Industry how much public money has been given to British Energy in each of the last five years; and what this money has been used for. [93682]

  Mr. Wilson
  On 9 September 2002 the Government agreed to provide British Energy with a credit facility for up to £410 million in respect of its working capital requirements and cash collateral for trading in the UK and North America. On the 26 September 2002 the Government agreed to extend the credit facility and increase it from £410 million up to £650 million. As of 24 January 2003, £418 million of the facility has been drawn down.

  Capital Expenditure (Energy)
  Matthew Taylor
  To ask the Secretary of State for Trade and Industry if she will list the principal elements of planned(a) current and (b) capital expenditure for financial year 2002–03 on (i) post office and telecommunications, (ii) nuclear liabilities, (iii) aerospace, (iv) departmental capital and other minor programmes and (v) capital investment in energy as listed in tables 2 and 3 of her annual report for 2002–03 to 2003–04.Cm 5416; and if she will make a statement. [92793]

  Ms Hewitt
  The principal elements of planned expenditure in 2002–03 in these categories at the time of publication of the annual report (Cm 5416) are as follows:

  £million

  (a)Current

  (b)Capital

  (i) Post Office and Telecommunications Modernisation of the Post Office network

  70

  —

  (ii) Nuclear Liabilities

  Decommissioning (non-cash) costs on UKAEA sites

  84

  —

  Decommissioning (non-cash) costs on BFNL sites

  112

  —

  Resource Consumption of UKAEA

  20

  —

  UKAEA net capital receipts

  —

  (7)

  (iii) Aerospace

  Net expenditure on the Government's portfolio of Launchy Investment Contracts

  75

  22

  921W

  £million

  (a) Current

  (b) Capital

  (iv) Departmental capital and other minor programmes

  National Physical Laboratory capital expenditure

  —

  31

  Radiocommunications Agency capital expenditure

  —

  12

  (v) Capital investment in Energy

  Renewable energy capital grant schemes

  —

  163

  Commercial Policy (QMV)
  Mr. Heathcoat-Amory
  To ask the Secretary of State for Trade and Industry what her policy is on the recommendation of Working Group VII of the European Convention that areas of commercial policy should be decided by Qualified Majority Vote. [91544]

  Ms Hewitt
  I am giving full consideration to the Convention's deliberations in co-ordination with my Ministerial colleagues. Many areas of commercial policy are already decided by QMV. Further moves on commercial policy cannot be considered in isolation and the full implications of these proposals, including their impact on trade policy, will need to be understood before UK position is finalised.

  Consultations
  Mr. Yeo
  To ask the Secretary of State for Trade and Industry if she will list consultations her department has conducted since 2 May 1997; and when each consultation (a) opened and (b) closed. [93799]

  Ms Hewitt
  Records relating to consultation documents issued before the introduction of the Cabinet Office Code of Practice on Written Consultations on 1 January 2001 are not held centrally. The list of consultations undertaken by the Department since 1 January 2001, and the dates they were opened and closed, are placed in the Libraries of the House.

  Correspondence
  Mr. Collins
  To ask the Secretary of State for Trade and Industry when she expects to reply to the correspondence from the hon. Member for Westmorland and Lonsdale of 13 January, regarding redundancies announced by Clarks at K Shoes in Kendal. [94016]

  Ms Hewitt
  A reply to your letter was sent on 28 January 2003.

  Departmental Running Costs
  Mr. Andrew Turner
  To ask the Secretary of State for Trade and Industry what the running costs of(a) the Department and (b) each of its sponsored agencies were in (i) 1997 and (ii) the most recent year for which figures are available. [90706]
  922W
  Ms Hewitt
  Detailed information on administration costs for the Department of Trade and Industry and its agencies, going back to 1998–99 and with projections to 2003–04, is set out in Table 5 of the 2002 departmental report (Cm 5416). Data for years before 1998–99 are not available on the same basis. Provisional outturn for gross and net administration costs limits were published in Public Expenditure 2001–02 Provisional Outturn (Cm 5574), Tables 4 and 5. Updated information, with plans to 2005–06, will be published in the 2003 departmental report in the spring.

  Export Credits (Equitorial Guinea)
  Mr. Hammond
  To ask the Secretary of State for Trade and Industry what assessment her Department has made(a) of the availability of ECGD support for investment in Equatorial Guinea and (b) of the adequacy of such support in relation to the current level of opportunity for British business investment in Equatorial Guinea. [92621]

  Ms Hewitt
  ECGD is able to offer Overseas Investment Insurance to protect UK direct investment in Equatorial Guinea against the risks of war, expropriation and restrictions on remittances. It will also consider approaches from UK exporters for cover under its "Good Projects" scheme which provides support for viable hard currency generating projects and relies on the use of structured finance techniques e.g. dedicated income streams and offshore escrow accounts.

  ECGD recognises increasing demand from UK investors in and exporters to Equatorial Guinea, and a review of its risk assessment and cover policy is scheduled for the spring, following completion of the IMF's latest assessment of Equatorial Guinea.

  Export Promotion Support
  Dr. Murrison
  To ask the Secretary of State for Trade and Industry what financial support is available for UK companies exhibiting abroad. [91843]

  Ms Hewitt
  British Trade International supports UK companies wishing to exhibit at overseas trade fairs through the Support for Exhibitions and Seminars Abroad (SESA) scheme. All UK businesses and organisations involved in exporting from the UK are eligible for support. Grant entitlement is currently limited to three participations in most countries (five in Japan, China (excluding Hong Kong), Russia and the USA).

  The basic level of grant for eligible participants is 60 per cent. of their expenditure on stand space and stand construction up to a maximum of £2,300.

  The scheme is over subscribed, resulting in restrictions on the number of exhibitions in the programme, and on the number of companies in each group. Estimated expenditure on supporting UK organisations exhibiting abroad during 2002–03 is £21 million.

  Dr. Murrison
  To ask the Secretary of State for Trade and Industry what financial support her Department gives to UK companies for the purpose of exchanging
  923W
  abroad; and what assessment she has made of support given by (a) France and (b) Germany to businesses based in those nations exhibiting abroad [92356]

  Ms Hewitt
  British Trade International supports UK companies wishing to exhibit at overseas trade fairs through the Support for Exhibitions and Seminars Abroad (SESA) scheme. All UK businesses and organisations involved in exporting from the UK are eligible for support. Grant entitlement is currently limited to three participations in most countries (five in Japan, China (excluding Hong Kong), Russia and the USA).

  The basic level of grant for eligible participants is 60 per cent. of their expenditure on stand space and stand construction up to a maximum of £2,300.

  The scheme is over subscribed, resulting in restrictions on the number of exhibitions in the programme, and on the number of companies in each group. Estimated expenditure on supporting UK organisations exhibiting abroad during 2002–03 is £21 million.

  The Director of Trade Partners UK, International Business Schemes attends twice yearly meetings of the West European Trade Facilitation Exhibitions Group (WETFEG) this forum is attended by a number of European State countries with similar schemes to SESA. Through this committee Trade Partners UK receive periodic reports from the member states on their various trade fair schemes and programmes. We are not aware of any assessment on the support given by France and Germany.

  GATS
  Mr. Challen
  To ask the Secretary of State for Trade and Industry if she will make a statement on the estimated impact of GATS on(a) the UK economy and (b) developing countries. [91355]

  Ms Hewitt
  The UK can expect to gain from commitments taken by other WTO Members, as this will provide a more stable and competitive environment for UK companies seeking to expand into new markets. Similarly, for developing countries, GATS commitments should help to attract foreign participation in their markets and bring new investment and technology, while commitments by developed countries should confirm market access for service sectors and modes of supply (notably movement of people) of interest to them.

  Liberalisation is always a domestic policy choice. Governments will always weigh the risks and benefits in their assessment of what is in their overall interest. GATS negotiations cannot and will not force countries to make commitments where they choose not to do so.

  Iraq (Export Credit Guarantee)
  Jeremy Corbyn
  To ask the Secretary of State for Trade and Industry what her estimate is of the potential export credit guarantee liability in respect of contracts entered into with companies in Iraq and the 924W
  Government of Iraq; how much of this amount is in respect of military contracts; and what amount of export credit guarantee liability has been paid. [92338]

  Ms Hewitt
  [holding answer 21 January 2003]ECGD has not underwritten any business with Iraq since early 1990. Claims of £623 million were paid and remain outstanding, however as these guarantees have expired there are no further liabilities.

  Of the £600 million outstanding, around £26 million is in respect of equipment with potential defence applications, (e.g. communications equipment).

  Post Office
  Mr. Robathan
  To ask the Secretary of State for Trade and Industry if she will make a statement on the state of negotiations between the National Federation of Sub Postmasters and Post Office Ltd. about the implementation of universal banking and the post office card account. [93377]

  Ms Hewitt
  Negotiations between the National Federation of Sub Postmasters and Post Office Ltd. are a matter for the two parties concerned.

  Publicity and Advertising
  Mr. Laws
  To ask the Secretary of State for Trade and Industry how much(a) her Department and (b) each agency and non-departmental public body sponsored by her Department spent on (i) publicity and (ii) advertising in each year from 1995–96 to 2002–03 (estimated); and if she will make a statement. [92259]

  Ms Hewitt
  For expenditure on advertising through COI from 1995–96 to 2000–01,1 refer the hon. Member to the answer I gave to the hon. Member for Twickenham on 20 November 2001,Official Report, column 162W. Expenditure for 2001–02 and 2002–03 (to date) was £3,959,543 and –3,841,676 respectively. Information on publicity expenditure from centrally held budgets is contained in 'The Government's Expenditure Plans' which are available in the Libraries of the House.

  Information on publicity and advertising by NDPBs is not held centrally and could be produced only at disproportionate cost.

  Redundancies (Cumbria)
  Mr. Collins
  To ask the Secretary of State for Trade and Industry what discussions she has had with(a) South Lakeland district council and (b) Cumbria county council regarding the redundancies recently announced by Clarks at K Shoes in Kendal. [94011]

  Alan Johnson
  The North West Development Agency (NWDA) are in close contact with South Lakeland district council officials to coordinate the response to the situation in Kendal. NWDA will also participate in a task force meeting, convened by Cumbria county council, to discuss the K Shoes redundancies on 31st January 2003.

  Scotch Whisky
  Mr. Donohoe
  To ask the Secretary of State for Trade and Industry if she will make a statement on the
  925W
  outcome of her recent visit to India and Thailand, with particular reference to representations she made on behalf of the Scottish whisky industry. [93265]

  Ms Hewitt
  During my recent visit to India and Thailand, I raised the issue of taxation on spirits and beer with Mr. Arun Shourie, the Minister for Commerce and Industry in New Delhi, and the Thai Prime Minister, Dr. Thaksin, and Deputy Finance Minister, Mr. Suchart, in Bangkok.

  Mr. Tim Jackson, of the Scotch Whisky Association, accompanied me on my visit to India as part of a UK trade delegation and during my call on the Thai Deputy Finance Minister.

  He raised the concerns of the Scotch whisky industry, in relation to the Indian Market, direct with Mr. Shourie.

  During the call on the Thai Deputy Finance Minister, Mr. Jackson offered to provide assistance to the relevant Thai authorities in their analysis of alternatives to ad valorem excise duties.

  The Thai Deputy Minister of Finance indicated that it was his aim to overhaul the current regime on Scotch whisky. He expressed the hope that this would be soon.

  Temporary Workers
  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry what steps her Department is taking to help improve the competitiveness of Britain's temporary worker market. [93399]

  Alan Johnson
  The Department of Trade and Industry is seeking to maintain a modern and effective regulatory framework for temporary agency work. To this end we have consulted on proposed changes to the conduct of employment agencies and employment business regulations, and also on the proposed European Union directive on temporary agency work.

  Third-world Producers
  Helen Southworth
  To ask the Secretary of State for Trade and Industry if she will support the right of poor country governments to provide targeted support and protection for their local producers. [91607]

  Ms Hewitt
  Flexibilities for developing countries (with additional flexibilities for the least developed countries) to retain some targeted support and protection for their local producers already exist within all WTO trade defence instruments agreed in the Uruguay Round.

  The Government recognise that trade reform can have significant adverse effects on particular sectors and groups, especially in the short-term. This is why it is important that trade reform is accompanied by complementary policies to manage the process of change and integration into the world trading system. This may include some measures to promote indigenous industrial development. But the evidence of the benefits of specific tariff protection is mixed so the Government do not see it as a particularly useful tool to foster economic growth and therefore poverty reduction. Greater protectionism by developing countries limits
  926W
  the opportunities for poor countries to trade both with each other and with developed countries, excluding them further from the benefits of international trade.

  The Government also believe that existing WTO agreements should take better account of countries' specific development needs. Therefore, within the current Doha Development Agenda negotiations we support the further development of Special and Differential Treatment provisions to assist developing countries to integrate into the world trading system.

  Trade Liberalisation
  Mr. Challen
  To ask the Secretary of State for Trade and Industry what progress has been made in the GATS negotiations with ensuring that impact assessments are made on the liberalisation of trade. [91352]

  Ms Hewitt
  The negotiating guidelines and procedures drawn up by WTO members for the current GATS negotiations call for impact assessment to be an on-going activity of the Council, with the negotiations adjusted in the light of the results of the assessment.

  In March 2002, the Services Council held a two-day symposium devoted to impact assessment. All the papers tabled for that symposium are publicly available on the WTO website at http://www.wto.org/english/tratop—e/serv—e/symp—assessment—serv—march02—e.htm.

  UK Space Strategy
  Dr. Cable
  To ask the Secretary of State for Trade and Industry whether the objectives of the UK Space Strategy 1999 to 2002 were met; and if she will make a statement. [91656]

  Ms Hewitt
  The objectives set out in the United Kingdom Space Strategy 1999 to 2002, 'New Frontiers', were: to help industry maximise profitable business opportunities in the development and exploitation of space systems which improve the quality of life and enhance choice for consumers; to pursue the highest quality astronomy and space science; to improve our understanding of the Earth's environment and natural resources; to foster the development of innovative technology, its commercial exploitation and its application to research; and to communicate the results and their significance to a broad audience.

  I am satisfied that we have made good progress towards each of these objectives. The Strategy included a large number of key actions to monitor the implementation of the Strategy. Details of the actions and progress made have been made publicly available on the BNSC website: www.bnsc.gov.uk

  These long-term objectives have been further refined. I published a new draft Strategy for public consideration on 22 January 2003, Official Report, column 13WS. This further focuses on the use of space systems throughout the economy. Copies of the draft Strategy have been placed in the Libraries of both Houses and the text is available on the BNSC website. We aim to publish the final Strategy later this year.

TRANSPORT

  Airport Capacity
  Mr. Redwood
  To ask the Secretary of State for Transport when he will complete his review of airport capacity in the south east of England. [93610]

  Mr. Spellar
  The consultation period, throughout the UK, has been extended until we have consulted on Gatwick runway options. We intend to issue a revised south east consultation paper next month. The consultation period will then run for four months after the date of publication of the new material. Those who have already responded to the consultation will be able to amend, add to, or replace their response having considered the new material, if they wish to do so.

  All responses to the consultation will be considered and analysed carefully before final decisions are taken. These will be set out in an air transport White Paper, which we aim to publish towards the end of the year.

  Bicyclists
  Mr. Hunter
  To ask the Secretary of State for Transport, if he will bring forward proposals to sections 28 and 29 of the Road Traffic Act 1988 so that the provisions in respect of dangerous or careless riding of bicycles apply to bicycles ridden on a public footpath which is not adjacent to a road. [94053]

  Mr. Jamieson
  This amendment is not necessary as a public footpath is a highway and therefore a 'road' for the purposes of sections 28 and 29 of the Road Traffic Act 1988.

  Correspondence
  Mr. Blunt
  To ask the Secretary of State for Transport when he expects to reply to the letter of the hon. Member for Reigate and East Surrey of 17 December 2002, concerning Redhill Aerodrome. [93785]

  Mr. Jamieson
  The letter to which the hon. Member refers was received in the Department on 30 December 2002 and acknowledged on the same day. A reply was sent on 27 January 2003.

  Emissions
  Gregory Barker
  To ask the Secretary of State for Transport what estimate his Department has made of carbon dioxide emissions from transport from 1997 to 2002; and if he will make a statement. [93824]

  Mr. Jamieson
  Carbon dioxide emissions from transport between 1997 and 2001 (including from domestic aviation) were estimated to be as follows:

  Million tonnes of carbon

  By 'end user'

  By 'source'

  1997

  39

  36

  1998

  39

  36

  1999

  39

  36

  2000

  39

  35

  2001

  n/a

  34

  928W
  'End user' figures include a share of the emissions from fuel processing industries and the combustion of fossil fuels at power stations, whereas the 'source' figures do not. The 1997 to 2000 figures are published in "Transport Statistics Great Britain, 2002 Edition" and are obtained from the National Environmental Technology Centre (NETCEN). Only 'source' figures are available for 2001 and these are provisional estimates derived from DTIs "Digest of United Kingdom Energy Statistics 20022. No estimates are available yet for 2002.

  Illegal Immigrants
  Mr. Don Foster
  To ask the Secretary of State for Transport how many illegal immigrants were recorded as entering the UK via UK ports in each year since 1997, broken down by region; and what the estimates were in each year. [93242]

  Beverley Hughes
  I have been asked to reply.

  I regret that information on the number of illegal immigrants recorded as entering at UK ports is not available.

  Light Aircraft
  Mr. Key
  To ask the Secretary of State for Transport what plans he has to reduce noise from light aircraft using grass airstrips in rural England. [93696]

  Mr. Jamieson
  Light aircraft have to comply with an internationally agreed noise certification standard, unless they were on the UK register prior to 1980. This standard was tightened for aircraft certificated after 1999. There are currently no plans for additional measures to reduce aircraft noise from light aircraft using grass airstrips in rural England. It is the responsibility of all aerodromes to ensure that appropriate rules are set and enforced to minimise noise nuisance.

  M60 (Flooding)
  Andrew Bennett
  To ask the Secretary of State for Transport on how many occasions flooding has occurred on the stretch of the M60 between Denton and Hollinwood since it opened; how many accidents on this stretch have been attributed to flooding; who designed this stretch of motorway; what plans he has to undertake work to rectify design faults; and what estimate he has made of the cause of flooding in each case. [93420]

  Mr. Jamieson
  I have asked the Chief Executive of the Highways Agency, Tim Matthews, to write to my hon. Friend.

  Letter from Tim Matthews to Mr. Andrew Bennett, dated 29 January 2003:
  I have been asked by the Transport Minister, David Jamieson, to reply to your recent question about flooding on the M60 Motorway between Demon and Hollinwood.
  Since the M60 opened m October 2000, there have been no recorded occurrences of flooding caused by either failures of the motorway drainage system or overflow from external water courses. What has happened is that during periods of intense rainfall, excess water can collect on the surface of the carriageway.

  929W
  Whilst we are not aware of any accidents that have occurred as a result, there are anecdotal reports from drivers that this is a matter of concern.
  The section of motorway between Denton and Medlock was designed on behalf of the Highways Agency by Mouchel Consulting Ltd. The remaining length to Hollinwood was the subject of a Design and Build contract undertaken by Balfour Beatty who used Gifford and Partners to advise on the design.
  At present, we are not aware of any design faults to which the excess water could be attributed. However, mindful of our duty of care towards motorway users, suitable warning signs were erected in Autumn last year. Additionally, and working with Greater

  2001–02

  2000–01

  1999–2000

  1998–99

  Violent Crime

  4,737

  4,726

  4,652

  4,084

  Sexual Offences

  718

  647

  751

  789

  Theft of passenger property

  16,918

  15,194

  14,661

  12,725

  Robbery

  2,625

  2,109

  1,813

  1,612

  Public Disorder Offences

  1,712

  1,585

  1,691

  1,796

  Motor vehicle/cycle offences

  13,197

  13,044

  13.460

  14,895

  Total

  39,907

  37,305

  37,028

  35,901

  These figures are for offences reported to the BTP for the rail network that they police, less London Underground. The figures for 1997–98 were recorded using different Home Office rules that would not be comparable with the figures for subsequent years.

  Road Deaths
  Lynne Jones
  To ask the Secretary of State for Transport how many(a) people (b) children under 15 and (c) cyclists were killed on Britain's roads in each of the last 10 years; and if he will make a statement. [93096]

  Mr. Jamieson
  The table shows the number of fatalities in the All, Child (0–14) and Cyclist categories in each year since 1992.

  Road accident fatalities: GB 1992–2001

  Casualties

  All

  Child

  Cyclists

  1992

  4,229

  268

  204

  1993

  3,814

  270

  186

  1994

  3,650

  265

  172

  1995

  3,621

  230

  213

  1996

  3,598

  211

  203

  1997

  3,599

  228

  183

  1998

  3,421

  179

  158

  1999

  3,423

  196

  172

  2000

  3,409

  162

  127

  2001

  3,450

  185

  138

  1 Fatalities aged 0–14.

  During the period 1992–2001 there has been a steady downward trend in the number of people killed and seriously injured on our roads. This has been achieved despite an increase in road traffic (including pedal cycles) since 1992 of 15 per cent.
  930W
  Manchester Police, we have made use of variable message signing which is currently being used to good effect by encouraging drivers to slow down and take extra care in wet conditions.
  Investigations are currently in hand to identify causes of the surface water problems and I will write to you again when we have a clearer picture.

  Rail Crime
  Gregory Barker
  To ask the Secretary of State for Transport how many crimes have been committed against passengers on British Rail lines in the past five years. [93825]

  Mr. Jamieson
  The British Transport Police (BTP) have provided me with the following information.

  Road Quietening
  David Davis
  To ask the Secretary of State for Transport if he will list the road quietening schemes that are being examined by his Department in Hull and the East Riding. [93821]

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

  Letter from Tim Matthews to Mr. David Davis, dated 29 January 2003:
  I have been asked by the Transport Minister, David Jamieson, 10 reply to your recent Parliamentary Question asking for a list of road quietening schemes that are being examined by his Department in Hull and the East Riding.
  The Highways Agency is working to achieve the Government's commitment to deliver the target of resurfacing 60% of the trunk road and motorway network with low noise surfacing by 2011. This includes resurfacing all concrete roads. Within Hull and the East Riding there are two sections of concrete roads, both on the M62 Motorway, between Gilberdyke and Newport, and Balkholme and Gilberdyke. Some preliminary design work has been undertaken on schemes for these sections of road. There is also a section of concrete carriageway on the M18 Motorway between Junctions 6 and 7, which falls partly within the East Riding. The timing of resurfacing work will depend on when road maintenance is required.
  In addition, the Agency regularly reviews the trunk road and motorway network to identify the need for maintenance. At present, we envisage undertaking the following maintenance schemes within the next four years and will be considering the use of quieter surfaces:

  M62

  Junction 35 to Langham

  A63

  M62 to South Cave

  South Cave to Welton

  Western Interchange to Brighton Street

  I hope this is helpful. If you would like any further information you may wish to contact the Agency's Area Manager for Hull and the East Riding, Mick Spink, on 0113 283 5397, or you can email him at mick.spink@highwavs.gsi.gov.uk

  Thames Valley Multi-modal Study
  Mr. Redwood
  To ask the Secretary of State for Transport what the annual capital sums are which are planned within the budget for transport over 10 years announced in the Thames Valley multi-modal study.[93612]

  Mr. Spellar
  The capital measures recommended by the Thames Valley Multi-Modal Study have been estimated by the consultants to cost £1.1 billion over an implementation period to 2018. Subject to the Government's response to the recommendations, the annual capital costs will depend on decisions about the phasing and construction of recommended schemes.

  Train Franchises
  Mr. Redwood
  To ask the Secretary of State for Transport how many train franchises were(a) renewed and (b) let in the last year; and what the average duration of those new franchises is. [93609]

  Mr. Spellar
  The following franchises were renewed or re-let in 2002. The table shows the type of extension/ renewal/re-letting and the duration.

  Train operator

  Re-letting etc. (date)

  Duration

  Chiltern railways

  18 February 2002

  Until 2012, 2017 or 2022 depending upon the achievement of contractual terms

  GNER

  16 January 2002

  Extension of two years of April 2005

  South West Trains

  6 November 2002

  Extension of one year to February 2004 in order that negotiations about extension of the franchise for a further three years may continue

TREASURY

  Flooding
  Patrick Mercer
  To ask the Chancellor of the Exchequer if he plans to introduce an extra tax for property owners whose dwellings are threatened by persistent flooding. [92857]

  Mr. Boateng
  As stated in the 2002 Spending Review White Paper, the Government are building on the work of the flood and coastal defence funding review to explore options for putting in place new funding mechanisms and simplifying the administration of flood defences. An announcement on any reforms to the administration or funding of flood defence will be made in due course.

  Diversity Objectives
  Mr. Laws
  To ask the Chancellor of the Exchequer if he will list the diversity objectives set by each senior civil servant within his Department for the latest year available; and if he will make a statement. [93443]
  932W
  John Healey
  I refer the hon. Member to the answer given by the Financial Secretary to the hon. Member for North Norfolk (Norman Lamb) on 13 January 2003,Official Report, column 414W.

  Health and Safety Accidents (Treasury)
  Mr. Laws
  To ask the Chancellor of the Exchequer if he will list the health and safety accidents which occurred in HM Treasury in 2001-02, stating the reason for each accident; and if he will make a statement. [93450]

  John Healey
  There were 27 minor health and safety accidents in the period concerned, of which 11 involved Treasury staff and 16 involved contractors working in HM Treasury.

  Information Technology Skills
  Mr. Prisk
  To ask the Chancellor of the Exchequer what representations he has received about the credit incentives from learning providers about higher level information technology skills; and what financial incentives his Department is planning to encourage individuals to undertake training. [93368]

  John Healey
  The Chancellor and other Treasury Ministers have received representations on skills issues from a variety of organisations, including learning providers. The Government are currently reviewing the funding of adult learning, including the role of financial incentives. This review will feed into the National Skills Strategy, which will be published in the summer.

  Office of Government Commerce
  Mr. Laws
  To ask the Chancellor of the Exchequer what reasons underlie the reduction in expenditure by the Office of Government Commerce between 2001–02 and 2002–03; and if he will make a statement. [93441]

  Mr. Boateng
  The level of resource consumption estimated for 2001–02 for the Office of Government Commerce (OGC) in the latest H.M. Treasury Departmental Report (Cm5425) was £88 million, reducing to a planned -£5million in 2002–03. The actual level of resource consumption in 2001–02 was £6million. The change between the estimated and actual outturns for 2001£02 is largely accounted for by a revaluation to and change in timing of the run down of some of the provisions the OGC holds in respect of its obligation to dispose of the Government's remaining surplus Residual Civil Estate. The change in the timing will also affect the outturn for 2002–03 where it is now anticipated that the likely outturn will be some £50 million. Such fluctuations in the valuations of and timing for the sale of the remaining surplus Estate, which reflect market conditions and opportunities, can be expected to continue in the future, although on a smaller scale as the size of the remaining Residual Estate continues to reduce. The actual change in resource consumption between years also reflects a reduction in the level of income the OGC generates.

  Sickness Absence
  Mr. Laws
  To ask the Chancellor of the Exchequer what the rate of staff(a) absenteeism and (b) sickness

  933W
  was in his Department and each of its agencies and non-departmental public bodies in each year from 1990–91 to 2002–03; what the target set is for his Department; and if he will make a statement. [93504]

  John Healey
  Information on absenteeism is not available. Unauthorised absence is recorded as unpaid leave along with authorised unpaid absence (such as maternity leave or career breaks) and cannot be disaggregated.

  Average working days absence per staff-year

  1994

  1995

  1996

  1997

  1998

  1999

  2000

  2001

  Customs and Excise

  8.3

  9.6

  9.1

  8.9

  9.4

  9.6

  9.0

  8.7

  Inland Revenue

  9.6

  10.8

  10.8

  11.9

  11.0

  11.5

  10.9

  9.5

  Valuation Office Agency

  —

  —

  —

  9.8

  9.0

  10.1

  9.2

  7.0

  Office for National Statistics (Central Statistical Office)

  9.1

  11.5

  —

  9.1

  9.6

  8.8

  8.0

  7.9

  Department for National Savings

  14.3

  16.1

  14.3

  10.9

  9.6

  4.7

  8.8

  2.2

  Government Actuary Department

  5.8

  5.8

  10.4

  6.2

  6.7

  6.7

  6.6

  6.9

  HM Treasury

  7.0

  8.4

  5.1

  4.9

  5.3

  5.5

  3.9

  4.7

  Information for the Royal Mint and the Debt Management Office is as follows:

  Average working days absence per staff-year

  1994

  1995

  1996

  1997

  1998

  1999

  2000

  2001

  Royal Mint

  7.5

  8.2

  8.0

  5.8

  6.3

  6.5

  5.4

  5.9

  Debt Management Office

  —

  —

  —

  —

  0

  0.5

  0.3

  1.1

  Information for 2002 will be announced in due course. Sick absence targets for Customs and Excise, Inland Revenue, Valuation Office Agency, ONS and HM Treasury are reported in the relevant departmental or annual reports. These are available on the relevant websites. Targets for DNS, GAD and the Royal Mint are in the following table. The DMO are reviewing their sick management policies.

  Sick absence target

  DNS

  4.3 working days by 2003

  GAD

  7.5 working days by end of March 2003.

  Royal Mint

  6.3 days for non-industrial staff for 2003

  Tax Regime
  Mr. Cousins
  To ask the Chancellor of the Exchequer if he will change the Inland Revenue regime for life insurance and tax exempt savings plans; and when he will next meet the Association of Friendly Societies.[93974]

  John Healey
  The Sandler review of the market for medium and long-term retail savings, which was published last July, recommended two changes to the regime for taxing life insurance products. These changes are the abolition of qualifying policies and the replacement of the so-called 5 per cent. tax-deferral rule which applies to withdrawals.

  As we announced in the Pre-Budget Report, the Government are considering these proposals as part of the Budget process and is discussing their implications with the insurance industry and friendly society movement. I understand that the Association of
  934W
  Information on sickness absence covering the Treasury, Customs and Excise, the Valuation Office Agency, Inland Revenue, the Department for National Savings, the Government Actuary Department and the Office for National Statistics is published by the Cabinet Office in their annual reports on "Analysis of Sickness Absence in the Civil Service".

  Information since 1994 from those reports is as follows:

  Friendly Societies (AFS) has been in frequent contact with Treasury and Inland Revenue officials. I am not aware of any recent request from the AFS for a meeting with Treasury Ministers.

  Unemployment (Fife)
  Mr. MacDougall
  To ask the Chancellor of the Exchequer what the latest figure is for unemployment in the Fife region for(a) men, (b) women, (c) men over 50 and (d) women over 50. [93558]

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

  Letter from Len Cook to Mr. MacDougall, dated 29 January 2003:
  As National Statistician, I have been asked to reply to your Parliamentary Question about unemployment in Fife. (93558)
  The local Labour Force Survey for March 2001 to February 2002 (not yet adjusted for the 2001 Census) shows an estimated 15,000 unemployed people resident in the Fife local authority district. No figures by age and sex are available as the sample sizes are too small to provide reliable estimates.
  The Office for National Statistics also compiles claimant count statistics for local areas of people claiming Jobseeker's Allowance. The following table shows the figures for Fife in December 2002.

  Claimant count in Fife local authority district—not seasonally

  adjusted (December 2002)

  Men

  Women

  Total claimants

  6,499

  1,931

  Age 50 and over

  1,229

  376

  Written Parliamentary Questions
  Mr. Laws
  To ask the Chancellor of the Exchequer what proportion of written parliamentary questions received by his Department in 2001–02 were not answered substantively within(a) two weeks, (b) one month and (c) three months; and if he will make a statement. [93445]

  John Healey
  Treasury Ministers attach importance to answering parliamentary questions promptly. In the 2001–02 session, 4,618 of the 5,888 written questions to the Treasury (78.4 per cent.) received substantive replies on or before the due date for answering. 111 (1.9 per cent. of the total) had not been answered within two weeks, 57 (1.0 per cent.) within one month and 43 (0.7 per cent.) within three months. In the 2002[en rule]03 session to date, 76.7 per cent. of all written questions have been answered on time.

  Number of applications for Attendance Allowance received, successful and unsuccessful each quarter from September 2000

  Received

  Successful

  Unsuccessful

  September—November 2000

  101,715

  78,680

  25,415

  December 2000—February 2001

  90,745

  66,130

  21,380

  March—May 2001

  103,190

  77,405

  24,720

  June—August 2001

  102,050

  75,870

  23,525

  September—November 2001

  97,470

  76,395

  23,110

  December 2001—February 2002

  87,690

  68,290

  20,470

  March—May 2002

  107,395

  79,740

  22,560

  June—August 2002

  96,870

  74,365

  21,595

  September—November 2002

  99,905

  80,745

  23,185

  The figures for successful and unsuccessful claims relate to the decisions given during that period and will not necessarily equate to the number of claims received during the period.

  Further data regarding appeals is not available at this time.

  Actual average clearance times AACT (in working days) for normal rules (NR) claims, reconsiderations and appeals (Attendance Allowance) April 2000 to December 2002

  AACT

  Total quarter Date

  NR claims

  Reconsiderations

  Appeals

  2000–01

  1

  April-June 2000

  36.1

  58.7

  68.8

  2

  July-September 2000

  31.8

  50.0

  69.7

  3

  October-December 2000

  26.4

  44.6

  55.7

  4

  January-March 2001

  26.7

  40.1

  47.9

  2001–02

  1

  January-March 2001

  26.0

  35.0

  38.9

  2

  July-September 2001

  27.9

  36.8

  36.1

  3

  October-December 2001

  28.9

  36.9

  36.8

  4

  January-March 2002

  25.4

  36.5

  34.2

  2002

  1

  April-June 2002

  24.6

  34.1

  33.4

  2

  April-June 2002

  26.6

  32.8

  32.2

  3

  October-December 2002

  24.1

  32.2

  31.8

WORK AND PENSIONS

  Attendance Allowance
  Mr. Paul Burstow
  To ask the Secretary of State for Work and Pensions if he will set out for each quarter from September 2000(a) how many applications for attendance allowance have been received, and of those how many were (i) successful, (ii) unsuccessful, (iii) subject to appeal and (iv) successful at appeal, (b) what the average processing time has been for attendance allowance for (i) first-time claims and (ii) appeals for claims to be reconsidered, (c) how many applications for attendance allowance have (i) been subject to reconsideration and (ii) successful at reconsideration, and what was the average number of days taken to process appeals, and (d) how many (i) claims, (ii) reviews, (iii) reconsiderations and (iv) appeals there were on which a decision had not been reached at the end of each quarter of the last three years. [89826]

  Maria Eagle
  Such information as can reliably be made available is contained in the table. Information is not available on claims, reviews, reconsiderations and appeals on which a decision had not been reached (part(d) of the question).

  Source:

  Information supplied by MIS Support (FPMT) Norcross Data from National Management Information Pack

  Number of attendance allowance reconsiderations each quarter from September 2000

  Decisions

  Successful

  September-November 2000

  7,955

  3,465

  December 2000-February 2001

  6,050

  2,480

  March-May 2001

  5,900

  2,435

  June-August 2001

  5,930

  2,425

  September-November 2001

  5,495

  2,140

  December 2001-February 2002

  5,575

  2,390

  March-May 2002

  5,325

  2,265

  June-August 2002

  5,495

  2,420

  September-November 2002

  6,120

  2,710

  Source:

  IAD Information Centre 100 per cent data taken from 100 per cent extract of monthly management information system and rounded to the nearest 5.

  Benefits Agency (Fraud)
  Mr. Heald
  To ask the Secretary of State for Work and Pensions what recent guidelines he has issued in respect of the(a) disciplinary measures and (b) criminal proceedings to be imposed when staff of the Benefits Agency are found to have committed fraud. [92505]
  937W
  Malcolm Wicks
  In December 2002 the Department issued a revised disciplinary policy to all staff which outlined the guidelines to be issued in all cases of serious and minor misconduct, including internal fraud. The policy is supported by separate guidance produced for individuals and managers and includes categories of disciplinary offences and the range and duration of penalties.

  Guidance outlining the circumstances when criminal proceedings should be considered is regularly reviewed and updated as appropriate.

  Call Centres
  Mr. Heald
  To ask the Secretary of State for Work and Pensions if he will list the telephone call centres that provide services for his Department and its agencies, indicating in each case(a) who is responsible for operating the centre, (b) how many staff work in the centre and (c) what the cost of the centre was in the last 12 months to his Department and its agencies. [88448]

  Mr. McCartney
  The available information has been placed in the Library. This information is not routinely collected or validated centrally. Many DWP call centre services are integrated with the Department's core functions to varying degrees and this has made it difficult to disaggregate some staff functions and costs or to provide details on a consistent basis. The figures provided should, therefore, be read with reference to the explanatory notes that it has been necessary to provide for most returns.

  Disability Living Allowance
  Matthew Taylor
  To ask the Secretary of State for Work and Pensions how many recipients of higher level disability living allowance there are in(a) England, (b) Scotland, (c) Wales and (d) Northern Ireland; and if he will make a statement. [92795]

  Maria Eagle
  The information requested is contained in the table. Disability Living Allowance is divided into two components: care, which has three rates; and mobility, which has two.

  Number of people receiving the highest rate care component and

  the higher rate mobility component of Disability Living Allowance

  at 31 August 2002

  Thousands

  Highest care

  Higher mobility

  United Kingdom

  531.9

  1,587.2

  England

  396.7

  1,193.8

  Scotland

  56.7

  172.1

  Wales

  40.1

  137.5

  Northern Ireland

  38.3

  83.8

  Note:

  Figures are in thousands and rounded to the nearest hundred.

  Recipients of highest-rate care component may also be in receipt of a mobility component.

  Recipients of higher-rate mobility component may also be in receipt of a care component

  Northern Ireland Figures were provided by the Statistics and Research Branch, Department for Social Development

  Source:

  IAD Information Centre, data taken from 5 per cent).

  Gas Pipes
  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions what percentage of the gas network has metal mains pipes. [87482]

  Mr. Nicholas Brown
  I am informed by the Health and Safety Executive that there are approximately 275,000 km of gas main in Transco's network of which approximately 55 per cent. of the total length are metal i.e. 151,000 km.

  Government Subsidised Training
  Mr. Heald
  To ask the Secretary of State for Work and Pensions what research he has(a) commissioned and (b) received into the length of time which individuals on average practise a particular trade or occupation after receiving Government subsidised training in it. [93560]

  Mr. Nicholas Brown
  [holding answer 27 January 2003]The objective of our policies is to help jobless people, particularly the most disadvantaged, move into and remain in employment. Initiatives such as the New Deals and Work Based Learning for Adults are helping to achieve this. Some of those helped into work by government programmes may change their jobs or occupations at a later date. However, the skills and confidence they have gained through participation in our programmes will stand them in good stead in the current dynamic labour market. Success, therefore, should be measured by the improvement in the level of employment. This has increased by 1.3 million since 1997 and now stands at 27.8 million.

  There has been no specific research into the length of time individuals stay in a particular occupation after receiving Government subsidised training. However, we have commissioned a study into Work Based Learning for Adults that will examine the impact of a subsidised training programme on client outcomes.

  Grants
  Mr. McLoughlin
  To ask the Secretary of State for Work and Pensions if he will list the grants funded by his Department for which individual members of the public and organisations may apply; and if he will make a statement as to(a) the total of such funding in the last financial year, (b) the total number of awards and (c) their administrative costs. [82197]

  Mr. Nicholas Brown
  Our objectives are to fight poverty, create opportunity for all and help people become self sufficient and independent. Jobcentre Plus and The Pension Service administer adiverse range of grant schemes, usually linked to specific life events such as maternity or bereavement, to which individual members of the public can apply for help. Grants are also available to help people lead independent lives in the community.

  In addition the Department works in partnership with a number of grant aided organisations. However we do not administer any grant schemes which are open to application by outside organisations.

  Information on administration costs is currently not available in the format requested. The Department now accounts for its administration and benefit expenditure

  939W
  by Strategic Objective, as set out in its Public Service Agreements (PSA), and by individual Requests for Resources (RfRs) as set out in the Departmental Estimates and Accounts.

  Information relating to the principal grant schemes administered by the Department in 2001–02 is in the table.

  2001–02 Expenditure (£ million)

  Number of awards

  Sure Start Maternity Grant1

  61.2

  201,000

  Funeral payments 1

  38.4

  42,000

  Community Care Grants 1

  102.6

  233,000

  Job Grant2

  5.3

  530,000

  New Deal 50 Plus Training Grant3

  0.885

  2,100

  Access to work 2

  40.9

  13.000

  1Social Fund Annual Report 2002

  2Jobcentre Plus computer system

  3ND 50 plus evaluation data base.

  Notes:

  (i) Expenditure rounded to nearest thousand

  (ii) Number of awards rounded to nearest thousand.

  Incomes (Kendal)
  Mr. Collins
  To ask the Secretary of State for Work and Pensions what percentage of the population of the Kendal travel-to-work-area had an income(a) below, (b) at and (c) above the national average in each of the past five years. [94817]

  Mr. Nicholas Brown
  The information requested is not available.

  Minimum Income Guarantee
  Mr. Willetts
  To ask the Secretary of State for Work and Pensions if the 34-page version of 'Review Claim Form A2' continues to be issued to Minimum Income Guarantee claimants. [88202]

  Mr. McCartney
  The review claim form A2 continues to be used when reviewing certain Minimum Income Guarantee (MIG) claims. It is completed, for example, when the claimant is in receipt of another income such

  Pension provision by size of organisation, 1996, 1998 and 2000

  Cell percentages

  1996

  1998

  2000

  Type of pension provision

  Up to 19 employees

  20+ employees

  Up to 19 employees

  20 + employees

  Up to 19 employees

  20+ employees

  Occupational scheme12

  n/a

  2n/a

  2n/a

  2n/a

  5

  22

  Salary-related

  3

  19

  2

  13

  1

  12

  Money purchase

  2

  13

  3

  10

  2

  9

  COMBS

  —

  —

  0

  1

  3—

  1

  Top Hat

  6

  8

  3

  10

  3

  6

  Other

  0

  0

  0

  3—

  0

  1

  Closed scheme

  1

  6

  1

  5

  2

  5

  Group personal pension

  6

  19

  4

  26

  7

  37

  Contributions to personal pensions

  20

  27

  21

  30

  16

  23

  Any provision

  36

  70

  32

  66

  26

  64

  No provision

  64

  30

  68

  34

  74

  36

  1Any

  2Information not available from published reports.

  3Less than 0.5 per cent.

  940W
  as occupational pension, has capital,or receives Invalid Care Allowance or Attendance Allowance. It was used in around 10 per cent. of MIG claims in 2001-02 and was completed by a member of DWP staff in two thirds of these cases. Help to complete the form is available to everyone.

  David Wright
  To ask the Secretary of State for Work and Pensions how many pensioners in Telford benefit from the Minimum Income Guarantee.[93283]

  Mr. McCartney
  As at August 2002 there were 2,900 people benefiting from the Minimum Income Guarantee in the Telford constituency.

  Source:

  Income Support Quarterly Statistical Enquiry, August 2002.

  Ministerial Travel
  Mr. Laws
  To ask the Secretary of State for Work and Pensions what his estimate is of the total expenditure by his Department on ministerial travel(a) in the UK and (b) abroad, in each year from 1995–96 to 2002–03 (estimated); and if he will make a statement. [92474]

  Mr. Nicholas Brown
  I refer the hon. Member to the answer given by my hon. Friend the Minister of State, Cabinet Office, Mr. Alexander, on 22 January 2003, Official Report, column 334W.

  Occupational Pension Schemes
  Miss McIntosh
  To ask the Secretary of State for Work and Pensions how many companies offered occupational pension schemes on(a) 1 May 1997 and (b) 1 May 2002. [93002]

  Mr. McCartney
  The information is not available.

  Some information on the proportion of private sector employers that offer occupational pension schemes can be found from the DWP Employersl Pension Provision survey, which has been conducted in 1994, 1996, 1998 and 2000. Results from these surveys have been published and are available in the Library.

  The table is a reproduction of Table 4.2 of 'Employers Pension Provision Survey 2000', by Alison Smith and Stephen McKay, DWP Research Report no. 163.
  941W
  Notes:

  1. COMBS schemes (contracted-out on a mixed benefit basis) were not available until April 1997. Top Hat schemes are those set up for senior managers or only currently available to senior management.

  2. Figures for 1997 are not available. There was no survey in 2002 but a survey for 2003 is currently being undertaken.

  3. Methodological improvements to the survey between 1996 and 2000 mean that results are not strictly comparable across years. A detailed explanation of these improvements is given on pages 45–46 of the publication referred to above.

  4. Data are only available in the form of proportions, rather than numbers of employers.

  5. Results refer to private sector employers only.

  6. Companies may offer more than one type of pension scheme.

  Pension Credit
  Mr. Steen
  To ask the Secretary of State for Work and Pensions what estimate he has made of the likely take-up of the new pension credit; and how many questions pensioners will be required to answer to assess their eligibility. [93884]

  Mr. McCartney
  We have committed to a target of paying pension credit to at least three million pensioner households by 2006. We have already shortened the minimum income guarantee claim form from 40 to 10 pages. We are designing the pension credit application process to be even simpler, including use of the telephone for most applications. The number of questions that a pensioner is required to answer in order to assess their eligibility to pension credit will depend on their individual circumstances.

  Pensioner Poverty
  Mr. Graham Brady
  To ask the Secretary of State for Work and Pensions what recent representations he has received about pensioner poverty. [89715]

  Maria Eagle
  The Department receives representations about pensioner poverty on an ongoing basis and also meets with Partnership Against Poverty group regularly.

  Providing a decent income is the key to tackling pensioner poverty and from April, no pensioner will have to get by on less than £102.10 a week (£155.80 for married couples).

  Pensions
  Mr. Webb
  To ask the Secretary of State for Work and Pensions if he will make a statement on his policy on the annual upgrading of retirement pensions for British citizens living in(a) Barbados and (b) Canada. [88792]

  Mr. McCartney
  We uprate State Pensions for British citizens living overseas where there is a legal requirement or a reciprocal social security agreement to do so.

  The UK has a reciprocal agreement with Barbados that provides for British pensioners living in that country to be paid the same rate of State Pension as would be paid if they lived in the UK. However, although there is a social security arrangement with the Canadian Government, it does not allow for the payment of UK benefits to persons in Canada and contains no similar provision on the uprating of State Pensions.

  The uprating of State Pensions abroad is the subject of a Court of Appeal hearing set for 24–25 March 2003. This is an appeal against the High Court's finding that the UK Government are not in breach of the European
  942W
  Convention on Human Rights by not annually uprating the State Pension in countries where there is no agreement to do so.

  Retirement Age
  Mr. Wray
  To ask the Secretary of State for Work and Pensions what discussions he has had with interested groups on plans to make the retirement age for men and women equal. [87364]

  Mr. McCartney
  The UK has a fixed age for eligibility to State Pension (currently 60 for women and 65 for men, although to be equalised at 65 for both sexes as from 2020). We do not have a national mandatory retirement age. Sex discrimination legislation prohibits employers from setting different retirement ages for men and women.

  A variety of representations have been received from a range of organisations and individuals about the equalisation of State Pension Age, the bulk of which would have been dealt with at the time of the previous administration. A discussion document "Options for Equality in State Pension Age" was published in December 1991. A White Paper "Equality in State Pension Age" followed in December 1993.

  Plans to equalise the State Pension age progressively over the period 2010 to 2020, were enacted by the 1995 Pensions Act.

  We are also committed to implementing the age strand of the European Employment Directive by 2006, when domestic legislation will come into force outlawing age discrimination in employment and training. Under the Directive, employers' compulsory retirement ages are likely to be unlawful unless they are objectively justified.

  Transco
  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions what punitive action was provided for prior to March 2002 by (a) statute and (b) regulation against Transco for failure to fulfil its statutory obligations to reassess its engineers' qualification to the Approved Competency Standard, and to provide an emergency service to domestic premises. [91403]

  Mr. Nicholas Brown
  In March 1997, Transco was registered with Corgi and all its emergency service operatives were deemed to hold valid certification under the Health and Safety Commission's Approved Code of Practice (ACOP) scheme, the sole means of demonstrating safety competence then in force. As this certification was valid for five years, no action could have been taken against Transco up to March 2002.
  943W
  If Transco were to breach legal requirements in this area, there is a range of enforcement action available to HSE under the Health and Safety at Work etc. Act 1994, ranging from the provision of advice to the serving of an enforcement notice and, ultimately,prosecution.

  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions when the Approved Competency Standard ceased to be the qualification required by Transco for its engineers engaged in safety work in domestic premises. [91406]

  Mr. Nicholas Brown
  Since 1998, competency standards have been incorporated in the Nationally Accredited Certification Scheme for Individual Gas Fitting Operatives (ACS). However, a new National Vocational Qualification, developed by the Gas and Water Industries National Training Organisation (GWINTO), was launched in 2002, and includes competence assessments that, with regard to gas safety matters, are aligned with those of the ACS.

  Transco has a duty to meet the requirements of the Gas Safety (Installation and Use) Regulations 1998 with regard to gas work downstream of the emergency control valve immediately before the meter. It has to ensure that its operatives who undertake this work are competent to do it safely. The accepted means for determining competence is for operatives to be assessed against recognised national standards on a five-yearly cycle. Standards were originally set under a Health and Safety Commission Approved Code of Practice (ACOP). All Transco engineers engaged in safety work in domestic premises hold valid certificates of competence under one or other of these schemes, and accordingly, meet the registration conditions laid down by the Council for Registered Gas Installers (CORGI).

  Claimant unemployment (not seasonally adjusted)

  December 1997

  December 2002

  Percentage fall

  Romford

  1,093

  835

  24

  London borough of Havering

  3295

  2,350

  29

  Greater London

  234000

  166000

  29

  Source:

  ONS
  944W
  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions what percentage of work under the safety case is performed by non-Transco employees; and who bears statutory responsibility for the quality of that work. [91407]

  Mr. Nicholas Brown
  The percentage of work performed by non-Transco employees may vary and is not prescribed in Transco's safety case. However, the safety case contains details of Transco's health and safety management system, which includes arrangements for the management of contractors.

  Both Transco and their contractors have a statutory responsibility for ensuring work carried out is such that it will not, so far as is reasonably practicable, expose either its own employees or others to risks to their health and safety.

  Unemployment
  Mr. Rosindell
  To ask the Secretary of State for Work and Pensions if he will make a statement on unemployment in(a) Romford, (b) the London Borough of Havering and (c) Greater London. [90300]

  Mr. Nicholas Brown
  Our policies have created a strong economy geared to delivering stability, low inflation and have helped deliver a high and stable level of employment benefiting every part of the country. Alongside this, through Jobcentre Plus and programmes such as the New Deal, our labour market policies promote attachment to the job market.

  Our success is reflected in the fall in the unemployment figures for London, the London Borough of Havering and for Romford which are in the table:

WORK AND PENSIONS

  Local Authorities (Benefit Administration)
  The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks):
  We are publishing today the quarterly performance statistics for local authority administration of housing benefit and council tax benefit (HB and CTB). These statistics are for the first two quarters performance of 2002–03; in the future they will be updated every three months. A copy of the quarterly statistics for all local authorities in Great Britain has been placed in the Library and has been published on the Department for Work and Pensions website at http://www.dwp.gov.uk/asd/other_stats.html.

  This will make councils more accountable to the public as we publish, for the first time, figures for how quickly they process housing benefit and council tax benefit.

  Publishing these statistics is part of our strategy for reforming housing benefit. It is right and proper that the public see how well or how badly their council is doing. Housing benefit is a vital weapon in our attack on poverty and our Welfare to Work programme. Good housing benefit performance can have a significant impact in tackling poverty and providing opportunity, whereas poor performance restricts opportunity and leaves people facing financial problems. We are using these statistics to challenge poor performance.

  It is unacceptable that the worst performing councils take up to five times longer to process claims than the best performers. Council leaders and chief executives need to take responsibility where there are serious performance failures and act to improve delivery. We are working with councils to improve efficiency.

  These figures, based on a selection of performance indicators, show that nationally the time taken to process new claims has improved by around 4 days to an average of 8 weeks. But they also highlight widespread variations across individual councils.

  For example, in the second quarter of 2002–03:
  Over 100 councils were processing new claims for housing benefit within 34 calendar days on average, while the worst performing councils were taking up to 162 days.
  Changes of circumstances were being handled in around 3 days in some councils, but in excess of 100 days in others.
  The target of 14-days for issuing decisions on claims in which all the necessary information has been supplied, was being met in 100 per cent of cases in some councils but in only 20 per cent of cases in others.

  The statistics cover the following areas of performance:

  average time for processing new claims

  average time for processing changes of circumstances

  42WS

  percentage of renewal claims processed on time

  percentage of cases calculated correctly

  percentage of new claims decided within 14 days of receipt of the local authority receiving all necessary information

  percentage of new Rent Allowance claims where the first payment is made on time.

  The statistics are unaudited and are provided quarterly by local authorities to the Department.

  The latest annual audited Best Value performance information for English local authorities is for 2001–02 and was published by my right hon. Friend the Deputy Prime Minister on 12 December 2002 on the Best Value Performance Indicators website at http:// www.bvpi.gov.uk/home.asp. A copy is available in the Library.

  The most recent corresponding data for local authorities in Wales are for 2000–01. This is published on the Audit Commission website at http://www.auditcommission.gov.uk/pis/pi_data 01shtml. A copy of the relevant extract from this site is available in the Library. The Local Government Data Unit for Wales intends to publish audited performance information for 2001–02 by the end of this financial year.

  The most recent corresponding data for local authorities in Scotland are for 2001–02 and are in the Accounts Commission publication "Performance Indicators 2001/2002: Benefits, Finance and Corporate Issues", a copy of which is available in the Library.

  Angus Council (Benefit Fraud)
  The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks):
  On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the Benefit Fraud Inspectorate (BFI) inspection report on Angus Council was published today and copies of the report have been placed in the Library.

  This follow-up report finds that Angus Council has responded positively to the BFI's first inspection in May 2000 and has made many improvements in the way that it administers and counters fraud in housing benefit and council tax benefit. For example, the council has introduced the Verification Framework and a new claim form to make the benefits gateway more secure.

  The council has also improved the quality of its fraud investigations and this has enabled it to make good use of sanctions as a deterrent. Importantly the council has significantly increased the number of staff employed in benefits and counter-fraud work.

  This report notes that the council has acknowledged that it still needs to improve in some areas. In particular, it needs to improve its speed of benefits claims processing and to do this it must finally eradicate its small backlog of work that had built up since the middle of 2001–02.

  Senior officers and elected Members have a close interest in benefits and counter-fraud activity and were closely monitoring efforts to clear the backlog.

  In the first inspection, the BFI reported that the council needed to make better use of a wider range of methods to recover overpaid benefits. This follow-up

  43WS
  report finds that the council has put in place effective processes and is performing well against targets. However, to prevent the total debt outstanding rising year on year, the council will need to increase the rates at which it makes recoveries.

  In 2001–02, Angus Council administered approximately £20.5 million in housing benefits. This is approximately 9 per cent. of its total gross revenue expenditure.

  The report makes recommendations to help the council address the remaining weaknesses and to further improve the administration of housing benefit and council tax benefit, as well as counter-fraud activities.
  44WS
  My right hon. Friend the Secretary of State is now considering the report and will be asking the council for its proposals in response to the findings and recommendations of the BFI.

FOREIGN AND COMMONWEALTH AFFAIRS

  Iraq
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw):
  I have today placed in the Library copies of the statement made to the United Nations Security Council on 27 January by Dr Blix of the United Nations Monitoring, Verification and Inspection Commission (UNMOVIC) and Dr El Baradei of the International Atomic Energy Agency (IAEA).

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

University Admissions Policy
Lord Chalfont Lord Chalfont asked Her Majesty's Government:
What guidance is given to universities on the criteria to be applied in selecting candidates for admission.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, universities are responsible for their own admissions policies. We believe that admission should be on the basis of merit. Universities are already exploring different ways in which to select students who will succeed on a course. We have asked the Higher Education Funding Council, with other higher education organisations, to look at how best practice might be translated into a flexible framework to help to ensure fairness and consistency.
Lord Chalfont: My Lords, I thank the Minister for that reply. Is she aware that someone whose son was recently rejected by a Cambridge college was told that the Education Secretary was advising the university that it should favour not only candidates who went to schools with poor academic records but also those whose parents are badly off and uneducated? Can the Minister say whether that reflects Her Majesty's Government's policy?
Baroness Ashton of Upholland: My Lords, my right honourable friend the Secretary of State does not give advice to individual universities. It is for universities to determine their own admissions policies. In the White Paper, we have put forward proposals to look at the benchmarking exercise run by HEFCE which enables universities to examine how they recruit students of high merit from different backgrounds. I refer the noble Lord to that report.
Lord Elton: My Lords, the Minister said that the Secretary of State did not give directions to individual universities. But the Question concerned whether a general direction had been given.
Baroness Ashton of Upholland: My Lords, as I said, my right honourable friend the Secretary of State does not give general direction. As noble Lords are aware, in the White Paper we looked at how benchmarking is carried out with HEFCE. We also considered the separate issue of introducing a regulator for universities which choose to increase their fees.
Baroness Maddock: My Lords, given that at present universities select according to A-level grades, can the
1120
Minister tell the House what information her department has and how far that is a predictor for success in courses at university?
Baroness Ashton of Upholland: My Lords, some interesting research is currently taking place. Noble Lords may be aware of comments by Mike Tomlinson over the past couple of days about the use of e-portfolios. There is no question but that we want to ensure that students who arrive at university obtain the greatest benefit from that education. We recognise the fundamental importance of A-level grades within that. However, as HEFCE has done, we have also been examining research which demonstrates how university applicants who do not have the highest grades have proved themselves, within the context of their education, to be extremely good candidates. Although it is in its early stages, there is some evidence that those students can do better at university. I believe that for some time a number of universities have been trying to ensure that they follow good practice in finding the best candidates who will prove to be the best graduates. I believe that we can support that.
Lord Taylor of Blackburn: My Lords, does my noble friend agree that British universities have not only been looking at A-levels as markers but at the baccalaureate as well?
Baroness Ashton of Upholland: My Lords, as I said, universities look at a range of different ways of assessing the best possible students. I do not have information on which universities may be considering the baccalaureate, although I suspect that some will do so.
Baroness Blatch: My Lords, how are young students to make sense of the answer that the Minister gave to the noble Baroness, Lady Maddock? How are they to understand what, other than their A-level grades, is to be taken into account? What can young people be advised to do in order to access university? Why should background matter at all when, as the noble Baroness said in her first Answer, access should be on merit?
Baroness Ashton of Upholland: My Lords, I am sure that we shall debate these issues at greater length than we can do within the Question. I am clear that the Government believe that students should be admitted to university on the basis of merit and that those who access such education should do the best that they can and be the best graduates. Over the years, universities have been concerned that applications should come from young people who are able to access that education; in other words, they want schools to work closely with them so that students apply to the best universities. They also want schools to ensure that young people realise that a university education is for them.
It is crucial that students are accepted on merit. Sixty-eight per cent of students who arrive at university with three grade As at A-level are from the

1121
state sector. Some universities will take perhaps 50 per cent of those; others will take a higher figure. Universities ask whether that is because some students do not apply to those universities or whether it is for other reasons. All universities want to ensure that they get the best students that they can.
Lord Faulkner of Worcester: My Lords, does my noble friend agree that many of our state schools could do more to raise the aspirations of their best students? Does she also agree that one problem that older universities, in particular, have is that a dearth of applicants come forward for the places? I do not know whether my noble friend saw the article in a popular newspaper last week written by Sir Colin Lucas, the Vice-Chancellor of Oxford University. He described the process that Oxford has gone through in trying to attract fresh applicants. As a result of that, the number of students from state schools has increased by 30 per cent over the past three years. Is that not the way that we should be going?
Baroness Ashton of Upholland: My Lords, the work carried out by Sir Colin Lucas is important, as was his article. As I have said before, the 14 to 19 strategy is important. If schools do not assist their young people to aspire to go to university, those young people will find it much more difficult to recognise the value and importance of a university education, especially if they do not have the role model of relatives or friends who have attended university. Universities can play a fundamental part in working with such schools. I pay tribute to Oxford University for the work that it does.
Lord Smith of Clifton: My Lords, can the Minister say precisely how the access regulator will go about his or her business in monitoring the admissions process in relation to all kinds of background data?
Baroness Ashton of Upholland: My Lords, consultation will take place in regard to the access regulator. In the coming months my right honourable friend the Secretary of State will issue a consultation paper that will enable debate to take place on the access regulator. When a university wishes to increase its fees, the access regulator will look at the admissions procedures of the university, at the best practice that exists, at what the university does to provide bursaries and other support and at the support that it provides to schools across the country to help them to prepare students for university life. We should recognise the value of that to students.
Baroness Warnock: My Lords, is the Minister aware of the social despair among those who were the first from their families to go to university, who enjoyed and benefited from the experience and who now fear that their children will be deprived of such a chance simply on the grounds that their parents benefited from a university education? That seems to them, and to me, to be a curious way of selecting candidates.
Baroness Ashton of Upholland: My Lords, there is nothing in our proposals that says that we would wish
1122
to see a good candidate for university fail to get in. This issue is not about social engineering in any way, shape or form, despite what the media may say. I am sure that noble Lords who have carefully considered our report will recognise that. We shall debate it at length. In this country we have good candidates who do not go to university. We want a well-educated society in which everyone who is capable of enjoying a university education benefits from it.

Statutory Instruments: Select Committee
2.45 p.m.
Lord Skelmersdale Lord Skelmersdale asked the Leader of the House:
What progress is being made on the establishment of a Select Committee of the House to report on the policy considerations of statutory instruments.
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, the Liaison Committee is responsible for considering proposals for new committees and for making recommendations to the House. When approving the fifth report of the Procedure Committee the House invited the Liaison Committee to give the idea of a new committee "early and sympathetic consideration". I understand that the Liaison Committee is due to meet on the 17th February to consider that proposal.
Lord Skelmersdale: My Lords, I am grateful to the noble and learned Lord. Is he aware that this excellent proposal, which first surfaced at the end of the last century, has been going through the processes of Parliament with the speed that would make a snail look somewhat like a racing car? Furthermore, given that this House is complementary to another place, but also autonomous, and given that we had radio broadcasting and television broadcasting of our proceedings before another place and that we have set up our Delegated Powers and Regulatory Reform Committee which has no equivalent in another place, can the Minister explain why we should not act on our own?
Lord Williams of Mostyn: My Lords, I am happy to accept responsibility for most things, but not for the past 100 years, although sometimes it feels like it! This has nothing to do with the House of Commons. I have notified another place as a matter of courtesy. The President of the Council, my right honourable friend Mr Cook, said that he is looking, with interest, to see the experience that we are able to offer in our own committee. It would be a Lords committee, not a Joint Committee. I repeat, I hope without impoliteness, that the matter has nothing to do with the House of Commons.
Lord Hardy of Wath: My Lords, does my noble and learned friend accept that the case for policy consideration appears to be serious? I illustrate that by saying that when the Joint Committee considered an order requiring taxi cabs to display notices saying that

1123
guide dogs were permitted, Parliament was in fact requiring that the dogs should read the notice. However. I was out of order in making the point.
Lord Williams of Mostyn: My Lords, I believe that we have agreed that the committee will draw attention to those instruments that merit further debate or consideration. That appears to be an ample rubric.
Lord Boston of Faversham: My Lords, does the noble and learned Lord realise that he does not need to accept responsibility for what happened more than 100 years ago because the noble Lord, Lord Skelmersdale, said "at the end of the last century", which was only a couple of years ago?
Lord Williams of Mostyn: My Lords, I am so sorry. I misunderstood what the noble Lord said. Time goes very quickly when one is having fun.
Lord Strathclyde: My Lords, the reason for setting up such a committee, which I believe is desirable, is that over the past few years we have seen a massive increase in the amount of delegated legislation going through both Houses and increasingly an unwillingness of Ministers to put down details of legislation on the face of primary legislation. What is the noble and learned Lord doing, in his position in the Cabinet, to use all of his powers of persuasion, which are legion, in order to discourage the practice of increased secondary legislation coming through Parliament?
Lord Williams of Mostyn: My Lords, we need to approach this problem in at least two ways. First, we need to look at pre-legislative scrutiny, which your Lordships have warmly applauded and on which we are now starting to deliver. Secondly, we need a committee of experience and expertise to draw attention to instruments that merit further debate. I look forward to the experience that we can derive from the work of the committee which can perhaps be offered to the Commons.
Baroness Williams of Crosby: My Lords, we on these Benches welcome the proposed committee and believe that it would be an effective instrument to deal with people's concern about regulation and secondary legislation being used in place of primary legislation. We hope that another place will listen to the experience of this House on the matter.
Lord Williams of Mostyn: My Lords, I am grateful for that generous observation. During the next year or two, we may consider whether we can improve our procedures. If so, I am sure that lessons will be learnt.
Lord Carter: My Lords, if the Select Committee is to consider those instruments that require particular attention, does that not imply that a large number of
1124
instruments are not contentious arid could be dealt with separately—perhaps off the Floor of the House, in a Grand Committee of some form?
Lord Williams of Mostyn: My Lords, I am sure that that is right. For example, I think that we all remember the shellfish orders with consuming passion. My noble friend, named as Peer of the Year—which was extremely well deserved—
Noble Lords: Hear, hear.
Lord Williams of Mostyn: My Lords, what my noble friend said echoed what the noble Lord, Lord Strathclyde, suggested the other day, which was that we might take some orders off the Floor or the House—the noble Lord suggested the Moses Dom. That appears to me to be a useful step for the Liaison Committee to consider.

Fire Service
2.51 p.m.
Lord Renton of Mount Harry Lord Renton of Mount Harry asked Her Majesty's Government:
What arrangements they have in mind to improve methods for setting the pay of British firefighters.
Lord Bassam of Brighton: My Lords, the Government are committed to modernising the Fire Service along the lines of Sir George Bain's independent review. We intend to restore a power for the Government to direct pay and conditions in the Fire Service. That means that we shall be able to impose a settlement if it proves necessary to do so. We hope that it will not. The Government will respond in full to the Bain review in a White Paper later this year.
Lord Renton of Mount Harry: My Lords, I thank the noble Lord for that Answer. As we have all done, I studied carefully the Statement made yesterday by the Deputy Prime Minister, Mr Prescott. I welcome Mr Prescott's Pauline conversion. Although it has taken a long time, his decision to seek emergency powers to settle the pay for the Fire Brigades Union is right.
However, will not the legislative process take at least some weeks? Given that the Armed Forces are now stretched to the limit, would it not be sensible, if a negotiated settlement has not been reached within a week or two, to consider seeking a court injunction for emergency powers to stop the strike?
Lord Bassam of Brighton: My Lords, the issue of court injunctions is entirely a matter for the Attorney-General. It must be right that he gives that matter independent consideration. We welcome the noble Lord's support for the measures announced yesterday. Although it is true that they will take some weeks to introduce, we intend to ensure that they are in place in

1125
weeks rather than months, so that they can have some bearing on the outcome of this most unfortunate and regrettable dispute.
Baroness Hamwee: My Lords, the Minister will know that the employers supported the Deputy Prime Minister's Statement yesterday. That is not surprising, given that the negotiation has been tripartite and confusing. Is the Minister aware that the Bain review recommends,
"that the Local Government Association … take steps to develop the contribution of elected members on fire authorities and to ensure that they give stronger leadership in the future"?
Does not the Deputy Prime Minister's Statement indicate a centralising approach? How does it square with Sir George Bain's recommendation?
Lord Bassam of Brighton: My Lords, there might be some merit in what the noble Baroness said if it were not that Sir Jeremy Beecham, who is after all the chairman of the Local Government Association, gave the Deputy Prime Minister's announcement yesterday his fulsome support. That speaks volumes about where the employers are: they are at one with the Government in seeking to resolve matters and entirely agree with the steps that the Government announced yesterday.
Lord Lawson of Blaby: My Lords, if the Government are fully committed to a solution along the lines of the Bain report, would they not be well advised to suggest to the local authority employers that they give notice that if there are any further strikes, all the striking firemen will be dismissed and offered immediate re-employment individually on Bain terms, and that any subsequent vacancies will be filled by recruitment? After all, President Reagan did something similar more than 20 years ago with the air traffic controllers in the United States and it worked extremely successfully.
Lord Bassam of Brighton: My Lords, that is an interesting notion, but I doubt that it bears much relation to the reality of the situation. Obviously we must protect fundamental rights; the right to withdraw labour is one of those rights. On the other hand, we have a duty to ensure that public safety is paramount and protected. That is why the Deputy Prime Minister yesterday announced what I consider to be a balanced and measured set of proposals to try to bring a conclusion to this unfortunate and regrettable dispute.
Lord Marsh: My Lords, does the Minister agree that there is a long history of politicians and governments getting involved in trade union negotiations? Although the Government must pick up the tab, trade union negotiations are best conducted between employers and employees, who must live with each other at the end of the day.
Lord Bassam of Brighton: My Lords, that is what the Deputy Prime Minister has been seeking to encourage
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during the past few months. He has prosecuted his case extremely well. It is absolutely right that employers and unions must sit round a table to hammer things out. The measures announced yesterday are an encouragement to that process.
Lord Dixon: My Lords, will my noble friend not take too much notice of advice from those on the Opposition Benches on dealing with trade union matters? I served for many hours with the noble Lord, Lord Renton of Mount Harry. during the passage of the Trade Union Act 1984. His claim to fame then was as chairman of the Association of Conservative Trade Unionists. I suggest that my noble friend takes more notice of the point made yesterday by the noble Lord, Lord McNally, about the official solicitor. Many of us know what happens when governments try to impose conditions on striking workers.
Lord Bassam of Brighton: My Lords, my noble friend speaks volumes about how we ought to try to proceed in these matters: with care and caution to ensure that the unions and employers work together to conclude effective collective solutions. That is the best way forward; that is what we are trying to encourage; the Deputy Prime Minister wants matters to proceed in that manner.
Baroness O'Cathain: My Lords—
Lord Campbell of Alloway: My Lords—
Lord Williams of Mostyn: My Lords, the noble Baroness has given way at least twice. I think that it is her turn.
Baroness O'Cathain: My Lords, is there really a sense of urgency in trying to sort this lot out? The Deputy Prime Minister's Statement yesterday gave one the feeling that action was being taken, but in his Answer the Minister said that a White Paper considering the Bain proposals would be issued later this year. The Bain proposals have been published for weeks now. Why have the Government not yet done something about them? There must be squads of people who could conduct the analysis and prepare a White Paper, which would make it much easier to set the pay of British firefighters in future.
Lord Bassam of Brighton: My Lords, it is right that we try to hasten the conclusion of the discussions to resolve the pay dispute. The modernisation package is a longer-term issue and the proposals that will no doubt be made in the White Paper must take into account the finer detail of what was, after all, a comprehensive report. I have no doubt that that will happen, but we must concentrate our efforts on settling the pay dispute. As part of that, Bain, modernisation and the White Paper will be part of a whole package.
Lord Stoddart of Swindon: My Lords, has the Minister noted the reservations expressed by the

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general secretary elect of the Trades Union Congress, the general secretary of the Transport and General Workers Union and the general secretary of Unison? In the light of those reservations, do the Government plan to meet the TUC and other union officials who are concerned about yesterday's announcement?
Lord Bassam of Brighton: My Lords, I understand that there are regular liaison meetings about all those issues. No doubt they will have a bearing on the outcome. Of course we take careful note of what is said in public debate on the matter, but the Government remain resolute in seeking to ensure a proper solution to the tire dispute. We urge the FBU to get round the table with the employers, return to the Advisory, Conciliation and Arbitration Service and ensure that proper negotiations are conducted so that this unfortunate dispute can be drawn to a conclusion.
Lord Campbell of Alloway: My Lords, does the Minister agree that time is of the essence and that if disruption continues the Government will have no option but to bring forward emergency legislation? If not, does the noble Lord agree that arbitration independent of the Government would be a far more acceptable means of resolution than any imposed by decree of the Government?
Lord Bassam of Brighton: My Lords, we have an adequate arbitration system through ACAS and the Government are happy to rely on that. It has worked effectively for many years. It certainly worked effectively when the party of which the noble Lord is a member was in government. We shall rely on that process and hope that the FBU and the employers will use it to ensure a satisfactory outcome to the current dispute.

Zimbabwe: Travel Sanctions
3.1 p.m.
Lord Blaker Lord Blaker asked Her Majesty's Government:
What their policy is regarding the renewal of European Union travel sanctions against Mr Mugabe and his senior colleagues.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, our position on renewing sanctions on the Mugabe regime, including the EU travel ban, remains unchanged. Our objective is to see the current EU common position on sanctions—including the travel ban on 79 members of Zanu PF—rolled-over when it expires in February. This will require a unanimous decision by all 15 EU member states. The matter was discussed at a meeting of EU Foreign Ministers in Brussels on 27th January, but this proved Inconclusive. Further discussions are due to take place tomorrow, 30th January.
Lord Blaker: My Lords, I agree with that reply so far as it goes. I do not propose to take time discussing the invitation to visit Paris issued by Mr Chirac to Mr
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Mugabe as I wish to discuss a more important question—that is, the renewal of sanctions. Is the Minister aware that the sanctions imposed by New Zealand on Zimbabwe and Mr Mugabe apply to considerably more people than there are on the European Union list? They apply not only to members of Mr Mugabe's party but to his business supporters. Will the Minister arrange to instruct the United Kingdom representative at tomorrow's meeting to propose that sanctions should be extended to some of the financial backers of Mr Mugabe who were named in the report approved by the United Nations Security Council only last Friday—including, for example, Mr John Bredenkamp and his family? Mr Bredenkamp was deeply involved in plundering the Congo in collaboration with Mr Mugabe arid is one of his principal financial supporters.
Baroness Symons of Vernham Dean: My Lords, I can assure the noble Lord, Lord Blaker, that our instructions to our permanent representative, Sir Nigel Sheinwald, who will be at tomorrow's meeting, will be to press for the most robust package of sanctions and the longest period of roll-over it is possible to negotiate. However, I stress that we must proceed on the basis of a unanimous agreement. The noble Lord will be aware that this matter will be pursued under the common foreign and security policy. That means that all countries will have a veto—and that can sometimes cut two ways.
Lord Avebury: My Lords, will the Minister draw the attention of' our European Union partners—the French, in particular—to the Inter-Parliamentary Union council resolution of 27th September 2002 in which serious allegations were made about the torture of six opposition Members of Parliament? Will she also draw the attention of our partners to the demand made by Mr Morgan Tsvangirai for a judicial investigation into the torture of another MP, Mr Job Sikhala? In view of these allegations, does not the Minister consider that any members of the regime who set foot on European soil should be interviewed with a view to their prosecution under the relevant legislation giving effect to the Convention Against Torture, which has been signed by all European states?
Baroness Symons of Vernham Dean: My Lords, I assure the noble Lord. Lord Avebury, that Her Majesty's Government brings all these matters to the attention of our partners in the European Union and many are supportive of our stance. The noble Lord cited the IPU report of 27th September. I would cite the statement of the Secretary-General of the United Nations on 14th January this year. There is ample evidence of the terrible effect that the Mugabe regime is having on a country which was once the breadbasket of the region but which is now riddled with famine and difficulties of the kind described by the noble Lord. We lose no opportunity to make this clear to our partners, and we very much hope that they will listen.
Lord Howell of Guildford: My Lords, does the Minister recall that on Monday the noble and learned

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Lord the Attorney-General enunciated the principle that heads of state while serving were immune from criminal jurisdiction? Does or does not that apply to those who have been heads of legitimate governments which are now regarded by Her Majesty's Government as illegitimate? Will that apply to Robert Mugabe when he comes to Paris, or will we seek to extradite him?
Baroness Symons of Vernham Dean: My Lords, as I understand it, it does not apply to former heads of state. If I can be any more forthcoming for the noble Lord on that issue, I shall place a letter in the Library of the House.
Lord Elton: My Lords, can the noble Baroness explain what is the difficulty in bringing this matter to a conclusion in Europe? Is the view of the other European countries more forgiving than ours? Why are they not prepared to roll-over the sanctions almost automatically?
Baroness Symons of Vernham Dean: My Lords, the noble Lord comes to the heart of the question. There is no problem with the roll-over of most of the sanctions—the arms embargo, the assets freeze and a number of other matters— but there is an issue in regard to the travel ban. As they do every other year, the French wish to hold a summit meeting and to invite the heads of state of all the African countries to meet them in Paris. That meeting is due to take place in a period shortly after the sanctions end. The idea the French are pursuing is that there should be a window of opportunity to allow them to do that. There would therefore be a gap in the travel ban of some three to four days. Her Majesty's Government are disappointed that the French take that view.
Lord Stoddart of Swindon: My Lords, in regard to the answer given to the question of the noble Lord, Lord Howell, about the prosecution of heads of state who have left power, did not the House make a declaration on a similar matter when it decided that General Pinochet could be prosecuted? Indeed, he was placed under house arrest in this country. Is that not the case? Am I wrong?
Baroness Symons of Vernham Dean: My Lords, yes. That is why I answered the noble Lord, Lord Howell, in the way that I did.

Service Personnel: Life Insurance
3.8 p.m.
Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
What proposals they have to protect those regular and reservist service personnel who are now being refused life insurance cover.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My Lords, the Ministry of Defence makes provision under the Armed Forces Pension Scheme and the equivalent reserves scheme for personnel injured or killed in service. Those wanting additional protection can obtain cover from commercial providers through independent financial advisers or insurance brokers. The MoD also facilitates voluntary, commercially-run schemes—PAX, Forces Safeguard and RPAX—for all personnel. These are still available at present. Nevertheless, the Government are currently examining the options should the necessary cover become unavailable at a reasonable premium.
Baroness Gardner of Parkes: My Lords, I thank the noble Lord for that Answer. I declare an interest as an honorary vice-president of the Royal British Legion women's section. Is the Minister aware of the great anxiety this is causing? People who are willing to risk their lives are concerned that those they leave behind may suddenly find themselves homeless because mortgages cannot be met. All kinds of other financial difficulties could arise. As I understand it, the pension scheme to which the Minister refers will give only the equivalent of one year's earnings, whereas many private companies schemes give four times that. Is he also aware that, contrary to what he has said about the Safeguard scheme, I am told that it is not available at present and that it has never covered reservists?
Lord Bach: My Lords, the RPAX scheme, which has been in operation for some time, covers reservists. Of course there are concerns about this, and the Government want to do their best to alleviate those concerns. That is why I want to make it clear that personnel who are already insured under the Forces Safeguard and the RPAX schemes, as well as being insured under ordinary commercial schemes, will be covered. That is the crucial message that we need to get across this afternoon.
Baroness Trumpington: My Lords, is the Minister aware of the recent letter in The Times from a consultant surgeon who is also a reservist, worrying about the fact that there is no cover, from his point of view? Is the Minister worried that there will be a shortage of medical personnel if it is true that they will not be covered without a limit of finality on their service abroad?
Lord Bach: My Lords, I am aware of the letter that appeared in The Times yesterday. I have already accepted that there is concern about the issue. I can only repeat that the Armed Forces Pension Scheme and the equivalent reserves scheme are available and that those wanting additional protection can still get it from commercial providers. Those who already have additional protection are covered.
Lord Redesdale: My Lords, will there be an increase in the death-in-service benefit from one and a half times to four times, and when could we expect such provision to be made? If there is an excess premium for

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reservists who are caught out if they are called up unexpectedly, will the Government meet those excess premiums?
Lord Bach: My Lords, on the first part of the noble Lord's question, it is a little too simple to suggest that the death-in-service benefit under the existing Armed Forces Pension Scheme is as limited as the noble Lord suggests. There is a one-off lump sum payment with a subsequent pension. For death on active service, both are tax free and are calculated according to factors such as number of dependants and length of service. We are looking at how we can improve this package, but it will take some time before we can complete our consideration and do so.
Lord Vivian: My Lords, what guidance is given on life and disability insurance matters when reservists report to mobilisation centres? What guidance is given to regular personnel when enlisting into the Armed Forces? Will the Minister comment on the fact that, as I understand it, Safeguard has said that it is excluding war cover with effect from 7th February?
Lord Bach: My Lords, as far as Safeguard is concerned, I believe that a meeting is to be held tomorrow to see whether what appeared in The Times yesterday will happen. The noble Lord asks what we do to inform personnel, especially reservists, about insurance matters when they join up. Some providers—and I think this is the basis of his question—have withdrawn schemes for new members under order to deploy. Existing policyholders are on unchanged risk until their policy expires. Internal communications briefings steer individuals to the services' insurance and investment advisory panel. We assist service personnel in getting independent financial advice by publishing a list of 35 independent financial advisers and brokers who have knowledge of the services.
Baroness Strange: My Lords, will the Minister confirm that on the death of any reservist in this conflict, which we hope will not be, his widow would count as a war widow?
Lord Bach: My Lords, I can confirm that because, as I said in answer to the original Question, the equivalent attributable reserves scheme—the equivalent of the Armed Forces Pension Scheme, which the noble Baroness, Lady Strange, knows very well— will apply for personnel injured or killed in service.
Baroness Gardner of Parkes: My Lords, is the Minister aware that in another place, the Secretary of State for Defence said that these insurance companies were still offering cover, whereas the Minister seems to have admitted today that a number of well known insurers are not? Is not the great dividing line between those who already have policies, whom we know are covered, and those who are now applying? Is he willing to admit that people are being refused policies now?
Lord Bach: My Lords, there is no difference between what I am saying and what my right honourable friend
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the Secretary of State said on Monday in another place. He quoted directly from the website press release of the Association of British Insurers. It produced a press release on Saturday 25th January, which, of course, was the date on which this story appeared for the first time in The Times. He quoted the press release as saying that,
"existing life insurance policies held by members of the armed forces would be unaffected by any call-up or deployment in the Gulf".
It also said:
"Existing life insurance policies will continue in force if the policyholder is on standby or deployed on active service".
In addition, the press release said that,
"armed forces personnel are encouraged to recognise the long-term nature of life insurance at all times and not just at times of more active service".

Business
3.17 p.m.
Lord Grocott: My Lords, with the leave of the House, between the two debates today, my noble friend Lord Sainsbury of Turville will repeat a Statement on auditing and accounting.

Standing Orders (Public Business)
Lord Williams of Mostyn: My Lords, I beg to move the Motion standing in my name on the Order Paper. The first amendment implements a recommendation to which your Lordships agreed on 15th January and the second and third correct drafting errors.
Moved, That the Standing Orders relating to public business be amended as follows:
Standing Order 42(Business of which notice is not necessary)
In paragraph (3), after the first sentence insert "On Thursdays Bills may also be presented after Starred Questions in the afternoon."
Standing Order 73 (Affirmative Instruments)
In paragraph (1)(a) leave out "Schedule 1" and insert "the Schedule".
Standing Order 74 (Joint Committee on Statutory Instruments)
In paragraph (1) leave out "Schedule 1" and insert "the Schedule". —(Lord Williams of Mostyn.)
On Question, Motion agreed to.

Design in Public Services
3.18 p.m.
Lord Freyberg Lord Freyberg rose to call attention to the role of design in improving public services; and to move for Papers.
The noble Lord said: My Lords, the aim of this debate is to look at the way design is used in the public sector and to examine its potential to create a lasting

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impact, both financially and practically. I should like to speak about the design of goods and services in the public sector and about the systems needed to deliver them. Coupled together, these can offer the tools to transform our public services and provide ways of saving money in the long term.
Every year, central and local government spend billions of pounds on the design of goods and services in the public sector, from building hospitals to providing furniture for schools, new housing, street lighting, prisons, transport, waste disposal, and so on. However, there is evidence that the standard of design in these areas is still far from impressive, and new initiatives to improve it seem to be making very little impact.
On the face of it, the solution seems to be simple: first, to make greater use of the best design talent available; and, secondly, to realise that proper investment in good design at the outset will save money and improve lives in the long term—that is, long-term value over short-term expediency. However, at present, a host of good intentions and theoretical practical measures, such as the insistence that design principles be applied, have been set out in numerous government reports and ministerial speeches, but these are not in any way matched by results. What can the Government do that they are not doing already?
Discussion with those in the design world and at the Design Council in particular, of which I am a member (along with co-chair of the Associated Parliamentary Group for Design & Innovation), has led me to conclude that there would be considerable benefits in the public sector reassessing its design practices; that is, the point at which the design of products and processes is considered. In other words, what needs to change is the very culture responsible for procuring new buildings and services.
I would therefore like to alert the Government and those responsible for public sector spending to ways of thinking about and applying design principles that are most likely to produce good results. Over the past few years, the case for good design in government and public services has been keenly fought and, by and large, accepted. However, this message does not seem to be getting through to those who are actually responsible for commissioning and managing public buildings and services. For example, the recent Audit Commission report, which looks at schools built by private finance initiative (PEI) and those funded by traditional public finance, shows that the quality of all buildings was unsatisfactory. The faults referred to are fundamental ones; for instance, the quality of the building, layout, lights, classroom size, heating and acoustics as well as an absence of design innovation. This is a terrific waste of opportunity.
This and other evidence that I could point to suggests that despite many initiatives the overall standard of design in building schools has not improved. A similar picture holds for recurrent spending on product design. The Department for Education and Skills spent £1 billion a year—13 per
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cent of total expenditure—on learning tools and resources. Yet currently few of Britain's best designers are involved and purchasing decisions are not linked to the broader understanding of desired educational outcomes.
There is clear evidence that while those taking decisions to acquire new services often recognise the importance of good design, they lack the expertise or contacts. Last year, the Commission for Architecture and the Built Environment (CABE) discovered that only 23 per cent of local authorities make use of design expertise when assessing planning or investment applications. Schemes which teach design awareness to the decision-makers and local authorities are crucial if we want to raise the standards and quality of our public services. That applies also to government and their departments.
The question today is how we use design to achieve practical and worthwhile changes in our public services, turning aspirational government policy into real beneficial and long-lasting improvements for the use of those services.
The connection to design in this context might not seem obvious, but design, of course, is not just about objects and the aesthetics of form. It is my belief that well designed systems for delivering public services are a crucial part of providing these desired improvements. Design considerations should be brought into play at the earliest possible opportunity—technical systems and organisational structures need themselves to be well designed.
I am not advocating endless surveys into the requirements for each public service. Instead, targeted consultation at the point of use should be carried out by people who understand the function of design as a tool to deliver public services. The design industry has developed a range of fast and effective techniques—borrowed from the social sciences—to understand and interpret the needs of users. Those techniques are simple to apply and go beyond focus groups or market research in what they can deliver.
The Government can encourage the learning process: more specifically, their various departments must be prepared to engage in dialogue with each other and with frontline agencies if more than one is involved in a particular scheme. These user-focused techniques developed by the design industry can encourage cross-departmental thinking and provide easy-to-use tools for the new practice.
Nor should we shy away from addressing first principles where necessary. Many of our public service institutions are still built to Victorian models and need to be radically rethought. The Do Tank's report on the 21st century prison looks at the problem of sprawling gaols built in the 19th century and is concerned that many of our new ones are simply modern and outdated versions of the originals. It proposes smaller "learning prisons", specifically designed to enable resources to be switched from security to rehabilitation.
Integral to the project is not only a building design, but the design of a new learning regime—again, developed by working with prisoners and prison

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officers. I am no expert on penal reform, but I can and do applaud the report's attempt to use design in such a practical and radical way.
There is clear evidence of the all-round benefits when the design is right. A King's Fund document published in 2002 highlighted the example of Newham Hospital in south-east London where levels of staff morale increased by 56 per cent following the redesign of the hospital. When asked whether they felt valued, 78 per cent of staff said, "Yes", after the redesign compared to 22 per cent three years previously. In other words, when one makes an investment in high-quality fabric and environment, one is making an investment in the people who work and pass through it as well. There is no short cut to that.
Up until now, the effective use of design within public services has lagged behind industry where the benefits have already been clearly demonstrated, a fact which has been borne out repeatedly by Design Council research. There have been a few notable exceptions, such as the redesign of the Royal Mail's change of address service. As a result, the public's completion of forms was transformed from 87 per cent incorrect to 90 per cent correct and entirely eliminated the need for staff training.
An example of good practice in the education field can be seen in the work of the government-funded charity. School Works, which links the design of secondary school buildings to the educational agenda —a rare occurrence. At Kingsdale in south London— a school classed as failing at the start of the project—a new curriculum, management structure and pastoral care system were designed along with a new building.
The momentum created by the whole process led to a renewed belief in the school's future. Pupils gaining GCSE grades A to C increased 20 per cent in the first academic year. In a recent report for the Department for Education and Skills, PricewaterhouseCoopers documented the strategic use of a design process in turning the school around. However, it should be emphasised that such practice is at present the exception rather than the norm.
The School Works scheme aims to provide practical solutions by combining expert knowledge with the expertise of those who work and live in the educational institution. Such an approach may sound like common sense, but it is an advance on the way design solutions have been achieved in the past, when they were often imposed without full consultation with those who would be using them.
Another problem is that many of the best smaller design companies are put off applying for the public sector design contracts by the long-winded bureaucratic hoops that they have to jump through. Public accountability is important, but it should be recognised that there is a downside. Where possible, we need to speed up the system and harness all the creative talents that we can.
This is of pressing importance because the Government have embarked on the most ambitious programme of public spending investment and reform
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since the 1940s. To give an example of the scale, in 2003–04, £24 billion will be spent on public services in addition to what is already invested and in 2004–05 that will increase to £40 billion.
I was recently introduced to the term "smart spending", which I suggest is an apt one for the use of design in public services. Investment in good design is a form of smart spending: it need not cost more and it can save money in the medium to long term. Improving the quality of design also offers the potential to improve the outcome of the services offered.
Finally, I would like to encourage all government departments to see design as important and relevant to them and not just the preserve of the DTI. Design of effective systems as well as of goods and services can bring lasting benefits to the users of those services and can save money in the long term. More importantly, we need to ensure that the people at the forefront of delivering those services, of building or managing them, know the benefits of using good design solutions because without their participation all of those good intentions will be wasted.
My Lords, I beg to move for Papers.
3.29 p.m.
Lord Pendry: My Lords, the whole House is indebted to the noble Lord, Lord Freyberg, for initiating the debate and for the way in which he introduced it. The power of design in reshaping the underlying systems and businesses process is very important. Without a doubt, high quality public services are vital to the nation's prosperity and well-being.
Britain is rightly regarded as a world leader in design. Successful businesses are the ones that invest in design to create more innovative and valued products and services, but in the public services that is not the case, and we must ask why.
The Government clearly recognise the importance of high quality public services to the nation's prosperity. Much effort is being put into modernising our public services, and the Government have embarked upon the most ambitious programme of investment in public services for more than 50 years. By 2004, public spending on education alone will buy one-third more than in 1997 terms. Modernisation requires investment, which is something that our public services were starved of in the 1980s and 1990s and—to be honest—well before that. That amounts to years of neglect, and it will take a long time before that can be turned round.
Money alone, however, will not deliver the reform of public services, or the transformation necessary. We all know that some of the worst public services have been among the most costly. People who work in public services systems do not go to work because they want to do a bad job—quite the reverse. Often they work in systems and structures that inevitably deliver poor outcomes. How frustrating and demotivating it

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must be for workers to work in a system capable only of delivering poor outcomes, however good they are as individuals.
For the Government's investment to deliver improvements, we must take a completely fresh look at the systems and structures that underpin the delivery of those services. We need to break out of the traditional ways of doing things, which will only continue to deliver the same outcomes and ultimately fail the needs of the people who depend on those services. Design skills and design thinking have a central role to play in transforming our public services. Design offers creative innovation and a new perspective on persistent problems. If public services are to be valued by the public, they must be redesigned around the needs of the users—the pupils, parents, patients and passengers.
The traditional model of a public service can be caricatured as being provider led, inward looking and hidebound by rules and structures and hierarchy. We need to break out from that model; services need to be redesigned so that the user is at the centre of everything that is done. Targets, inspection and league tables all have a part to play in increasing the accountability of public services, but over-inspection and the imposition of arbitrary targets can actually stifle creativity and innovation.
Fundamentally, improvement comes from within public organisations, and is not something that is done to it from outside. The people who work in the systems and processes will be those who deliver that improvement. We need to build the capacity of our public services to transform themselves and to achieve improvement continually. We need to give those who work in public services the right tools and techniques to redesign systems and structures to deliver high quality services for their customers.
I have some good examples from public services in my area. For example, local pension officers from the Department for Work and Pensions work alongside local council officers to provide a one-stop-shop for pensioners to improve ease of access and take up of benefits and pensions. That is so important when at least a quarter of pensioners do not take up their benefit entitlement.
I can also cite a successful partnership between police and local councils delivering enterprising solutions for designing out crime from local neighbourhoods, such an "alley gating" schemes. That involves the gating off of common alleyways in terraced housing areas, reclaiming the space for local people and cutting burglary by one-fifth compared with other areas.
My local council in Tameside, with its staff, recently redesigned the way in which they process council tax benefit claims. By involving the staff, applying the tools and techniques of design and taking a completely fresh and unfettered look at the services, they reduced the error rate from 80 per cent—the sector's norm—to less than 1 per cent. They also reduced the time taken to process claims from 10 days to one and, at the same time, slashed unit costs.
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Finally, we must not have the idea that redesigning services is a one-off process. It cannot be seen that way. The search for improvement in public services must be never ending. The use of design as a critical tool must be an integral process.
3.35 p.m.
Lord Wakeham: My Lords, I add my congratulations to the noble Lord, Lord Freyberg, for initiating this debate, as it is an important subject.
I was the Minister responsible for the Design Council about 20 years ago, and I remember those days well. The situation then was that good design was always spoken of as important but never given enough importance in practice. It was somewhat similar to a publishing and purchasing policy for which I also had some responsibility around that time. As an ex-Treasury Minister, I accept that some of the blame remained with the Treasury, but that is not the whole story.
We produce many of the best designers in the world, but at that time far too many of them went overseas to work. The constant complaint to me from leading designers was that too many of the top people had financial skills but knew absolutely nothing about design. There was a lot of truth in that accusation, but in my view the fault is not on both sides. Part of my purpose today is to hear from the Minister how we have moved on in the past 20 years.
For every business manager who knew nothing about design, there was a designer who knew nothing about finance. They simply did not speak the same language. A key of good design is that it is sometimes wise not to accept the lowest price on offer. Many times the lowest price is the right choice, but the cheapest is not always the best. Taking something well designed or building up a long-term relationship with a supplier may be more expensive in the short run but cheaper in the long run. Those who know about design need to persuade those who make decisions to take a wider view.
I detect that we may have made some progress over the past 20 years and we still have a long way to go, but the Design Council can take a lot of credit. However, that organisation's website shows that too much of its material is designed to appeal to those who are already converted and accept the basic concepts of good design. That is important for the Design Council, which must remain at the forefront of progress, but there is another more basic job to do. The Design Council must get across to a large majority of the slightly cynical mass of managers that good design is a vital part of any investment appraisal.
Put simply, we need good designers but we also need financial managers who are better aware of the importance of good design. My experience taught me that one cannot take everything that they say at face value. In my day there were, and I suspect there still are, too many managers who publicly called for design and were strong advocates of it but who did not in practice, when making decisions, live up to their word.

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I have not come to this debate to criticise or to complain but to find out how, in this important area, the messages that I was trying to get across 20 years ago have made progress. I look forward to hearing what the Minister has to say.
3.39 p.m.
Lord Rodgers of Quarry Bank: My Lords, I greatly enjoyed the speech made by the noble Lord, Lord Freyberg, in both its spirit and substance. I wait with keen anticipation what the noble Lord, Lord Foster of Thames Bank, will say in his maiden speech. He is a shining star of architecture world-wide. We look forward to his speech.
Almost 50 years ago I walked into the newly-opened Design Centre in Haymarket and it was a revelation. It was an outcome of the Festival of Britain. I was greatly impressed by the products on show. My wife and I were newly-married and we looked for our essential domestic utensils. We bought them from the shops when they were available. We still have some of those cups, saucers, knives and forks that we saw in the Design Centre.
As names are so easily forgotten, I pay tribute to Gordon Russell and Paul Reilly who brought energy and flair to the Council of Industrial Design and to the nation. It made a permanent impact on those times. Together with the Consumers' Association and Which? magazine, they led a consumer revolution in what was becoming an affluent society. At least, that was my lay view because I had not been involved in design or manufacturing.
Then, almost 20 years ago, the voters of Stockton-on-Tees lost their enthusiasm for me and, in due course, in 1987 I became director-general of the Royal Institute of British Architects. So for the first time I began to reflect on the design of buildings, including buildings serving the public.
As a Minister I had not thought much about the role of architecture in the public estate. I was involved in the planning of a new headquarters building for the Ministry of Defence, including its location, its cost and the transfer of staff, but I never raised the question of design, nor did my civil servants offer any such advice.
Good public sector clients usually appointed good architects and good architects achieved good public architecture. But new, countervailing factors in the late 1980s and early 1990s began to damage the role of high quality design. The first was the growth of design and build (usually a misnomer) and, secondly, compulsory competitive tendering (CCT). The aim was to reduce costs by diminishing the primary role of the architect as designer, thus putting price before value. Later, a third factor emerged with the arrival of the private finance initiative (PFI) which would further diminish the role of the architect.
Then, rather to my surprise, soon after 1997 the new government decided that design could lead to better public buildings. With the Prime Minister's personal support, the Commission for Architecture and the Built Environment was set up and Sir Stuart Lipton, a hard-headed property developer, was appointed.
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Despite some scepticism and little initial enthusiasm on the part of most Whitehall departments, it has since vigorously campaigned for high quality design. Already CABE has helped to change the mood of all those deeply concerned about the environment.
That is all good news but I have three principal concerns. First, it is probable that the PFI will diminish the design factor in the complicated equation of construction. As the noble Lord, Lord Freyberg, mentioned, the recent Audit Commission report has said that early PFI schools are not significantly better. All the pressures, including the Government's own PFI ideology, point the wrong way.
Secondly, despite good intentions, guidance on improving standards of design in the procurement of public buildings falls short of instructions. I hope that operational guidance on the procurement of public buildings will be acted upon and that performance will be monitored.
Thirdly—this is wholly relevant to this very welcome debate—I hope that CABE and the architectural dimension in the public sector will be cross-party. It is right for the Government to claim credit for these developments. I welcome the Prime Minister's award for better public buildings. But if we are to have better public buildings from one generation to another, there must be a sustained campaign that will endure from one government to another.
3.45 p.m.
Lord Borrie: My Lords, it is a pleasure to take part in a debate initiated by the noble Lord, Lord Freyberg, who, as most of us know, is a skilled practitioner in sculpture. Sculpture is to my mind one of the most attractive and satisfying of the visual arts because of its three dimensional aspect.
I believe that design, whether it be design of objects or furniture or design of the internal and external layout of buildings of all kinds, or, indeed, the design of whole districts and cities, can enhance immeasurably our ability to work and function effectively and, indeed, the whole environment in which we live. To my mind, good design is not just a joy in itself.
Design is as old as civilisation itself. In creating today's public buildings and their layout and content, I believe that design is as vital to the purposes and functions of those buildings as it was in the creation of a Greek temple or a Roman palazzo. The Design Council, of which the noble Lord, Lord Freyberg, is a distinguished member, has published a useful briefing paper for this debate. Reference has already been made, both by the noble Lord, Lord Freyberg, and by my noble friend Lord Pendry, to the neatly alliterative phrase of the Prime Minister when he referred to the importance of design in satisfying users whether they be patients, parents, pupils or passengers. I believe that he also referred to victims of crime. I should like to mention passengers and victims of crime.
Foreign visitors to London comment frequently most favourably on the design of our taxis and, indeed, of our buses. Not long ago I was about to take my wife

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home after an orthopaedic operation and asked the hospital to order us a taxi, knowing that the back of a taxi is splendidly designed for ample luggage and, indeed, for putting one's legs straight out without having to bend them. We were somewhat dismayed when we realised that the hospital had an arrangement with a minicab firm. A small saloon arrived that was completely useless for the purposes in hand because of the small amount of room in the back.
The design of our buses has gradually been improved and adapted over the years, especially for driver-only operation, although they could do with further change to facilitate the carriage of disabled passengers. There is always a great outcry whenever that is mentioned because of the expense that might be involved. But sometimes it is important to put in order of preference comfort and convenience on the one hand and expense on the other. I think in particular of how the design of some of our train carriages has, far from improving, declined. I am, unfortunately for myself, a frequent traveller on Thames Trains. They have become typically poor in terms of design for luggage space, seating and lavatories. The Design Council states in its briefing paper:
"Britain has a wealth of expertise in transport design".
Indeed, but, sadly, good design aimed at comfort and convenience of passengers often seems forced into second place against the demands of economy.
Economy class seating in aircraft has been a subject of debate many times in this House and I need not worry your Lordships about it. Noble Lords will well know that for long-haul flights in particular the space between rows has been limited and reduced. I fear that it is not only a matter of inconvenience but also perhaps of risk to one's health. I believe that passengers are a good deal less impressed by those changes—they are often referred to as design improvements—in the liveries and logos of transport companies, as the noble Baroness, Lady Thatcher, once graphically demonstrated in relation to British Airways, than by changes that can be brought about to enhance comfort.
Because of the time factor, I shall not go into the matter of the victims of crime. I believe that noble Lords would agree in general terms that, whether it be the layout of council estates, referred to by my noble friend, or car parks, although a great deal has been done, even more could be done to ensure greater safety for the possible victims of thieves and drug dealers.
3.51 p.m.
Lord Foster of Thames Bank: My Lords, in rising for the first time in your Lordships' House, I am greatly indebted to my noble friend Lord Freyberg for initiating this vitally important debate on something which is so close to my heart.
A debate about design is, for me, a debate about values because I sincerely believe that there is a moral imperative for good design; to do it well and responsibly. Design is not an add-on, it is not a cosmetic, it is not window-dressing. It is a core,
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primary activity because anything in any part of the world that we inhabit has to be made. But before it is made it has to be designed. There are no exceptions whether it is on the scale of a city, the infrastructure of its buildings, the equipment in them, the infrastructure of streets and public spaces, pavements, the paving slabs, the door handles and even the invisible digital electronic world—it all has to be designed. It is a human act because design is a response to the needs of people, whether they are spiritual or material. The quality of that design affects the quality of all of our lives. As Winston Churchill said,
"we shape our buildings and thereafter they shape us".
He could be talking about infrastructure because the infrastructure of public services is arguably more important than any individual building.
There are many myths about good design or perhaps they are really excuses for bad design. One is that it costs more and that we cannot afford it. Believe me, quality is an attitude of mind. It is not how much one spends of precious resources; it is how wisely one spends them. Resources are money. obviously; time is a very precious resource, but above all, there is creative energy. That is the determining factor, which is more important than money.
Given the power of creative energy, as a nation we are fortunate to have an abundance of talent, which is sought after around the world. Perhaps the most important point of all is that the challenge is to harness that creative energy and bring it close to the decision-making process. Only in that way can we raise standards and genuinely encourage innovation.
Apart from the ability of good design to lift our spirits, to offer delight and pleasure, enlightened design delivers economic benefits. We know that in a hospital a room with a view reduces recovery time. We know that the workplace is a good and desirable place to go as it can provide a better lifestyle, which increases productivity. We know that an airport with views, natural light and sunlight makes travel less stressful but vitally it dramatically reduces energy consumption.
We know that our buildings can be powered by clean, renewable sources of energy. We are not dependent on depleting fossil fuels. The German Reichstag parliament is a working example of that philosophy. But design is not a static one-off event; it is evolutionary. As the components of our environment erode around us over time design initiatives are required to upgrade them and eventually, as they become obsolete, they are required to replace others with more adequate and up to date facilities. In that sense it is evolutionary.
Designers continually face new challenges, some caused by irresponsible past strategies, the threat of global warming and population growth. They affect the balance of an island nation as much as a mega-city on the Pacific Rim. The challenges are the same, only the scale varies.
I passionately believe that we have to build more densely in urban areas and—a vital coupling—when we do that we have to improve the standard of urban

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living. It may mean building taller, but not always. It certainly means producing more housing of higher quality and at lower cost. I believe passionately that history is on the side of the density argument.
Buildings consume half the energy produced in an industrialised society; transport and industry, the infrastructure, the remainder. Given the link between energy production, pollution and global warming, the threat to the fragile planet's eco-system, there are strong arguments for reducing the energy demands in building and infrastructure.
The quest for a greener, more ecologically responsible design is not about fashion, but about survival. Designers can advocate with passion, but in the end they are only as good as those who lead; those who have the courage and the political will to set standards and raise goals. In that spirit it has been a privilege to participate in this constructive and, I believe, far-reaching debate. I thank your Lordships for your kind attention in listening to me for the first time.
3.57 p.m.
Lord Hunt of Chesterton: My Lords, it is a great pleasure to follow the noble Lord, Lord Foster of Thames Bank, and to say how honoured we all are to have such a distinguished architect and designer in our midst. Although no one is predicting that we shall follow the Germans with a new parliamentary building as part of our reforms, we could be sure that the design would be in good hands with the noble Lords, Lord Foster, Lord Rogers of Riverside, and perhaps with the noble Lord, Lord Freyburg, contributing some modern sculpture.
The noble Lord, Lord Foster, was educated at Burnage Grammar School, Manchester University School of Architecture and Yale University School of Architecture. His career has been in private practice. He has pioneered new structures, collaborating with Buckminster Fuller. Noble Lords will have seen the gherkin rising in the City and Stansted and will have some idea of their origins.
He has set up a world famous practice. His buildings have enlivened our cities and helped the United Kingdom to develop a more design conscious society. He has received many awards, prizes and fellowships from Europe and the United States, from academies and universities. As a professor at University College London I am pleased to say that he has been a visiting professor at Bartlett School of Architecture there. His books describe beautifully his marvellous buildings. He even has time for his recreations of flying, ski-ing and running.
I congratulate the noble Lord, Lord Freyberg, on initiating this debate on such an important topic. I also thank the Design Council, which has produced a useful package of information for it. My own experience in this area is that I ran a rather high profile government agency, the Meteorological Office, where we had many discussions on design and presentation. The chief executive's view was seldom listened to. That is because we listened to designers.
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As with any government agency there were the more mundane aspects; for example, rather dilapidated buildings in remote Scottish islands, which are also part of the public service domain. The important point that I wish to make is that there have been very considerable improvements in the culture and application of design in the public service since the 1970s. As a cynic, one might say that the advertising world has had a more beneficial influence on government than it has on politics, in that respect. Certainly, the world of government is more design conscious.
I should like to focus a few remarks on the importance of environmental design, which the noble Lord, Lord Foster, emphasised. Perhaps one of the most important features is that good design must be fundamental and not merely an afterthought. My noble friend Lord Rogers, who regrettably could not be here today, said that environmental design was not just a question of green lipstick, which is rather a vivid expression.
I shall give an example. An element of design in Britain that is a bit of a scandal where environment and design could come together is noise barriers. One sees the most remarkable noise barriers in France and Germany. They are extremely important to communities as we increase our roads, and the efforts in this country are absolutely woeful.
As the noble Lord, Lord Foster, mentioned, buildings are extremely important. Design and science must be brought together, so that designers and people involved in building regulations work together. At a conference in London recently, it was realised that the architecture profession was perhaps not as much at the forefront of pushing the agenda forward as it should be.
Design does not relate only to hard matter; it also affects landscapes. My wife is a landscape architect, so I hear a lot about that. Perhaps one of the triumphs of design is the good design now being applied to restoring historic landscapes, with the help of the Millennium Fund. It leads to tremendous tourism. The most widely advertised posters on the Underground may be those that concern Hampton Court and its new design. Landscape design is also extremely important on housing estates. For example, by investing in better landscape design, Peterborough was able to reduce vandalism considerably. Other noble Lords have commented about design being important in reducing waste.
Government managers or chief executives of government agencies will be under considerable pressure from the Treasury or their government departments to reduce their budgets, or to be as efficient as possible. Therefore, it is very important that there be as much encouragement as possible from the centre for managers to consider good design. As other noble Lords have said, the cheapest design may not be the best. It is important that agencies and departments should use a business case with a design element in their decision making.

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The framework documents of agencies should include the need to use good design, both in terms of their own activities and those of their contractors. I hope that the Minister will explain how the best practice is being developed to ensure those vital needs.
4.3 p.m.
Lord Kirkham: My Lords, I should like to add my thanks to the noble Lord, Lord Freyberg, for initiating the debate, and to congratulate the noble Lord, Lord Foster, on a very interesting maiden speech, which lifted my spirits.
The debate could be more accurately headed, "How to improve the quality of life for all in the United Kingdom"—and do it easily and effectively. Public services are at the very heart of our quality of life in the United Kingdom. We have no alternative but to rely on public services to a greater or lesser degree throughout our lives. Hospitals, the police service and education all impact massively on the way in which we live. The quality and relevance of the service that we receive can determine how we prosper, how we live and how we die.
Although investment and focus clearly are important in helping to make our public services fit for and able to support our 21st-century economy, money and attention are not enough in a world of forever-changing attitudes, values and standards, and even faster-changing technology. Public services need to do more to keep abreast of changing user requirements and new demands.
Business has long recognised that fact. It has recognised the colossal contribution that good design and innovation can make, and the massive impact that they can have on communication and the morale, performance and retention of staff. All that is important to public services. Design also has an impact on product quality and service and, of course, on profitability. Public services should use design in the same way.
The most successful example is the Department of Health, which is currently working with the Design Council on a project to "design out" medical accidents. Other government departments are working with the Design Council to develop new perspectives on old recurring problems. They clearly understand the direct read-across from good design to user satisfaction, but that is not widespread. Why not? What is the down side? It is certainly not the cost, because good and effective design pays for itself, over and again.
If a better designed hospital environment helps to shorten a patient's stay, if it helps patients to retain their dignity and to recover more quickly, and if it frees beds, how much value is there in that? If our criminal population and crime are lowered by reducing the opportunity for theft through designing "crime-resistant" products, what is that worth to us? If simply the clever design of a bus shelter is not only more comfortable and better looking, but can be directly linked to lower crime levels, as it has been in South
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Yorkshire where I live, that must make design a bargain-basement investment. Design works in schools, too, where well designed lighting, heating, acoustics and furniture have been proved to yield better results.
We have heard already that there is no shortage of design ideas. We in the UK are the largest design workshop in the world, with almost 4,000 design consultancies that employ more than 67,000 people. In fact, last year the British design industry had export earnings of more than £1.4 billion. We lead the world in so many areas of design and have always had a spirit of invention and good ideas, from Harry Beck's London Tube map, which was designed in 1931 and still shows us the way home, to the bioform bra, the Dyson vacuum cleaner and the Millennium Bridge in Gateshead. We can choose from thousands of world-famous projects. British design successes are legend, but not in the public services. If our public services are to have any chance of meeting our growing needs and demands, the implementation of good design is not simply desirable but absolutely essential.
We need actively to encourage more dialogue and closer collaboration between the policy-makers, the manufacturers and the design industry, and we need to do it now. The catalyst to do that already exists in a long-established agency that makes things happen now through design initiatives in both industry and public services. That agency—the Design Council—has been mentioned several times.
The Design Council is currently funded by a DTI grant to the tune of around £7 million per annum—not £70 million, but £7 million per annum. That is small change in a government context, and some might say miserly. With a wall of money descending on the public services at the moment, now is the time to invest in design. Procrastination is not a valid option. Let us involve the best in the design industry and invest creatively.
How we do that does not matter, but the Design Council would be a good, practical starting point. It is in a warm-start position and, if adequately funded, could massively accelerate its aim of helping to turn design ideas into actions. It could accelerate that change and move toward a better quality of life for all in the UK, and achieve that through public services that could be transformed beyond recognition through and by design.
4.9 p.m.
Baroness Greengross: My Lords, I add my congratulations to the noble Lord, Lord Freyberg, on securing the debate. I say to the noble Lord, Lord Foster, how much I enjoyed his excellent and very inspiring maiden speech.
The debate is timely and important, given the Government's focus on public services and the intention of putting the patient, client, user and consumer at the centre of all provision. If those people are to be at the centre of all provision, an inclusive approach to design is essential. I want to put that in the context of this profound social revolution through which we are living: the age revolution.

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I was privileged to have been involved in a Design Council initiative called "Living Longer", involving Professor Roger Coleman at the Royal College of Art and the charity that I chair, the ILC-UK. We looked at design in the new context that we face. I was also involved in another initiative with the Royal Society of Arts involving an international competition for postgraduate students.
Many public services are no longer appropriate, given the change in the population that we are going through. The same is true of housing and consumer and household products. More older and many more disabled people are living alone and are keen to maintain their independence and, above all, their autonomy. They want to live, work, shop and enjoy their leisure in a safe and secure environment that is tailored to their needs and which adapts to their needs as they go through life and age.
It is the combination of the ageing population that we are experiencing with rapid technological and consequential social change that is the big issue. It is imperative to include and not exclude through design. In addition, the Disability Discrimination Act and related legislation gives rights to people who are discriminated against by bad design. They can and will take the offenders to court. That will also apply in the workplace when anti-age-discrimination legislation is introduced. There is a carrot and a stick for providers—and "providers" includes government. There is a need to develop products and services that work for us all, throughout our lives, and do not present obstacles to social participation. Those that do so will succeed and those that do not will fail. That is especially true for public services and in particular for housing, transport, education, health and caring services and leisure. Those public services can and must be at the leading edge of design.
With regard to ageing, what Peter Laslet described as the secular shift in ageing is recent. As little as 50 years ago the probability of surviving to enjoy an extended period after work was so low as not to be worth investing in. Now everyone worries that they have invested too little, as does the state, which 50 years ago embarked on a pension scheme that involved not investment but only income and expenditure. Now we know that that is becoming unsustainable. The big thing to realise is that the shift from young to old societies has never happened before in the history of mankind. This is uncharted territory and we are all learning as we go along.
Instead of thinking about retirement we must think of continuing to work into our seventies. That has enormous implications for the type and extent of our public services, and not just their design in physical terms. It also means that the people involved must be involved in the actual design of what they use and need. They must participate; that includes older people and those with disabilities. They must have the goods and services that give them that possibility and ensure their continuing independence. They must be available as part of any mainstream consumer offers. If people
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are to work longer, they will also have more money to spend, and the producers of goods and services are beginning to realise that.
What can we do? We must encourage the adoption of inclusive design thinking and practice. People in the design profession have been working on those ideas for some years now, but inclusivity is rarely asked for in design briefs. That must change, and measures must be taken to encourage industry to change its practices in that regard and to "mainstream" inclusive design.
The British Standards Institution has decided to introduce a BS in the 7000 series on inclusive design management. That standard is now in the drafting stage and should be completed for publication during the course of this year. That is important because it will encourage industry to engage with those issues and, in tandem with the DDA, it will expose those that do not take reasonable steps to ensure that the design needs of older people and those with disabilities are taken into account.
I shall add a few examples to the many that have so far been given. We must have a "life course" approach to design and flexible homes that adapt to us as we go through life. We might want semi-independence for our teenage children but also a granny flat; it is not impossible to design homes in that way. Leisure centres and parks should cater for all ages and the judicious use of street lighting for safe and secure living has been mentioned. Glass must be used and the design of bus stations and railway stations should be considered. Schools could be very adventurous because with interactive learning age becomes irrelevant and we can have learning centres that cater for everyone—teenagers and older. Interactive learning is only one part of an holistic approach to design, which can transform people's lives throughout their lives and make age in fact irrelevant.
4.16 p.m.
Lord Gavron: My Lords, I add my congratulations to the noble Lord, Lord Freyberg, and offer him my gratitude. He talked in a very erudite manner about the change in culture required in our attitudes to design. I also congratulate the noble Lord, Lord Foster. it is almost impossible to discuss design in this country without quoting the noble Lord, but seeing him sitting in the Chamber rather inhibits my doing so. His was a most accomplished and remarkable speech.
The planning of our splendid new Royal Opera House building took more than 20 years. Several times during that period we seemed to be ready to build but when we got our quotations the price had gone up so much since the previous time that we had to stop again and raise more money. Eventually we realised it was now or never. There was still a funding gap, but we had to go ahead. We called in that brilliantly creative property developer, Sir Stuart Lipton. described by the noble Lord, Lord Rogers, as hard-headed. I agree. Sir Stuart took one look at our plans. He took one look and said, "Cut out the lowest two levels". We had been going down 60 feet. The bottom 30 feet would have cost us much more than all the other space in the

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building. It also involved the risk of further entanglement with London Underground and with various hitherto unknown archaeological sites—even at 30 feet we found a Saxon village—and we would have endangered our 1858 foundations. So we took his advice. To make up for the lost basements, we had to use some office space that we had hoped to let. However, the overall financial saving pretty well closed our funding gap. Our project had been saved, not by a designer, but by an expert briefer of designers.
When I recently visited one of our renowned teaching hospitals for a health check, I stopped briefly at the main signboard. An elderly woman was staring at it in a bemused way. "What does that mean?", she said pointing at a sign saying "Renal Medicine". I told her. "And that?" she asked of "Podiatrics". "And that?" she asked of "Haematology". I just about knew what they were. "These signs aren't for us", she said. "They're for the doctors and nurses. If they were for us they would be in proper English; you know: 'Kidneys', `Feet' and `Blood'". I agreed. "What's that one?", she asked. She was looking at "Colo-rectal". I pointed at the relevant part of my anatomy. "That's me", she said, and began to march off but she stopped and spoke again. She said, "It should have said, `Bums'". I believe that our designers of hospital signage should probably take their briefing from her.
Coming from a background in printing and publishing, I feel that I should mention the importance of typography and graphic design in our daily lives. As the noble Lord, Lord Foster, said, everything has to be designed: every book and every sheet of paper. The design affects not just the aesthetics but also the function of the printed product. Noble Lords may not realise it, but the speed at which one can read, absorb and remember information depends largely on its design. There is incontrovertible evidence that a well-designed textbook can be effectively read at almost twice the speed of a badly designed textbook. We all know about the pain of reading text that some designer has decided should be printed in small white type on a black background that comes off on your hands.
The design of the many printed forms and booklets issued by public sector organisations is variable. All express clearly the needs of the issuing body. The bad ones go no further. Good design takes the customer into account. There is great variation in the public's sensory capacities and relevant knowledge. Technical terms and small print, for example, can make form filling a nightmare for some people, especially older people.
Like many of my noble friends, I recently had the opportunity to discuss with someone in the Audit Commission its much talked about report on PFI schools. It is obvious that private contractors are interested in maximising their profit on each contract. In one case, a contractor, to save money, put a tin roof on an assembly hall. When it rained, not a word could be heard. That is not the fault of the Government, nor of the contractors, nor even of the architect. The specification was at fault, and the briefer who drew it up.
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In conclusion I return to my main theme: we must use designers for everything we make. In the UK we produce great designers, as we have heard. According to the Design Council they earned huge fees from abroad last year. Good design gives pleasure and is highly cost effective. But in order to achieve good design we need good briefing of designers. The people who brief designers in the public sector have a great effect on our daily lives. They need to be numerate, clear thinking, decisive, and have long term vision. They need to behave as if spending their own money. I commend to the Minister that they need to be fully and properly trained for their job.
4.22 p.m.
Baroness Flather: My Lords, I thank the noble Lord, Lord Freyberg, for initiating this interesting debate. Design surrounds us all the time. We value good design when we see it, but we do not stop to think about it. I thank the noble Lord for making us think consciously about a subject that we do not normally think about. It was a privilege to hear the noble Lord, Lord Foster of Thames Bank. I hope noble Lords will agree that we would like to hear more from him from time to time.
We have heard much about good design, but I begin with the impact of bad design. In the 1970s I became a member of the board of visitors of Holloway prison, which at that time was newly constructed. If one needed an example of impractical bad design, it was that prison. It was decided not to have bars on the women's prison, but the windows were so wide that a slim young woman could slip out. In the end they had to put bars on narrow windows which made it even darker and more unpleasant inside. One could not see very far down the corridor or what was going on around the corner. There were places where things could be thrown onto little roofs. Your Lordships would not have liked to see what used to land on those bits of roof.
We have to realise how destructive and expensive bad design is. It is important to start right and provide for people's needs. Good design, however, uplifts the spirit. That point has not yet been mentioned. When we go to see the Great Court at the British Museum or Tate Modern, the spirit lifts. Good design gives us much more than a space to use; it does something for our spirit.
I have a few points to make, which may be because I am a woman. Forgive me if my glasses keep falling off; they are not mine. It would be today that I would forget my glasses. Good lighting is important. How often lighting is relegated to being something that will happen by itself. In this country, where we have four months of almost non-stop darkness, good lighting should be at the top of everyone's list of considerations.
I turn to practicality and the people who are to use public spaces. The noble Lord, Lord Borrie, mentioned patients, victims and so on. If they are to use a space, are they ever consulted? Do we consult patients when we design hospitals? Do we consult

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anyone else when we design facilities for those people? It is extremely important that there should be an opportunity to consult users. A working environment can succeed only if the people who are to use it are at least asked for their views about it.
With your Lordships' indulgence perhaps I may place a slight gloss on the debate: good design is in itself a public service. I have been involved for five years in the construction of a memorial on Constitution Hill. It is a long overdue memorial to the men from the Indian subcontinent, Africa and the West Indies who volunteered to serve with the British forces in two world wars. Somehow they have been forgotten. Nearly 5 million served in the two world wars.
The memorial sits on the top of Constitution Hill as one enters from Hyde Park Corner. The architect Liam O'Connor described it as follows:
"Four sculpted piers in solid stone, surmounted by bronze urns form a cenotaph, a square, a public space, sacred to the sacrifice made by a great many people.
The space between the piers forms a perfect square … framing views towards the Wellington Arch to the west and a domed pavilion to the north. The pavilion forms the heart of the composition; a belvedere in the Park flanked by two plinths, each a monolith carved with campaigns from the two World Wars. Cast bronze railings with a peacock theme form balconies from which the four main piers may be viewed across the sand-ride…
Bronze lamp standards have been designed with tops to match the pavilion dome and the lotus leaf capitals re-appear as supports for the urns and the pavilion dome finial. The oak leaf section of the lamp standards re-appears as a wreath moulding to the urn bases, a reference to Lutyens' Whitehall Cenotaph".
The reference to Lutyens extends beyond the Whitehall Cenotaph, because coming from New Delhi as I do, I see echoes of Lutyens throughout the memorial. It completes Aston Webb's original plan for a gateway to that side of the park. It is a serene and beautiful memorial, with beautiful Portland stone. The construction is exquisite. I think that that is a public service. The good design of that memorial helps us to enjoy the past even more.
4.30 p.m.
Lord Chan: My Lords, I also congratulate the noble Lord, Lord Freyberg, on securing a debate on a topic that has enormous practical implications for the lives of users and staff of our health services. It was a particular pleasure for me to listen to the maiden speech of the noble Lord, Lord Foster of Thames Bank, and I look forward to hearing more.
I shall use examples from my professional experience to demonstrate the importance of good design for healthcare. One of the essentials for the care of new-born babies—especially those who are ill—is a clean, warm environment with electricity and a constant supply of clean water. The facility should be close to the delivery room with access to mothers. Those two facilities should therefore be on the ground floor of a hospital. But the environment of the delivery room where the baby is born is so different from the unit for the care of newly born babies.
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Keeping a new-born baby care unit clean and free of infection requires, among other measures, that all adults entering it—including mothers and staff—wash their hands. Only when their hands are clean should they handle babies. That is difficult to achieve because most people do not wash their hands regularly.
A clean supply of water 24 hours a day, seven days a week, 52 weeks a year is a commodity that we take for granted. Most infections in a new-born care unit are water-borne because the drainage pipes of washbasins trap and breed germs, so they need to be sterilised regularly. Here is an opportunity for better design. Taps with long arms are necessary if we do not want to contaminate our washed hands when turning off the water supply.
Washing our hands with water regularly, before touching any baby in the care unit, will give us sore hands within two days. That is why today we wash our hands thoroughly with water and soap on entering the unit and then use antiseptic lotion to clean our hands before handling every baby thereafter.
Simple things can be difficult I o achieve, particularly when a team of healthcare professionals is looking after a sick baby who will have visits from parents. Design and the proper use of facilities is a prerequisite for helping people who need clinical healthcare. The user of the service must be the one whose well-being determines our design of buildings and equipment. Today, we would not approve of any health service facility that does not have access for disabled patients or visitors in wheelchairs. But reception desks may still be above the eye level of people in wheelchairs.
Primary care trust boards are now conscious that small premises with a doctor working single-handed are no longer adequate for healthcare in the 21st century. A health centre should have facilities for services other than doctors, nurses and receptionists so that patients need not go to hospital for ECG tracings of their heart, blood tests and X-rays.
Automatic doors are common at the entrances of hospitals, but they are inefficient in keeping out the cold when patients insist on smoking just outside the doors.
Design for the safety of patients must be a high priority. For many years I worked in a unit for newborn babies that was on the fifth floor of the maternity building when delivery rooms were on the ground floor. I was informed that in 1966 the architects of that maternity building in Liverpool had not heard of the need for a new-born baby unit and had added one on the top floor rather than draw up new plans. But in Birkenhead we have the best-designed bus station in Europe. Staff working in the baby unit had to have regular practice in moving incubators and cots down five floors in case of fire. The unit was closed only two years ago.
Design for the safety of patients and their families requires attention to detail. Let us consider the example of the medicine bottle with a child-resistant cover containing small pills for an older person. How often have we struggled to get the child-proof top off

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the bottle, or heard grandparents asking a young grandchild to help remove the top in order to reach the tablets for their blood pressure or heart failure? There are effective bottle tops, which people with arthritis in their hands can open that are genuinely resistant to the child under five, but they are expensive.
Other design improvements can be life-saving, such as needles attached to syringes that do not need to be removed by hand, thereby avoiding needle-stick injuries and preventing the infection of healthcare professionals who take blood from patients with hepatitis or HIV.
Another improvement needed must surely be the colour coding of medical solutions for injection used for anaesthesia, treatment of severe blood-poisoning and cancers. Some injectable drugs given directly into the blood will be lethal if injected into the spinal fluid. Such drugs should be colour coded so that doctors will be warned, and patients protected from medical accidents and death.
Finally, I shall quote from the Design Council, which states:
"Good design creates products, systems and environments that can help improve the outcomes of healthcare, providing more effective and safer services".
Designing for patient safety must be the highest priority. Therefore, I welcome the news that the Department of Health is working with the Design Council to investigate the potential for a design-led approach to reducing the opportunity for medical error as part of its on-going "Building a safer NHS" patient safety strategy.
I look forward to the Minister's response to the debate.
4.36 p.m.
Lord Chorley: My Lords, I, too, congratulate my noble friend on the masterly way in which he has addressed a complex and extremely broad subject.
In the short time that I have to speak, I want to touch, first, on the importance of teaching good design in schools and, more particularly, art colleges. I draw attention to the work of the Royal Society of Art and its student design awards scheme, which attracts more than 3,000 entries a year. The RSA increasingly sees its role as helping to set the agenda for design colleges by bringing in fresh new thinking. I find it rather refreshing that this ancient body, whose full title is the Royal Society for the Encouragement of Arts, Manufacturers and Commerce, should be so active in promoting new ideas.
The RSA drew attention to some worrying trends. The huge increase in student numbers has resulted in a dramatic change in student:staff ratios. That, in turn, has led to a loss in the quality of teaching. The RSA questions whether it can retain its pre-eminent position in design education. Sadly I do not have the time to mention its consequential observations.
I turn to buildings. About 10 years ago the Royal Fine Arts Commission published an admirable study called, What makes a good building?. Incidentally, the
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study was commissioned by the noble Lord, Lord Brooke of Sutton Mandeville, when he was the Culture Secretary. The final words of that excellent report are as follows:
"To achieve a good building requires a good brief, a good client and a good architect…It is not a simple matter, and requires great effort and passionate commitment".
I think that we had the passionate commitment from the noble Lord, Lord Foster, in his masterly maiden speech.
I want to talk about the brief and the client—the procurement process. My first point has already been made, but it is worth repeating that research both at home and abroad shows that investment in good design generates economic and social value. This is not a novel point among professionals, but decision-makers, such as the Treasury, often tend to forget it. If I have time, I may come back to that issue.
Sir Stuart Lipton, who has already been mentioned by a number of speakers, the chairman of the RFAC's successor body, the Commission for Architecture and the Building Environment—CABE—reminds us that the Government are now embarking on the most significant building programme since the 1960s. Therefore, the stakes have been upped and the procurement process becomes all important. In the same piece, where he spoke about the big spending ahead of us, Sir Stuart Lipton was fairly scathing about some of our new buildings.
I want to touch on one or two consequential issues. First—again, the point has already been made but I repeat it—how can we ensure good design in PFI contracts, or, to put it the other way round, how can we design the form of PFI contracts so that good design is ensured?
Secondly, how can the Treasury, for example, be made to understand that building economics on the basis of lifetime costs is far more efficient and better than the normal Treasury regime of the initial cash budget approach? Of course, the Treasury denies that. It says that we have manuals on how to proceed with such matters, but, when the chips are down, it is cash that matters.
Thirdly, how do we prevent what I call "design degradation", which usually comes about when endeavouring to economise on detailing or qualities of finish—for example, door knobs and so on—when budget problems arise during construction? I draw attention to the issue but have no time to go into it.
Fourthly, how can we encourage the participation of innovative small sub-contractors; for example, in relation to furniture and furnishings and so on? The red tape of the billing process can constitute a crippling overhead.
It is so easy to identify the problems and so difficult to find solutions. In brief, how do we train and educate our officials not only in the virtues of good design but in identifying, and distinguishing between, good and bad? I believe that the answer is to educate and train officials at—I emphasise—all levels.

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I must conclude. I should have liked to link building design to urban planning. But, again, the noble Lord, Lord Foster, took us down that path and spoke in his outstanding maiden speech far better and with far more authority than I could have done.
4.42 p.m.
Lord Rea: My Lords, when thinking of what to say in this debate, I looked in the Oxford English Dictionary and found that the word "design", simply as a noun, has eight definitions. Number five was,
"a crafty contrivance or hypocritical scheming".
I am afraid that for some design—or perhaps lack of design- —that definition may occasionally be apposite.
I was much helped in preparing these remarks by the recent short document published by the Commission on Architecture and the Built Environment, referred to by a number of noble Lords. On the very first page, the results of a MORI poll show that 81 per cent of the population are interested in how the built environment looks and feels. Even more people—85 per cent—agree that better quality buildings improve the quality of people's lives.
Those findings, which show such a high awareness among the general public, perhaps explain some of the other positive research findings in the report. One has been given by the noble Lord, Lord Freyberg. Another is a study by the University of Nottingham, which found that in a cardiology ward which had been fitted with improved lighting, better external views and other improvements, patients' blood pressure and pulse rates were significantly lower and post-operative stays came down from 11 to eight days.
My own medical practice moved into a newly built health centre in the mid-1970s. It was in advance of its time and had carefully thought-out plans to enhance joint working between doctors, nurses and other primary care team members. At the planning stage, there was much discussion between the staff who were going to use the building and the architect. However, due to cost-cutting during construction, the fabric of the building began to fail at an early stage so that now, 30 years later, it is having to be extensively rebuilt. That is an example of how skimping on building costs, despite a good conceptual design, can lead to greater expense in the long term.
On my way to my home in East Sussex, I often pass the remarkable development known as "BedZED"— the Beddington Zero Energy Development—in the borough of Sutton. This is a high-density housing project of around 100 homes. It is immediately arresting because of the brightly coloured wind-driven, heat-exchanging ventilators, which swivel on the roofs—a system rather similar to that used in Portcullis House.
There are many other novel features—many more than I can describe—including a small biofuel combined heat and power unit. Energy consumption in the dwellings is only 10 per cent of that in a comparable traditional dwelling. That 10 per cent of energy is produced on site. The project was developed by the Peabody Trust to the design of architect Bill
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Dunster who first tried out the design concepts when building his own house. It is a superb example of good design and environmental conservation, and the cost of building it was no greater than that of a conventional housing development.
Like other noble Lords, I want to refer briefly to the Audit Commission's report on PFI in schools. It shows that, of the 10 traditional and eight PFI schools studied by the Building Research Establishment, the PFI schools were, on average, worse in all five aspects of design quality used. However, to be fair, one PFI school was commended. Its quality may have been high because the head teacher was involved in the project negotiation from the start. It is a key feature of a successfully designed building that the eventual user, who may not be the commissioning agent, should be involved from the start.
The summary of the final chapter comments:
"There is a strong case for changing capital funding incentives to enable options other than the PFI to be pursued equally advantageously".
It was very audacious of the Audit Commission to give advice to the Treasury. But surely the main reason for using PFI in the first place was to shift the burden of raising capital from the public to the private sector and, thus, the debt incurred would not appear on the Government's balance sheet. But the debt is still there, of course, and it costs the public considerably more to service than a state-secured loan. In addition, as the report shows, the product that results may be less suitable, of inferior quality and have higher maintenance costs. All that is because of an inflexible Treasury rule not to increase visible public sector borrowing.
Good design may initially cost a little more in time and thought, although not necessarily in money. But the end result is more pleasing to the eye and more efficient, costs less to maintain and is kinder to the environment.
4.48 p.m.
Lord Brooke of Sutton Mandeville: My Lords, I, too, commend the noble Lord, Lord Freyberg. His family's ancestral courage is well known, but the personal imaginativeness of the subjects which he chooses to bring before your Lordships' House for debate deserves separate praise. He has also on this occasion given us the opportunity to hear the notable maiden speech of the noble Lord, Lord Foster of Thames Bank.
The noble Lord, Lord Freyberg, referred to 19th century prisons. There is a great continuity in our affairs. I mention the prison that Bentham built—the Millbank Penitentiary, where the Tate now stands. Not for nothing was he a utilitarian. Five prisoners were lodged in a group of cells but there were washing facilities for all of them from the start. Judge Tumim could not have approved more.
I declare an interest as a Senior Fellow of the Royal College of Art. My own speech will be idiosyncratic and telegraphic. My greatest luck in public life was to be the Minister to issue the guidance to the Lottery

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distributors that they should consider the architectural quality of the applications put before them. I thank the noble Lord, Lord Chorley, for his kind reference to another initiative in my time.
Others have quoted the Design Council report. In the spirit of the quotation given by the noble Lord, Lord Chorley, the observation in the report that the input of end users is most valuable at the start of the process, before the designs have been made and before the cost of change grows prohibitively high, was the story of how Japanese ship-building took over the world.
My father's philosophy tutor became the controller of metals during World War II. My father asked what his qualifications were and he said, "They are two. The first is that I am trained to ask questions—there are a large number of questions to ask in the context of metals. The second is that everyone else in metals has an emotional involvement in particular metals like wolfram and tungsten, but I have no emotional involvement in any of them". The creation of a post within Government with the oriental title "The Great Questioner" would do design a great favour.
I was lucky enough to attend a school founded in 1843 where, around a fine early 18th century house, the governors employed Blore, Street—I spent four years in a boarding house designed by Street who put concrete into a domestic building for the first time—Norman Shaw, Bodley, Comper, Aston Webb and WG Newton whose science laboratories were among the 50 first 20th century buildings to be listed. There was even a Waterhouse cricket pavilion, perhaps his only one, which the school has just restored to Waterhouse's original design. The child is father to the man and these things teach one what is possible.
One of the earliest boys to attend the school—in the school's first five years—was William Morris. It is interesting to note that what made the most impression on him during his school days was Avebury seven miles away. I remark that Avebury is essentially a public sector artefact.
From that school I also took away the recognition that people behave as a result of the way in which they are treated—whether it is listed blocks of council flats in Pimlico, the design of the legendary Thomas Telford School in Shropshire, with its academic success, or the new Jubilee Line stations that won the buildings of the year prize, competing, coincidentally, in the small change of today's debate, against a bus shelter in Scotland.
To draw on Waterhouse's cricket pavilion, I shall add to the list of design successes in the public services. I cite topically the English Cricket Board's use of the national curriculum, initially to design coursework and teaching aids based on cricket—arithmetic, geometry and physics come first to mind—but more subliminally to get school children interested in cricket as well.
Thirty-five years ago I called on the enlightened managing director of a public but smallish company in the Black Country who had just sent a new appointee
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to his board on a three-month sabbatical all around Europe to refresh himself and to look at recent capital investments by industrial companies. I ask the Minister how far that example is followed in the public sector today.
All of that said, we should not rely blindly on innovation. I saw the Nottinghamshire County Council's winning exhibit at the Milano Biennale in the winter of 1960 of a CLASP prefabricated school, and I flushed with national pride. But 25 years later I was a DES Minister when the CLASP schools all needed renewal at the same time.
Finally, a cheering coincidence. Like the noble Lord, Lord Rodgers of Quarry Bank, in 1961 I furnished my first office from the Design Council's design index. On that index was only one hatstand. I loyally and blindly bought it. The other day I was in Bond Street where the Fine Arts Society was selling a Charles Rennie Mackintosh hatstand for £35,000. In life, as in the Bible, the bread that one casts upon the waters comes back after many days.
4.53 p.m.
Baroness Warwick of Undercliffe: My Lords, I join other noble Lords in thanking the noble Lord, Lord Freyberg, for initiating the debate. It provides a timely opportunity to acknowledge the importance of design in all parts of public life. It also allows me to stress how important the higher education sector is for encouraging improvements in design in public services and more generally. I declare an interest as chief executive of Universities UK.
Too often the role of design is forgotten. Universities have a central role in research, teaching and knowledge transfer in all areas of design. Our universities have a reputation as world leaders in creativity and innovation. That is a reputation on which they are keen to build.
Design is just one of the 13 creative industries defined by the Department of Culture, Media and Sport. Others include architecture, music, performing arts, publishing and software and computer services. The creative industries in the UK are a massive success story. They generate revenues of some £112.5 billion, employ something like 1.3 million people, contribute around £10.3 billion in exports and account for over 5 percent of GDP.
The universities already make an enormous contribution to improving the delivery of public services. They train the professionals on whom we rely. We might ask what that has to do with design. In the context of this debate, it means not so much the doctors, lawyers and engineers of whom we normally think, but the designers and architects whose creative vision provides modern hospitals with specialist equipment, attractive living accommodation in towns and the countryside, bridges across our rivers, new transport systems and so on. Design is not a sideline in universities but a mainstream activity.
I shall take 2000–01 as an example. In that year there were well over 40,000 full-time undergraduates taking degrees in design studies. In addition, there were

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almost 6,000 more who were studying courses that included elements of design. That enormous number means that just over half of all creative arts students in our universities were studying design. It does not stop with undergraduates. Also in that year there were almost 3,000 postgraduate students studying design, either as their sole area of study or as a component.
I think that that makes it clear that without the work of our universities there could be little possibility of improved design in our public services. Like other noble Lords I pay tribute to the enormous amount of work carried out by the Design Council in promoting the excellence of UK design. I was delighted to see its recent publication, Meeting of Minds. It illustrates universities' role in design, innovation and research and highlights what business and public services gain from working with universities.
I am delighted to use an example which will be close to the heart of the noble Lord, Lord Foster. I compliment him on his enlightening and uplifting maiden speech. I give the example of the partnership between Primal Pictures and University College London. Supported by the DTI and the Medical Research Council, that partnership led to the development of the interactive hand, a 3D virtual model of a hand, a new and important teaching and reference aid for the medical profession.
Where else are universities having an impact? The noble Lord, Lord Wakeham, will be pleased with my second example, as it demonstrates the progress for which he was looking. Brunel University has been involved in a project to design millennium homes that will be designed with state-of-the-art technology to enable elderly people to live independently in their own homes for longer. I could quote many more examples.
Where do we go from here? How do we increase the skills base of our designers so that they can help to improve the delivery of public services? How can we ensure that more of the innovation in design in our universities can be put at the disposal of the public sector? First, I hope that the Government will remember the importance of design and the other creative industries as they consider how they implement last week's White Paper on higher education.
In that light, I welcome wholeheartedly the announcement that there will be an arts and humanities research council by 2005, although I have a concern about the possible direction of research funding in the White Paper. It is important that the council will be able to support emerging centres of excellence and not just those that are already world leaders. It is an area of growth and innovation and if we stop innovating it will soon die.
I also hope that the Government will continue to press for overt reference to arts and humanities in the design of important research initiatives in Europe, such as the future framework programmes and the European research area. Finally, I hope that the White Paper will result in additional funds to teach the next
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generation of designers in universities whose skills are vital to ensure that design plays its full role in the improvement of public services.
4.59 p.m.
Lord Bhatia: My Lords, I am grateful to the noble Lord, Lord Freyberg, for initiating this debate and I congratulate the noble Lord, Lord Foster, on an illuminating maiden speech.
I am no expert on design, but as a layman who is constantly the end-user of products and of public services, I want to share my views on good and had design. I should like to talk about our built environment. Whether housing or office space, it affects our quality of life and output. A badly designed house or office has an adverse effect on our behaviour, work and well-being. About 20 years ago, I was involved in the development of an institutional building in the centre of London, and have been fortunate to be able to build a small house for my family to the west of London. Perhaps I may share some of my experiences with your Lordships.
The institutional building required office space, conference and meeting facilities and a community hall. We had a sensitive owner and architect, both conscious of the need for a building that would cater for a large number of people using its facilities, taking into account movement from one space to another and providing sufficient lighting and good, well-designed furniture. Above all, the building would have to stand up to constant use by a large number of people.
Many believe that architects and builders are the decision-makers. My experience is that unless end-users are brought in from the beginning and their views sought at the planning stage, the whole development will be a disaster. We shared the architect's initial drawings with the end-users and, indeed, with the neighbours. We asked whether they liked the plant and facilities and whether they wanted anything added or deleted. Photomontages were produced to show how the new building would sit with the existing, neighbouring buildings.
Although that process was painful, time-consuming and expensive, it enabled us to develop a building that truly reflected the needs of end-users. My point is that good design of a building is not the sole domain of the architect, but needs involvement from the owner, user, builder, building material supplier and craftsmen We spent much time on the building materials and quality of workmanship. We searched for and found the most suitable materials and the best workmen to execute the final product.
A plaster ceiling in one part of the building won an award, but the most fascinating incident involved a teak wood bench designed and placed in one circulation area near a glass window. I found myself with the carpenter who had made the bench and the designer. They were arguing about who was the creator of that beautiful product. The bench, under the window with the sun pouring through, cast a beautiful shadow on the marble floor below. The bench was beautiful and so was the shadow. They finally settled

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on the compromise that the design was that of the designer but the shadow belonged to the carpenter. The pride in the design of that simple bench and of the craftsman who had built it with loving hands was evident.
I have been watching the people who use the building for a long time to see whether such a well-designed and built work space has any effect on the quality of their lives and output. Surprisingly, I constantly notice the huge change in the way people use the building and how a well-designed space affects the quality and output of their work. Working in a good environment automatically makes them conscious of the stationery they use, the publications they produce and the manner in which they organise social and other events. I often find them arguing about whether the kind of event they are planning will match the beautiful building in which they are located. Working out the most minute detail of such events reflects the detail of the way in which the building was built and is maintained. As a whole, I can say that that well-designed building raises standards of output and presentation and reflects on the people who use the building. There seems to be a direct relationship between a well-built environment and the quality of the work carried out in that space.
We all see the huge number of new office buildings being constructed in London. We hear about modern buildings of all shapes and sizes being built to attract and accommodate new businesses and investments. Some of those new developments are unattractive and unpleasant to look at. I do not understand why planning authorities allow such buildings to be constructed. I am often told that such structures are built to last for no more than 25 or 30 years because the land value is so large that the developers can knock the building down in 30 years and build yet another atrocity in its place to meet the demand for office space. So good design—external and internal—is sacrificed on the altar of more space for a short-term gain. Some of the new buildings in the City of London today bear witness to that phenomenon.
About 12 years ago, I was fortunate enough to build a small house for my family in the west of London. Being able to build something from the ground up in London had been only a dream. The best I had hoped for was converting an existing building to my needs—never the best solution. However, I found a piece of ground on which I could build something to suit my needs. I made contact with a local architect, who said, "Yes, I can design two nice bedrooms upstairs and a living/dining room space downstairs". It took me some time and effort to explain to him that I knew what I wanted. I sketched it for him on a piece of paper. He sat there looking at me in disbelief and said: "This is probably the first time I have met a client who knows what he wants". It was obvious to me that he had never asked what the client wanted.
We got on splendidly well thereafter until we started to talk about the internal finishing and designing. It soon became obvious to him that he was designing a house for a person from a different culture.
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Fortunately, a lucky event saved us both a lot of trouble. I happened to be travelling to India for some work and invited the architect to come with me to see some of my cultural heritage. We agreed that he was not to copy anything that he saw but was going there simply to understand his client's cultural background.
It was one of the best things that happened to him and to me. On our return, his words were, "I think that I understand you better". From thereon he completed the design of the house, which was reviewed in the Financial Times, House and Garden and a couple of other arts and architecture magazines. I have now lived in the house for the past 12 years. I consider it a well-designed space—of course, I would say so—in which I feel comfortable because it is built to meet my needs.
Lord Evans of Temple Guiting: My Lords, with all due respect, the noble Lord is well over his allocated five minutes.
5.7 p.m.
Lord McNally: My Lords, during one of the last warm days of autumn, I took my three children on the riverboat from Greenwich to Westminster. As is the custom, one of the boatmen offered us a running commentary as we went down the river. As we passed the headquarters of the Greater London Authority on our left, he said, "And there, on our left, is the new headquarters of the Greater London Authority. As you can see, it was designed by an under-employed window cleaner".
It was a great honour today to hear from that underemployed window cleaner. I thought that I would tell the noble Lord that story because he has had so much praise today that he should hear at least one word from his critics. It was a great pleasure to hear from the noble Lord, Lord Foster.
My other problem arises from hearing the noble Lord, Lord Freyberg. As noble Lords may know, I am one of the revolutionaries concerning reform of this House, and yet, whenever I get out the tumbrels for the hereditaries I think of the noble Lord, Lord Freyberg, and his contribution to this House. Yet again, he has made a major contribution by raising the issue of design, and we are all in his debt for that.
My interest in design originated with my membership of the Select Committee on Trade and Industry in another place, then as director-general of the British Retail Consortium in the mid-1980s, and then, since entering this House, becoming associated with the campaigning groups, Anti Copying in Design, known as ACID, and the Federation Against Copyright Theft. Much of their work is about protecting creativity in areas such as music, film and product design, but protecting a good idea and rewarding creativity applies equally to the power and direction of public service procurement.
I agree with the Prime Minister that Britain's future lies in creating a high-skill, high-tech, high value-added economy. But to create and sustain such an economy it is essential that ideas, innovation and

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design distinctiveness are protected and that the ideas of men and women of innovation are protected by law. That has been one of my interests in the House.
This excellent debate has drawn on the brief produced by the Design Council, which is among my papers. I shall not repeat many of the points that other noble Lords have referred to except to point out that, although it may be a brief for the converted, as the noble Lord, Lord Wakeham, said, it would be well worthy of wider distribution, if only to provide the proselytizers of good design with a good document from which to work.
I agree with the noble Lord, Lord Pendry, that design has great importance in ensuring that our public services are taken up. Too many buildings that house organisations which offer help seem to say not "We are here to help" but "Abandon hope all ye who enter here". It is true that good design can make a building appear friendly to people who may be a little cautious about becoming entangled in the bureaucracy of public service.
Throughout the debate various themes have been taken up—for example, how good design can help in the areas of health and education; in sport and leisure, an issue to which the noble Lord, Lord Pendry, referred; and in tourism. I agree that good signage can be a great help to tourism.
As to housing and housing design in the public sector, I can remember going round a council estate in Southwark with a local councillor 30 years ago, at the beginning of my political career, and him standing there with real pride, looking at the high rise flats and saying, "When I see those high rise flats I see socialism in action". It is worthwhile designers and planners reminding themselves that sometimes they can get it disastrously wrong. Those high rise flats, which were built with such good intentions and such worthy aims, created massive social problems that we have spent many of the past 20 or 30 years trying to repair. In addition to the many virtues advocated today, I urge on the designers and planners a tad of humility.
Another area where public service lateral thinking as regards design can help is in the design of built-in deterrents against theft. Too many products are too easy to steal. There have been exchanges in the House about mobile phones and how slow the companies were in building-in anti-theft devices. Before that, the manufacturers of cars were similarly accused.
There is a whole range of areas in the public service where positive thinking can be of help. We have all learnt something today. Having listened to the noble Lord, Lord Brooke, speak about his hat-stand, my noble friend Lord Rodgers will probably now rush home and take a close look at his Festival of Britain cups and spoons. I recommend that he takes them to the next edition of the "Antiques Roadshow" because he might have some worthwhile heirlooms on his hands.
Like my noble friend Lord Rodgers, I left another place by public demand. One of the nice things about it is that I occasionally get invited back to my old constituency. On 28th March I shall be going back to
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Stockport to address the Stockport Chamber of Commerce annual dinner and to present prizes at a design award ceremony. The competition, which was sponsored by the Stockport Chamber of Commerce, Stockport Council and the local community, was to redesign the centre of Stockport.
One of the lessons to come through the debate is that end users must be involved in design right from the beginning. I am going back to Stockport with a real sense of pleasure—although slightly fraudulently because it is my membership of the All-Party Design Group which gives me the qualities to present the prizes. As my colleagues know, I have not been renowned in the past for my Armani suits or design consciousness.
The arguments that provoked the competition in Stockport could be rehearsed elsewhere. Good design is a win-win situation. It is a win for the citizen as a taxpayer because, as speaker after speaker has emphasised, good design brings good value. It is a winner for the citizen as the consumer of these services because, again as other noble Lords have emphasised, good design helps the consumer. My Whip is wagging his finger but, if he reads the whip, he will see that I have got 10 minutes. Whips try to control everything.
Finally, as my 10 minutes come up, let me say that good design is good for UK plc. I work with one of the big trade associations—the electrical manufacturers— and it is still in Britain because of the quality of design. Whether in manufacturing or public services, the lesson to be learnt is that design is not the cherry on the cake but the real heart of success.
5.17 p.m.
Baroness Miller of Hendon: My Lords, I thank the noble Lord, Lord Freyberg, for several things; first for having introduced the debate; secondly, for himself having introduced it so well; thirdly, for having introduced a debate which has caused so many excellent, interesting and different speeches to be made; fourthly, as my noble friend Lord Brooke said, for giving us an opportunity publicly to congratulate the noble Lord, Lord Foster of Thames Bank, on his excellent maiden speech; and, fifthly, for his adventurous spirit in introducing a debate that is more about ideas than anything tangible. It is true that the ideas have to be linked with discipline and experience, as many noble Lords have said, but the whole concept is very interesting.
Like the noble Lord, Lord Rea, I looked up the definition of "design" in the dictionary. The definition I came up with is completely different from his—I did not notice that there were seven others—and states:
"The art of producing plans, sketches or concepts"—
I emphasise the word "concepts"—
"for the making or production of a building, machine, garment or other object".
I stress the word "concept" because the Design Council, of which the noble Lord, Lord Freyberg, is a member, in its brief for the debate, attaches the word "design" not only to physical objects such as I have described but to much more abstract matters.

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I hope that the noble Lord, Lord Freyberg, and the House will forgive me if I do not attempt to deal with the philosophical concepts of design—other noble Lords have spoken to that issue. It will be easier for me if I speak to the more tangible purposes and the need for good, better physical design.
My personal approach to the tangible nature of design is best expressed by the well-known quotation, to which I am glad no one else has referred today because I do not want to feel that I am repeating other noble Lords, from the American poet, Ralph Waldo Emerson, which is generally summarised as:
"If a man build a better mousetrap…the world will beat a path to his door".
One of my own experiences of the effect of better design was an advertisement, which many noble Lords may remember, from 25 years ago when a company introducing tea used a very elegant-looking teapot. I do not know how much tea the company sold but it was said at the time that thousands of the teapots practically walked off the shelves. I still have one that I use today.
"Design" is not simply about building a better, better-looking or more efficient mousetrap. It is about finding what is sometimes described as a gap in the market, discovering an unfulfilled need and devising the means of filling it. It was so interesting to hear different people's experiences. The noble Baroness, Lady Greengross, talked about having to design things differently for the older person. Like the noble Lord, Lord Chan, I cannot open that wretched thing for pills that is supposed to be safe for children. Everything has had to change considerably. So discovering an unfulfilled need and devising the means of filling it is very interesting and worth while.
I remember my first experience of using a mobile phone—it was during an election in 1984. It was a great big heavy thing; you had to carry around heavy batteries because the thing never lasted long before it needed charging up again. I did not think that it was much use, but today, mobile phones are light and tiny. The only thing you need is good eyesight so that you can see the numbers. However, you can do all sorts of things such as sending text messages and photographs. I have just learnt to do that, which is why I mentioned it—I would not have done so otherwise.
A new world-wide industry, of vast economic significance, has developed because of the improved design of the equipment and the technology which, within a generation or so, will make the public phone booth as obsolete as the gas lamp which, in turn, disappeared as a result of the introduction of the better designed, more efficient and less labour-intensive electric lamp standard.
It is clear that design is not limited to making objects better; it is also about bringing into existence more efficient and functional objects. Perhaps this is what the Design Council means when it talks about producing environments for people to work in that are more pleasant or promote more efficient operations—or, preferably, both.
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Britain has long been a leader in design in every aspect of invention or in the delivery of services. The Moscow underground may be something of great beauty, but the London Underground map is a classic of design that has stood the test of decades. It has survived the introduction of several additional subway lines and is a model of clarity for locals and foreigners who need to find their way around. In fact, as my noble friend Lord Kirkham mentioned, that is especially so when we compare it with the maps of the Paris Metro or the New York subway. I do not want to be rude to them, but they resemble plates of spaghetti.
The London Underground map is an outstanding case of design improving public service. It also shows that good design can be timeless. In my former business, I used a machine for filling envelopes with forms and literature which is still used to this day. I was amazed to find that the machine that I used was designed in 1906. Apart from adjusting the use of simple knobs rather than complicated nuts and screws it was, in effect, exactly the same. Similarly, the qwerty keyboard, on which I typed my notes today, has served English-speaking typists throughout the world for almost 100 years.
It is beyond argument that well designed schools and classrooms are just as essential for encouraging learning and good teaching as well designed text books, while old-fashioned, decrepit classrooms encourage slovenly habits among the pupils.
Like the noble Lord, Lord Gavron, I am moving on rather quickly, as time is passing and much of what I was going to say has been said.
In a series of searching Written Questions in another place last summer and autumn, the honourable Member for Stourbridge elicited the information that although the Department for Education and Skills had one of the ministerial design champions, it had not sponsored a single project—at least, not as at 26th February 2002.
By contrast, it is a totally different story at the Department of Health. Research has come up with the fairly obvious conclusion, which many noble Lords have mentioned today, that medical treatment is better and recovery quicker in a pleasant, well designed hospital than in one that resembles a Victorian workhouse.
The noble Lord, Lord Hunt of Kings Heath, is the ministerial design champion for the Department of Health. Scouring through a series of Written Answers, I see that he is commendably mentoring four National Health Service schemes in central Manchester, Birmingham, Leicester and Walsall. To its credit, the Department of Health employs 47 chartered surveyors, 14 architects and four town planners in addition to outside specialist expertise. When someone who knows what to do harnesses that knowledge with whoever is to design a project, that makes it so much better.
Public transport is another important matter, particularly the objective of persuading more people to use it rather than their cars. I suspect that penal taxes will not be the answer. Instead, getting people to

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abandon their cars and use public transport needs an adequate number of buses and trains, running with adequate frequency and on schedule. No less important is that those buses and trains should be well designed and comfortable. The noble Lord, Lord Borrie, made similar comments when he was talking about the design of trains and being packed in like sardines. That is hopeless—who wants to use that as an alternative to a comfortable car?
I give credit, however, to the Civil Service for the efforts that it has conspicuously made over many years to redesign many of the forms that it sends us for a variety of purposes, so that they are clearer and easier to fill in by members of the public. The noble Lord, Lord Gavron, mentioned that as well. Doubtless, they are better because it is probably easier for computers to read them, but it is very important none the less.
The debate has shown that there is a consensus in favour of good design, not just for aesthetic reasons but for sound, commercial and environmental reasons, and in the interests of efficiency, delivering essential public services. I shall be very interested, as I am sure all your Lordships will be, in hearing the thoughts that the Government have to offer, not in the form of general platitudes or talk about more departmental design champions, but indicating what active steps they are taking to encourage good design in every field in which the Government, as the font of all public services, have an interest.
5.27 p.m.
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Lord Macdonald of Tradeston): My Lords, I, too, congratulate the noble Lord, Lord Freyberg, on securing this quite excellent debate. As the noble Baroness, Lady Greengross, said, it comes at an important time. This Government have increased levels of capital investment in our public services to their highest, in real terms, for well over a generation. In just four years, we have doubled levels of investment to some £38 billion in 2003–04.
I echo, too, the views of my noble friend Lord Pendry and others. These levels of capital investment are essential to deliver our main ambition, which is the reform of public services. The relationship between this ambition and the role of good design can be simply stated. Understanding and responding to customer experience is the key to successful public service reforms. By redesigning our systems for tracking the views of the users of our public services, we can then redesign services to match more closely the public's needs and priorities. As the noble Baroness, Lady Flather, and the noble Lord, Lord Bhatia, have emphasised, we need that stronger focus on customer needs.
The Government also believe that it is vital that public servants, politicians and other professionals think imaginatively about innovative ways in which we can realise the huge potential of good design to improve and even revolutionise sectors of our public services. As the Prime Minister stated when launching the Better Public Buildings initiative in 2000, we have
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asked Ministers and departments to achieve real change in the quality of design across the public sector so that we leave a legacy of well liked public buildings delivering well appreciated public services.
Good design is not just a matter of aesthetics, although we should always be aware of the profound impact of attractive products and distinctive buildings on the reputation of institutions and towns and the self-esteem of those who live and work in them. Good design is also about utility and service delivery. Better designed hospitals allow medical staff to deliver higher standards of healthcare and encourage patients to get better quicker, as we have heard. Staff and pupils can no doubt advise on how better designed schools can make teaching more pleasant and productive. Carefully designed local environments help the police to fight crime and promote community safety. In short, good design is a necessity for all our people, not a costly indulgence for a minority of aesthetes.
I hope to persuade the noble Lord, Lord Wakeham, therefore, that this Government have learnt from experience that good design need not cost more over the lifetime of the product or building. That is a lesson my colleagues in the Treasury would readily endorse. Good design can also demonstrate how new technology can promote better ways to build, manage and maintain new facilities. When one considers that design investment is usually only about 0.1 per cent of the total cost of building, maintaining and delivering services within a public building, one can see the potential for improvement. As the noble Lord, Lord McNally, warned, whether through municipal ambition or private speculative building, all around us in the public realm is the dismal evidence of past failure and the false economy of saving through the neglect of decent design.
As my noble friend Lord Borrie said, we must be alert to the lessons of that history. Given past mistakes, this Government have also had to start from a poor position. In contracting, the public sector was not often a competent client. In the 1980s and 1990s, building projects typically suffered cost over-runs and delays of some 60 per cent. That is why we invited Sir John Egan to produce his report on Rethinking Construction, which demonstrates how the standardisation of procurement techniques and the transfer of construction risk to the private sector could help us control our capital expenditure plans. By setting tough targets, we now have far more buildings delivered on time, on budget and with fewer defects.
I, too, share the fond memories of the noble Lord, Lord Rodgers of Quarry Bank, of those exciting early days of the Design Council in the 1950s and 1960s. He was pleased to learn that we have resourced two organisations—the Design Council and the Commission for Architecture and the Built Environment (CABE) —to champion the pursuit of quality design across the procurement process. We understand that we can achieve the most efficient procurement process in the world, but unless we have a committed client working with talented designers, we will still end up with a poor product. We need only to look back at some of the disastrous public building strategies of the 1960s to see that future generations

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will scrutinise our contribution according to what we deliver, not just how fast we deliver, on the planned £38 billion spend. We, too, want to ensure that PFI projects do not skimp on design, as the noble Lord, Lord Rodgers, fears.
We certainly have no cause for complacency. As the Audit Commission recently reminded us in respect of school design, we are still not achieving on a consistent basis the standards we strive for. Nevertheless, in responding to the debate, I want first to set out what we consider we have achieved to date before considering what more we need to do.
We have heard from distinguished former Ministers, such as the noble Lords, Lord Brooke of Sutton Mandeville and Lord Wakeham, who in their time effectively championed good design and we try to maintain that tradition. Following the launch of the Better Public Buildings programme in 2000, the Prime Minister appointed the noble and learned Lord, Lord Falconer, to chair a group of ministerial design champions.
A Minister champions good design in each government department with a significant capital expenditure programme. This group has been meeting for more than two years and it has made impressive progress. Each department now has a clear action plan for improving design standards which it is systematically implementing. Those are monitored by the CABE.
That system of champions has been replicated across the public sector so that, for example, every NHS trust—hospital and primary care—now has its own design champion. The same applies to regional development agencies, the Housing Corporation and a growing number of local authorities. Each Minister is personally mentoring between one and four large capital projects to understand and influence the procurement process first hand.
Each department has been working hard to improve design standards. The importance of design in healthcare is reflected in empirical evidence from around the world, which demonstrates that high standards of design lead to quicker patient recovery times and improved levels of staff recruitment and retention.
Let me amplify the example of good practice in health given by the noble Lord, Lord Freyberg, and cite one of the studies mentioned by my noble friend Lord Rea. The University of Nottingham compared three healthcare environments before and after they were redesigned. The schemes included a cardiology ward with improved lighting, better external views and the clustering of beds in smaller groups; and a coronary day-care unit with better beds and patient facilities, larger windows and a visitors area. Measured healthcare improvements included lower pulse rate and blood pressure readings among patients; shorter post-operative stays—eight days down from 11 days; and lower prescribed drug intakes. That is a remarkable outcome and the contribution of the noble
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Lord, Lord Chan, a distinguished paediatrician, is a personal testament to the importance of design for patients.
The Department of Health recognised early on that the NHS was achieving inconsistent standards of design in the early stages of its hospital building programme. There were some clear winners, such as the Norwich and Norfolk hospital, but some designs were out-dated in terms of our desire to create patient-focused environments. As a result, the NHS appointed His Royal Highness the Prince of Wales as its design champion and has partnered CABE on a variety of initiatives to improve standards. It has set up a design review process, which should help reassure your Lordships, so that every new hospital project is scrutinised for its quality at the key stage of the PFI process. It has revised its guidance to ensure that it reflects up-to-date healthcare management.
As the noble Lord, Lord Chan, may know, the NHS has also introduced a system of design quality indicators to help all the users of a hospital to be involved in the design process. Finally, it has sent the CABE to help individual hospitals and primary healthcare providers in the early stages of the design process. On hospital signage, I trust that the designers will take note of the lady mentioned by my noble friend Lord Gavron, who, like myself, does not have the Latin, and design something more functional.
The recent Audit Commission report tells a similar story in the education sector. A few years ago, the then Secretary of State for Education asked PricewaterhouseCoopers to explore the main impacts of capital investment in schools on pupil performance. It found that capital investment had the strongest influence on staff morale, pupil motivation and effective learning times. In the early years of this Government, we found that there was a considerable variation in the extent to which the LEAs and individual schools were responding to the design challenge. There were some real success stories, but too many schools were providing environments that were functional but not inspiring.
In response, the DfES has partnered both the CABE and the Design Council to drive the message home. The CABE is now working with every LEA going into a major round of PFI school procurement to act as a confidant and adviser in the early stages of that process. Both organisations are serving on the School Buildings Advisory Group, which also includes educationists, head teachers and designers. The DfES has recently published the results of Classroom of the Future, which used design and innovation to plot a series of responses to the changes in education environments we can expect over the next 10 years and beyond.
Perhaps most significantly, the Secretary of State is commissioning a series of exemplary primary school and secondary school designs, which will combine great architecture and urban design with a drive to maximise the benefits of off-site modular construction techniques. These exemplars will draw on the best

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design talent in this country and beyond and will act as a resource for all LEAs and individual schools entering into a major building project.
I cannot match the breadth of aesthetic influence on the noble Lord, Lord Brooke, of his school days, but I was fortunate enough to attend Scotland Street school in Glasgow. Sadly, it was the only school ever built by the brilliant Charles Rennie Mackintosh and I wish I had taken my school desk away with me when I left.
As the noble Lord, Lord Freyberg, mentioned, the department has been funding an organisation called School Works to examine new ways of involving pupils and teachers in the design process. Its first active case study was the Kingsdale secondary school in Southwark, which has just achieved a 20 per cent increase in the number of pupils achieving at least five GCSEs at A to C grade level.
All this effort does not start just when children enter primary school. Among our most successful design initiatives have been Sure Start centres and Neighbourhood Nurseries. In both cases, we used national design competitions to set the standards of design at the outset of those initiatives.
The noble Baroness, Lady Warwick of Undercliffe, and the noble Lord, Lord Chorley, reminded us of the importance of educating an ever more creative generation of graduates. I trust that this debate will demonstrate to students of design the broad and strong support for their future role, as witnessed by the entertaining contributions of the noble Lord, Lord McNally, and the noble Baroness, Lady Miller.
On courts and prisons, the Lord Chancellor has pioneered new approaches to the design of court buildings. Again from the outset he has used CABE as a critical friend. He has also employed the internationally-renowned architect, Ian Ritchie, to set appropriately high standards for these landmark buildings.
At the same time, Ministers at the Home Office are working with the Design Council and the independent design organisation, the Do Tank, to rethink the design of prisons. The importance of that issue was highlighted by the noble Baroness, Lady Flather. As I learnt previously from the noble Lord, Lord Freyberg, the cost of keeping a prisoner in gaol each year is twice the cost of Eton School's fees and six out of 10 ex-offenders are still returning to prison within two years. We have to work harder to incentivise those building and managing our prisons to design systems of detention which place greater emphasis on improving the future life chances of the prisoner, and reducing the probability of reoffence.
Of course, the role of design in the delivery of public services is not confined to the delivery of public buildings. In a few days' time, in another place, the Deputy Prime Minister will be publishing his Communities Plan which will set out how this Government intend to create neighbourhoods in different parts of the country which offer the better quality of life which the noble Lord, Lord Kirkham, rightly demands. We face two different problems: the
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need to deliver additional housing in London and the South East; and the need to renew the housing stock in parts of northern England and the West Midlands. I can reassure the noble Lord, Lord Hunt of Chesterton, that the importance of design will be branded into the Communities Plan. Excellence in urban design will be essential in creating higher density mixed use neighbourhoods. This will require the skills of architects, landscapers and planners who will have among their concerns the needs of the elderly, as described by the noble Baroness, Lady Greengross.
The Deputy Prime Minister has already announced at the Urban Summit that CABE will be asked to set up a new unit, CABE space, to champion the design and management of public space, including parks, playgrounds, squares and streets. At present, over half of local authorities have no strategy for making the most out of their green spaces. It is not surprising, therefore, that 30 per cent of the population will not use our parks at all.
Part of the process is designing places that are safe. The Office of the Deputy Prime Minister is currently working with the Home Office, CABE and the police to revise the planning guidelines on designing out crime. Again, there are many empirical studies that show a clear relationship between good urban design and improved community safety. We need to use Secured by Design principles, including increasing natural surveillance and reducing rat-runs, to help local communities and the police deter criminal and other anti-social behaviour.
I hope that your Lordships will agree that this programme of activity demonstrates our commitment to raising our consciousness across Government when it comes to investment in quality design. But we cannot be complacent. I want to close by concentrating on what still remains to be done. Last year, we asked CABE and the Office of Government Commerce to review our design performance in the procurement of public buildings. The report of their review was published last October. The 11 recommendations they made have been accepted by every government department and by the National Audit Office.
Let me add to the praise of the noble Lord, Lord Hunt of Chesterton, and many others. I feel particularly privileged to speak in the same debate in which the noble Lord, Lord Foster of Thames Bank, makes his maiden speech. It was an outstanding contribution which I take to heart as a Minister. in a previous life, as chairman of the Scottish Media Group, I was fortunate enough to be a tenant in his wonderful ITN building in Gray's Inn Road; and before that as a journalist who once worked in the old newspaper building which stood on the site I congratulate him on the dramatic use he made of the depth of the old print room. As a former Transport Minister, I should say that if one wishes to travel on the Tube, go to Canary Wharf. The station, designee: by the noble Lord, Lord Foster, is well worth the journey.

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The noble Lord, Lord Borrie, spoke of transport. I understand the problem with taxis. I see them also mutating into people carriers in many of the market places up and down the land. The noble Lord and I are both impressed by the advances made by London Transport with its low-floor buses, and so on—despite the fact that it is at the expense of that splendid classic, the Routemaster, which is a splendid vehicle as long as one does not fall off the platform.
The noble Lord, Lord Hunt, mentioned noise barriers. On the transport side, I assure him that we are very conscious of the needs there. The noble Baroness, Lady Greengross, spoke persuasively of the changing needs of an ageing population, comments which should carry across Government. I listened with great interest to the noble Lord, Lord Gavron, and the experience with the Royal Opera House and its thoroughly enjoyable outcome.
In conclusion, I agree with the general thrust of the argument of the noble Lord, Lord Freyberg, and other noble Lords who have spoken so persuasively from their wide experience of business. We all agree that we have extraordinary design talent in this country, arguably the best in the world. We are already reaping the benefits of that design talent in export receipts. It would be a missed opportunity if we were not to maximise the use of that talent in our drive to improve the quality of public services. We want the best designers and the best architects designing new public buildings and products. Our message to the private sector is quite simple. If you do not employ this design talent, you are reducing your chances of winning business from the Government. Once again, I commend the noble Lord, Lord Freyberg, on securing this debate and congratulate both the Design Council and CABE on their work to date. They enjoy our full support for the future.
5.47 p.m.
Lord Freyberg: My Lords, I congratulate all noble Lords who contributed their impressive and considerable expertise to the debate. I also congratulate the noble Lord, Lord Foster, on his extremely informative and accomplished maiden speech, bringing to bear his enormous knowledge in this area. We all look forward to his future contributions on this and other matters.
I know how seriously the Government take the question of design in public services. The fact that current measures are frequently not achieving the high standards is no reflection on their interest in the subject but evidence that there is no single, simple set of criteria which can be implemented. However, I hope that the Minister will agree with me when I say that it is well worth persevering to improve all aspects of design in the public sector and that when a high standard is achieved, even in just one project, rewards are enormous. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Auditing and Accounting
5.48 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, with the leave of the House I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Trade and Industry. The Statement is as follows:
"I should like to make a Statement about the report of the Co-ordinating Group on Audit and Accounting Issues and the report of the Review of the Regulatory Regime of the Accountancy Profession which my right honourable friend the Chancellor and I are publishing today. Copies of both reports have been placed in the Library.
"Last year the collapse of Enron, WorldCom and Andersens in the United States appalled investors all over the world. Millions of people saw their savings and pensions collapse.
"As I told the House last year,
'audit and accountancy standards in Britain are different from those in the United States: different and, as is now widely acknowledged, in some respects better'.
So there was no need for the UK to rush into a Hewitt/Brown equivalent of the Sarbanes/Oxley Bill. But equally it would have been folly to sit back and say, 'It couldn't happen here'.
"Structures, standards and regulations can never be a complete defence against individuals determined to do wrong, nor can they wholly protect us against a culture of corporate greed and loose ethics. But we owe it to savers, investors and employees, as well as to all the honest business people whose reputation has been tarnished by these scandals, to ensure that our defences are as robust as they sensibly can be.
"The reforms I am announcing today, along with those proposed last week by Derek Higgs and Sir Robert Smith will raise standards of corporate governance—I should emphasise that the reforms essentially cover only listed companies—strengthen our accountancy and audit professions, and provide for a more effective system of regulating the profession. Together, they make up a complete package of reforms—comprehensive and mutually reinforcing.
"First, I address the issue of boardrooms. Following Derek Higgs's proposals, the combined code on corporate governance will be strengthened to provide that at least half
"the board (as well as the chairman) should be independent—as should all members of the audit and remuneration committees, and a majority of the nomination committee; the definition of an independent director should be strengthened and clarified; the separation of roles of chairman and chief executive should be reinforced; and new descriptions should be given of the respective roles of the board, the chairman and non-executives.
"Mr Higgs's report showed a startling picture of the way top level appointments are handled, with over half of directors being appointed through

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personal contacts and friendships. I welcome his proposals to promote meritocracy through an open, fair and rigorous appointments process. As part of the follow-up, a group led by Laura Tyson of London Business School will look at ways of bringing candidates from the non-commercial sector to greater prominence—including women—and will report to me in May.
"In revising the combined code, the Financial Reporting Council will also implement the recommendations of Sir Robert Smith's group that the audit committee should consist entirely of independent members, with at least one having relevant financial experience; monitor the auditor's performance, especially on independence and objectivity; and develop and implement policy on the purchase of non-audit services from the auditor, with reference to tough new ethical guidance.
"Following well established practice, listed companies will be required either to comply with these provisions or to explain to their shareholders why they are not doing so.
"The second aspect of our reforms concerns tougher measures to underpin auditor independence. Following the recommendations of the co-ordinating group, I can announce that, as well as an enhanced role for audit committees and a tightening up of the provision of non-audit services by auditors, the professional bodies have already changed their regulations so that the lead audit partner has to be rotated within five years; partners and senior employees of audit firms will not be able to take up employment with a company they audit within two years of leaving their audit firm; and most of the UK's large audit firms have already agreed to publish an annual report, provide management and financial information, and reveal levels of dependency on single clients, including how the firm handles conflicts of interest and interdependence issues. I believe that that third aspect will work on a voluntary basis. If not, we will make such disclosures a condition of auditing listed companies.
"I am also calling for the standards and ethical guidance for auditors on the provision of non-audit services to be toughened up further.
"We will also strengthen enforcement of accounting standards. At the moment, the Financial Reporting Review Panel only steps in if particular concerns are raised with it. But the co-ordinating group recommends, and we agree, that enforcement of these standards must be proactive. From now on, the Financial Services Authority will help the Financial Reporting Review Panel on enforcement—particularly in identifying the high-risk cases which most merit investigation. The FSA and panel will need to agree as soon as possible a memorandum of understanding to clarify their precise roles and responsibilities.
"These measures will be underpinned by the third element of our reforms—more effective regulation of the professions. The Financial Reporting Council will assume the functions of the Accountancy
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Foundation. This will create a unified, independent UK regulator with three clear roles: setting accounting and audit standards; proactively enforcing and monitoring them; and overseeing the self-regulatory professional bodies.
"The Financial Reporting Council, under Sir Bryan Nicholson, has developed an excellent reputation. The Accountancy Foundation, chaired by Lord Borrie, has also done valuable work, for which I thank it. The new combined body will build on these achievements.
"After wide consultation, the DTI's review team recommend, and again I agree:
"First, the Auditing Practices Board should take over from the professional bodies responsibility for setting standards for independence, objectivity and integrity. Oversight of other ethical standards will become the responsibility of a new professional oversight board. The Ethics Standard Boa rd will be wound up in due course. I have greatly appreciated the work which its chairman, Christopher Jonas, and his colleagues have done to take forward the ethical agenda and to provide the basis for the new board's work;
"Secondly, a new independent inspection unit, located within the FRC, should take over from the professional bodies responsibility for monitoring audits of listed companies, major charities and pension funds, and;
"Thirdly, the long delayed Investigation and Discipline Board should come into operation quickly to provide a truly independent forum for hearing significant public interest disciplinary cases.
"It is vital for the new structure to have clarity of accountability and responsibility, together with the appropriate powers, to operate effectively in the public interest. There is a strong case for statutory underpinning to make the new body work. We will consider that further and report our conclusions to the House.
"The proposals that I have outlined today are substantial and mean significant changes to the way companies and their auditors carry out their work. This package must be implemented as quickly as possible. Changes to the regulatory structure will be taken forward immediately. The DTI will lead an implementation steering group on which Sir Bryan Nicholson, Lord Borrie and Peter Wyman, president of the ICAEW, have kindly agreed to serve.
"An FRC with enhanced responsibilities will require more investment. The Government will pay their share of core running costs, but I also expect companies from the profession to contribute. It is in all our interests to make these changes work—and it is fair that we all pay for the improvements. Changes to the combined code arising from the Higgs and Smith reports will be made in the early summer once the FRC has consulted on the precise wording. All these measures will be taken forward alongside the

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Government's longstanding programme of company law reform, following last year's White Paper.
"These proposals are not a response to short-term market movements. They are about strengthening the foundations of our capital markets for the long term. I want in particular to thank Derek Higgs and Sir Robert and his group for their excellent reports, as well as all those who participated in the coordinating group under the joint chairmanship of my honourable friends the Minister for Competition and Consumer Affairs and the Financial Secretary to the Treasury. I also want to pay tribute to the officials who so swiftly took forward the review of the regulatory regime.
"The overall package is tough where that is needed, but measured and proportionate throughout. It will ensure that our corporate governance structures remain among the best in the world—for the benefit of the millions of pensioners, savers and businesses that depend on them".
5.57 p.m.
Lord Hodgson of Astley Abbotts: My Lords, I am grateful to the Minister for repeating the Statement made in another place. Bearing the public matter in mind, I begin by declaring an interest as a non-executive or independent director of two listed companies and a mutual building society.
On these Benches, we welcome measures designed to reduce the possibilities of fraudulent activity. Trust is a vital ingredient in financial markets, giving confidence to those who wish to save, especially over the long term. However, it is a bit rich for the Government to claim that the proposals are not a reaction to short-term market movements, for that is precisely what they are, and the Government are being disingenuous to pretend otherwise.
We welcome the Government's attempts to try to avoid a one-size-fits-all approach to corporate governance by applying the new standards to what the Statement describes as "essentially only…listed companies". However, it would be helpful if the Minister can explain what is meant by the word -essentially". It is potentially a weasel word. Either they apply to listed companies exclusively, or they do not. Secondly, do the new standards apply to AIM listed companies, which are listed on the alternative investment market? Thirdly, do they apply to foreign companies listed on the London Stock Exchange? If so, how will they be enforced? If not, how will potential investors in those companies be aware of the greater risk that they are running?
Finally, are the Government aware of the huge range of listed companies—multi-billion, multinational companies at one end of the spectrum and the £50 million capitalised local engineering company at the other? For the latter to have over half its board made up of independent directors will be quite a challenge. Could thought be given—or has it
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been given—to focusing the new rules so that they fall most heavily on larger companies, say those listed in the FTSE 100 or the FTSE 250 index?
As I say, these new rules are the by-product of fraudulent activity but we must always be careful to distinguish between fraud and risk. Too often people are inclined to view fraud as their risk that went wrong. In the previous debate mention was made of the importance to UK plc of design. But UK plc also needs risk takers. Risk takers need freedom to manage and a competitive base from which to run their businesses. The new rules will undoubtedly represent another regulatory and cost burden. We understand why they are being introduced but will the Government undertake a study of the cumulative effect of the increasing regulatory burden on UK businesses' world competitive position?
Will the Minister also clarify the chain of command in the new structure? We have, as I understand it, the Financial Reporting Council, which will take over the Accountancy Foundation. We have a new professional oversight board taking over the Ethics Standards Board. We have a proposed independent inspection unit and a new investigation and discipline board. We have an implementation steering group and a financial reporting and review board. Circling over all that we have the Financial Services Authority, the Department of Trade and Industry and, last but not least, Professor Laura Tyson. How will we ensure that there is no duplication of effort and of cost?
It is very welcome that the Statement repeats the importance of separating the roles of chairman and chief executive. In those circumstances it is an even greater shame that the Government do not follow their own precepts and that it took enormous pressure in your Lordships' House to persuade them to split the roles of the chairman and chief executive of the Office of Fair Trading in the Enterprise Bill. I invite the Minister to take this opportunity to announce that the Government will forthwith split the roles of chairman and chief executive of the Financial Services Authority, particularly given the FSA's important role in enforcing the new proposals announced today.
Finally, it goes without saying that we on these Benches find any form of fraud unacceptable. Fraud enables the greedy to prey upon the weak and the unsophisticated. We therefore give a broad welcome to the proposals. But before more legislation is put on the statute book, if legislation is required, we need to have an informed public debate as to how effective the detailed proposals will be in the real world.
6.3 p.m.
Lord Razzall: My Lords, I join the noble Lord, Lord Hodgson, in thanking the Minister for repeating the Statement made in another place. It seems to me that your Lordships' House is exactly the place where detailed comments on such a Statement can be made. The noble Lord, Lord Hodgson, mentioned some important issues. I look forward to hearing the Minister's response, particularly with regard to the FSA, without wishing to intrude on past private grief.

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As the Minister rightly said, the Statement brings together three reports raising different issues that are relevant to corporate governance in the UK. First, I refer to the Higgs proposals on conduct in boardrooms and the way in which listed companies should conduct themselves. It is not for me to respond to the noble Lord, Lord Hodgson, but it is fair to say that the Derek Higgs report makes clear that he proposes applying the most onerous requirements on the leading 350 listed companies. There is a section in the report in which he recognises that the smaller listed companies will not be able to comply—certainly not immediately—with the more onerous requirements. I believe that the Minister with his business experience would be the first to agree that the Higgs report is at the very soft end of what might have emerged in relation to corporate governance. I am sure that some of the Minister's noble friends, who are not present today but are often present at Question Time, will consider that the Higgs proposals do not go as far as they would wish.
The noble Lord, Lord Hodgson, made an important point with regard to small listed companies. I refer to a fundamental concern—I hope that the Minister will give his views on the matter—namely, from where will the people come to provide the non-executive directors that the Higgs report requires? Looking around your Lordships' House I see a number of noble Lords and noble Baronesses who sit on boards of directors as non-executive directors. Given the current state of liability, I am not sure that any of them would readily take on a new post as a non-executive director. We are not talking here about people who are effectively seconded from major companies to sit on those boards. Although the Higgs report wishes to increase vastly the pool of non-executive directors its recommendations will restrict the number of executive directors who can take up non-executive appointments in other companies. I should welcome hearing the Minister's comments, not only his comments as a Minister but also those arising from his own practical business experience, in regard to where all these non-executive directors will come from.
I believe that the noble Lord, Lord Hodgson, indicated that the essence of the Higgs recommendations is that this matter should not be a case of "one-size-fits-all". I cannot let the moment pass without commenting that Mr Higgs himself sits on the board of direct ors of British Land but has so far been unable to persuade the chairman and chief executive to stand down from one of those positions. That situation is rather ironic. I believe that a similar irony arose in the Greenbury report that was issued years ago.
I turn to the recommendations regarding the accountancy profession. I believe that those measures are at the soft end of recommendations compared with some ideas that have been floated. For example, there is no recommendation that there should be any form of statutory split between audit and non-audit work. Noble Lords who follow these matters are well aware that that is a major issue both in Europe and in the UK. I should also welcome hearing the Minister's
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views on whether the trend towards separation of audit and non-audit work will continue and whether the Government will support that.
What views does the Minister hold on an idea that my noble friend Lord Sharman has floated on a number of occasions as former chairman of KPMG; that is, that the National Audit Office should be allowed to compete in the private sector for big company audits? We believe that the National Audit Office would be keen to do that and that it could develop a degree of audit expertise which would be outside that of the big four which dominate the FTSE 100 companies. In the case of the National Audit Office there would obviously not be the problem of wanting to compete for non-audit work.
I turn to the alteration of the position of the regulators. I draw noble Lords' attention to the sentence on page 7 of the Statement which states:
"There is a strong case for statutory underpinning to make the new body work".
I hope that the Minister will comment further on that sentence. I should have thought that what the words,
"There is a strong case for statutory underpinning to make the new body work",
actually mean is, subject to negotiation to get it into the Queen's Speech, there will be statutory underpinning to make the new body work. I hope that the Minister will develop that point.
In conclusion, I take up the sentence where the Government say that the proposals are substantial and
"mean significant changes to the way companies and their auditors carry out their work".
I would consider that as going a little far. These proposals will only mean what the quotation stares if the voluntary provisions recommended here are actually complied with by companies and auditors. Is the Minister prepared to be drawn on what action the Government will take if it transpires that many of these recommendations are not adopted in practice by companies and auditors? In those circumstances do the Government propose to legislate?
6.10 p.m
Lord Sainsbury of Turville: My Lords, I shall deal first with the point made by the noble Lord, Lord Hodgson. He said that these measures were a response to short-term market movements. Given that they have spent a long period in gestation., I do not believe that we can say that they are such a response. It can be fairly said that they were a response to events which took place in America. It seems to me wholly right that where we have that situation in America, which was outlined at the beginning of the Statement., action should be taken because of it. If we had not taken action, I believe that the noble Lord would have said with some justification that we were in danger of being complacent. I do not believe that that is the same as making a response to short-term market movements.
As regards to whom it applies, we very carefully said that it applied to "essentially" listed companies. That was not the use of a weasel word, but to be strictly accurate about the situation. It is a whole package of

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proposals. The Co-ordinating Group on Accounting and Audit alone has 27 recommendations. What we mean by "essentially" is that the vast majority apply only to listed companies; for example, a measure such as a pro-active enforcement of accounting standards will apply beyond purely listed companies and in fact to some large private companies. It was for that reason that we did not want to say misleadingly that all the measures applied only to listed companies.
We have not taken the view that one size fits all. In many cases we are saying that there will be a model and that companies, through the listing agreement, will either have to go along with that or explain to the market why that is not being done. It will be the market's judgment on the matter. That is the wholly appropriate way to proceed.
I do not believe that there is a great deal of extra regulatory burden although some of those burdens may be different because they require people to do different things. That is not the same as increasing the regulatory burden.
As regards the new bodies, there is equally a reduction in their numbers. For the new arrangements for the Financial Reporting Council it can be fairly said, having looked at the pages where the Accountancy Foundation is set out, that we are simplifying and probably cutting down the number of bodies involved.
The noble Lord, Lord Razzall, asked where the non-executive directors are to come from. There are substantial sources from which people can come. The Laura Tyson taskforce will look at how we can increase the number coming from outside the corporate world. Within it there are executive directors of other companies where it is regarded as good for their development that they should be non-executive directors of other companies. That source could be drawn on much more in future.
As regards the separation of audit and non-audit work, the co-ordinating group considered various approaches to the problem of auditing independence. I believe that an outright ban would be the most extreme response. The co-ordinating group recommends against it and we very much agree. The UK approach is based on key principles and safeguards, not on lists of banned activities. If no adequate safeguards can be implemented then the auditor must not carry out the work. But the thrust of the matter is that each situation must be judged on its merits against the overall standards. That is why the role of the audit committee is so crucial.
As regards the statutory underpinning of the Financial Reporting Council, the noble Lord is right. We shall consult on that as to exactly which parts of that council should be underpinned statutorily. We do not believe that it is necessary that all its activities should be. There are some quite fine judgments involved in that. We shall consult on it and return to the House on the matter.
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As I said at the beginning, a great deal depends on voluntary action in some cases, but in many others it is underpinned by the fact that a listing agreement will require companies to explain why they do not take the necessary action. In that event there will be a market judgment and in others there will be new statutory underpinning. I believe that the total package gets the balance right in terms of taking firm action, but proportionately.
Lord Hodgson of Astley Abbotts: My Lords, do these measures apply to AIM companies and what is the position of foreign companies listed on the London Stock Exchange? I do not believe I had a response to those two matters.
Lord Sainsbury of Turville: My Lords, may I come back to the noble Lord on those matters? As I said, there are very many issues here which apply in different ways. I shall write to the noble Lord.
6.15 p.m.
Lord Sheldon: My Lords, I am not a director now, but I have been in the past. I am concerned about the role of non-executive directors. Some years ago a Permanent Secretary at the Department of Trade, having retired, was offered a non-executive directorship at one of the largest of the listed companies in this country. Nothing happened and he wondered why. He was told that the chairman had said that he would not have him because he would ask too many awkward questions.
When someone as competent as that— and he was an outstanding Permanent Secretary—receives that kind of reaction, it makes one worry about the kind of situation he was likely to have entered into. There is a need to strengthen the independence of a number of the non-executive directors. I would welcome that.
The legislation is obviously going to be very complex. Can my noble friend say anything about that?
Lord Sainsbury of Turville: My Lords, the independence of non-executive directors is a very important question. In order to protect my back, I take it absolutely sine qua non that a Permanent Secretary would be an excellent addition to any board. That is obviously unarguable. The Higgs report is about giving a much stronger position to the non-executive directors and much clearer independence. But in answer to the noble Lord's question, it is also a process by which they are chosen not on the whim of a chairman but through due process, which will widen the selection and make it more transparent.
Lord Williamson of Horton: My Lords, I declare an interest as a hard-working, non-executive independent director of Whitbread PLC and a member of its audit committee for a long time.
While I very much welcome what the Minister has said about non-audit services provided by audit firms, we need to be extremely careful about it. I agree with

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the noble Lord, Lord Razzall, that the proof of the pudding is in the eating because it is a voluntary system although it underpins the listing requirements. We need to give a lot of attention to this matter.
Does the Minister agree that with the many reports which we have had on governance, including the Higgs report, we have to be careful not to get ourselves into a position where we believe that every recommendation is automatically right. Some of the recommendations can be legitimately challenged on grounds of efficiency and how business should be conducted. For example, should a senior non-executive member of a board be appointed so that he can have further contact with shareholders? There are other ways to do that, and it is important not to get ourselves into the position of thinking that everything in a report must be adopted automatically. Some things can be done better in other ways.
Baroness Noakes: My Lords—
Lord Sainsbury of Turville: My Lords, if the noble Baroness would like to answer the question, I am more than happy for her to do so. She is probably more qualified.
Much of the Statement meshes together. As important as distinctions between audit and non-audit work are, that question is in the context of the Smith report and its strengthening of the audit committee. The committee will have the say on the matter. That its independence has been greatly strengthened by the Smith report is very relevant.
We did not say that we would accept every recommendation of the Higgs report, but we looked at it carefully. It is an excellent report. We are impressed with the recommendations and will take them forward.
Baroness Noakes: My Lords, I apologise for jumping the gun. My eagerness on the subject overcame me. I declare a couple of interests as a non-executive director of listed companies, a member of audit committees and a member of the Institute of Chartered Accountants, although fortunately no longer an office holder.
I start by asking the Minister about costs. The Statement says that there will need to be more investment in the new regulatory arrangements and that the Government will pay their share. However, it is silent on how much those costs will be and how much the Government are prepared to contribute. I assume that they have not signed a blank cheque on that. Will he give us some more information?
Related to that is the impact of all the changes on audit costs. Is the Minister aware that audit firms in the US are talking about audit costs rising a minimum of 25 per cent, and often much more, to deal with the equivalent regulatory changes there? Do we think that there will be a similar impact on costs in particular? Have the Government thought about the impact of costs not on the larger plcs, but at the smaller end of the scale, which is the engine room of growth?
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Finally, will the Minister say what the Government have achieved, if anything, in ameliorating the impact of Sarbanes/Oxley on dual-listed companies that have their main listing in this country?
Lord Sainsbury of Turville: My Lords, I cannot say much more about the costs of the Financial Reporting Council, including the foundation of functions. Clearly, we will try to proceed in the most cost-effective way, and the FRC will consult contributors, the Government, industry and the profession on firm budgetary estimates of its running costs. We think that the FRC's core annual running costs should be broadly shared by the Government, business and the profession, with two exceptions. The cost of cases heard by the investigation and discipline board should fall to the professional bodies concerned, and the cost of inspection by the independent audit inspection unit should be met by the audit firms. In both cases, that reflects the current position.
In terms of the impact on audit costs, one needs to keep a firm view on the end objective of the whole process, which is to make certain that company accounts are trusted by investors of all kinds. If that does not take place, we are in a serious situation in terms of the functioning of the capital markets. If that involves some extra expenditure but leads to trust in accounts, that would be money well spent.
The SEC is showing a welcome sensitivity to foreign concerns and to some issues arising from Sarbanes/ Oxley on corporate governance, non-audit services and rotation of audit partners, in response to the pressure from the UK and the European Commission. We pointed out that sometimes the regulations do not turn out well, and there is sensitivity to some of those issues.
Lord Carlile of Berriew: My Lords, I apologise to the Minister for missing the first moments of his Statement.
Bearing in mind that the curse of many disciplinary tribunals is delay, does the Minister support the hope and expectation that the investigation and discipline board will be expected to create protocols that enable it to act quickly? Also, does he support the hope that it will have interlocutory powers and, where there are criminal investigations—such as by the Serious Fraud Office, which can be long delayed—disciplinary proceedings will not necessarily have to await the conclusion of criminal investigations?
Lord Sainsbury of Turville: My Lords, if I may say so, that is slightly jumping the gun in terms of where we have got to on the process. All the points that the noble Lord has made are in principle highly desirable but, in terms of where we have got to, I would jump the gun if I assured the House that all that would definitely take place.
Lord Naseby: My Lords, I declare an interest as a non-executive director of three companies—one listed, one mutual and one large private company.

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The Minister made no mention of mutuals, at least two of which, Standard Life and Nationwide, would probably fall into the FTSE 100 if they were listed. Would the proposals affect the mutual sector as well? The Minister mentioned large charities. Is there a definition of a large charity?
My third question relates to Europe. None of us should ignore the fact that as we sit on our varying boards we not only have to cope with the FSA and its continuing consultation documents but increasingly have to take into view what is happening in Europe. Can we have confidence that Her Majesty's Government will not produce recommendations that then have to be amended two years on because of data or instructions coming out of Europe that we should have known about already?
Lord Sainsbury of Turville: My Lords, on the first question I would have to say what I said originally. What we have been talking about is an enormous and substantial package of proposals. They apply in different ways to different kinds of organisation. I cannot give a simple answer for mutuals or anything else without going through all the proposals and saying how they would impact on them.
So far as international standards are concerned, a lot of work is now taking place to make it certain that UK accounting standards are brought in line with international standards. In the world in which we live, that is clearly of increasing importance.
Baroness Howe of Idlicote: My Lords, would the Minister say a little more about the range of expertise that may be available for non-executive directorships? I speak as one who has held no more than three at any one time. That is presumably within the remit of the Higgs report. It was commented that there would be a serious dearth of suitable candidates. Not even thinking of the vast number of suitably qualified women who could do the job, what about the range of academics, lawyers and heads of Civil Service departments? Surely a huge range of suitably qualified people could help to make up the 50 per cent suggested by Derek Higgs.
Lord Sainsbury of Turville: My Lords, I refer to what the Secretary of State said in the Statement, which was that Professor Laura Tyson of the London Business School would look at ways to bring candidates from the non-commercial sector to greater prominence, including women, and would report in May. That is on the basis that the Secretary of State and I have considerable confidence that an enormous pool of talent is waiting to be drawn on.
Lord Brooke of Sutton Mandeville: My Lords, I declare an interest as an audit client for 18 years, as a tax client for 40 years with Arthur Andersen and as a continuing tax client of its successor, Deloitte & Touche Private Clients. The first tax partner who looked after my affairs, who is now sadly dead, always prefaced complicated ideas by saying that I would
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have already considered and rejected the suggestion that he was about to make but he thought it was worth a second look. Leaving aside the over-kindness of the preface that I have mentioned, can the Minister enlarge on the answer that he gave to my noble friend Lady Noakes about how the understanding of these matters among the amateur investing public can be improved, so that after recent events they do not unnecessarily shun the Stock Exchange?
Lord Sainsbury of Turville: My Lords, that is an extremely difficult question. To convey to the average investor the range of regulations that already exist and the further action that we are taking would be a considerable task. I hope that as these measures are put into place, the average investor will increasingly become aware of the action that is being taken and will realise that we are in no way complacent about the situation, despite the fact that in comparison with the United States, we have had comparatively few incidents of serious mis-statements of company accounts.
Lord Naseby: My Lords, I asked the Minister three questions, the third of which was: what was the definition of a large charity? That was mentioned in the Statement that he repeated. Is there such a definition?
Lord Sainsbury of Turville: My Lords, I do not believe that there is such a definition. We were simply pointing out that large charities—without specifying what they were—would come into that same category.

Special Education
6.31 p.m.
Baroness Warnock Baroness Warnock rose to call attention to the case for rethinking the provision of special education; and to move for Papers.
The noble Baroness said: My Lords, in moving this Motion, I must declare two interests: I was chairman of the government committee of inquiry many years ago into the education of children with special needs, which reported in 1978 and which was followed by the Education Act 1981; and I am currently president of the British Dyslexia Association.
There are several reasons why I wish to raise this question now. The main reason is the publication last year of two Audit Commission reports. The first, which was published in June, was entitled, Statutory assessment and statements of SEN: In need of review? . The second, which was published in November, was entitled, Special educational needs: A mainstream issue. In the second appendix to the latter report (on page 60) the commission refers to the public response to a recommendation in the June report that the Government should,
"establish a high-level independent review to consider options for future reform".

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Eighty per cent of those consulted were apparently in favour of the proposal and 60 per cent were strongly in favour. Those who were most supportive were local education authorities, health and social services departments and teachers. Those groups feel that the present framework of provision gives rise to the greatest lack of clarity and variation in standards of provision up and down the country. I want to point to a few of the areas in which that lack of clarity is damaging.
The last such general inquiry took place in 1974–78; after that, as I said, the framework was laid down in legislation in 1981 within which provision is still made, although there have been numerous changes in detail. The framework is as follows. Special educational needs may be identified either at birth or soon thereafter by medical or social services. In principle, education can begin at two years of age, although that is not very common. However, the increase in nursery provision under the present Government has made earlier identification of needs much more likely. That is a matter of great satisfaction. Thereafter, assessment may follow at various stages, leading to extra support for individual children in mainstream schools wherever possible. In the case of a proportion of children so assessed, a statement of needs will be issued by the local authority laying down what the local authority is bound by statute to provide to meet the child's needs.
It is largely in the matter of these statements that things have gone wrong in my view and a disastrous lack of clarity has increasingly emerged. In its briefing for this debate, the Royal National Institute for Deaf People said that,
"it would be folly to alter the framework around statementing".
In so far as I understand that, I profoundly disagree with it.
Among the difficulties with statements are these: there is an enormous difference between local authorities as to how many children are issued with statements; as the local authority has a mandatory duty only to "statemented" children to provide what they need, parents have come to feel that only if a child has a statement will any extra provision be forthcoming; and some local authorities even wait for parents to demand a statement before they consider assessing the child to establish whether he needs one. The result is that parents are increasingly demanding that a child be assessed and a statement issued.
For example, in Birmingham, parents are in conflict with the council on the grounds that their children are not automatically assessed or reassessed when they move on to secondary school. Appeals by parents of children with special educational needs are now increasing faster than at any time since 1997. The appeals are because the local education authority has refused to issue a statement; because what is mentioned in it as needed by the child is not being provided; or because parents—very reasonably, I believe—suspect that the only provision that is identified in the statement is that which the local education authority believes it can afford. It has more to do with what is affordable than with what is needed.
More than 3,000 parents lodged appeals during 2001–02, which was an increase of 11 per cent over the previous year; the figures continue to rise. This appears to me to be a frightful waste of resources. Such resources should properly be spent perhaps most importantly on the training of teachers to recognise, take account of and seek help for children in mainstream schools who have special needs; they could also be used for the provision of more classroom assistants. Those assistants are absolutely essential if differentiation within the classroom to take account of children's special needs is going to be widespread. Moreover, an atmosphere of conflict and anger is not a good background for the provision of what is best for the child.
Long ago—in the 1970s—we hoped that there would be a partnership between parents and local authorities. In those days, of course, local authorities had far more powers, they knew their children far better than they do now and the situation was radically different. Confrontational litigation and appeals tribunals, which are the opposite of partnership, are proliferating.
Another problem is that there is enormous confusion within schools and among parents about how the provision of special educational needs is to be resourced—whether for children with statements or those identified as having special needs but without statements. This is made more difficult by the number of resources allocated to schools to dispose of at their judgment. There is little incentive for schools to spend money out of their regular resources on children with special educational needs. Worst of all, there is little incentive for mainstream schools to admit children identified with special educational needs. That is another great source of conflict with parents, who cannot get their children into their first choice school.
The help that schools are supposed to receive from social services and the National Health Service—especially for speech therapy, which is one of the most important areas of help for children with special needs—is often not forthcoming. There is confusion here although a local education authority may place on the statement that a child needs a certain number of hours of speech therapy per year, it is subject to how much the National Health Service in that area can afford. So there is no reason to suppose in the present circumstances that a child will receive the speech therapy he or she needs.
I strongly believe that the interests of the most severely disabled children must be safeguarded. They must be offered the possibility of education in special schools, if such schools are most able to cope with their multiple and complicated disabilities. Some in particular should be allowed the chance to be educated at boarding schools, which are often the best, most secure, supportive and effective means of educating, providing 24-hour education.
Having said that, the unclear and increasingly controversial division between those with and without statements no longer acts as a proper safeguard. Some other safeguard for these most vulnerable children

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needs to be devised. It leaves those who do not have statements liable to receive little help. A large number of children identified as having special needs have hardly an hour per day's help from a classroom assistant in a mainstream class.
Although the framework within which needs are assessed and met has remained the same for more than 20 years, our concept of educational needs has radically changed, especially since 1997. In the 1970s it was only recently that the most severely disabled children had been brought under the wing of the Department of Education. Hitherto, they were considered uneducable. We on the committee all those years ago decided to change people's view of educational needs and to make them recognise the continuum of needs, at one end of which were children in mainstream schools with needs that could readily be met with a little more help; and at the other of which were children with multiple, severe and permanent disabilities. It was for those children that we invented the concept—I now think it was a mistaken concept—of the statement.
We envisaged that those children needed help and an assurance that they would not be overlooked again. We envisaged them as 2 per cent of all children of school age. Now it is difficult to obtain reliable statistics of the relation between the number of children with statements and the number assessed as having special needs who do not have statements. It is almost impossible to discover how such children are doing at school. We need a method of monitoring the progress of children who either do not take the key stage tests, or, if they do, automatically fail.
I want to explain what I meant when I said the concept of educational needs had radically changed. When the committee was set up, we were given two warnings: first, that we were not to deem that a child had a special educational need on the grounds that his first language was not English—technically at the time the Home Office was supposed to finance the teaching of English as a second language. Secondly, we were told that we must not deem a child to have special educational needs on account of poverty or other deprivation.
I am happy to say that such limitations on the concept of needs now seem ridiculous. We know that by far the largest number of children with special needs and those who most urgently need help to communicate, to enjoy work and play and to progress are those living in poverty; those with abusive or dysfunctional families; and those in care. We know that by nearly any criterion of need there are whole schools within which almost every child has a special need.
That is why I have begun to wonder whether the framework of the 1981 Act has outlived its usefulness. Since 1981, there has been a considerable body of legislation regarding children and their rights. I am not certain that the way in which children with special needs are treated in mainstream schools is always in conformity with this legislation. It will be interesting to hear what becomes of the Bill proposed in Scotland,
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which was published last Friday, which seeks to remove the duty of recording—which is equivalent to our statement.
I believe it is more appropriate to start again with what I know is the Government's interest, which is to educate all children, however unhopeful their beginning, and to concentrate on resourcing the schools where many of those children are and not to think of them as a race apart. I beg to move for Papers.
6.47 p.m.
Lord Astor of Hever: My Lords, the House will be grateful to the noble Baroness, Lady Warnock, for introducing the important subject of special education. I will focus on the special educational needs of children with autism, and in doing so declare an interest as the father of an autistic daughter.
The Government are driving the push towards "inclusion". However, the emerging picture nationally is that for many vulnerable children that does not work. Indeed, autistic children and their needs are identified by most mainstream schools as the single issue for which they have the greatest difficulty catering.
Mainstream education failed my daughter totally. We battled it out for four years, the last two amounting to nothing more than childcare. The education provided, and the totally inadequate support, were quite unable to meet her needs. Unfortunately, my daughter's case as a mainstream failure is typical.
The National Autistic Society's recent survey of schools found that one in 86 children has special educational needs related to an autism spectrum disorder. The schools also reported that one in every 152 children had a formal diagnosis of an autism spectrum disorder. Ongoing research in 366 schools in England and Wales suggests that 17 per cent of all statements mention autism or Asperger syndrome. Through its Advocacy for Education service, the NAS hears from thousands of parents who are deeply dissatisfied with the educational provision that their child is receiving. Across all age ranges, and in every type of provision, parents run into conflicts with schools and LEAs in their attempts to identify and meet the needs of their child with autism. This struggle to access appropriate education provision is reflected in the number of cases related to autism registered with the SEN tribunal. Last year there was an increase of 22 per cent of cases registered. It is unacceptable that parents should have to battle for what is every child's fundamental right. I agree with the noble Baroness, Lady Warnock, that this is a complete and utter waste of resources.
As the noble Baroness mentioned, last year the Audit Commission published Special educational needs: A mainstream issue, which looks at how well our system is serving children with SEN. I welcome this review as the current system is failing many children with autism who have SEN. However, my understanding of the problems posed by the current system and potential avenues for improvement, differs from the blueprint set out in the Audit Commission

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report. I would welcome improvements to the current assessment and statementing procedures, but reject the Audit Commission's conclusions that statements add little value, provide little assurance to parents, lead to an inequitable distribution of resources and are inconsistent with inclusion. Without statements, parents, who are not satisfied with their child's SEN provision, would have no practical legal redress.
My concern over the current statementing and assessment process is that there is no statutory body to regulate local education authorities. At the moment, parental vigilance is the only means of monitoring the implementation of a statement of special educational needs. This is compounded by the fact that local education authorities act as gatekeepers to the actual assessment process in the first place. Often parents do not know their rights and are, unsurprisingly, unable to cope with the complexities of the process without support.
I ask the noble Baroness what mechanisms can be put in place to give parents access to quick and easy forms of redress when statutory bodies fail to deliver on their SEN duties. How can the current variations in assessment and statementing practice be removed to end the postcode lottery of SEN provision? Although the statementing system is not working as it should, many parents of children with SEN are desperate to get a statement for their child as it is the only means of ensuring that they receive support in mainstream.
There are three fundamental problems with the current statutory assessment and statementing process. First, there is a gap between identified levels of need and current human and financial resource availability. Secondly, there is the failure of LEAs to act according to current law and guidance. Thirdly, there is the lack of any mechanism to ensure that LEAs implement statements. Those three points must be addressed to ensure that children with SEN access the education they need and deserve.
I do not agree with the Audit Commission's view that reducing the number of statements issued by LEAs would improve the current situation. The sole purpose of the current statutory assessment and statementing process is to determine the appropriate provision to meet the needs of all children with SEN. I believe that the motivation for parents to fight for an assessment comes from a deep dissatisfaction with the level of provision available from a school's SEN budget. As many LEAs are already delegating much of their SEN funding to schools, it seems unlikely that further delegation will lead to provision that will satisfy parents and will be appropriate for children with high-level and complex needs. Instead, assessment and statementing should be modified with the intention of putting into practice the current law and guidance designed to ensure appropriate provision for all children with SEN.
At no point does the Audit Commission ask whether we are spending enough on SEN nationally. There are several indications that we are not. The average lifetime cost resulting from autism and associated learning disabilities is estimated to be £3 million. That
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is a staggering figure. Only 7 per cent of that sum is spent on education. Evidence suggests that even slight increases in educational provision could result in major savings in later living costs. In my own county, Kent, with a funding gap of £3.7 million as a result of the Government switching resources to Labour core areas, the education budget will have to be cut dramatically.
Whether they are in mainstream or special schools, children with autism and Asperger syndrome need to be taught in an environment that is autism-aware and responsive to the needs of individual children. Regardless of whether the underlying rate is increasing, there are more children with autism in English and Welsh schools than ever previously reported. Resources must be found to meet the needs of those children if the policy of inclusion is to work.
What can be done to improve the recruitment and retention rates of specialist SEN professionals, particularly speech and language therapists, to increase the likelihood that assessed provision will actually be delivered? The noble Baroness rightly pointed out the vital role of speech therapists. Many teachers do not feel that they know enough about autism. Therefore LEAs should plan to train all teachers, assistants and specialist professionals in awareness and understanding of autism as part of the accessibility planning duty introduced by the Special Educational Needs and Disability Act 2001. The Teacher Training Agency should include modules in basic teacher training on how to meet the needs of children with autism spectrum disorders. The excellent document, Autism Spectrum Disorders, Good Practice Guidance, issued jointly by the DfES and the DoH, provides practical advice on teaching children with autism. I urge the Government to send a copy to every school in the UK.
6.57 p.m.
Lord Addington: My Lords, I thank the noble Baroness, Lady Warnock, for opening the debate, and for having the courage to prick the bubble of defence that has built up around the idea of statements. Virtually everyone who has been involved in these matters for any length of time see statements as a shield and support. Should we get rid of them because there is something better, or are they still the only show in town? That is the question that comes out of this debate. Whether they should or should not be the only option is another question. I believe that we should have an alternative, but at present there is not another way forward—at least not from here. I am reminded o f the story about asking directions in Ireland and being told, "Well, I wouldn't start from here if I were your."
The awareness of autism and autism spectrum disorder reminds me of dyslexia 20 years ago. People are suddenly discovering it. I hope that the noble Lord, Lord Astor, will not take this badly when I say that it is the sexy disability of the moment in education. It is a disorder that we are just discovering. Many of the cases that people are discovering and going through may be fairly mild, but I am not sure whether there are stories about autism spectrum disorders with people

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saying, "Oh, I knew someone who used to be autistic but he got over it", as I hear about dyslexia. Such people fail to comprehend what a disability is. They do not understand what is involved in the coping strategies, in learning and in getting through the problems. But I am sure that it will happen eventually. It is a little like, in fashion terms, the second run of flares: they have a slightly different cut but basically the same process is going on. People are discovering something new.
Against that background and against the expansion that took place, the statementing process, which finally gave people a way to say, "We need something to protect our educational needs and requirements", was vitally important. I do not believe that we have gone far enough into the process to be able to drop statementing yet, if we ever do.
The words of the noble Baroness, Lady Blatch, will be listened to with even greater interest than normal on this occasion as the statementing process was so much part of her drive. I believe that we should think long and hard before we drop statementing as it provides protection for the individual.
Reading the Audit Commission report reminded me of everything that I had ever heard was wrong with the education system in relation to special educational needs over many years. We are told: there is more awareness of the problems; there is not sufficient initial teacher training; there is not sufficient in-service training; it is better than it was; or, it is nowhere near good enough; and so on. That was the impression that I gained from the report.
Also, as the noble Lord, Lord Astor, has already pointed out, the Audit Commission does not address the fact that we may not have sufficient resources. The issue might be put into context if I break with habit and read what the Audit Commission says about itself:
"The Audit Commission is an independent body responsible for ensuring that public money is spent economically, efficiently and effectively, to achieve high-quality local and national services for the public. Our work covers local government, health and criminal justice services".
It does not say how big the cake is and whether it is big enough to feed all the people; it simply says that it should be done efficiently.
I am convinced that the Audit Commission will say that statements, which absorb money because they allocate needs effectively, are inefficient. More importantly, groups such as the National Autistic Society, the British Dyslexia Association and the RNID, to name a few, are very good at ensuring that people now receive statements.
Another problem pointed out in the report was that it is the middle-class child with the articulate parent who obtains a statement. I am reminded of dyslexia, which was known as the "middle-class disease". Problems do exist but, until we get something better, we shall be in trouble if we try to get rid of the statement. We should not do so until we are able to produce a better framework with teachers who know not only that dyslexia is a Greek derivative word
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meaning that one's spelling is bad, but who know fundamentally more about the variations that exist, how people are affected in later life and how there are different learning strategies.
I do not even dare to embark on the subject of autistic spectrum disorder. There are dozens of other groups concerned with hearing and sight problems—that is, sensory problems. Until the problems that can occur are known—at least, in theory, in the classroom—people will always be playing catch-up.
I believe that the Audit Commission was absolutely right to point out that we are not giving the teachers a fair start. If we are talking about integrating 10 or 20 per cent of children with a disability-based, special educational needs problem into the classroom, then it is inconceivable that a teacher would be able to meet the problems that he would face without starting with a better basis of factual knowledge. I believe that some people are receiving only two or three hours' initial training. A technical factual base is vital in getting this matter right. We must provide such a start.
The Government are always telling us that more will be done in this area. But perhaps we may finally have a Statement at some point saying that league tables are a problem. Such a high proportion of the school population will have difficulty in passing examinations or there will be so many holes in the exam-passing mechanisms that it will not add up. There cannot be simple league tables; they must be adjusted in some way. If they are adjusted often enough, surely league tables will become so complicated that they will become useless. If we are to be fair to special educational needs, we must tackle that problem. At present, teachers are having to defend their positions.
I do not know what more can be said on the subject. I shall simply say that if 20 per cent of the school population can potentially lower the status of a professional institution, that is not a great way forward. I hope that we shall hear more about that. But I suggest that the ultimate answer is, at the very least, to get rid of these crude league tables and to consider their entire status.
I hope that the answer that we reach in considering our whole approach to this matter is that in future it might be possible to get rid of the statement. I believe that we can do so if we institute better training and better resourcing in special educational needs. But that should not happen now or in the immediate future because, at present, it is the only show in town and we do need something.
7.6 p.m.
Lord Rix: My Lords, I begin by thanking my noble friend Lady Warnock for providing another opportunity to discuss such an important issue. As president of Mencap, as the father of a daughter with Down's Syndrome and as the grandfather of a grandson with a like syndrome, it is an issue close to my heart, as it is to the hearts of many other noble Lords present. In one sense, it has all been said before, but I do not apologise for saying it again. Each child

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with special educational needs who gets less than the best we can offer is an affront to both our society and our educational system.
With not a little help from this House, the noble Baroness, Lady Ashton, and her colleagues have done a good job on education and disability. They deserve credit for that. Nevertheless, I need to sound a note of caution. Legislation is important—we would not all be sitting here if we believed otherwise. However, even more important is the implementation of that legislation locally—in each local education authority and in each school. The findings from the two recent Audit Commission reports do not leave me with great optimism about the extent to which we have already secured full-blooded implementation.
In my view, special education means tailoring to the individual needs of the child the curriculum, the teaching skills, the teaching materials and the measures of achievement. With that tailored support, every child can enjoy his or her childhood and fulfil his potential. Having seen what children labelled as "ineducable" have achieved, I am not willing to settle for anything less than the best that we can offer. That means that mainstream schools and pre-school groups must try much harder.
In the light of the two Audit Commission reports and their tale of what has yet to be attempted and achieved, I want to focus on two areas that particularly affect children with a learning disability: early years provision in inclusive groups and meeting health needs in mainstream and special schools.
One of the recent Audit Commission reports made a very strong case for a substantial increase in early years investment. Children with severe learning and other disabilities are too readily sidelined into specialist settings—bypassing the experience and losing the benefits of mainstream nurseries or pre-school playgroups. Separation can mean isolation: missing out on early educational experiences and on early social experiences as being members of their local community. The children are separated from their brothers and sisters and from their potential friends. At the same time, their parents are separated from important contacts with other parents.
Inclusion is a real possibility for virtually all children, particularly in the early years, and it should be explored, not ignored. Indeed, there are many examples of children with the most complex needs being successfully included to their benefit and to the benefit of other children. As I said, the Audit Commission calls for more investment in early years provision for disabled children. Quality is not cheap; and I am pleased to hear about the new special educational needs and disability development fund. Can the Minister confirm that that will be extra money and that some of it will be used to support the inclusion of children with complex needs during the vital early years?
To pursue my central theme of including those who are most readily excluded, I jump from early years education to the subject of meeting the health needs of pupils with special educational needs. If that seems a
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jump too far, I trust your Lordships will remember that Eddie the Eagle was once a national hero. Since my noble friend Lady Warnock wrote her historic report some 25 years ago, there have been significant changes in the child population. Many more profoundly disabled babies are surviving. That steady rise in a very special population is thought to be due to improvements in healthcare, including enhanced prospects of survival for premature babies. By no means all, but a significant proportion of those children have multiple disabilities and complex health needs. Unless the Minister can tell me otherwise—we do not have precise numbers but we are talking about some thousands of children who may need to be tube-fed, are on complex medication or need specialist support of some other kind.
Mencap's report, Don't Count Me Out, revealed the exclusion from school life experienced by children with substantial health support needs. This very day Mencap has held a seminar to bring experts in the field together to help to plan the changes that are needed to include all children with health needs in education. Progress in that area is patchy. Some schools have been able to include children with major health needs with a minimum of fuss. Sadly, in other areas schools have made it clear to parents that their child was being refused admission on health grounds. Some claim that insurance is the problem, while others claim that t hey do not have a school nurse. Whatever the excuse, exclusion on health grounds is clearly discriminatory and the Disability Rights Commission, with the support of Mencap and many other organisations, is keen to do battle to stop such discrimination.
Severe disability comes as a challenge to some head teachers and school governors; it does not come easily to the parents or indeed to the child either. However, those who have risen to the challenge have shown that even the most complex health needs can be met successfully with the help of health colleagues. My generation of parents fought to get any kind of education for their disabled children. My wife and I, together with other parents, raised thousands of pounds to build a school many years before the 1970 disability legislation came into force. Today's parents still struggle to acquire the best education for their disabled children. Many want mainstream education, but all want really good appropriate education. None has a child who is ineducable, but there have been some blatant cases of discrimination against children and young people with learning disabilities, of whom society's expectations and priorities are often appallingly low, especially when it comes to educational needs.
Often discrimination is not premeditated; it arises out of a lack of imagination and planning. and sometimes a lack of resources to develop the right infrastructure in which disabled children can flourish. The Special Educational Needs and Disability Act has removed many barriers of exclusion and blatant discrimination for disabled children but, as with the weeds in my garden, new barriers seem to spring up

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when old ones are removed and unless those barriers are swept away, we shall be unable to follow Plato's prophetic dictum:
"The direction in which education starts a man, will determine his future life".
7.14 p.m.
Baroness Darcy de Knayth: My Lords, I welcome this opportunity to debate special education provision following the Audit Commission's report. I thank my noble friend Lady Warnock for initiating the debate and for her report that gave birth to the 1981 Act which together with the codes of practice in the 1993 and the 1996 Acts forms the pillars that prop up special education law.
Only six months ago at Third Reading of the Education Act 2002, which introduced powers to free schools from the national curriculum and so on, many noble Lords who are present today were involved in tabling an amendment to secure for the future the legal safety net for children with special educational needs created by those pillars: the duty to identify, to assess and to statement when necessary. My noble friend Lady Warnock was swift and stalwart in her support. At cols. 226 to 227 of the Official Report on 3rd July 2002—I paraphrase—she said that the so-called 18 per cent of children without statements were those at risk of being swallowed in the excitement of innovation—which was greatly welcomed—and that the preservation of the duty to identify children with special educational needs was the most important part of the amendment.
Your Lordships will remember that the Minister, while unable to agree to the amendment, gave firm assurances at cols. 230 to 235 that the protection would remain, but that innovation, if judged in the best interest of children with special education needs, would be permitted. I am sorry to go over old ground, but I believe that, welcome as the noble Lord's view may be, we need to keep the concept of the safety net firmly in mind. I hope that the Minister will reiterate that assurance today.
The first report argued for a high level review of statements. Eighty per cent of responses supported that recommendation. It is interesting to note that the least supportive of it were SENCOs, parents of children with statements and voluntary organisations, the people nearest to delivery or receipt of special education provision. They worried that the review may be focused unduly on the erosion or the removal of statements in a world where there is no other framework for assuring parents of the provision to be made for the child. Several said that they would welcome strengthening the law around statements, rather than scrapping them and argued for some practical solutions.
IPSEA, of which I am a patron, said that at present, the law which gives disabled children legal rights to appropriate provision can only be enforced by individual parents in respect of individual children. That is manifestly very hard especially for those children whose parents, for whatever reason, lack the
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ability or the resources to challenge the actions of their LEA. That was a problem that was also highlighted by the National Autistic Society.
For many years IPSEA has argued for the establishment of an independent enforcement agency that could ensure that LEAs fulfil their legal duties towards disabled children. That could be achieved through an extension of the ombudsman's role or that of the Special Educational Needs and Disability Tribunal. That is a practical suggestion that would remove from parents the burden of having to police local education authorities. It would bring immediate benefit to many children.
The second report highlighted difficulties with SEN as a mainstream issue. Many of those points—weak accountability for SEN provision or a patchy approach to early intervention and so on—underlined the importance of the safety net. As the SEC puts it, precisely because of the difficulties identified in the second report, it is crucial that we have the statutory framework in place. The SEC welcomes the second report and the 10 point agenda for action, and has been pressing for many of those points for a long time. The Government have done much to promote some of them and the report will be a spur to putting the more neglected elements back at the top of the agenda. The new duties on schools and LEAs to increase access to schools for disabled pupils should be a great help and with the new initiatives involving a multi-agency approach for pupils at a very young age it is hoped that children will no longer experience failure before they receive additional help. The National Autistic Society and the RNID made that point.
However, the SEC stressed that even if statements are being very little used, it is important that they are not abolished. They still provide the safety net, should schools or LEAs be unwilling or unable to provide for the individual child's special education. I entirely support what the noble Lord, Lord Astor, said about cost. A small increase in what is spent would produce a spectacular result.
Why do I sound such a fuddy-duddy when I used to go on about integration and then inclusion? I should be the last to meddle in Scottish affairs, certainly since devolution. The noble Baroness, Lady Linklater, was in her place; unfortunately, she is no longer present.
Lord Addington: My Lords, I shall ensure that the comments of the noble Baroness are passed on to her.
Baroness Darcy de Knayth: My Lords, I am grateful to the noble Lord, Lord Addington.
Last Friday, the Scottish Parliament published a Bill, the Education (Additional Support for Learning)(Scotland) Bill. If enacted, it would remove a disabled child's right to the special educational provision for which his or her needs call. IPSEA and her sister organisation in Scotland have condemned that move.

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The warning that we must heed from the actions of the Scottish Parliament is that not all those engaged in the debate on the legal framework for the delivery of special educational provision will have as their prime concern the aim of protecting and extending disabled children's education. Some will argue, as it seems to be argued in Scotland, that it is too bureaucratic to assess individual disabled children's needs and too expensive to provide for them. That is why I was so delighted that we had the debate in the summer during which the Minister gave us her firm commitment about that. I do not suggest that that argument will prevail, but things can go pear-shaped and we always need safety nets.
I am less hesitant about raising another point about Scotland. The Disability Discrimination Act 1995 covers Britain—it is not devolved legislation. Noble Lords will remember that when that Act was extended to cover schools, including schools in Scotland, the Government decided that failure to provide the auxiliary aids or services that a child needs would not constitute discrimination. The reasoning behind that was set out in the code of practice for schools on the Act at paragraph 6.20, to the effect that special educational provision should include any educational aids and services where those are necessary to meet the child's identified needs as specified in the statement.
Clearly, if the legal framework for special education in Scotland is changed to remove children's rights to assessment and provision, they will be exposed to disadvantage under both education law and the Disability Discrimination Act 1995. It is not for me to decide how to sort things out, but I hope that the noble Lord, Lord Addington, will convey that message, as he promised. The Disability Rights Commission in Scotland is well aware of that difficulty. When the Scotland Office consulted on the ideas behind the Bill, the DRC' in Scotland argued:
"It is not in the best interests of the child to displace the legal right to assessment, recording"—
that, is statementing—
"review or appeal … We support a revised and strengthened process whereby the Record of Needs is developed to become an entitlement to support".
By all means let us have a full review, innovate and be imaginative, but I urge the Government to hang on to the safety net. As the noble Lord, Lord Addington said, we have not yet gone far enough to do without it, if we ever will. One never knows; things can go pear-shaped, as we have seen in Scotland. Let us hope that that can be sorted out, but if the two pillars were to become the twin towers and the whole safety net were to collapse, children with special educational needs would be left without a lifeline.
7.24 p.m.
The Lord Bishop of Hereford: My Lords, I, too, thank the noble Baroness, Lady Warnock, for introducing the debate and for all her care, concern and hard work over many years on behalf of disadvantaged children and those with special needs.
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I shall speak briefly from my perspective as a bishop and from the point of view of the Church of England, which has always been much concerned with education—not least, to cite the Board of Education, with,
"the education of the most disadvantaged in society and of children with special educational needs".
Those priorities were reiterated in the Church's report entitled, The Way Ahead, published two years ago in response to a General Synod debate in 1999 that identified Church schools as being at the heart of the Church's overriding concern with mission.
A bishop has a particular interest in that aspect of education. At his consecration service, he is charged by the archbishop to have a special care for the outcast and the needy. The noble Baroness, Lady Warnock, eloquently explained how wide a spectrum of disadvantage we need to consider—not simply those children whose special needs are such as to warrant a statement but all those from variously disadvantaged backgrounds, for social, political, economic or linguistic reasons, who need special care, encouragement and help. So the cause is dear to my heart.
However, to concentrate for a moment on statemented children, I agree with what has been said by most noble Lords during the debate: we need to retain that system. It is interesting to note how policies towards their education have changed over the years. In the early 1980s, following the establishment of the new framework, there was at long last a recognition of the need for both proper identification of special educational needs and the inclusion of children with those needs, as far as possible, within mainstream schools—although it is of course true that the most severely disadvantaged children will continue to need to be educated in special schools.
I have two severely autistic great nephews for whom inclusive education was briefly possible in a local primary school with special support. Both now have to be educated in special schools. I am glad to say that that education is reasonably satisfactory.
In Herefordshire—or Hereford and. Worcester, as the LEA was in the 1980s—special units were established in each secondary school. Since 1997, most of them have been disbanded. The statutory framework for inclusion, Inclusive Schooling, Children with Special Educational Needs, published in 2001, gives all statemented children a strengthened right to a place in a mainstream school unless that would be incompatible with the wishes of their parents or—this is difficult to evaluate—with the provision of efficient education of other children.
As noble Lords have mentioned, there is an inherent conflict of interest between the inclusion agenda and the league table culture. They make uneasy bedfellows and can sometimes cause serious tension or outrigit conflict. The inclusion of children with moderate or severe learning difficulties in ordinary classes creates enormous difficulties in most cases, although some schools—I speak in particular of Church schools—that have welcomed SEN children have found it an enriching experience.

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The answer must be that we need varied and flexible provision. Classroom assistants can give valuable help with moderate SEN children or children who do not have a statement but still have considerable problems with learning. Last week, I visited a primary school on the edge of Telford, an area of considerable social deprivation, that has been turned around, by a brilliant headmaster, from a failing school to a beacon school in which, in one classroom, three classroom assistants are working with the class teacher in a good and happy atmosphere.
But the disbandment of most special units in secondary schools in Herefordshire has meant that secondary-aged children in the county with more severe problems—either of physical disability or of learning difficulty—have gravitated to the one remaining specialist unit, which is excellent. It is within the Church of England secondary school in Hereford itself, happily called the Bishop of Hereford Bluecoat School. That unit accommodates 46 children in a school of about 1,100 with generous specialist staffing needs. It is on the campus, physically linked to the main buildings yet distinct and distinctive in its ethos and style. It is an impressive place. The children who go there are happy and achieve what are for them remarkable results. There are excellent relationships between the SEN and other children—good social interaction, which is beneficial to all.
Let me give another example, this time from the primary sector and from Suffolk. A Church of England voluntary aided primary school there has worked very closely with the LEA and has provided for two classrooms to be adapted and staffed in order that statemented children, some with multiple disabilities, can be educated within the environment of a mainstream school, with real benefits, education and social, to the whole school community.
In the same county—this picks up on the issue of a wider interpretation of multiple disadvantage and the special education provision which may be necessary—the diocese and the LEA are working together on a Sure Start project for pre-school children with severe behavioural difficulties which enables them, after proper assessment, to move into mainstream schooling.
These are small but typical examples of good practice, implementing an inclusive policy in a sensitive way which respects all the children involved, those with special needs and those without. From my conversations with teachers, I believe that there is a reluctance on the part of the teaching profession to embark on further new developments, let alone to see new legislation introduced at this stage, although I recognise the point, well made by the noble Baroness, about the disproportionate resources which at present are going into the statementing process. We need to find some way of reducing that disproportionate use of resources.
It would be better to share existing good practice. There is not an even spread of good practice across the country and sharing it must be the first way forward to
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increase the integration of the Sure Start and Home Start projects with local schools which can do so much to help children get a good start when they first enter primary schooling.
Alongside that initiative for very young children, there must be continuing efforts to overcome the multiple problems caused by poverty, broken homes and all the damaging consequences of disfunctional families and social exclusion. But I suggest, for the time being at least, that we will have to live with the statementing process and build on best practice.
7.32 p.m.
Lord Lucas: My Lords, I declare an interest as editor of the Good Schools Guide.
The 1981 report of the noble Baroness, Lady Warnock, was a great achievement from which many good things have flowed. If one looks back over the years at what life was like for the kind of children who are now statemented—before the process began, before the Warnock report and before the progress that has been made—we can see that undoubtedly things are much better than they were and that we have done many good things. However, I share entirely the noble Baroness's analysis that we have reached a point where we need to look to see whether we are going in the right direction and whether we could not do better by changing tack to some extent.
It is not satisfactory that local authorities are seen as the enemy of statemented children, but it is inevitable given the current structure of funding. Local authorities are under a great deal of funding pressure. They have very little free money in their schools budgets—a delegation of which I thoroughly approve—which necessarily makes the statementing process contentious. In many local authorities great delays creep into the process, to the great distress of parents and the disadvantage of the child.
It is a process which, in financial terms, can be extremely difficult to manage and can result in a great misallocation of resources. The system is bureaucratic. Educational psychologists and other people—a resource which is very short in this country—are tied up in the process and do not have time to dedicate themselves to looking after the children. It is very rare that a local education authority EP sees a child twice. The child is seen for the statementing process and then the EP is gone. If we were providing proper support for children in need of educational psychological assessment, it would happen every couple of years or so in order that a child's progress through the system could be charted and adjustments made as necessary.
A system is emerging where resources are very much directed at 2 per cent of the school population. If you are a fraction outside that, you get nothing. In many schools, 98 per cent of the population do not benefit from the things that are done for SEN children. The way things are going, the way things are structured at the moment, I cannot see how this situation will do anything but get worse.
Parents, not unnaturally, see the statementing system as the solution to their problems with their child, and those who are articulate and able will push

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extremely hard to get their child into the system because of the benefits that flow from it. And quite rightly too. If the money is there for that purpose, I entirely support parents who choose to make use of it. But it is a source of continuing pressure on the system, and will continue to be the source of distress and malfunctions within the system in years to come if we do not look for a better way of managing it.
There are possibilities for doing things differently. My vision is for a system based on SEN-friendly schools, taking inclusion a stage further to the point where schools are truly able to deal, in a routine way, with most mainstream SENs. This would involve schools taking a great deal more responsibility in this area than they do at the moment. It would involve a great deal of training, principally. Teachers should be trained to deal with children with dyslexia, Asperger's and ADHD and other disabilities. Resources should be available with the SENCO or with the LEA to help a teacher who needs an additional understanding of how to deal with a child who has a mainstream SEN in a disruptive or extreme way.
The structure is already there in some schools. Such schools are wonderful for all children because a school that is good at dealing with special needs is a school that pays attention to the needs of every child. It adapts itself to the needs of every child, rather than having a set way of operating and letting the children bump around regardless of their individual needs. That kind of school can deal with the needs of most children with SEN, providing great benefits to all children in the process.
Under that kind of structure you could put a border on statementing. You could say, "This is what should be treated by the school and anything beyond that will be provided for by the statementing process". I imagine that most of the charges of the noble Lord, Lord Rix, would stay within the statementing process. Children who require such a degree of support need specialist, individually provided and individually crafted support, whereas most children with dyslexia can deal with an environment where the resources are there and teachers know how to help the child make use of them, but they are not specially provided for the child.
You could give parents the right to expect and schools the duty to provide that kind of education. You could provide the resources to schools as part of their financial baseline to train teachers up to the necessary standards. You could expect schools to have a general awareness of special education needs. You could expect schools to indulge in baseline testing so that they know the pattern of abilities and disabilities of their students and know how to respond to it. You could expect schools to have teaching styles which are SEN friendly. And, in many other ways, you could expect schools to provide, as a matter of routine, the kind of support that parents now have to fight for under the statementing system.
I do not believe that we can hope to establish such a system merely by making changes in legislation and saying, "We now expect schools to do this", and
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leaving all those children who are presently supported by the SEN system to sink or swim according to whether or not their school responded in a correct way to this change in expectations. It is much more complicated than that. Under those circumstances, the noble Baroness, Lady Warnock, is quite right to ask for a proper investigation and report on how such a change might be achieved.
I would like to see a situation in which children with SEN could expect support from all the professionals who were involved in the SEN business. Everything would work together to make sure that they received the support they needed, but in a way that benefited everybody and kept costs under control. People would not have to fight all the time to have extra money spent on their child as the resources would be available in the way that they are for the ordinary needs of most schoolchildren as a matter of course.
It is worth looking again at the system. I do not think that we can go on the way we are, and so I thoroughly support the Motion of the noble Baroness, Lady Warnock.
7.40 p.m.
The Earl of Listowel: My Lords, I, too, thank the noble Baroness, Lady Warnock, for allowing us this opportunity to think carefully about special education. I have no view on statements—I do not have the experience to have such a view. I am concerned about inclusion, particularly the inclusion of children in care, and that is why I speak.
I should like to describe how one primary school maximises inclusion and works very much in the spirit of what the noble Lord, Lord Lucas, has just said. I should also like to call attention to one model of teacher support that I think could be more widely used. I suggest that we have smaller secondary schools in areas of high deprivation or devise some means to make smaller community schools for secondary students in those areas.
Marion Rosen, the head teacher of Star primary school, has minimised the number of her children needing statements. She has achieved that in a school of over 600 pupils that has a higher than average number of pupils on free school meals. The school has very high pupil mobility—half the pupils have spent less than two years there. The establishment is in Newham, an area with large numbers of families in bed-and-breakfast and substandard accommodation. The area's social services are overstretched and under-resourced. In this area, a child's death was associated with fearfulness on the part of the social services department to visit the violent parents. The neighbourhood has a large ethnic minority, asylum-seeker and refugee population.
In 1997, Star primary school was in special measures. Marion Rosen was seconded in March 1999, and by March 2000, her institution was removed from special measures. Sadly, there is not time to catalogue and detail all the improvements the head teacher and staff have made. If your Lordships are curious to learn more about this remarkable school, please ask me outwith the Chamber.

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Star primary school has two children in the autistic spectrum who have not been statemented. Four-year-old Tanya's needs were identified by Sure Start before she arrived in the nursery. She already has a full-time worker and when she settles into the nursery class she will receive support from a full-time nursery nurse. Later she will be supported full time by a teaching assistant.
On Monday morning of this week, we saw Hamid being taught. Jane, his teaching assistant, had her leg behind his chair so that he could not remove himself from the task in hand. As he turned away, she would reach to the side of his chin and gently redirect his gaze to the work in hand. Watching Jane was Olga, another teaching assistant, who is being trained up with Hamid. Jane was described to me as an outstanding teaching assistant who was being used to model the correct way of working with autistic children.
The funds that might have gone to provide for a statement had here been delegated to the school for it to develop the whole school framework to provide for children with SEN. In co-operation with the local education authority, three criteria for deciding the quantity of delegated funding were identified—the numbers of children on the school roll, the numbers of children on free school meals and the rate of pupil mobility. Additional funding is available by application to a board of special education needs coordination officers, who moderate such payments.
With the assistance of this funding, money from Sure Start, Excellence in Cities and the Healthy Schools initiatives as well as from education action zones, Marion Rosen and her staff have transformed their school. According to the latest Ofsted report, Star primary
"is now a very good school providing good value for money. This is an inclusive school which provides a very good education for all pupils. The school has made rapid improvement because of the head teacher's careful analysis of the needs of the school and the very effective management systems and structures she has put in place. The quality of provision for pupils with Special Educational Needs has improved under the inspired leadership of the school's Access Manager".
One needs to be realistic in making decisions about which children will benefit from inclusion in the mainstream. One needs to ensure that they do not hinder or harm other children. There is still an important role for special schools. At Star primary school, two children benefit from three days a week at a local special school. However, the better managed and resourced a school is, the more able it is to include challenging pupils and harmonise them into the whole school. That is what one sees at Star primary, Marion Rosen's school.
Last night, the noble Baroness, Lady Sharp—I see that she is in her place—and I were reminded of the Office for National Statistics figures for the mental health of pre-school children. Some 15 per cent have moderate mental health difficulties, while an additional 7 per cent have severe mental health difficulties. In the United States, one in seven children
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is prescribed Ritalin, a drug to manage hyperactivity. Such hyperactivity in children is associated with postnatal depression in their mothers.
Lady Young is with us in spirit today, and I hear her drawing attention, as she always so eloquently did, to the changes in family structure that have contributed to this. However, there is no going back to past models of family life. We must deal with the needs of children and families as we are confronted with them now. We should also recognise that our decision not to invest in housing, not to invest more in midwives, health visitors, social workers and teachers has pushed many of those families that might have been viable over the edge.
In this context, I ask the Minister to consider making available to staff of schools with particularly challenging children regular consultation with an appropriate mental health professional. It would be on a group basis and the consultant would need an understanding of the particular circumstances of schools. Such a service might play an important part in teachers' professional development and prove an effective means of strengthening teachers' capacity to deal with emotionally unhealthy children and occasionally with their emotionally unhealthy parents. It might well prove useful in improving the retention of teachers in such stressful environments.
Three weeks ago I was speaking with the manager of a children's home who has 30 years' experience. Once every three weeks, she and her staff meet and discuss their work with a child psychotherapist from the Anna Freud centre. This has been part of the home's culture for many years and the manager has found it invaluable.
I have seen a similar system at work to great effect at Centrepoint. Speaking today with the deputy head of a well respected pupil referral unit in Lambeth, I was told that his staff benefit from such a consultation once a month. He, too, finds it invaluable but dearly wishes that it could be more frequent. His view is that many mainstream schools could benefit from such support and significantly fewer pupils might then be excluded.
If teachers are to work effectively in milieux within which there are growing numbers of increasingly troubled young people—and, from what I hear, there are worrying increases in disturbed behaviour in children, with increasingly young children acting in very troubling ways—they need to be adequately supported in doing so. I should make clear that I am not suggesting that teachers stop teaching and concentrate on their pastoral role. Rather, I believe it may be necessary for teachers to have a protected place in which to think about their work. They might then be better enabled to teach well; to teach creatively; and to carry on teaching well and creatively.
In that proposal, I am supported by Kairen Cullen, head of the child and educational psychology department of the British Psychological Society. Marion Rosen, last Monday morning, repeated to me several times the need to make schools more emotionally literate. If the Minister would care for more information about that proposal, I will gladly furnish her with it.

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Finally, as we rethink special education and as we think about inclusion, perhaps we can also think about the size of our secondary schools. Is their scale suitable for building a sense of community, a sense of being valued and of being considered among their pupils? Are children who have lacked nourishment within their families likely to warm to an anonymous institution in which the head teacher may know them by name only if they cause trouble?
Practitioners are telling me and academic research demonstrates that we need to give serious consideration to smaller secondary schools—not necessarily smaller classes—in areas of high deprivation. Alternatively, it might be possible to have larger schools broken down into smaller units where every child and adult knows every other child and adult.
My time is up. I am grateful to the children's mental health charity, Young Minds, for its advice in preparation for the debate. I look forward to the Minister's response.
7.51 p.m.
Baroness Howe of Idlicote: My Lords, I, too, thank my noble friend Lady Warnock, who is so deeply knowledgeable about SEN children, for raising the matter for debate. While I was reading the Audit Commission's report, my mind went back to the late 1950s when I was on the management committee for Botley's Park hospital for those suffering from mental deficiency, as it was called in those days. I admit to being fairly appalled at the conditions that existed then for the patients—including children—and I suppose that from then on I have supported campaigns for reforms aimed at what is today called "inclusiveness"; that is, enabling those with handicaps to live as full a life as the rest of us. However, sometimes I wonder whether we think through sufficiently the consequences of our well-meaning policy changes.
One recent Starred Question in your Lordships' House wanted to know whether the NHS had abolished mixed wards in hospitals. Yet it is not that long ago that after much campaigning these were introduced. Those of us who had campaigned—including myself—felt that to keep the sexes separate in this way, especially in long-stay hospitals, was not the natural way the rest of would want to live. That example illustrates the kind of problems we face today due to the well-meaning emphasis on full education opportunities for SEN children and, in particular, our wish for as many as possible of them to be educated in mainstream primary and secondary schools.
I am not suggesting that that approach is wrong. But I fear that unless more resources are allocated the short-term effect may well be the exact opposite of what was intended.
A top government priority—rightly, in my view—is to get children out of poverty. SEN children, like looked-after children, form a targeted group within the category. But, sadly, the report highlights sharply that this group is still not the priority it should be. There are even some potentially counter-indicative trends emerging.
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We have heard how the budget of £3.6 million is split between children with statements and those without. That leaves only one-third of the budget to be spread over the remaining 1.5 million children. No wonder the vast majority of SEN children are not diagnosed early enough. There are clearly far too few resources available for that important early diagnostic work, which, with the right support, might well prevent later suffering and expenditure.
Secondly, there is an appalling dearth of reliable statistics, not least about the higher absentee and permanent exclusion rates for SEN pupils. LEAs' provision and support services generally vary considerably. Some case studies show just what can be achieved, but the overall picture is fairly dismal.
Thirdly, there are concerns from SEN children and their parents. These include, for example, difficulties over school access—and not just for the physically disabled. There is a lack of speech therapists and a perceived lack of friendliness on the part of other pupils and, no doubt, for seemingly good reasons such as safety, restrictions on access to some curriculum subjects and the fuller school life. There are hints, too, that one reason why fewer academic SEN children may be discouraged from taking exam subjects is the competitive league table problem.
Recommendations to deal with many of these problems are made in the report. They include more training in SEN for all teachers in their induction year. But there is a general need for wider knowledge at all levels of SEN problems and how to cope with them. There is a need, too, for far better support from the LEAs' educational psychology service and more detailed record keeping by both LEAS and schools.
But, apart from children's educational needs, as the report points out:
"It is clear that educational inclusion poses particular challenges to health and social services, as children with complex needs who might previously have been grouped together in special schools are increasingly attending mainstream schools".
As my noble friend Lord Rix said, many more babies survive who might not have done so previously, which is good. We face, too, a more complex scene partly because of a better understanding of the range and complexity of those with SEN. The noble Lord, Lord Astor, mentioned autism. It was not that long ago that autism was not acknowledged and parents fought strongly to win that acknowledgement. Now we have a spectrum of autistic disorders, all of which contributes to the complexity of the problem.
So have we got the policy wrong? Are more children, not fewer, being disadvantaged socially as well as educationally by our wish to see as many as possible educated within mainstream schools? I am sure that the answer to that question should still be "No". But despite the considerable efforts in some areas, and considerable improvements over the past few years in some areas, the report shows how much work there is still to do.
Much the most important factor is the need for a joined-up-government approach—very much at the heart of the Minister's thinking. We need to use every

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kind of resource available, statutory and voluntary, at both central and local government level. Almost certainly the families most in need of help will be from poorer, more disadvantaged, often dysfunctional backgrounds. They should all have been identified, although clearly this has not happened and not early enough, through splendid schemes such as Excellence in Cities and Sure Start.
On the voluntary side, this should be a major target area for established organisations and for those such as the Experience Corps, which is doing so well in recruiting the new wave of retired volunteers. Home Start, on the voluntary side, is exactly the kind of hands-on practical support needed, with individual, confidence-building relationships developed and practical help given where needed.
Finally, I turn to the teachers themselves. As I read and agreed the report's recommendations, my heart sank. I think I have supported almost all of this Government's attempts to break the Keith Joseph "cycle of deprivation" and yet I am beginning to feel we are asking teachers to take on far too much simultaneously. They need—and must have—more time and resources to tackle these requests and, above all, to do the actual teaching they are qualified to do. That is why we must look hopefully for a fast-growing number of assistants to be involved in classroom work in future.
I close by emphasising that these key people—the teachers and those who work with them and, dare I say it, ahead even of those responsible for our health—should have the resources, proper pay and respect that reflects the vital role they play in our society.
8 p.m.
Lord Pearson of Rannoch: My Lords, as usual in debates of this kind, I declare my interest as the father of a mentally handicapped daughter, with Down's syndrome, who is now 22.
I join other noble Lords in thanking the noble Baroness, Lady Warnock, for introducing the debate and particularly for her support for parents of children with severe learning disabilities who want those children to go to special schools, including boarding schools. My own daughter was very fortunate in being able to go to such a school.
I trust that it will find favour with your Lordships if I reveal that I said most of what I would otherwise say tonight as recently as 18th December of last year (at cols. 755 to 758 of the Official Report) and feel sure that noble Lords will be relieved if I do not repeat it all again now, especially as some of your Lordships participated in that debate. The debate was an Unstarred Question in the name of the noble Lord, Lord Ashley of Stoke, to ask Her Majesty's Government what consideration they were giving to introducing legislation to protect people with mental incapacity. I devoted most of my remarks to the very distressing situation which is being created—perhaps, one should say, made even worse—by the recent Special Educational Needs and Disability Act with its
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emphasis on mainstream education for all children, however handicapped, if that is what their parents want. The distressing situation to which I refer is that parents of children with mental handicap or severe learning disabilities are finding it even harder than before to place their children in special schools if that is what they want to do because they believe it to be essential for their children.
In the debate, I quoted the assurance of the noble Baroness, Lady Blackstone, when the Special Educational Needs and Disability Bill was going through your Lordships' House early in 2001, that parents who want special schools would not find themselves in a worse position as a result of the Bill. I drew the Government's attention to a substantial article in the Daily Telegraph on 12th December 2002 and I quoted from a letter in the same newspaper on 14th December from Mr Mic Carolan, headmaster of Hurst Special School in St Helens, both of which set out the detail of the difficulties I have mentioned.
The debate on 18th December was focused on the many problems surrounding mental incapacity in general and was answered, therefore, for the Government by the noble Baroness, Lady Scotland of Asthal, on behalf of the Lord Chancellor's Department. I did ask the noble Baroness to do her best to make sure that her colleagues in education took note of what I had to say and of the article and correspondence in the Daily Telegraph. It is entirely understandable that the noble Baroness did not confirm in her winding up speech that she would do so, and so my purpose in intervening briefly tonight is merely to make sure that the noble Baroness, Lady Ashton of Upholland, and her colleagues in the Department for Education are indeed aware of what I said on 18th December and will take it into consideration in their deliberations on the future of special education needs in this country. The noble Baroness nods her head. So on the assumption that she will feel able to do so, I need trouble your Lordships no further now.
8.3 p.m.
Baroness Sharp of Guildford: My Lords, I, too, thank the noble Baroness, Lady Warnock, for initiating the debate and for raising this important if challenging question: whether the process of statementing has outlived its usefulness.
Two years ago, we were debating the Special Educational Needs and Disability Bill, now an Act. For the most part, we were united in our vision of the inclusive society that we wanted to see in which each child was treated as an individual and his or her needs met within the school system, either mainstream or special schools. I agree with the noble Lord, Lord Pearson. The noble Baroness, Lady Blackstone, assured us that the special schools system still had a place, even though she and other noble Lords wanted to see a more inclusive approach within mainstream schools.
However, at the time we warned that such a vision needed resources to match it. The vision of a mainstream school which is thoroughly inclusive was

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mentioned today when the noble Earl, Lord Listowel, referred to Star Primary School. It is a primary school that I, too, have visited. I was enormously impressed. But it is a primary school in an Excellence in Cities programme, receiving vast resources. That two children who are not statemented can be given classroom assistance indicates that the school has resources for that purpose. Most mainstream primary schools do not have the resources to devote a classroom assistant to an individual child unless they are statemented. That is one reason why schools and parents are anxious to get children with special needs statemented: it brings extra resources into the schools to enable them to cope with those problems.
We warned the Minister time and again that in some senses the aspirations and visions set out in the Bill required resources. By and large, at the time the Minister and the Government were willing the end but not the means. The estimates of the costs of implementing the Bill were grossly inadequate.
In the two reports received last year, the Audit Commission gives a good snapshot of what has been happening. It considers the question of resources. A number of noble Lords have asked whether there are enough resources. My answer is no. When debating the Special Educational Needs and Disability Act, it was clear that many noble Lords believed that resources were insufficient. However, it is not the Audit Commission's role to say whether resources are sufficient. Its main job is to consider the resources available and to advise local authorities on whether those resources are being spent wisely and whether we are getting value for money. It is clear from the two reports that at present the commission feels that even if there are not enough resources, the resources available are not always spent wisely. The question that many of us have been hit by is why 70 per cent of the resources are being spent on the small minority of children with statements. Is that right, or do we need more resources in the system as a whole?
Among the issues that the Audit Commission has identified as being unsatisfactory in the present use of resources is, first, the arbitrariness of provision. Whether needs are met varies enormously between local authorities and schools. There is a complete postcode lottery in that regard. Secondly, the Audit Commission has made it clear that the early years agenda is hardly being addressed, as the noble Baroness, Lady Howe, said. Thirdly, there remains a big problem of interagency co-operation. Fourthly, there are major shortcomings in training. A huge effort needs to be made to ensure that all staff have some understanding of how to cope with the challenges of children with special educational needs and to put best practice into practice.
Fifthly. there are major tensions in schools between the performance and inclusion agendas, as highlighted by the fact that a disproportionate number of children with special educational needs find it difficult to gain admission to the school of their choice and, subsequently, a disproportionate number tend to be excluded.
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Lastly, but by no means least, it is extremely difficult to monitor what is happening because there is no coherent monitoring of what schools are doing with special educational needs.
In the time available, I shall consider four of the issues from that list. First, on the matter of the tension between performance demands that are made on schools and the special educational needs agenda, only a couple of weeks ago the schools Minister reiterated that in the light of the disappointing STATS results for key stage 2, the Government would renew their pressure on teachers to get better performance from children. That is a most unsatisfactory approach. We know that those statistics are unsatisfactory because they are crude at the moment. Yes, we are beginning to receive value-added statistics but, if the secondary school value-added tables are anything to go by, they will not be worth much more than what we have now.
Why do we have to go on treating children as statistics rather than as individuals? The whole purpose of the inclusion agenda is to treat children as individuals, as we should be doing. As the Audit Commission says, there should be a separate plan for each child; each child needs to be monitored according to its own plan, not according to set performance indicators from Her Majesty's Government.
Secondly, I want to address the issue of early intervention. It is clear that the sooner that one identifies needs and starts to meet them, the lesser are the problems that must be met. One has only to consider the costs—not only to society. When children are emotionally and behaviourally disturbed, as an increasing number are, if one could nip that in the bud one would save on the enormously high costs of hooliganism, of sending children to special schools and at a later stage to what used to be called borstals and now to prison. If we could intervene early enough and help the child and parent, all those costs might be saved. Surestart is a marvellous programme, but we need to follow it up.
That brings me to my next point, which is the need for joined-up thinking and interagency working. As the Audit Commission said, the fact remains that teachers and schools are not involved alone. One needs to bring together health and social services and frequently the housing authority, because many problems may stem from housing difficulties. However, we know perfectly well that there is an enormous shortage of social workers and educational psychologists. In a school where I was a parent/ governor, I remember the head saying, "We try to get these people together, but when I ring up the social services and ask them when I can come along, I am told in six weeks time. If I have a problem today, I need these people now for a case conference. It is no good making it in six weeks time".
The fact is that all local authorities are squeezed by the Government in terms of the local authorities settlement. The situation is extremely difficult, particularly in the South East, and I view the matter very much from the Surrey point of view. We do not have enough social workers. Social services are

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squeezed. Even to stand still we must increase the council tax by 13 per cent. If we were to fulfil our agenda entirely, we would have to increase the council tax by 20 per cent. It is a difficult agenda. It is made the more difficult by the fact that the money that used to go to schools directly from the DfES is now incorporated within the SSA. For all that the Minister says that the money is there, it is there in the SSA but it is not there on the ground, as it used to be.
Fourthly, I have little time left in which to speak but I wish to say a few words about training. Training requirements are clearly extremely important. We need to train teachers and we need to be aware that specific training is available on each aspect of special education. Teachers have to be put through these training programmes and that takes time. Time is the most precious resource of teachers these days. The headmaster of one of the big local secondary schools told me of a two-year training course on the needs of the visually impaired. Two of his teachers are undertaking that course but they have to do it largely in their own time. As the headmaster said, those teachers are voluntarily undertaking to do that course in their own time. Different training courses are needed across the spectrum of special needs. We expect our teachers to devote an enormous amount of time to such courses. As I say, time is a scarce resource.
I have run out of time myself. However, I should like to finish by coming back to the question posed by the noble Baroness, Lady Warnock, when she asked whether it was time to review statementing. I believe that we need a review. I make two points on that. First, we need to allow time for the Special Educational Needs and Disability Act 2001, and the codes of practice that were introduced subsequent to that Act, to shake down, to put it colloquially. Much change is occurring in the system at the moment and we need to see whether it is working. Secondly, I think that a review is probably needed, but we clearly cannot change the system until after such a review has been held. As the noble Baroness, Lady Darcy de Knayth, said, the statement is a lifeline for parents to ensure that they can exert their rights. It is important that that lifeline remains. We must not take it away until a new lifeline is introduced.
8.16 p.m.
Baroness Blatch: My Lords, I join noble Lords who have thanked the noble Baroness, Lady Warnock, for providing us with the opportunity to have this debate. We have very much more to thank the noble Baroness for. I refer to the enormous amount of work that was done in the 1970s, the Warnock report and the Act that followed it. We are enormously grateful to the noble Baroness for that. The great strength of this House is the ability of its Members to select a subject and to provide such informed and expert opinion. It is always a joy to participate in these debates.
The noble Baroness, Lady Warnock, calls for a new look at the framework in which special educational needs are identified and met. The work that preceded the Warnock report and the Act that followed took
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place almost 30 years ago. The noble Baroness. Lady Warnock, is right to argue that the world has changed and that assumptions made all those years ago should be challenged today.
Many points have been made tonight to which I should like to respond. But, alas, as the noble Baroness, Lady Sharp, said, time is our enemy. I cannot do justice therefore to what I consider has been an extremely important debate that needed to be held.
Two main issues need to be considered separately: first, the statutory framework and whether it is timely to call for another fundamental review; and, secondly, the current system, its strengths and weaknesses. I support the call for a review. However, it would take a long time. Therefore, the present system has to be sustained and has to be made to work more effectively. The safety net of the statementing system is important and has been argued for cogently by my noble friend Lord Astor and the noble Baroness, Lady Darcy de Knayth.
My noble friend Lord Astor concentrated on the condition of autism and the spectrum of related disorders. My noble friend made the case for more effective statementing but I couple with that the concern for non-statemented children who also have special educational needs. Because the system demands it, there is a tendency to focus attention on statements and statemented children. The challenge for teachers in the classroom are those children who are non-statemented. But the problem arises—this was picked up in the report—from both the perception of, and the actual incidence of, the system not meeting the requirements of children who have needs over and above the norm. That is where I believe more effective teacher training is absolutely crucial.
I am attracted to the idea of learning centres outlined by the noble Baroness. I believe that having such centres of excellence would help enormously in many areas. Such centres could help in a practical way but could also help to develop teachers' expertise. The noble Lord, Lord Addington, mentioned autism. I do not believe that he chided my noble friend Lord Astor about autism but he was absolutely right to say that it is not a new condition.
I was particularly moved by the programme which told the story of the life of young Prince John. In addition to suffering from epilepsy that young boy probably suffered from autism or a related condition. As one watched the programme it was clear to see how easy it is to become very angry and cross with a child who looks insolent, disaffected or something else. In the same programme one saw what progress could be made by someone who understood, empathised with and worked with the condition of the child. Although it is newly discovered, we have a very long way to go towards identifying and picking up those signs early.
I have some concerns that I hope will be picked up in any review. There is the issue of statementing and non-statementing. I believe that it creates unnecessary tension and dissipates energy. It certainly dissipates resources. It tends to concentrate on statements and not on the needs of the other children who fall short of needing a statement.

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I am also concerned about those who are philosophically opposed to specialist schools providing for children with special educational needs. I do not believe that we should have a philosophical hang-up either way. We should focus policy on the appropriate provision for children with special educational needs whatever they may be.
The IPSE point is very well taken; it is to make the distinction between those children who are failed by the system simply because the LEA, the school, the teacher or someone in the system is disobeying the law and those failed by the system because it needs reform. Those are two very different things.
I hope that the review will focus on the 20 per cent. As I understand it—and I stand to be corrected—it refers to the fact that at any given time approximately 20 per cent of children in the system need special attention. Two to 3 per cent will need continuous, almost lifetime, attention because they are at the severe end of young people with disabilities. But it also includes young people with a temporary condition. It also includes children who simply did not learn to read early enough. It includes children who received poor teaching early on and those with parents and families who did not work in concert with the school. Therefore, there are innovative ways of looking at how some of the needs of quite a large part of the 20 per cent could be met.
The other issue is exclusions. One sees some very depressing statistics. The vast majority of young people excluded from our schools are children who have special educational needs. Very often they are needs which have not been identified and where there has not been effective attention.
I agree with my noble friend Lord Lucas that teachers deserve to be trained better to identify special educational needs. Quite a number of them could be dealt with in the classroom. My right honourable friend Iain Duncan Smith, and my honourable friends Damian Green and Eleanor Laing in another place, who is responsible for special educational needs, held a conference six months ago with all interested parties. They said much the same as we are saying now. They certainly would have supported much of what the noble Baroness, Lady Warnock, said.
I say to the noble Lord, Lord Rix, that yesterday my honourable friend Eleanor Laing went to see a Mencap project in Birmingham. I believe it was called The Transaction Project. It is a pilot project where young teenagers without special educational needs are brought together with young people with such needs. They are learning ways in which to make the transition from teenager to adult life more straightforward and effective. She was extremely impressed with the project.
In summary, a fundamental review is timely and I hope that that can be supported. I believe that there is scope for improvement in the delivery of the current provisions and that more attention should be given towards obeying the law. The noble Baroness is right. In 1981, 1993, 1996 and in 2002, we passed legislation. However, there are two serious problems with it. One
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is that a policy of inclusion is very expensive, and to resource it would create great tension. The other is that the law is frankly being ignored. Simply passing law does not make the system any better.
There should be a fundamental review, an improvement in the delivery of current provision and more research, especially into what works. To pick up a point made by the right reverend Prelate, there should be more research into what we would define as good practice. First, the research should say what good practice is, and, once that has been identified, it should be disseminated. We also need more research into autism and related conditions.
The right reverend Prelate also made a point about the exploration of greater flexibility. There are many ways to meet the special educational needs of the young people concerned. We should have many more structures in schools, such as separate units, clustering children and using learning centres. All sorts of ways can be explored; we could do more. We should certainly improve teacher training.
Whatever the outcome of the review, however long it takes, and whatever comes at the end of the exercise, early identification and effective early intervention will always be the key to addressing special educational needs of young people. We thank the noble Baroness for the opportunity to discuss an absolutely fundamental subject.
8.26 p.m.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, I too thank the noble Baroness, Lady Warnock, for initiating the debate, for the work that she has done, and for her on-going work with dyslexia. I associate myself with the remarks made by the noble Baroness, Lady Blatch, about this House. I also say that I have never thought of the noble Baroness, Lady Darcy de Knayth, as fuddy-duddy, which is how I think that she referred to herself.
I want to begin by putting on record what we mean by children with special educational needs. I am fully aware that the expertise in the House at present means that that may be unnecessary, but it means children who require additional or different help, in order to access the curriculum and to make progress, from the provision normally available in maintained mainstream schools in their area.
I can tell the noble Baroness, Lady Blatch, that my figures—they correlate well with what she said—state that about 16.8 per cent of children with special needs do not have statements, and have their needs met by their schools with occasional help from local education authorities. I hope that figure clarifies that point.
The committee of inquiry that the noble Baroness, Lady Warnock, chaired in the late 1970s laid tile foundations for the statutory framework for special educational needs. We have built on that framework, most recently through the changes introduced by the Special Educational Needs and Disability Act 2001. The purpose of the 2001 Act was to broaden access and

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opportunity for children with special needs and disabilities by giving them a stronger right to mainstream places in schools, where that is appropriate, and extending the Disability Discrimination Act to education.
I agree with all noble Lords that now is a good time to take stock of where we have reached, and to consider what steps we can take to improve support further for children and young people with special needs and disabilities, and, in doing so, for their families as well.
The Audit Commission's recent report, referred to by most noble Lords, is timely. It provides an overview of the key issues and recognises the action that the Government are already taking. It highlights how, as said by the noble Baroness, Lady Warnock, implementing some of the statutory processes can be time-consuming and bureaucratic. However, it acknowledges the assurance that they offer parents, and that they are the safety net referred to by the noble Lord, Lord Addington, and the noble Baronesses, Lady Darcy de Knayth and Lady Blatch.
We believe that the statementing process offers assurance not only to parents, but to schools in helping them plan and make provision. We recognise the value that it has in ensuring that severe or complex needs are carefully assessed.
The noble Baroness, Lady Warnock, supported by some noble Lords including the noble Baroness, Lady Blatch, argued for a wide-ranging review of the statutory framework for special needs. I do not believe that making further changes to the legislative framework at this time is the right way forward. As the noble Baroness, Lady Sharp, said, we must ensure that the new changes have time to bed down, and we must evaluate their impact. As the right reverend Prelate said, we need to look at the sharing of good practice and ensure that we focus on what the practical measures are to help our schools—that was referred to by every noble Lord who spoke. We must also look carefully at the role of and support for local education authorities and their partners in order to improve the quality of provision for children with special educational needs.
However, I agree with the noble Baroness, Lady Warnock, that there is a focus on the statementing process; some parents see that as the only option available. We all desire a better system that addresses that issue.
We announced in answer to a question from the noble Baroness, Lady Walmsley, in December an SEN action programme. The purpose of the programme will take forward some of the work that is already under way and address many of the areas highlighted in the Audit Commission report and by noble Lords this evening. All of the action areas that we will examine have been mentioned this evening. They include: earlier identification of special educational needs and early intervention; the co-ordination of education, health and social services; support for schools in meeting diverse needs, including managing
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behaviour, autism, dyslexia and dyscalculia; the attainment and achievement of children with special needs; and their transitions to further education, work and adult life. The programme will consider the future role of special schools. It will include measures designed to enable schools and local education authorities to develop their arrangements for monitoring performance and sharing effective practice. We will be consulting widely on its development and hope to publish it later this year.
A number of noble Lords discussed the complex issues of early identification. I wholeheartedly agree with the noble Baroness, Lady Blatch, that we stand a much better chance of addressing the needs of children with special needs if we identify those needs early on. Despite what the noble Baroness, Lady Sharp, said, we are investing heavily in ensuring that we do so. We already have a £25 million package in place to provide special needs co-ordinator support, SEN training and experts for early years settings. Moreover, there is £3 million to support early years development and childcare partnerships for low incidence special needs; that rises to £8 million next year. We are also promoting good practice through Together from the Start, which is guidance for professionals on identifying the needs of disabled children aged nought to two and co-ordinating services for their families. There is also an early support programme to test out the principles of the guidance and related guidance on early intervention for children with hearing impairments and their families. It is being piloted in 28 local areas. We want to evaluate those programmes but they are essential tools to ensure that we have the early intervention that we want.
I agree with the noble Lord, Lord Rix, that early intervention is essential and critical. Within the SEN code of practice, we must ensure that we offer appropriate guidance to our early education settings. We have a range of materials to help teachers to support pupils with special needs. That is being provided through the national literacy and numeracy strategy. They are important developments, but I agree with all who said that there is more that we need to do. We want to put this at the heart of our Sure Start programme. We recognise, as the noble Baroness, Lady Howe, said, the value of the Home Start programme. We also recognise that we need to look at issues of childcare for families with disabled children and ensure that our childcare provision is able to assess children with special educational needs and ensure that those needs are met. We hope to provide family support for those children in the children's centres that will be developed to ensure that those children get the best that they can.
A number of noble Lords rightly indicated the need for better integration and co-ordination of education, health and social care. I say to the noble Earl, Lord Listowel, that I agree completely that regular contact with mental health professionals is an essential part of that. We are working closely with the Department of Health to ensure that child and adolescent mental health services can work as close to schools as possible. We know that for parents getting help to meet their

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children's needs can be very frustrating. They want the professionals to be integrated and joined up. For too long we expected families to join up the professionals, but we need to do that for them.
I also accept that we need to get better at recognising how the services can integrate. We are promoting a co-ordinated approach to the children's national service framework, which will set new national standards in health and social care and in links to education. I hope that the noble Lord, Lord Rix, will be pleased that the national service framework, especially the strand on children with disabilities, is collecting data at last on those children.
When services are joined up we recognise that the benefits are enormous. Our communication aids pilot project, which offers fast-track assessment and access to ICTs for school-age children facing significant communication difficulties, illustrates what can be achieved. We hope that the children's trust pilots, announced yesterday, working in collaboration with our colleagues in the Department of Health, will model local joined-up planning. They will enable services to be commissioned and delivered for children with special needs and disabilities across education, social care and health. We believe that that will answer some of the issues noble Lords have rightly raised.
Many noble Lords talked in detail about ensuring that we supported our children in meeting their diverse needs. I agree with the noble Baroness, Lady Warnock, and the noble Baroness, Lady Blatch, about increasing the diversity and range of provision by allowing schools to collaborate and do things differently, providing centres of excellence and so on. I will read with care their comments in Hansard to ensure that we are fully addressing those issues. We need to ensure that our teachers have access to the knowledge and resources that they require.
I did not completely agree with the noble Baroness, Lady Warnock, when she said that schools have no incentive to support these children. Many schools support them incredibly well. But I agree that we must ensure that we have, for example, the right quantity and quality of speech therapists. We have been considering how to involve other professionals in providing ongoing speech therapy support, working closely with qualified speech therapists.
We offer training and support through the SEN Standards Fund, to which I believe the noble Lord, Lord Rix, referred. I recognise that we must give far more support to teaching assistants. I am in discussion with the Teacher Training Agency about how to improve the quality of training for teachers, recognising the issue of time and the importance of not taking teachers out of the classroom so much, as the noble Baroness, Lady Sharp, said. We are looking closely not only at teachers' training years, but also at their induction years.
I am also interested in ensuring that teachers have the opportunity to talk to each other, either through ICT in a virtual forum or in other ways, so that they can learn from each other. There are many teachers with many years' experience of working with children
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with special educational needs. That experience is locked up in their particular schools and I am keen to help new teachers or those new to a particular kind of special need to use that informal mentoring support, which can add a great deal to their work.
We often discuss whether we should give money directly to schools. I notice that the noble Baroness, Lady Sharp, is unsure about our putting money directly through to local authorities. Where schools have the resources—going back to the point of the noble Lord, Lord Lucas—they are able to make choices, particularly for children who are not statemented. They can use the support that they are able to purchase with their own resources flexibly and effectively and in a way that will benefit such children, whom they may be unsure about classifying as having special educational needs.
As the noble Baroness, Lady Blatch, said, children come in and out of the system in terms of their special needs requirements, which needs to be recognised. I am concerned—and noble Lords have raised this issue—that we ensure that for low incidence or complex special educational needs resources are available at LEA level to move with the pupils so that their needs can be addressed. I hope that I shall have more to say on those issues as we develop the system.
Dyslexia and autism will feature prominently in the work that we do. Further work with national literacy and numeracy strategies will take account of the needs of children with special educational needs, and will offer a key means of support for children with dyslexia and dyscalculia. We have already provided targeted help for teachers.
I can tell the noble Lord, Lord Astor, that the Medical Research Council estimates that 60 per 10,000 children under eight have autistic spectrum disorders. We know that improvements in identification of ASDs mean that every school is likely to have a child with an autistic spectrum disorder. Seventy three per cent of parents who have been surveyed by the NAS said that they were satisfied with the education provision made for their children. That means, of course, that 27 per cent said that they were not satisfied.
I believe that we have to raise awareness of the issues of autism, Asperger's syndrome and the entire spectrum. We have to encourage the spread of good practice and to iron out the variations described by the noble Lord to promote greater consistency between schools and education authorities. We have published guidance, which has been welcomed. It is an important step forward. I was grateful to the noble Lord for supporting that. We are following it up with dissemination events, rather than just simply sending the guidance. We want to ensure that we have the opportunity to talk to teachers and schools about it.
We believe that a multi-agency approach, clear pathways of identification through diagnosis and early intervention are vital. We look forward to seeing the report from the national initiative on the identification and screening of autism, which will inform the autism exemplar under the national service framework for children. It will set national standards of provision for

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children with autism. I intend to pursue that issue. I am grateful to the noble Lord for raising those issues and look forward to discussing with him further what more I can do.
Noble Lords talked about the high expectations that we need to have in raising attainment and achievement levels for children, and the need to recognise that many children with special needs achieve very well. They fulfil the full spectrum of educational ability. New data are coming on stream that will help us to learn more about children with special needs. I agree with the noble Baroness, Lady Warnock, that we need a range of bench-marks to analyse the performance of children with special needs, some of whom will not reach the national targets.
I remind the noble Baroness, Lady Sharp, that the purpose of key stage 2, level 4, is that we are confident that children can access the secondary curriculum effectively. It is important that we know where our children with special needs are. We have made some progress with the introduction of scales to measure the performance of children who are not expected to reach level 2. Guidance and target-setting for pupils operating at that level have been distributed. I agree with the noble Baroness, Lady Warnock, that there is much more work to do in that area. We know that Ofsted inspections can be valuable. They are important, but we must also ensure that schools that are strong on inclusion and support do not feel disadvantaged by the performance tables. I accept what the noble Lord, Lord Addington, said. We know that valued-added measures can help, but we have a long way to go. I shall be considering the matter carefully as part of the action programme.
I am not sure about the proposal of the noble Lord, Lord Lucas, about SEN-friendly schools, partly because I think that all schools should be SEN-friendly. It is important, however, to recognise and celebrate their achievements, which I think is the point that the noble Lord was getting at.
I was pleased that a number of noble Lords raised the issue of the future of special schools. We are committed to a more inclusive society. We recognise that an inclusive education system is paramount to that. All children can benefit from an inclusive education. It is not only those with special needs or disabilities who can do so. Our policy is that children should be taught in mainstream schools when parents want it and it works for the child, the school and the other pupils. I agree with the noble Lord, Lord Rix, that many disabled children thrive within that atmosphere. Increasingly children with special needs are being taught in mainstream schools. We are looking again at the more diverse range of provision.
The right reverend Prelate the Bishop of Hereford described a good example of co-location. That is something that I am keen to encourage. I pay tribute to the work of many of the Church of England schools in developing those new models. I am also aware of the links that the Star primary school has with special schools. I have not yet had the good fortune to visit the
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school, but I have met the head teacher with the noble Earl, Lord Listowel. That is again something that we want to encourage.
I shall read what was said on 18th December and shall come back to the noble Lord, Lord Pearson. I say to him and the noble Baronesses, Lady Blatch and Lady Warnock, that there is a vital and continuing role for special schools as centres of expertise and as part of the community of schools, both special and mainstream, working together with other schools and other partners. It is crucial that noble Lords and noble Baronesses understand that that vital role is there.
I know that the inclusion agenda has made some of our special schools very unsure and unclear. Therefore, a few months ago I established a working group to help us to develop a clear vision of the future role of special schools, involving special schools. It focuses on the practical measures to support the role of special schools and to celebrate their achievements. It will present its report to us shortly and I shall be glad to come to your Lordships' House to discuss it with noble Lords. It will, of course, form a huge part of the action programme. I stress that special schools are critical and important. I say to the noble Baroness, Lady Warnock, that at present 11,000 children are in residential schools.
The noble Earl, Lord Listowel, mentioned the issue of children in care. We have deliberated on that subject many times. I say to the noble Earl that from next year—2003–04—we shall introduce a new vulnerable children's grant, which amounts to £84 million, including matched funding from local education authorities. I believe that that will have some significant advantages for children in care, many of whom—26 per cent—have special needs, as the noble Earl knows.
I was delighted that the noble Baroness, Lady Blatch, mentioned the issue of transition to adult life. We have the Social Exclusion Unit report, Bridging the Gap, and are looking to see what we can do within the 14-to-19 strategy. As noble Lords will be aware, Mike Tomlinson is advising us on this matter. We have 25 14-to-19 Pathfinder projects with a strong special educational needs focus. We shall ensure that we learn more about that.
I was interested in the proposal that secondary schools should be smaller. I shall be glad to pass on that idea to my honourable friend the Minister for Schools. Of course, I cannot comment on the Scottish system, but I watch it with great interest.
Finally, I agree that we must get better at monitoring performance and sharing effective practice. I believe that our special needs regional partnerships will make a difference to that work. I carry out a continual review to ensure that we work with our parent partnerships to support parents in finding their way through the system.
Again, I am grateful to the noble Baroness, Lady Warnock, for introducing the debate. It has, as always, been extremely useful for me. I look forward to continuing the discussions and to doing more to support these children.
8.47 p.m.
Baroness Warnock: My Lords, I am extremely grateful to the Minister for her very careful and sympathetic response to all the points raised. I am also deeply grateful to all noble Lords who have stayed and contributed to the debate. I have learnt an enormous amount from it and, for that, I am grateful.
I believe that we still need what is rather sadly called a "safety net", but we probably need it just as much for the non-statemented children as for those who have statements. I still believe that we should soon grasp the nettle and start to question some of the assumptions that we now make about the conceptual framework within which the delivery of special education is made. But, meanwhile, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Euro and the Dollar
8.48 p.m.
Lord Pearson of Rannoch Lord Pearson of Rannoch rose to ask Her Majesty's Government what is the comparative significance of the euro and the United States dollar to the United Kingdom economy.
The noble Lord said: My Lords, I start by expressing my gratitude to noble Lords who are to speak in this debate on what may appear to be a fairly dense subject. I am particularly grateful that the noble Lord, Lord McIntosh, is to reply for the Government because I share the great respect in which the noble Lord is held by all sides of the House. He is enormously admired for the volume, variety and complexity of the issues which he handles, and for the courteous, efficient and even humorous way in which he does so. But even the noble Lord is human, I think, and so on rare occasions—on very rare occasions—two of which I shall mention this evening, he can only be as accurate as the brief he has been given. And of course, he speaks for the Government, who view our membership of the European Union as an unquestionably good thing and who want to sign us up to European economic and monetary union just as soon as they can deceive the people into voting for it in a referendum.
So my purpose in bringing this Question before your Lordships this evening is to dispel two items of Europhile propaganda which lie at the heart of the question as to whether or not the United Kingdom should join EMU and which have a considerable bearing on whether or not we need to stay in the European Union at all. Those two Euro-myths are, first, that the euro is more significant to our economy than the US dollar, and, secondly, that some 60 per cent of our trade takes place with the euro-zone. This second Euro-myth has even been improved by Ministers for Europe and others to become,
"60 per cent of our trade depends on our membership of the European Union".
The effect of this propaganda is vastly to exaggerate the importance of the euro to our economy as a whole, and to belittle our trading relationship with the United States of America. The intention of those who peddle
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it is obviously to implant in the British people the fear that to leave the European Union would be economic suicide, and that they cannot afford to live for much longer without the euro either.
Let me start with the first proposition, that the euro is more significant to our economy than the US dollar. At first sight this is so unlikely that one wonders how the Europhiles dare to put it forward, but they do with monotonous regularity. I regret to say that the noble Lord, Lord McIntosh, is guilty of having clone so in your Lordships' House at least twice in the past year, although, as I have indicated, I am sure he did so in good faith personally. For instance, on the 26th February last year, the noble Lord, Lord Kilclooney, suggested that the sterling-dollar exchange rate was more important to us than the sterling-euro rate because the UK trades more in dollars than in euros and because we do a greater percentage of our trade in dollars than does the euro-zone. To this eminently sensible and accurate suggestion, I fear that the noble Lord, Lord McIntosh, replied as follows:
"My Lords, the Bank of England basket of currencies and exchange rates calculated on that basis shows that the euro is more significant than either the dollar or the yen and represents more than half of our trade. I am therefore afraid that the noble Lord is not correct in his initial premise".—[Official Report, 26/2/02; col. 1315.]
I fear that the noble Lord did it again two days later on 28th February 2002 when I suggested that he had got it wrong on 26th February and that in fact some 60 per cent of our foreign trade was transacted in dollars. At this the noble Lord stuck to his guns, or rather his brief, and informed the House:
"As for the euro's share in our overseas transactions, it comprises 65 per cent of the Bank of England sterling exchange rate index, whereas the US dollar comprises only 16.5 per cent of the index".—[Official Report, 28/2/02; col. 1527.]
The trouble is, as I tried to point out to the House later on in the same Starred Question, at col. 1529, that the Bank of England's exchange rate index is an entirely useless tool if we want to unearth the truth about the relative importance to our economy of the euro and the dollar. This is because that index excludes services and investment income, and covers only exports of manufactured goods, which amount to well under half of all UK exports. It also uses geographical breakdowns of trade which ignore actual currency usage; it excludes large areas of the world in which UK trade is significant; and it relies on data which are over 10 years old, from 1989 to 1991. So I trust we can forget the Bank of England's sterling exchange rate index for the purpose of this debate.
I am sure there are other ways of measuring the importance to our economy of the euro and the dollar, but I put a pretty authoritative one in front of your Lordships tonight. That is to be found in the Government's own publication, The United Kingdom Balance of Payments, known colloquially as the "Pink Book". There we find, for instance, the Government's figures on UK exporters' usage of the dollar and the euro as a currency of invoicing. The "Pink Book" tells us that for the year 2000—and I gather 2001 is not much different—UK exports amounted to some £413 billion. That figure includes exports not only of

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manufactured goods, but of services as well, together with investment income and transfers. So it is a total export figure, which I trust noble Lords will agree is what we ought to be talking about, not just exports of manufactured goods, important as they may be.
Of that £413 billion, some £142 billion, or 35 per cent, was invoiced in dollars, and only £91 billion, or 22 per cent, was invoiced in euros. The remaining £180 billion, or 44 per cent, was invoiced in other currencies, the overwhelming majority of which was of course in sterling. So on this basis dollar usage by British exporters was at least 1.6 times euro usage, which leads one easily to the conclusion that the dollar was at least 50 per cent more significant than the euro to the British economy.
I turn to the second Euro-myth which I wish to demolish tonight. This is that some 60 per cent of our trade takes place with the EU, or that 60 per cent of our trade depends upon our membership of the European Union. Here again, the purpose of the propaganda appears to be to frighten people into thinking that that trade and the 3 million or so jobs that support it might somehow be lost if we left the EU and/or will be put at risk if we do not join EMU. That is such obvious nonsense that I trust that I do not need to waste your Lordships' time by exposing it as such. The trade would go on, and so would the jobs.
Any noble Lord who doubts that does not have to believe a confirmed Eurosceptic such as me. Instead, he can read the report by the National Institute of Economic and Social Research—not at all a Eurosceptic organisation—published in February 2000 and entitled, A Continent Cut Off? The Macro-economic Impact of British Withdrawal from the European Union. Or he could read the report of August 2000 to the US Congress by the International Trade Commission, perhaps the most prestigious economic think-tank in the world.
So whatever is the percentage of our trade with the EU and however many jobs support it, none of it would be lost if we leave the EU or do not join the currency. But what is that percentage? The difficulty is that when Europhiles say that 60 per cent of our trade takes place with the EU, they really mean that 60 per cent of our exports of manufactured goods go to other EU countries. In this context, the word "trade" has come to mean "exports of manufactured goods". Of course, that is grossly deceptive. If we were to join EMU, that would affect the whole of our economy, which is already affected by all the debilitating regulations that pour forth from the corrupt octopus in Brussels.
So we must consider the question from the standpoint of the whole of our economy. If we use the word "trade" in this context, it must mean all of our trade, not just less than half of our exports. The only honest question therefore becomes: what proportion of the whole of our economy is involved in trade with the EU? If we stand back to consider the whole of our economy, we begin to get the true picture. That is that about 80 per cent of our economic activity takes place right here in the United Kingdom, in the British
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domestic economy; only 20 per cent goes in exports at all. Of that 20 per cent, less than half—or less than 10 per cent of the whole—goes to the EU.
I am not an economist and I do not pretend that even the experts find it easy to measure an economy or to agree precisely what proportion goes where. For instance, there are at least three accepted ways to measure the export of goods and services. They are: as a proportion of total consumption; as a proportion of gross domestic product; and as a proportion of what is known as final demand. According to Government figures from the Office for National Statistics. exports of goods and services to the EU amount to only 5.3 per cent of total consumption; 12.3 per cent of GDP; and 9.6 per cent of final demand. Of those, the ONS selects the latter measure, final demand, to show the relative weights of various sectors of the economy, so it is surely reasonable that we should do likewise and take rather less than 10 per cent as the proportion of our economy that goes in exports of goods and services to the European Union.
So the big picture, the true picture, is that rather less than 10 per cent of British activity is involved in exporting to the EU. None of that will be lost if we do not join EMU, or even if we leave the EU altogether.
Given the complexity of the subject, I propose to place two one-page briefing notes from Global Britain in the Library, in case any noble Lord wants to relish further the supporting detail for what I have said. I must of course declare an interest as one of the founders of Global Britain, together with the noble Lords, Lord Harris of High Cross and Lord Stoddart of Swindon, who I am delighted to see in their places. I must also place on record my gratitude to the noble Lord, Lord McIntosh, who, after our exchanges last February, encouraged dialogue between Treasury and Bank of England officials and the Director of Global Britain, Ian Milne, and of the British Management Data Foundation, Tony Cowgill, who also advises me.
The briefing notes that I shall place in the Library are No. 21, entitled Exposure of the UK Economy to the Dollar and the Euro, and No. 22, entitled 90‥ of the British Economy is not Involved in Exports to the EU. I trust that they may help to inform public debate as the convention in Brussels moves to its momentous conclusions and as we approach the next and perhaps final intergovernmental conference. In the meantime, I hope that we shall hear no more of the claim that the euro is more important to us than the dollar, or that 60 per cent of our total trade is in any way associated with our membership of the European Union.
I end with only one question to the noble Lord, Lord McIntosh. If less than 10 per cent of our economy is involved in trade with the EU, and if even that—or a somewhat larger figure—will not be lost if we do not join EMU, why do we even contemplate giving up 100 per cent of our currency to Brussels and Frankfurt? I repeat my thanks to other noble Lords who are to speak, especially at this late hour, and look forward to hearing their contributions.
9 p.m.
Lord Cobbold: My Lords, the answer to the Question on the Order Paper of the noble Lord, Lord Pearson, depends on which way we are looking. If we look backwards in time, it is obvious that the US dollar has been of unique importance to the United Kingdom economy. I agree with the noble Lord, Lord Pearson, on that.
With the demise of sterling under the burden of financing the last war, the dollar became the world's principal trading and reserve currency. Commodities became priced and traded in dollars, and the Bretton Woods arrangements confirmed the global supremacy of the dollar. With the UK economy's dependence on foreign trade, managing the relationship between sterling and the dollar has been of critical importance to successive British governments over the past 50 years.
If, on the other hand, we look forward in time, we have to consider two scenarios. The first is one in which the UK remains outside the euro. In those circumstances, the importance of the euro to the UK economy is likely to grow in significance from—I agree with the noble Lord, Lord Pearson—a lowish base at present and may well come in time to rival that of the dollar. It is likely to involve a delicate balancing act between the two.
If, however, sterling does become part of the euro, then the answer to the Question of the noble Lord, Lord Pearson, is simple: the dollar will undoubtedly be the most significant currency relationship for the euro-land economy. as it is already.
But the Question of the noble Lord, Lord Pearson, is not really about currency relationships but about creating arguments as to why we should not join the euro. The noble Lord's views on Europe are well known to your Lordships and we have heard them again today. I do not share them. I am one of those who have long supported the European adventure and Britain's full participation in it. I believe in the desirability of building a genuine single market in Europe. I do not believe that a genuine single market can be achieved without a single currency. Britain should be part of it, although the timing of our entry is critical and it may be best left until the current political and economic uncertainties are somewhat reduced.
The potential benefits to the UK economy of joining the euro are much more than simply giving transparency to pricing differentials across the Union and the convenience of common notes and coins saving conversion costs and currency risks. A more macro economic benefit is the reduced exposure of the whole economy to exchange rate fluctuations. At present, about 40 per cent of UK GDP is in foreign trade, compared with around 14 per cent for euro-land as a whole and around 11 per cent for the United States. Foreign trade is thus less important in the euro-land economy and the economy is less exposed to external trends. The domestic economy becomes paramount, as it is already in the United States for that reason.
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In Europe we are creating a domestic market of 350 million, rising to 500 million, people. This represents a massive pool of savings available for the financing of enterprise and, particularly, of research and development, all this contributing to the availability of cheap capital resources. The euro could also come to rival the dollar as an international reserve currency, providing euro-land with still further resources.
A single, seamless market in financial services, which we certainly have not yet created, means that private and institutional investors and pension funds would have a much wider choice of equity and fixed interest investment, free of exchange risk, from which to choose.
I believe that these are all fairly substantial potential benefits. But there are, of course, risks. I do not wish to deny that. Such a linking of currencies between nations has not been attempted before. But, in my view, the risks are worth taking.
We learnt from bitter experience in this country in the last century that printing money is a great temptation to politicians. We learnt that competitive currency devaluation is no recipe for economic salvation. Britain within the euro would mean four world currencies—the euro, the dollar, the yen and probably the Chinese renminbi. Capital flows would increasingly dominate the rates of exchange between the four blocs and might well cause unwanted distortions and volatility.
Therefore, if, as we all hope, the euro experiment proves to be a success, I believe that later in this century we may see moves to create a single world currency. It is late at night, my Lords, so this may be just a dream.
9.5 p.m.
Baroness Cox: My Lords, I rise with considerable timidity to contribute to the debate on this important subject, which was opened by my noble friend Lord Pearson with characteristically well informed and powerful argumentation.
One reason that I speak with such timidity is that this is the first time that I have participated in a debate in your Lordships' House on the European Union. I was prompted to do so because I have listened to or read many of the previous debates on this subject, which has such momentous significance, and have become increasingly concerned. One of the reasons for this concern has been the asymmetry between the detailed and compelling evidence and arguments put forward again and again by those who may be designated Euro-sceptics, such as the noble Lords, Lord Stoddart of Swindon and Lord Bruce of Donington, and my noble friends Lord Willoughby de Broke and Lord Pearson of Rannoch.
By contrast, the responses of Her Majesty's Government and their Euro-enthusiast supporters have often seemed less convincing. They have at times seemed deficient in their lack of detailed counter-argument and evidence. What is worse, argument has at times been replaced by derision, leading me to suspect that the Euro-sceptics have the stronger case.

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This has prompted me to do some homework, and my concerns have developed into a tentative commitment to the Euro-sceptic position. My contribution is therefore my first test of the validity of my perception, and I shall listen with deep interest to the Minister's reply to the points raised by my noble friend and perhaps to my own exploratory contribution.
I begin with an historical perspective and parallel. It is generally accepted that Britain's return to a fixed exchange rate system in 1925 was disastrous. The fixed rate system in question was, of course, the gold standard. The locking-in of the pound to the currencies of Britain's major trading partners and competitors led ineluctably to the general strike of 1926, then to severe unemployment and its attendant hardships. Only when Britain left the gold standard in 1931 did her economy recover.
The story of that disastrous decision has been well told by the late Lord Jenkins of Hillhead in his magisterial biography of Churchill. In 1925, Churchill was Chancellor and Norman was Governor of the Bank of England. This is how Roy Jenkins told the story:
"Nearly all the bien-pensant sources of advice were unanimous that it was Britain's interest and duty to return to the Gold Standard … Churchill's minutes were masterpieces of pungent questioning whereas the replies took refuge in a misty higher wisdom … The direct replies to the Churchill minutes … were splendid examples of substituting superior wisdom for rational argument … Norman, the great Governor, was even more sublimely bland. In the opinion of 'educated and reasonable men' he wrote, 'there was no alternative to a return to Gold … if not the Chancellor will be abused by the instructed and posterity—.
Churchill lost the battle, as we know. Roy Jenkins went on:
"The momentum of conventional wisdom swept his support away … the whole story was a remarkable example of a strong not a weak minister nonetheless reluctantly succumbing … to the near unanimous, near irresistible flow of establishment opinion … [and] the ability of such a near unanimous concentration of advice to be wrong … as a result there was committed what is commonly regarded as the greatest mistake of that Baldwin government".
The parallels with the present are obvious. Lord Jenkins was not only a distinguished Chancellor, he was a supporter of all things European. I cite the phrase about,
"the ability of such a near unanimous concentration of advice to be wrong",
because it may hold lessons for the present debate about Britain's membership of the European Union.
I shall leave discussion of the current short-term economics of Britain and the euro to colleagues far better qualified than I am. My focus is the longer term: the next 50 years. It is no use just looking at present-day economics, vital as they are, because joining the euro, as the Treasury quite rightly keeps on reminding us, is for all eternity. The decision we may be about to take must be the right one: not just for the next five months or five years, but also for the next 50 years at least.
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What is the prognosis for the next 50 years? The European Commission has just hazarded a guess in its review of the EU economy in 2002 which came out just before Christmas. It predicts that by 2050 the current 15 EU members states' share of world output will have shrunk by 44 per cent, from their present 18 per cent to 10 per cent.
Meanwhile, the United States' share of world output will increase from 23 per cent today to 26 per cent in 2050. One of the reasons for this projected divergence between the EU and the United States is the sharply contrasting demographic paths which each is predicted to follow. I shall cite projections produced by the United Nations Population Division, as they are probably as impartial and bias-free as any. Perhaps I may highlight some examples of the implications of projected demographic changes drawn from the Global Britain Briefing Note No. 18, entitled Demographic Change 2000–2050.
The projected EU 15 over-60s population in 2050 is 53 per cent higher than today. However, the projected working-age population of the EU 15 in 2050 is 28 per cent lower overall than today—a loss equivalent to the combined working populations of nine existing EU members: Austria, Belgium, Denmark, Finland. Greece, Luxembourg, Portugal, Spain and Sweden.
Enlargement to include the 10 nominated first wave countries would exacerbate the overall percentage decline in working-age population. The position of other potential European candidates for accession—for example, Bulgaria, Romania or Ukraine—is even worse.
The economic and social implications of such projected demographic changes are far-reaching and disturbing. Time permits me only to highlight a few examples. First, at the geo-strategic level, the United States of America will become even more powerful than it is today. economically, militarily, politically and culturally. Europe and the EU will decline relatively, economically, militarily, politically and culturally.
Secondly, at the geo-economic level, growth in GDP, market size and equity returns will occur outside Europe whereas the EU single market will be a shrinking market, unattractive to foreign investors.
Thirdly, at the EU level, even with enlargement, the tax base will shrink; tax rates and debt will have to increase. Shrinking and ageing populations mean more demand for healthcare and pensions, with fewer people to provide them. Most EU member states will see falling demand for houses, schools, factories and shops, with falling asset values and investment. This will affect the financial and equity markets on which pension provision depends. Sharply diverging demographics within the EU will make EU-wide one size fits all policies even more inappropriate in many spheres—monetary, tax, labour market, agricultural, asylum, immigration, environmental and so on.

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In conclusion, the demography-induced fiscal and budgetary implications of joining EMU, and indeed of staving in the European Union at all, will grow even more alarming. Therefore, it follows, I believe, that no matter what the short-term economics of joining the euro may be, searching questions must be asked about the wisdom of this country tying its fortunes to a grouping —the EU—whose future looks so problematic. The Prime Minister says that our destiny is Europe, but the last three centuries tell a different story. From looking at the evidence, I can only conclude that our interests are more global now than at any time in our long history and it is far from self-evident that those interests point to ever-growing, greater integration with Continental Europe.
Does the Minister disagree with, or can he disprove, any of the figures I have presented; or does he disagree with the implications of those figures I have identified? I welcome any reassurances he can give which will assuage my concerns—concerns which opinion polls show are now shared by a growing number of people throughout this country.
9.15 p.m.
Lord Stoddart of Swindon: My Lords, first, I welcome the maiden speech of the noble Baroness, Lady Cox, on the subject of Europe. We all listened to it with great interest and respect. It was knowledgeable and to the point. I sincerely hope that in the future we shall hear a great deal more from her on the subject. Secondly, I thank the noble Lord, Lord Pearson, for raising the issue and the manner in which he did so. Again, his speech was full of knowledge, statistics and good sound common sense. I support his praise for the noble Lord, Lord McIntosh. The noble Lord is the rock on which the Government in this House stand. I do not know what they would do without him. He is so versatile. He can be tough; he can also be soft; and he is always polite. We are indeed grateful to him for the enormous work he puts into everything he does in this House.
I should like to pick up on one or two points raised by the noble Lord, Lord Pearson. The first relates to trade and jobs. It is repeated time and again by government spokesmen that 3 million jobs will be at risk if we do not do this or that, if we do not go into the euro and if we do not become further integrated into Europe. They are trying to frighten the people of this country into believing that they could lose 3 million jobs if we do not join the euro and scrap the pound. Of course, it is a nonsensical argument. It simply is not true. If 3 million jobs are at stake in this country, more than 3 million jobs are at stake throughout the other countries of the European Union. Those countries are just as dependent on their exports to us as we are to them. If all exports and imports stop, they would be at the losing end because they export more to us than we export to them. So the idea put abroad that our trade with Europe will cease simply and solely because we will not scrap the pound or do everything the Europeans want us to do simply does not make sense.
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Indeed, our adverse balance of trade with the EU runs at about £4 billion per annum. If one translates that into jobs on a value added basis of, let us say, £15,000 per capita that means that we are 300,000 jobs in deficit. In other words, if we were not in the EU, we might very well have more jobs rather than fewer. I wish the Government would stop using this ridiculous argument. It has been used before. It was used during the only referendum held on whether we should join a Common Market, not a European Union. Again, it was bruited abroad that to save our jobs in the car industry, or any other industry, we must join the Common Market. Of course, that has not happened—it has not worked, as we all know.
I remember Harold Macmillan saying that the reason why we had to join the Common Market was that British industry should feel the chill wind of competition. British industry—he referred to the manufacturing industry—has indeed received the chill wind of competition. Manufacturing industry has reduced from 32 per cent of GDP in 1972 to 18 per cent, and employs fewer than 4 million people. That is the result of what happened, so let us hear no more about the 3 million lost jobs.
As the noble Lord, Lord Pearson, remarked, only 12 per cent of our GDP is involved in exports to Europe. That is why small businesses are not in favour of scrapping the pound. They fear what will happen if we scrap our pound, and scrap our control of our economy, and give them over to a bunch of bureaucrats in the European Central Bank and elsewhere in Europe.
The overall balance of payments deficit is sustained to a large degree by inward direct investment. Again, allowing for the Netherlands distortion, the largest part of that inward direct investment comes not from the EU but from the United States and Canada, which provide 58 per cent. The rest of the world, outside the EU, provides 17 per cent. Only 25 per cent comes from the EU.
If one considers the UK's investment in other countries, one finds the same thing. The United States and Canada receive 35 per cent of our investment overseas, the rest of the world 43 per cent, and the EU only 22 per cent. As the noble Lord, Lord Cobbold, said, our trade with the rest of the world is very important and large—but it is with the world, not simply with the European Union.
I should claim an interest as one of the founder members of Global Britain. Like the noble Lord, Lord Pearson, I shall put one of our briefing notes, giving details of inward direct investment, into the House Library.
We do not have to peer into the future to know what could happen if we were foolish enough to give up our currency and go for the euro. We have only to look at Germany, which once had the strongest and most vibrant economy in Europe. What is happening to Germany now? It is on the verge of recession. Production has increased by only 0.2 per cent, which means that Germany will go into recession very shortly. But Germany can do little about it because it

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does not have control of its own currency. Things are going to get worse because of that. Just at the very moment when Germany needs a bit of a devaluation and just at the time when it needs its currency to reduce in value, it is going up in value. That will hurt Germany very much indeed because it depends very much on its exports and, of course, it will be more difficult to export because of the rising value of the euro which is the only currency it now has. That is an example of what could happen in this country if we lost control of our monetary policy, which would eventually lead to the loss of our fiscal policy as well. As I say, Germany needs an increase in the value of its currency, which is now the euro, like a hole in the head.
Finally, it has surely now become clear that scrapping the pound is not only about economics and finance but about the creation of a European superstate dominated by the great duumvirate, France and Germany, who have made their intentions very, very, very clear only this month. It really is time for the Government to re-examine their policy of "me tooism" and make a start by recognising that scrapping the pound means scrapping the UK's monetary and fiscal independence and would put our very existence as a nation at risk. It really is time not to mess about with the euro but to say no to it.
9.27 p.m.
Lord Selsdon: My Lords, my noble friend Lord Pearson casts his Rannoch fly over deep waters of the lochs of Europe again and again. We must admire his persistence. Unlike many people, he is no turncoat.
I must begin my latest address on the European subject by reminding noble Lords opposite of the lengthy period of time when the Labour Party refused to send anyone to the European Parliament and was totally anti-European until the moment when it felt that there was a political benefit to be gained from Europe. At the time of the referendum I believe that the theme that was cast around was, "Britain in Europe: it is our business to be there". Those of us who were involved in trade and the financing of trade rather wished that the government had kept out of things because we could trade anywhere. We had all the mechanisms necessary and all we wanted was political stability.
I take your Lordships back to those days long ago when we had exchange control and the dollar premium and when we ourselves were perhaps the best in the world at calculating all that. That wonderful department in the Bank of England headed by Miss Hiscoth suddenly one day disappeared from view. All we looked for were stable currencies. We found that one of the biggest problems was sterling itself because sterling had become a reserve currency, possibly unwittingly and unwillingly in the post-Empire days. We found ourselves in conflict with the dollar while we were—as the noble Lord, Lord Cobbold, pointed out—still paying not for one world war but for two. We found ourselves stretched and pushed and we could not understand the movements of the eurodollar. That was due to the introduction of
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interest equalisation tax in the United States which led to a pool of dollars being kept abroad to finance other people's trade.
Sterling in general had been used to finance a large chunk of trade world-wide, but as our world role fell back, and the instability of sterling became so desperate, fewer and fewer people used sterling for trade finance. Now we come to that strange thing, the ecu. When I was on the Council of Europe I used to support Sir Brandon Rhys Williams in his desire to introduce the europa. Your Lordships will recall that in Henry VII's or Henry VIII's time there was the first golden ecu of the sun and the ecu doré for financing trade. When we came to the re-introduction of the ecu, it was felt that it had certain political overtones. My colleagues in the banking world advised certain senior British officials. We proposed the introduction of the parallel ecu, which could be used for financing trade and the reserve currency against which other countries could set their benchmarks, including ourselves.
The policy of noble Lords opposite and of their Government is most confusing. Not one of the five tests which they would like to apply could work at the present time. We live in troubled times. We look at what may happen to people's savings, the stock market, and currency fluctuations. I recall as a young boy often being lectured by my great uncle, Stafford Cripps, who had the awful job of devaluing sterling for the first time. The currencies of the world would always find a level against each other against which people could calculate. It would be 1:1, 1:2 or 1:3. As noble Lords know well, the dollar is now one dollar to one euro. The relationship between the kilometre and the mile is exactly the same; a euro is two-thirds of a pound. These currency movements often stabilise and that is where we are at the moment.
I remind the noble Lord, Lord Stoddart of Swindon, of that most interesting time when we were on a committee together studying what would happen when oil ran out. I believe it was Select Committee B. We asked that if manufacturing industry disappeared, what was going to replace it. Someone said that if there were service industries, probably we would have to service someone else's manufactures. The fact is that today we do not manufacture anything. We assemble, or as some people have been known to say, we down-size and out-source and we put things together. We service and we service, and often we do not say please and thank you. Our manufacturing base has gone. We have shifted from having for nearly 100 years a surplus income from manufactures to having our first deficit. That deficit grows and grows.
To say that we should concentrate on linking our currency to one within the continent of Europe is strange at the moment. The noble Lord, Lord McIntosh, will recall something he said some time ago. What happens when one tries to bring currencies together and not all parts of the economy come together? There are underlying pressures that do not emerge at first; they emerge later.

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The pressures we face with are that most of the continent of Europe has already spent substantial amounts on infrastructure. They have roads and railways which work; they have hospitals and schools. We have fallen so far behind on capital investment for infrastructure that it would have a major impact if we tried to link our currency too closely to others at this time.
Another matter is the wonderful word "arbitrage" which only emerged when there were differences between currencies or prices. Our currency was no longer linked to gold so the Bank of England sold all the gold it possibly could. Now we find that the value of gold has shot up at an almost incredible rate. Had we retained it we would have been better off. No one believed that we would return to gold because we believed that there would be stabilisation within stock markets and that currencies would remain stable.
We also forgot that as different taxation demands, which are not harmonised, emerged within countries, so it became cheaper for every country to buy in a foreign currency particularly if they could do it gris or noir without being accused of speaking French. It is not a good idea to buy certain agricultural machinery in one country when you can buy it cheaper in another. We know the argument about motor cars.
These differences in prices are rising all the time and now also apply to food. This is due to pressures of differential levels of taxation, the burden placed on employment or to the restriction on wages and the requirement to create better benefits and shorter working weeks. The differences between the countries are greater than they have ever been. My old friend Sir Basil de Ferranti worked hard on the question of non-tariff barriers. We have so many of them at the moment, which is unbelievable, but very few are legal.
What do governments do? They seek to govern by rules and regulations and it is those regulations themselves which are now starting to throttle large chunks of our own commercial sector, which in general is extremely honest.
I find it very interesting at this moment, and of particular importance, that the wild boar shooting season came to an end yesterday, I believe. The wild boar has suddenly become rather intelligent and does not get shot so often, so there has been a lower puntering of wild boar this year than ever before on the continent of Europe. Yet there are more and more of them.
What most people deem important to them is their way of life. I carry ecus and use ecus. There is no problem about a British company invoicing in ecus, dollars or anything else. It only needs a little calculator, which people can buy and have no worries. What concerns people is that, if we are in a scene with the potential of war, we do not have stability, and instability breeds fear. It is also a happy hunting ground for the noble Lord, Lord Pearson. If he keeps promoting his ideas, he will find a time when he will be
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absolutely right and a time when he will be absolutely wrong. For the moment, I conclude that no one is absolutely right. It is a time to sit back, watch, think and wait and see what happens.
9.36 p.m.
Lord Harris of High Cross: My Lords, if noble Lords will consult their stopwatches, I undertake to speak well short of the three minutes that I am informed are permitted in this gap.
I was driven to take part with one purpose only, which was to underline something that the noble Baroness, Lady Cox, said in quoting the late Lord Jenkins's quite excellent biography of Winston Churchill. He recounts that in 1925 the great man, against his own judgment and yielding to the predominant expert opinion, restored the pound to its pre-1914 value. I think that I recall from student clays that that was 4.866 recurring dollars. Among the results, as she said, were the general strike, record unemployment and so on, which were not relieved until 1931, when a so-called coalition government devalued the pound from that level to something a shade over four dollars to the pound.
The trouble with the euro is that the initially fixed rate is, as the noble Baroness said. for ever. The possibility of a later adjustment to meet changing circumstances is completely ruled out. When we contemplate joining, it is no consolation to me to think that the Germans in particular, and also the unhappy Irish, are now themselves suffering from a false rate of exchange between their natural currency—in Germany's case the mark—and the euro. They cannot change that rate of exchange and it dooms Germany, at least for the foreseeable future, to unemployment, retarded growth and all the other associated miseries. I believe that that logic reinforces the lesson that the noble Lord, Lord Pearson, has raised tonight.
9.38 p.m.
Lord Taverne: My Lords, I would like to follow the noble Lord, Lord Selsdon, in his almost philosophical journey through our monetary and trade history, but I want to concentrate on the two main points raised by the noble Lord, Lord Pearson. I think that we are all grateful to him for raising the issues because he makes us think about fundamentals. The only snag is that I had some difficulty in following part of his argument.
Let us start with the background of our trade in goods and services. I shall take the figures from the Pink Book as I have them for 2001, which show that our exports to the Euro 12 were 50 per cent of our trade, with 3 per cent added for Sweden and Denmark. That makes the total for the EU 53 per cent. In comparison, the United States was 17 per cent, so we start with the proposition that our trade with the rest of the European Union is at least three times as much as that with the United States. The others are divided in different places.

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This matter is important because the impact of a single trade area is considerable, especially if it is fortified by a single currency. The single currency means that trade is increased. For example, it is interesting that when there is no single currency, as between Canada and the United States, the average Canadian province trades 20 times as much with another Canadian province which is equidistant and about the same size as it does with one of the states of the United States because there is not the same currency. If one compares that with the figures for the European Union, one finds, for example—I take my figures from Eurostat—that in 2001, France's trade with other EU countries was more than 30 per cent and that the same was true of Germany, whose figure was 32 per cent. In both cases, the amount of trade has increased since the euro was introduced. In the case of the United Kingdom, our share of trade with other EU countries as a proportion of GDP has slightly declined since the euro was introduced, from 23.2 per cent to 22.8 per cent. Trade tends to be increased in a single currency area.
Despite the vagaries from time to time in currencies, there seems little doubt that if one is a member of a single currency, there is greater stability of the currency itself. For example, in the years between 1985 and 2003, taking the value in 1990 as 100, the pound was as high as 110 in 1985 but by 1995 it had gone right down to 88; now it is back to 110 again. If we had been in a single currency at the time, figures show that the variation would have been very much less. In 1985, we would have been at the ratio of 88, for example, to the deutschmark and the same relation to the deutschmark would have been 92 today; however, the period between 1991 and 1998 would have been 100. Inside a single currency area, it is likely that the pound would have been much more stable.
The noble Lord, Lord Pearson, referred to the fact that more of our trade is invoiced in dollars than in euros. The figures that I take from Customs and Excise show that about 44 per cent of trade is invoiced in domestic currency, 32 per cent in dollars and 20 per cent in euros. The noble Lord, Lord Pearson, draws from that the conclusion that therefore the dollar matters more. That appears to be the most elementary error. The question is about the stability of the domestic currency in relation to its customers. If I sell in pounds—or, for that matter, in euros or dollars—the question is: what will the goods be worth when I get paid? That is particularly important in the case of long-term deliveries.
The issue at stake is: what is the relationship and the exchange rate stability in terms of our currency and our top customers? There is no doubt that the biggest currency, whichever currency it is financed in, is that of the European Union. Dollar invoicing is irrelevant from that point of view. The point is: what is the stability relationship between our currency and our most important customers? The euro is now the currency of our most important customers. Floating has not had the advantages that the noble Baroness, Lady Cox, suggested. The deutschmark has varied
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from 3.32 deutschmarks to the pound in 1989, down to 2.22 in 1995, back again to 3.30 and now it is again dropping.
Another real question is: what do outsiders think? What is the view of those who invest in Britain? The Japanese do not invest in Britain in order to export to the United States; they invest in Britain in order to export to Europe. Sales in Britain are relatively limited. American investors do not invest in the UK in order to export to the United States; they invest in the UK as a base for Europe. The same applies to German and French investment in the UK.
The United Kingdom may have certain special advantages, but if currency relations put them at a disadvantage because of instability, that investment will decline. It takes time; these things do not happen overnight. But the effect of our exclusion from the eurozone is becoming apparent. To take Eurostat figures, in the period 1997–98 when the euro effectively began, foreign direct investment in the United Kingdom as a share of the total investment in the European Union was 52 per cent. In the period 1999–2001 it dropped to 24 per cent. In 2001, foreign direct investment in the Netherlands was higher than in the United Kingdom.
There are also signs of UK firms relocating outside the United Kingdom. The Japanese have made it clear that if we do not join the euro there will be no more investment in the United Kingdom.
Lord Stoddart of Swindon: My Lords, the noble Lord will know that Honda has a great factory in Swindon. It has recently said that it does not matter what happens with the plan; it is going to stay there.
Lord Taverne: My Lords, the position has been made clear by Toyota and Honda: as far as they are concerned there will be no further investment in the UK if we do not join the euro.
Foreign investment is important for a number of reasons. There are three main arguments for the euro: stability, to which I have referred; competition, which has often been argued about; and foreign direct investment, on which I shall concentrate. It is not only a question of jobs and the enormous contribution it makes to our exports, but the most important factor is its impact on the efficiency of management. Multinational companies are far more efficient than domestic companies, largely because they face tougher competition. They give a lead on productivity and innovation—one only has to look at the number of patents obtained.
Foreign direct investment has had an enormous beneficial impact on this country. If we stay outside the European Union and the eurozone the figures demonstrate, as clearly as figures can demonstrate anything, that investment from abroad will suffer. It will affect our productivity and prosperity. If the recommendations of the noble Lord, Lord Pearson of Rannoch, were to be followed, the United Kingdom would be much the poorer.
9.48 p.m.
Lord Howell of Guildford: My Lords, my noble friend Lord Pearson of Rannoch has done a great service by enabling us to have this short debate on an issue of vital importance. We can only touch parts of the picture in the time available, but it has been a good debate. If I may add a personal note, it has been a good debate so far for the noble Lord, Lord McIntosh. considering all the nice things that have been said about him. I hope that nothing that will be said in the final few minutes will upset that record.
As always with these issues and the underlying issue about the virtues or otherwise of euro membership, opinion is divided. It is divided in this House; among the captains of industry—although it seems to be tilting a little against at the moment; among the general public—although again the tilt is away; and among the media, some of which take one view and some another. One of the fascinating events of the past few weeks is the sign that the pink one, the Financial Times, has become distinctly more middling and less committed to the idea that it is vital to join the euro soon. That is a fascinating trend.
My noble friend Lord Selsdon and other noble Lords rightly made the point that we are trying to look at this one issue, although it is not a narrow issue, in the great economic sea against a background of enormous turbulence in the world economy. A vast recession is gathering force and, as everyone knows, the world's stockmarkets have a long way down to go.
Here in the UK, not only stocks, but house prices are far too high and are bound to crash. Budgets throughout Europe and the world are going awry. Huge trade deficits are building up in America to unsustainable levels. We have also had our share of enormity in our trade deficit. Trying to look at the issue of the euro, its virtues and positioning in our trade against that type of background, is like trying to row a small boat in a sea with enormous waves and with much bigger ones to come.
Every economist who tries to be objective knows that the famous five tests to which the noble Lord, Lord McIntosh, will no doubt refer, as he often does when answering questions in the House, cannot be unambiguous and clear. Every senior Treasury official—the people right at the top of the thinking apparatus of Government—has said that they are bound to be ambiguous and bound not to be clear. That is the nature of economics. We cannot possibly assume that even if the tests are carried out, they will be more than momentarily valid. What looks like convergence one day does not the next. That is the case in normal times, but it is even more so at present.
I may sound a little sceptical in general, aside from the sin or otherwise of Euroscepticsm, if I say that this is about the attempt to apply the so-called science of economics, which it is not, to the heaving changing scene. In my view—and I had the temerity to write a book on the subject—all economic statistics based on national aggregates are extremely dangerous and extremely unreliable, especially in the hands of political amateurs.
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Nevertheless, having said all that, I shall now go into reverse and try to hang on to some specific facts that have come out of the debate. Fact number one, raised by my noble friend Lord Pearson, is the Customs and Excise official currency of invoice figures applied to the currency denominations of our trade. I am using the word "trade" in the broad sense of earning moneys from overseas by export and paying moneys overseas for imports of services, goods and other items—our overseas transactions in other words.
One would have to be almost a nihilist to deny that 32 per cent of UK trade is denominated in dollars, 20 per cent in euros and the rest in sterling and other currencies. There are less official views, some of which are put out by the organisation referred to by my noble friend Lord Pearson, that put the figure much higher. One has to take into account many commodities, including oil, that are priced in dollars. The noble Lord, Lord Taverne, rightly asked whether that was a relevant factor.
The figures are 32 per cent and 20 per cent, which appears to contradict the famous—I was tempted to say notorious—answers of 26th and 28th February last year when he said at column 1527 on the 28th that the US dollar comprises only 16.5 per cent of overseas transactions.
It must be a puzzle for the observer or spectator that there are two such contradictory perceptions. Not for one nanosecond would I suggest that the noble Lord, Lord McIntosh, was misleading the House. He is far too upright, assiduous and nice—well, most of the time—to go down that road. He would perhaps concede that somewhere up the briefing chain there was some misleading done by those who advise in dragging out the trade weighted sterling index as the guide to the general assessment of the importance of dollar trade versus euro trade or trade in other currencies. I believe that the figure of 16.5 per cent fails to convey completely the reality of the situation. As my noble friend Lord Pearson and others have pointed out, the TWSI covers only trade in goods. It excludes large areas of the world and is hopelessly out of date.
The fact is that manufacturing in the modern world—the making by hand of physical objects—first, accounts for less than half the UK external payments. Secondly, again, as some of us have tried to point out in the past, the whole concept of identifying a different area of the economy called "manufacturing" is probably out of date. Vast parts of the so-called "manufacturing economy" are in fact services, technology and software, and large parts of the software and service industry include the structure of physical objects and manufacture. The matter is vastly confused, and I believe that our statisticians do us no service by clinging to these outdated definitions of the catallactic of industrial activity. However, we must live with it. That is the first point to have come out of the debate.

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There appears to be a complete conflict, and I believe that we must accept that either the trade weighted sterling index is not a very good guide or that the Customs and Excise official currency of invoice has simply got it wrong. I do not believe the latter. I am sure that, looking back at his remarks last year, we would all like to hear how the noble Lord, Lord McIntosh, now sees the situation.
The other issue that has come up—a vast range of issues is connected with our debate tonight and we cannot begin to debate them all—is the question of volatility, which is related to the question of dollar denominations of trade. The noble Lord, Lord Cobbold, referred to that, as did the noble Lord, Lord Taverne.
I believe that we know one or two facts rather than statistical opinions. We know that, against the dollar, in recent times sterling has been the most stable of all currencies. Indeed, this morning the Daily Telegraph—not always the most reliable newspaper, but in words which sound to me reasonably objective—states that, while other currencies fluctuate, measured by its trade-weighted average, which is surely the most objective way to judge its international value, the pound has hardly budged for years. It is, in short, one of the world's most stable currencies. That appears to be the record in a time of extreme turbulence. It is a time when, as the noble Lord, Lord Taverne, reminded us, the euro has been way down and way up and we are probably heading into a period when the dollar will slide away.
Secondly, with regard to the issue of volatility, we have the extremely remarkable and learned report from the National Institute of Economic and Social Research, as has already been mentioned. It comes from Christopher Taylor, who is the former chief adviser to the European division of the Bank of England. The report repays study because it casts enormous light on the issues on which we are trying to focus this evening.
Mr Taylor's three most important conclusions out of a very learned and detailed paper are that, first, sterling has, always has had and is bound to have dual affinities to the euro and to the dollar. He sees the prospect of more polarisation between the euro and the dollar and believes that maintaining those affinities will become more of an aching, stretching job even than it has been in the past.
Secondly, he speaks of the likelihood of greater volatility of the euro against the dollar as time goes by. Thus, if we are riding the euro horse, we shall be rocked around against the dollar far more than we have been over the past few years.
Thirdly, he establishes that, when the split in trade between the euro and the rest of the world includes services and investment income, the figures are 48 per cent for the European Union and 52 per cent for the rest of the world. He goes into that in such detail that I honestly do not believe there is much point in arguing further about the precise percentages because they are very closely around those levels.
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Mr Taylor's conclusion is that if we become euro members, volatility will only marginally reduce—that has been one of the main arguments of the supporters—and could, depending on a number of factors, worsen. Those appear to be the two hot issues of the debate. Many others have been raised, including foreign investment flows and the Japanese, which I would like to debate with the noble Lord, Lord Taverne, at another time, because in the words of Ernest Bevin, "I have heard different".
What we have heard tonight is important. If there is to be honest and open debate, the facts and conclusions should be clearly on the table. In the end, there will be a political decision. The British public know that, even if the politicians pretend that it is otherwise. It will also remain an extremely difficult decision, and I suspect that in the network world it will become more and more difficult to assess the final policy move on the euro.
The dual affinities are there; we are either doomed or blessed to live with them. I believe that we are blessed to be the land in between the great lumbering blocks. Giant blocks, like dinosaurs, have a limited lifespan, but that is the way it will be. It has been useful to discuss a part of the issue this evening.
10.1 p.m.
Lord McIntosh of Haringey: My Lords, I have enjoyed the past hour, listening to three speakers quote so fully from the well written, but badly argued, papers by Global Britain. I have enjoyed seeing the noble Baroness, Lady Cox, added to the small but doughty band of Eurosceptics. They had better be careful if they want to hold on to her because she may be too rational and too respectful of facts to stay with them. Their numbers are declining. It would be sad if they died out because they give so much innocent amusement to the House.
The noble Baroness, Lady Cox, accused the Government of sometimes answering with derision the arguments of the noble Lord, Lord Pearson. I am tempted towards derision, but I shall try to avoid it. There were so many plain, vulgar errors in his analysis and his speech that I must point them out, but I shall have to try to maintain a straight face while doing so.
First, the noble Lord, Lord Stoddart, is right: we are a trading nation. Our exports of goods and services in 2001, the year for which we have the most recent figures, were 27 per cent of GDP and our imports of goods and services were 29.3 per cent of our GDP. Clearly, trade is important to us, but that does not reflect the measure of importance to us of the eurozone or the United States, or NAFTA, which I believe the noble Lord, Lord Pearson, wants us to join. A figure of 10 per cent of exports in goods to the euro 12 does not mean that they are not important and that 90 per cent of our trade goes somewhere else. That is plainly wrong.
Lord Pearson of Rannoch: My Lords—
Lord McIntosh of Haringey: My Lords, I do not have time for interruptions. We can correspond, as we do so happily.
Taking our exports in goods and services, our trade with the euro-zone is 13.4 per cent of GDP; our trade with the United States is 4.7 per cent of GDP. That is the balance. Even if we took NAFTA it would be only 5.3 per cent. Our imports in goods and services—I am not talking about only manufacturing but also about goods and services—are 14.2 per cent with the euro-zone and 15 per cent with the whole of the EU, but only 4.2 per cent with the United States and 4.8 per cent with NAFTA. Whichever way you judge the matter, it is clear that our trade with the euro-zone, as a percentage of GDP, and certainly as a percentage of total trade, is enormously more important with the euro-zone than with the United States.
Let me go on to the figures, as a percentage of trade, because that is the most realistic measure. The noble Lord, Lord Taverne, gave some of the figures. Our trade with the EU as a whole—exports of goods and services—constitutes 53 per cent; for the euro-zone it is 50 per cent; for the United States it is 17 per cent; for NAFTA it is 20 per cent. Of imports of goods and services, the EU accounts for 52 per cent; the eurozone for 49 per cent; the US 14 per cent; and NAFTA 17 per cent. By no stretch of the imagination can it be thought that the United States is more important to us.
The noble Lord, Lord Pearson, then tried to pull the wool over our eyes by talking about the currency in which we invoice. It is where we do the trade, not the currency in which we invoice, that matters. The noble Lord, Lord Taverne, made clear that a large proportion—I do not have his figure to hand—of UK trade is in sterling. That does not mean that we are trading with ourselves; that is international trade. It is just convenient to invoice in sterling. If we entered the euro, all that trade would instantly be invoiced and denominated in the euro.
Imports and exports of oil throughout the world have always been in dollars. Our trade in oil with the Middle East is denominated in dollars. That does not have anything to do with the importance of our trade relations with the United States or the volume and value of our trade with the euro. That is such a vulgar and simple error that it is difficult to believe that it has survived debate in this House until now.
The noble Lord, Lord Pearson, raised another confusion: the issue of the index of exchange rates. He is right about that: the Bank of England's exchange rate index is far from perfect. As he said, it is based on an assessment made many years ago; and it is based on manufacturing rather than manufacturing and services. However, it is the only index we have, and follows the methodology used by the International Monetary Fund, so we must use it. But it is not relevant to our argument, because no policy decisions are taken on that basis. Policy decisions on monetary policy are largely taken on bilateral exchange rates rather than on any such basket.
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So on all the aspects on which the noble Lord, Lord Pearson, bases his argument, he is just plain wrong. He is wrong about the balance of trade between the United States and the euro-zone. He is wrong about interest rates. He is wrong about invoicing—as if invoicing were important. I do not want to hear that argument again; I have had enough of it.
Some other interesting things were said to which I should like to refer. I have not much to say to the noble Lord, Lord Cobbold, because I agreed with so much of what he said; I can say only, "Hear, hear". The noble Baroness, Lady Cox, gave us an interesting historical analogy with the gold standard. I recommend that she reads the 2002 Cairncross lecture by Ed Balls, the economic adviser to the Treasury, in which he goes into great detail about that point, pointing out that to a large extent what went wrong then was that a political timetable was set, rather than doing what we do now, which is to decide what is in the national economic interest.
I also enjoyed the history lesson given by the noble Lord, Lord Selsdon. The points that he and the noble Lord, Lord Cobbold, made were relevant. Yes, of course it was true that after the war the dollar was so dominant that it became and stayed a powerful denominator for international trade.
I was interested in what the noble Baroness, Lady Cox, said about demographic change over the past three centuries. I should like to think about the figures she produced. She challenged me to say whet her I disagreed with the figures or the interpretation. As they are new to me, I shall have to read them and respond to her in more detail.
The noble Lord, Lord Stoddart, is right about the decline of the manufacturing industry in this country. But, as I pointed out in response to a question from him, that decline in the manufacturing trade is common throughout the more developed world and not peculiar to this country.
A number of noble Lords rightly referred to the importance of inward direct investment, although they drew different conclusions. There was a minor point about the Netherlands effect and I shall write to the noble Lord, Lord Stoddart, about that—not because I cannot give the answer but because it is so long, detailed and incomprehensible that it would bore your Lordships silly. I believe the noble Lord's argument concerned the issue of intermediate holding companies and I should like to answer him in detail about that.
Certainly, it is true that direct investment in this country, as the noble Lord, Lord Taverne, said, does not come particularly from the euro-zone—although it does partly. However, when it comes from countries such as Japan, it does not come because of our trade links with the United States it goes directly there— but because of our trade links with Europe. It would be enormously serious if we were to put that at risk and we would be putting it at risk if we were to turn our

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backs on Europe in any way, whether in the form of the euro or in any other way. Clearly, direct investment is an important part of the argument. That is why it is one of the five tests.
As to the related issue, the noble Lord, Lord Howell, quoted Christopher Taylor of the NIESR. However, despite some of the things quoted by the noble Lord, the conclusion of Taylor in his paper was that,
"the findings in this paper support the view that UK high-frequency exchange rate volatility would be reduced by joining EMU".
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That is another important argument and conclusion from a thoughtful and interesting paper.
I am not going to go through—I would not be allowed to— the arguments about the five tests, the preparatory work, the timing and so on. I do not need to. Everyone knows that I cannot say anything new—there is nothing new to be said. If there was anything new to be said, it would not be said by me.
I have enjoyed the debate. The noble Lord, Lord Pearson, as always, has been a wonderful opponent and I have enjoyed the opportunity to set the record straight.
House adjourned at fourteen minutes past ten o'clock.

Official Report of the Grand Committee on the Crime (International Co-operation) Bill [H.L.]
(Fourth Day)
Wednesday, 29th January 2003.
The Committee met at half past three of the clock.
[The Deputy Chairman of Committees (Lord Tordoff) in the Chair.]
Clause 53 [Jurisdiction for terrorist offences]:
Lord Lloyd of Berwick Lord Lloyd of Berwick moved Amendment No. 134A:
Page 31, line 13, leave out "rape,"
The noble and learned Lord said: The purpose of this clause is to give our courts extra-territorial jurisdiction in respect of certain offences, which are set out in Article 1 of what is known as the framework decision, which was promulgated last summer, on 13th June 2002. That is in order to comply with our obligations under Article 9 of that decision. So far, so good.
The purpose of my amendment is simply to draw attention to what seems to me to be the extraordinary way in which the Government seek to achieve that in the Bill. I start with the simple point in the amendment because I cannot see rape mentioned in Article 1 of the framework decision. I may have missed it, but I do not think that I have, unless it could possibly be said to be included under Article 1.1(b). Article 1.1(a) says:
"Attacks upon a person's life which may cause death".
Article 1.1(b) says:
"Attacks upon the physical integrity of a person".
It is hard to believe that the Council had rape in mind when it used those words. I find the notion of a terrorist rape hard to envisage. It might intimidate the individual who is being raped, but how do you intimidate the public, or even a section of the public, by committing a rape? How do you seek to influence a government by committing a rape? It seems that the draftsman has added rape at this point with no real thought about what was intended, unless—if I may say so rather frivolously—he had a picture in his mind of those scenes often depicted by 17th century painters of the rape of the Sabine women, or something of that kind. Surely that is not what the Council expected when it required us, by Article 9, to provide for extraterritorial jurisdiction.
There is a wider point that goes beyond the mere omission of rape. Clause 53 confers jurisdiction on our courts where they would not otherwise have it. As I understand it, we already have jurisdiction in respect of numerous countries that are designated under the
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Suppression of Terrorism Act 1978. That long list of countries is set out on page 77 of my report. It includes all the member states of the Union and many others besides. No doubt the list has been added to since my report. I cannot see any proposal to repeal the 1978 Act—if indeed it could be repealed conveniently, which I doubt. As far as I know it is still on the statute book. So why do we have to go through the whole process a second time? Is not the Suppression of Terrorism Act 1978 a sufficient compliance with our obligation under Article 9 of the framework decision? Do we really need a belt as well as braces in conferring jurisdiction on our courts? My experience is that when you have both belt and braces, they both tend to fail just when you most want them.
Thirdly, even supposing that we have to do something to bring some other country within the 1978 Act—I am not sure which country that might be—surely we are setting about it in as clumsy a way as can be. Why do we have to say that a person who has committed a rape in France, or wherever, is deemed to have committed it in England? Why not say in simple, straightforward words, which is all that Article 9 requires, that our courts shall have jurisdiction in such a case? Sir Winston Churchill said that there was too much damned deeming in our legislation. This is a perfect example of unnecessary deeming when all we need to do is say that in those cases our courts shall have jurisdiction. That is the language of the framework decision.
The Minister is already aware of my fourth point, because I wrote to him about it after Second Reading. He was kind enough to see me about it. We need a comprehensive list of terrorist offences, set out in a new Schedule 1 to the Terrorism Act 2000. That is where all the offences ought to be brought together. That list of offences could be added to from time to time as new conventions are agreed and new international terrorist offences are created. I recommended that in my report, but for some reason—I have never been sure why—that recommendation was not accepted. As a result, nowhere in our legislation is there a definition of what is a terrorist offence. One has to go far and wide to find out what they are.
The most obvious terrorist offence—a terrorist murder—is still nowhere included as a terrorist offence. There are all sorts of little offences, such as wearing uniform or drilling the public, but nowhere is a terrorist murder described as a terrorist offence. Even if we pass the Bill as it stands, a terrorist offence of murder will still exist only by implication where it has been committed by or against a United Kingdom national abroad. There will still be nothing about a terrorist murder committed in England. That is not the way to legislate. I beg to move.
Lord Goodhart: The noble and learned Lord, Lord Lloyd of Berwick, has raised an important issue. He is an expert because of the very valuable and thoroughly researched report that he produced. I remember attending a seminar at which a number of us discussed many of the issues that he raised. I therefore regret that

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I do not feel able to support his amendment, mainly because I feel that rape can be a terrorist offence. In some countries, particularly Islamic countries, it can be used effectively as a weapon of terror. About 10 years ago I was involved in an investigation into human rights in Kashmir. There were allegations that some of the Indian government's troops were using gang rape as a method of punishment. That was not terrorism, because a state force was allegedly involved. I am not saying that the allegations were true. They were hotly contested. However, in countries where rape is a source of disgrace to the victim, it is possible for terrorist organisations to use rape or the threat of rape as a method of terrorising and intimidating the population. Although it would be unusual for rape to be a terrorist offence, it is by no means impossible. I would be happy for the word to be left in the clause.
Lord Carlisle of Bucklow: As I understand it, a terrorist offence is an act designed to influence a government or intimidate the public and made for the purpose of advancing a political, religious or ideological cause. What the noble and learned Lord, Lord Lloyd, said was compelling. Serious, horrible and dreadful though rape is, it is difficult to see how it can be said to be perpetrated for the purpose of advancing a political, religious or ideological cause. I hope the Minister will carefully consider the suggestion that rape does not fit in with the other offences mentioned in the clause.
Baroness Anelay of St Johns: I am grateful to the noble and learned Lord, Lord Lloyd of Berwick, for raising these issues. By homing in on a specific issue, he has enabled the Committee to look at the broader picture. Paragraph 117 of the Explanatory Notes, refers to the specific offences listed in new Section 63B(2) and goes on to say:
"These reflect those found in Article 1 of the FD"—
that is the framework directive. The noble and learned Lord has asked how accurate that reflection is. I wanted to ask the Minister the same question, so that he could put on the record the Government's interpretation of the reflection of Article 1 of the framework directive.
The noble and learned Lord posed a second vital question. Are we adopting belt and braces unnecessarily? Are we already compliant? In the language that the Government have used on the Floor of the House on the Courts Bill, what is the added value of having this extra compliance? The Government need to persuade us that we are not already compliant before we add this.
The noble and learned Lord returned to the intriguing point that he made on Second Reading, which found much favour on the Floor of the House. He said that there should be a clear and plain schedule of terrorist offences to which everyone can find ready reference. I should be interested if the Minister could put on the record any further reflections that the Government have had since Second Reading.
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I am aware that the habit of the Minister will be to write to the noble and learned Lord. Other noble Lords will not have seen that letter. If it exists, perhaps there have been discussions. It would be helpful to the Committee if information about that could be given so that others, such as me, could consider what approach we might take to these matters on Report.
Finally, I come to the kernel of the issue. The noble and learned Lord has hung the amendment on rape—I am mixing my metaphors. I find this a difficult issue to tackle. A couple of years ago, in a debate on the Floor of the House about asylum and some of the methods used in countries around Bosnia and Serbia, questions were raised about how rape was used as a weapon against specific communities. I was helpfully briefed by the Black Women's Rape Action Project. That certainly focused my mind carefully on whether rape could be a terrorist offence. My noble friend Lord Carlisle said that he can envisage the first ground of it being satisfied, but how can it then be linked to whether it is being used for the promotion of a religious ideology?
As the noble Lord, Lord Goodhart, said, there may be some circumstances in which people of a particular religious persuasion perceive rape as a way of terrorising some members of a community in order to force them to change their religion, or at least to stop practising their current religion. I believe that may be the case in some communities in the Indian sub-continent.
Although I had some briefing on the issue two years ago, I have been unable to obtain any current briefing for the Bill. That is a problem because there are organisations outwith the House which I believe should have interested themselves in this matter. I suspect that they will do so now because of the service that the noble and learned Lord has done the Committee, by raising the issue. It is important that we have a full response from the Minister, so that we can obtain opinions from those who are active in these matters outside the House. I hope that we shall be able to consider the issue further on Report.
3.45 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Filkin): As the noble and learned Lord, Lord Lloyd of Berwick, signalled, he spoke eloquently on those points at Second Reading. After Second Reading, it was very useful to the Government to have lengthy discussions with him to explore the issues, to ensure that we understood fully his argumentation and to reflect on it. However, I believe that the noble and learned Lord will know from the tenor of that discussion and our subsequent reflections that the Government are still of the view, as we set out on Second Reading, that we have positioned this correctly. I shall explain why.
Initially, I address the question of whether it is right to include rape under specific offences. It is our judgment that we would be unable to fulfil the requirement of Article 1 of the framework decision, which states that we must include offences that are

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classified as attacks upon the physical integrity of a person. In our view, it is clear that the offence of rape falls within this category.
I hoped that I should not be pressed to go further, given how particularly unpleasant this matter is as a topic. But, in a sense, the noble Lord, Lord Carlisle of Bucklow, challenged me to articulate circumstances in which it would be a terrorist offence. Members of the Committee will recollect the Iranian Embassy siege involving the SAS. At one point, the terrorists demonstrated their determination to achieve their aims by killing someone and throwing them out of the door. If the police constable concerned in that situation had been female, I believe that it would have been conceivable that the threat or the actuality of rape could have been used to demonstrate the seriousness of the terrorists' demands. Some might say, horrific though rape is, that it would be less bad than murdering a policewoman. In that circumstance, rape would have been terrorist rape and would have been carried out for a terrorist purpose. Therefore, although it is a horrific thought, I do not believe that it is inconceivable that rape could be a terrorist offence. I hope that illustration makes the point.
I also believe that example illustrates a further reason why the current situation is correct. As I said on Second Reading, the essence of our interpretation of terrorist offences is that they are acts or threats that are defined as terrorist by the context and the motive. The example of the Iranian siege illustrates that neatly. While one would not normally consider rape a terrorist offence, in that particular example it clearly would have been had it taken place.
Therefore, how are terrorist offences defined in that situation in order to encapsulate all the circumstances when the context and the motive—peculiar though they might be—together with the act or the threat, combine to make a terrorist act rather than a simple criminal offence? That is one—if not the only—reason why we believe that the current thrust of legislation is right.
I shall go into a little more detail. The purpose for which acts are carried out determines whether they are terrorist acts. The pragmatic point, which is not irrelevant, is that current legislation works well. The scope of the powers is well understood by the police and the security and intelligence agencies. To dismantle such legislation would be impractical, costly and time-consuming. Therefore, we do not see the benefit of doing so. We are not aware of the mischief to which this amendment would be a remedy. I do not think that when the noble Lord, Lord Carlile of Berriew, carried out his important and valuable review of terrorist legislation, he highlighted that this was a problem. Maybe I am wrong on that.
Noble Lords: Wrong Carlisle!
Lord Filkin: I was referring to what I thought was the recent review by the noble Lord, Lord Carlile of Berriew.
The clauses currently make it clear exactly which offences we seek to take extra-territorial jurisdiction for. United Kingdom legislation is the most practical
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and appropriate means of ensuring that we can prosecute those involved in terrorist activity. To list or attempt to list all crimes that could be committed by terrorists in counter-terrorism legislation is not necessary or desirable.
I turn now to specifics. When we were reflecting on the offences found in Article 1, we listed all those offences in normal criminal law which could be covered by the framework decision. In general, there are no exclusively terrorist offences under United Kingdom law. Therefore, we had to interpret the offences listed in the framework decision. The Suppression of Terrorism Act concerns extraterritorial jurisdiction over offences carried out in states who are signatories to the European Convention on the Suppression of Terrorism. Those clauses cover acts outside European states by and against UK nationals or residents.
The language used is standard to that used to take extra-territorial jurisdiction. Similar language is used in the Terrorism Act 2000 and other legislation. It gives jurisdiction to England and Wales, Scotland and Northern Ireland if the act committed would have been an offence there.
Finally, is there a real difference between UK tourists being attacked and physically assaulted in order to deter their presence in a foreign state or to make a point to the local government and the same terrorists conducting a campaign against UK tourists to achieve the same end? We believe that situation is unlikely, but possible.
For these reasons, we do not believe that there is a significant problem. Therefore, there is no need to change. For the reasons given, we believe that rape can be a terrorist offence. Therefore, with regret, we resist the argumentation put forward by the noble and learned Lord, Lord Lloyd.
Baroness Carnegy of Lour: When the Minister was describing the Iranian siege terrorist attack—which I found very useful because I recently saw it repeated on television and could picture it—he said that rape or the threat of rape could have been an offence. Is the threat of rape included here or was that a slip of the tong ue?
Lord Filkin: Yes, it is, under Article 1.1(a), threatening to commit any of the acts listed in (a) to (h).
Lord Lloyd of Berwick: I am very grateful in particular to the Minister for answering so fully. I may have misheard him on one point when he said that there are no specific terrorist offences in the Act. Among other places, they are all set out in Part 6 of the 2000 Act. That is my fourth and final point. All the offences should be listed together in one place, not scattered, as now, through three different Acts, which I find very confusing. I am grateful to the Minister.
He did not deal with the point on the Suppression of Terrorism Act, but as I had not given notice on that issue, perhaps that is easily understood. However, I hope that he will think again about the broader points that I have tried to mention—not necessarily the

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specific point on rape. I fully understand those arguments. In particular, I hope that he will think about the extraordinarily clumsy way of drafting the jurisdiction provision. I beg leave to withdraw the amendment.
Lord Filkin: Before we close, it is always a mistake for Ministers to attempt to do things themselves. While I am absolutely clear that threatening to commit any of the acts under Article 1 is covered in the treaty, I am advised that the threat of rape is not an offence under domestic law. Therefore, we do not take extraterritorial jurisdiction for it. Attempts, conspiracy, and so forth are in domestic law, so we take extraterritorial jurisdiction over them. I am surprised that the threat of rape is not an offence, but I am so advised.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 135:
Page 31, line 27, at end insert—
"(i) aiding, abetting, counselling, procuring or inciting the commission of, or attempting or conspiring to commit, any of the offences in paragraphs (a) to (h)"
The noble Baroness said: Having heard that exchange, I am now more confused about my own amendment than I was before. In a sense, I am returning to the underlying theme of the noble and learned Lord's argument—whether we have a belt and braces position here. Are we doing more than is compliant? In addition, are we doing enough? The issue of the threat of committing an offence is relevant.
As the noble and learned Lord said, Clause 53 inserts a number of new sections into the Terrorism Act 2000 to provide for extra-territorial jurisdiction in respect of offences linked to terrorism that are committed abroad by UK nationals and residents. To cut to the chase on this, when I first looked at the list of offences in the Bill, I noticed that—unlike when, as a magistrate, one just sees them listed—there was no reference to the related offences, such as,
"aiding, abetting, counselling, procuring or inciting the commission of, or attempting or conspiring to commit",
any of those offences. I was not thinking only of threatening. Threatening can be one of those, but it is possible to aid and abet without personally threatening—a person may not be present when an offence takes place or is attempted. Therefore, as I read the Bill, there will be no assumption of extraterritorial jurisdiction in cases of terrorist conspiracies or attempts to commit the terrorist offences listed in these sections.
I tabled Amendment No. 135 to find out if that is what the Government intend. It would mean that terrorists could not be prosecuted under the new extraterritorial jurisdiction provisions for conspiracies or attempts, but only for the commission of the actual terrorist atrocities. Perhaps I have missed the provision in the Bill or there is something in the convention that gives this interpretation to it.
Certainly, I am not clear and I should be extremely grateful if the Minister would explain whether aiding and abetting are covered and, if so, how.
I also wondered why other terrorist offences, such as causing an explosion likely to endanger life or property and attempting or conspiring to cause an explosion, are not listed. I believe that I am asking a supplementary to the question asked by the noble and learned Lord about terrorist murder. I beg to move.
Lord Filkin: We interpreted this as a probing amendment to determine whether we had taken extraterritorial jurisdiction in the secondary offences highlighted in the amendments to fulfil the requirements of Article 4. In that respect, they are right and proper probing amendments. I assure the Committee that we have and I shall explain the detail of how this has been done.
Article 4 of the framework decision requires member states to ensure that inciting, aiding, abetting or attempting to commit an offence is made punishable. Under UK law jurisdiction for secondary and inchoate offences, such as aiding, abetting, attempting, inciting, conspiring, counselling and procuring, is dependent on whether we have taken jurisdiction for the substantive offence in the UK. As we are taking extra-territorial jurisdiction over the substantive offences listed in Article 1.1, 1.2 and 1.3 of the framework decision in certain circumstances, we do not need to legislate specifically in order to take extra-territorial jurisdiction over aiding, abetting, attempting, inciting, conspiring, counselling or procuring to commit the offences listed in Sections 63B and 63C in the particular circumstances described in those sections.
Rather, where an extra-territorial offence is created, extra-territorial jurisdiction is also automatically taken over secondary and inchoate offences. No further legislation is necessary in order to achieve that. I hope that answers the very necessary probing amendment raised by the noble Baroness, Lady Anelay.
4 p.m.
Baroness Anelay of St Johns: I am grateful to the Minister for his clarification that secondary and inchoate offences are covered.
Lord Filkin: I regret the fact that I am moving up and down like a Jack-in-the-box, but a further question was raised which it would be better to answer now rather than troubling the noble Baroness with a letter. We already take extra-territorial jurisdiction over explosives offences under Section 62 of the Terrorism Act 2000. This also covers chemical and biological offences; nuclear offences are covered by the Nuclear Material (Offences) Act 1983.
Baroness Anelay of St Johns: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 135 A and 136 not moved.]
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 137:
Page 32, line 5, after "of" insert "or employed by"
The noble Baroness said: I shall speak also to Amendment No. 138. These amendments relate specifically to proposed new Section 63C of the Terrorism Act 2000, which is contained in Clause 53.
When I first read the provision, with recent events in mind, my thoughts turned to Zahoor Shah and Sayed Afzal, the two Afghans who worked at the English Embassy in Kabul and were awarded the MBE last year for guarding and maintaining the embassy through decades of war and civil strife. I am sure that Members of the Committee will agree that the honour was well deserved.
Thinking of the New Year's Honours List, I wondered whether the Bill's provisions would cover not only UK nationals working in British embassies abroad, but also foreign nationals working in any capacity in our embassies. There are so many such people who give long service.
A crucial term in new Section 63C is "protected person", the definition of which is contained in subsection (3)(c). Paragraph 118 of the Explanatory Notes states:
"'Protected persons' includes all diplomatic and consular staff, whether of UK nationality or not".
Subsection (3) provides that,
"a person is a protected person if … he is a member of a United Kingdom diplomatic mission … [or] … consular post".
My amendments would simply change that definition by inserting the words "or employed by".
I confess that there may be other protections that I have not looked into—for example, under the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations. Therefore, are there any other ways in which such persons would be given protection as opposed to what appears to be a gap in the Bill'? I beg to move.
Lord Filkin: New Section 63C(1) of the Terrorism Act gives the UK extra-territorial jurisdiction over certain domestic offences where they are committed against UK nationals or residents and "protected persons" outside the UK as an act of terrorism or for the purposes of terrorism.
Subsection (3) of this section specifies those persons who are "protected persons". This includes, inter alia, a member of a UK diplomatic mission within the meaning of Article 1(b) of the Vienna Convention on Diplomatic Relations 1961.
Therefore, the definition of a member of a diplomatic mission and consular post as contained in these provisions includes the employees of the mission and consular post, as the definition includes diplomatic, technical, administrative and service staff. So employees are already covered.
The Vienna convention defines members of diplomatic and consular mission as including diplomatic staff, administrative and technical staff and
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service staff. Service staff are persons in the domestic service of the mission. Accordingly, this definition includes all those employed by the mission whatever their nationality. Therefore, for those reasons I am happy to be able to reassure the noble Baroness that they are so protected.
Baroness Anelay of St Johns: I am grateful for the clarity of that assurance. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 138 not moved.]
Clause 53 agreed to.
Clause 54 agreed to.
Clause 55 [Application of section 56]:
Barness Anelay of St Johns Barness Anelay of St Johns moved Amendment No. 138A:
Page 35, line 24, leave out subsection (4).
The noble Baroness said: We now turn to a very long part of the Bill, but one which is almost entirely uncontroversial—certainly to Members on these Benches. I refer to the issue of driving disqualifications and reciprocal recognition of those disqualifications. In moving this amendment, with the leave of the Committee, I shall speak also to Amendment No. 139.
The Bill states that the duty to inform foreign authorities of the disqualification of a non-UK resident does not apply in prescribed circumstances. I am attempting to ascertain what those circumstances are. Will the Minister explain how and when the regulations will be made? Will they be published; and, if so, under what conditions?
Paragraph 123 of the Explanatory Notes states:
"Notification would not be required, for example, where another Member State has declared that it will apply certain discretionary conditions to the recognition of the disqualifications, as described in Article 6(2) of the Convention".
I merely included that wording in the substance of my amendment, in order to ask the Minister just what is meant by that example. What other examples are there? If this is merely "an" example of what can happen, on what other basis can certain discretionary conditions be applied? We are told that the circumstances will be prescribed in regulations. So far as I am aware, Members of the Committee have not yet received any information about the regulations. I beg to move.
Lord Bassam of Brighton: Under Article 6(2) of the EU convention, the state of residence may declare that it will always refuse to recognise a disqualification where the conduct involved does not constitute an offence in its legislation or where a disqualification would not be an applicable penalty for the offence. It may also refuse to act where the remaining period of disqualification to be enforced is less than one month.
The UK is not required under the EU convention to notify a disqualification to a member state which has declared that it will always apply conditions that would preclude the recognition of the disqualification.

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The Bill therefore provides for regulations to state when the duty to notify a disqualification will not arise.
The second amendment—which would disapply the duty to notify a member state where it has made a declaration in respect of Article 6.2—addresses the issue but does not provide the full remedy.
The EU convention allows a member state to declare that it will always apply the conditions in Article 6.2,
"in whole or in part".
Regulations allow us to reflect the exact terms of the declaration made by each member state.
We do not know at this stage how many member states will make a declaration in respect of Article 6.2. That will only become clear as and when other member states ratify the convention and we are able to conclude agreements with them to implement the convention on a bilateral basis. It is at that point that regulations will be made to detail clearly the circumstances in which the duty to notify a disqualification will not apply in respect of that state.
Regulations will be made on a bilateral basis with other member states to ratify the convention. It is probably widely known that, at present, only Spain has ratified the convention. We shall seek to begin negotiations with the Spanish to decide the terms of the regulations shortly after the Bill comes into force.
The noble Baroness asked what regulations would be made as regards other prescribed circumstances. They might cover such matters as the conduct for which the driving disqualification had been imposed; the remaining period of disqualification that might have to be enforced; and where disqualification was not a measure available under the legislation of the state of residence. I have probably not satisfied the noble Baroness on every point raised, but I hope that I have covered most.
Baroness Anelay of St Johns: I am grateful to the Minister for his reply. He has gone a long way towards satisfying me on these matters. I was certainly grateful to him for his comment on the bilateral basis on which implementation will take place. That is important and his response was very helpful. As the Minister will know, the Automobile Association, among others, has been very concerned about whether there will be reciprocal agreements and whether we shall jump the gun and put the provisions of this Bill into effect before there is a bilateral agreement.
I need to examine the Minister's remarks carefully. There remain other possible situations in which discretion might be applied. I do not think that I shall need to return to any major point, but further clarification may be required. I shall need to ensure that the Automobile Association is fully satisfied. Naturally, as we are in Grand Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 139 not moved.]
On Question, Whether Clause 55 shall stand part of the Bill?
Lord Carlisle of Bucklow: I shall refer specifically to Clause 55(5), but, first, I want to raise a general issue which I hope will warm the heart of my noble friend Lord Renton and strike a chord with other Members of the Committee. Ever since the noble Lord, Lord Clinton-Davis, and myself entered Parliament, at about the same time, in 1964—in fact, the noble Lord won his seat shortly after that —we have heard every incoming government state, before taking office, that it is their intention to pass less legislation and to do it in a clearer and simpler form.
One has only to stand in the Library of either House and look at the expansion in the volumes of legislation that has occurred year by year, to see not only that governments have failed to pass less legislation, but that they have certainly not done it in shorter and simpler form. I am concerned about the complexity in the drafting of every Bill—so much so that it is almost impossible to follow what is being said.
In this Bill, we have an example, not of complexity leading to a failure to understand what is being said, but of unnecessary verbosity and repetition. Clauses 55 and 56 require that the appropriate Minister—in this case the Secretary of State—shall give notice where an individual from another country has been convicted of a motoring offence in this country and has been disqualified.
Clause 55 starts by stating that Section 56, which gives the Home Secretary a duty to notify the appropriate authority abroad, will apply where,
"an individual … who is normally resident in a member State other than the United Kingdom is convicted of an offence".
That is simple. Secondly, it states that,
"no appeal is outstanding in relation to the offence".
That is simple. And, thirdly, it provides that,
"the driving disqualification condition is met in relation to the offence".
That is also simple. Why do we need subsection (5), which is a further seven lines, to define what is meant by the words "no appeal is outstanding"? Subsection (5) states that,
"no appeal is outstanding in relation to an offence if—
(a) no appeal is brought against an offender's conviction of the offence, or any order made on his conviction, within the time allowed for making such appeals, or"—
alternatively, if he has brought an appeal—
"(b) such an appeal is brought and the proceedings on appeal are finally concluded".
Surely, any appeal is outstanding until the time limit has passed during which he can make an appeal, or he has already made an appeal. Equally, an appeal is outstanding from the time that notice has been given of an intention to appeal until those appeal proceedings have been finally concluded. How can "no appeal is outstanding" mean anything other than what is said in subsection (5)?
Subsection (5) is a good example of a totally otiose and unnecessary subsection, which defines a matter that does not need defining and which is well known to

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all the courts in this country. I know that I shall be shot down in flames and told that it means many other things, but I cannot think—and I challenge any other member of the Bar immediately to think—what "no appeal is outstanding" can possibly mean, other than that no appeal has been made, that the time for making any appeal has been completed, or, if one has been made, that it has been concluded.
If we start with the simple exercise of taking out subsection (5) and then apply the same consideration consistently to other clauses in the Bill and other Bills, perhaps we shall achieve shorter, simpler and easier to follow legislation.
4.15 p.m.
Lord Renton: I support my noble friend Lord Carlisle. I confess that more than a quarter of a century ago I was made the chairman of the only official parliamentary committee since 1870 to advise on how Acts of Parliament should be drafted. In our report we tried to prevent over-zealousness in drafting, such as inserting unnecessary matters or entering into unnecessary detail. For the reasons that my noble friend Lord Carlisle has given, subsection (5) is not only unnecessary, but confusing.
Lord Bassam of Brighton: Far be it for me to contradict both noble Lords who have spoken of their length of time in their Lordships' House and in another place, and who have knowledge and experience. In particular, the noble Lord, Lord Renton, obviously occupied a special place when he reviewed how legislation should be written. My guess is that there are drafting conventions and that they change from time to time.
I am advised that subsection (5) is required because it makes clear—perhaps not to the satisfaction of the noble Lords who have spoken—that strict time limits apply and that the Minister need not wait to see whether special leave is granted in special circumstances. That is its purpose.
The subsection may appear unnecessary and otiose to the noble Lords who spoke, but it is there for a specific purpose. Certainly, I shall reread it in relation to the rest of the clause, but that is the explanation. Perhaps when the noble Lords have reflected on what I have said and have reread the provision, they may also see the point being made.
Lord Clinton-Davis: I find my noble friend's explanation rather unconvincing. I think that the least he can do is to say that he will take what has been said back and reconsider the situation. There is no point in including unnecessary provisions in legislation. Not only is it confusing for the advocates, but, more importantly, it is confusing to those who are charged with offences. I do not want to reach a hard and fast conclusion now because I believe that it is possible that on reflection my noble friend will be advised in another way, but I think that we should return to the situation on further consideration of the Bill.
Baroness Carnegy of Lour: It seems extraordinary that it is necessary to say that no appeal is brought if
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it has not been brought within the time allowed. However, if it is the convention to say that, I suggest it might be changed.
Lord Goodhart: I reluctantly get involved in this argument. I feel that the problem may be slightly the other way round. For example, if a month has been given during which time a convicted person can decide whether to make an appeal and he does not decide to appeal for three weeks, how within that three weeks can one say that an appeal is outstanding in the ordinary sense of the word because no appeal has been brought? So, it may be that this wording intends to make sure that a disqualification order cannot come into effect in the UK during a period while an appeal can still be brought within the time limits, but no appeal has in fact been brought.
Baroness Anelay of St Johns: I add my six pennyworth. I had problems with this subsection, but with paragraph (b). I could understand why paragraph (a) inserted time limits, but (b) refers to when,
"proceedings on appeal are finally concluded",
which seems not to refer to time limits as such. Therefore, I should be grateful if the Minister could reflect on the matter between now and Report.
Lord Carlisle of Bucklow: Like the noble Lord, Lord Clinton-Davis, I am not totally convinced by the Minister's explanation of why the words are necessary. I hope that he will look at the matter again because I believe that the principle that we should not put in unnecessary clauses and subsections is a valid one.
Lord Bassam of Brighton: I do not disagree with that argument. That would not be sensible. We all want matters to be brief, clear, plain and simple. The answer to the point made by the noble Lord, Lord Goodhart, is that his understanding fits into the category of "as well". So, it adds something. We are always willing to look at whether wording can be improved, but I say that without giving a commitment. We should all try to keep legislation as brief and to the point as we possibly can.
Clause 55 agreed to.
Schedule 3 agreed to.
Clause 56 [Duty to give notice to foreign authorities of driving disqualification of a non-UK resident]:
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 139ZA:
Page 36, line 5, at end insert—
"(g) state that there is written evidence that the offender has had adequate opportunity to defend himself and to gain access to legal advice"
The noble Baroness said: I shall speak also to Amendments Nos. 139ZB, 139ZC, 139ZD and 139ZF. They are probing amendments that invite the Government to clarify the part of the provision dealing with driving disqualification. I seek to ensure that a defendant in disqualification proceedings is dealt with in a clear and proper manner. We wish to ensure that

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an individual has access to the proper legal advice and that he receives proper written notice of notification of proceedings against him.
We seek to probe the drafting of some of the subsections relating to driving, which appear so vague that at some stages I was unsure of their purpose. I refer back to what my noble friend Lord Carlisle said in his clause stand part argument.
I hope the Government accept that an accused person should have proper legal advice in whatever country the proceedings commence. Would that not be especially important in a country where English is not the first language and a motorist has problems understanding what is happening? Will the Minister make provision in the Bill for fairness in legal proceedings and provide the legal help that should be available? Of course there will be many questions about how it can be taken up and the costs that might be involved and who should bear them.
Beyond the initial encounter with the police and after the hearing, the Bill states that, where the offender did not take part in the proceedings, a notice informing the foreign authorities of a driving disqualification of a non-UK resident would be accompanied by evidence that the offender was duly notified.
I am curious as to how that evidence would be presented. Would it merely be a copy of any correspondence that had been sent to the individual? If so, how do we know that the individual had actually received it; that there was good service?
Finally, I must admit that I was puzzled by some of the subsections in the clause. For example, subsection (3) states:
"A notice under this section may contain such other information as the appropriate Minister considers appropriate".
That is not the most felicitous drafting. The term seems rather vague. I should be grateful if the Minister could give us a fuller flavour of its meaning. What other information does the Minister envisage would come under that subsection? When will the other information be necessary, and which Minister would intervene in such proceedings? I beg to move.
Lord Renton: Amendment No. 139ZB would leave out subsection (3). I think that it should be left out. It gives rise to uncertainty as to whether the information referred to is to be considered as appropriate by the appropriate Minister without his giving any reasons for it. In any event, it is an excess of zeal to invite the opinion of the appropriate Minister.
4.30 p.m.
Lord Carlisle of Bucklow: I support what the noble Lord, Lord Renton, and my noble friend Lady Anelay have said. Presumably, Clause 56 deals with offences, including careless driving, set out in Schedule 3.
If a Frenchman were stopped in this country by the police and charged with careless driving, one could state whether or not the offender took part in the proceedings during which the disqualification was
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imposed. But how could one confirm that an offender who was moving around the country had been duly notified? Out of genuine ignorance I seek clarification. Normally, service of the notice would be effected by registered post and would be deemed to have occurred on its acceptance. Could one state with certainty that an offender travelling about the country on holiday had been duly notified of the proceedings?
Lord Clinton-Davis: Uncharacteristically, the noble Lord has misinformed himself. As I understand it, the authorities must only give notice by registered post where it is prescribed. Notice can be effected by other means. If the authorities cannot find someone who is travelling about the country—by caravan, for example—the service of notice is effected by registered post or whatever means the statute confers. It is not important that the individual should always be found.
Lord Bassam of Brighton: Committee Members have asked several questions. In setting out the thinking behind Clause 56, I hope that I can answer them.
In general, the amendments would place additional evidential requirements on the notification and recognition of driving disqualifications between the United Kingdom and member states. They would also restrict the information that the UK could provide to a foreign authority or a disqualified driver resident in the UK.
As is plain, our starting point for this part of the Bill is the EU Convention on Driving Disqualifications and what it says should be required to recognise a foreign disqualification. The convention requires us to notify a driver's state of residence of a disqualification covered by the convention. The notification and driver's licence must be accompanied by information to locate the driver; the original or certified copy of the order of disqualification; a brief statement of the circumstances of the offence and the legal provisions that gave rise to the disqualification; details of the disqualification; and a statement that no appeal is outstanding.
If the offender did not take part in the proceedings that resulted in disqualification, the convention requires that the notification should also include evidence that the offender was duly notified of the proceedings. That is the information that the convention has determined will normally be sufficient to allow the driver's state of residence to satisfy itself that the offender had an adequate opportunity to defend himself, and to allow it to give effect to the disqualification. If it is not satisfied that the offender had an adequate opportunity to defend himself, it may ask for additional information, and, ultimately, it could refuse to recognise the disqualification. Those are comprehensive and very equitable arrangements to allow the recognition of a driving disqualification in another member state.

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Amendment No. 139ZA would require a notice of disqualification given to another member state to include a statement to the effect that there is,
"written evidence that the offender has had adequate opportunity to defend himself and to gain access to legal advice".
At first glance, the amendment is perfectly sensible and reasonable. But it would take the requirements for what is to be included in the notification sent to a driver's state of residence beyond the factual information required by the convention. It would also introduce a test concerning access to legal advice, which is not covered by the convention.
The convention rightly leaves it to the driver's state of residence to form a view on whether someone has had an adequate opportunity to defend himself, based on the factual information provided by the state of the offence. The Bill provides for the information to include either confirmation that the offender took part in the proceedings resulting in disqualification or, if he did not participate, evidence of notification and that he had the opportunity to participate. Amendment No. 139ZA would require the UK to make a statement that written evidence exists of the adequacy of the driver's opportunity to defend himself and to gain access to legal advice. That statement would involve a subjective assessment of the fairness of the court proceedings. Without the evidence itself being transmitted, it would add nothing of value to the procedure.
Likewise, Amendment No. 139ZD, which deals with the recognition of foreign disqualifications in the UK, goes beyond what is required for the purposes of the convention to confirm that an offender has had an adequate opportunity to defend himself. It would make it a condition of recognition of a foreign disqualification in the UK that there is written evidence that the offender has had adequate opportunity to defend himself and to gain access to legal advice. The Bill already makes the recognition of a foreign disqualification conditional on the offender's having been duly notified of, and entitled to take part in, the proceedings. This is a less subjective test than that envisaged by the amendment. It also reflects, in line with the general application of the principle of mutual recognition of criminal decisions in the EU, that all member states are signatories of the European Convention on Human Rights, which guarantees the right to a fair hearing.
Amendment No. 139ZB would restrict the content of a notice of a disqualification given to another member state to only those details specified in Clause 56(2) and no other information. That would impede the effective operation of the notification procedures by preventing the UK from including additional information that would assist the driver's state of residence in executing the disqualification. It might include information relating to the court proceedings, or to the period of the disqualification already served in the UK, which the driver's state of residence must take into account. Member states may also have particular information requirements in order to give effect to a disqualification. Those will become apparent only during our concluding agreements for
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the bilateral implementation of the convention. Amendment No. 139ZB would prevent us from doing that.
Amendment No. 139ZC, which requires that evidence should be "written", is unnecessary and potentially restrictive, particularly at a time when steps are being taken to introduce electronic transmission. Although the notification sent to the driver's state of residence is likely to rely on written evidence to show that he was duly notified of the proceedings against him, the convention requirement is only for "evidence". To go beyond that could create problems with other states.
Amendment No. 139ZF concerns the notice given to a driver resident in the United Kingdom that a foreign disqualification is to be recognised here. It would restrict the content of that notice to only those details specified in Clause 59(1). It would be unduly restrictive, preventing the appropriate Minister from including additional information, as he considers appropriate, in a notice of disqualification sent to a UK resident disqualified abroad. That would not be terribly helpful in those circumstances. Information would be included in the notice only where it was relevant to the offender in respect of the disqualification imposed on him. The offender may, for example, be required to surrender his licence where it has not been seized by the state in which the offence was committed. Information on how to reapply for a licence might also be usefully included. It is helpful to ensure that that takes place.
Baroness Carnegy of Lour: In his response to the amendments that would ensure that the offender could defend himself and get advice, the noble Lord said that all participating countries would have signed the European Convention on Human. Rights, and, therefore, they would be bound to make such provision. Is he sure that that is the case? Have we been told that disqualification can result from actions that are not a criminal offence in some countries? If so, does the European Convention on Human Rights apply in those cases? I ask out of ignorance. It is important that we know.
Did the noble Lord reply to Amendment No. 139ZB, which would omit Clause 56(3)?
Lord Bassam of Brighton: I thought that I did. I explained that the amendment would be unduly restrictive. In some circumstances it would be helpful to include additional information that the Minister considers appropriate.
In response to the first point, all EU states have signed the European Convention on Human Rights.
Baroness Carnegy of Lour: Does that mean that a disqualification cannot be imposed in any of those countries without the offender having had the possibility of speaking up for himself in court and having access to assistance?
Lord Renton: While the Minister's advisers are considering an answer, I draw attention to a circumstance that I do not think the Minister's reply

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covered. A person can be disqualified from driving without being convicted. The DVLA in this country considers that some people's health makes them unfit to drive. People can, therefore, be deprived of their driving licence simply on those grounds rather than as the result of an offence.
Lord Bassam of Brighton: In response to the noble Baroness's point, the convention applies only to road traffic offences that constitute a criminal offence. Does that answer her point?
Baroness Carnegy of Lour: I thought that I had heard in previous discussions that some non-criminal offences result in disqualification, and, therefore, they might not be covered by the European Convention on Human Rights. I may be missing the point, but I thought that that was a gap in the Minister's argument.
Lord Bassam of Brighton: I am prepared to accept that it might be. We shall take that point away and reflect on it further.
To answer the point made by the noble Lord, Lord Renton, I must say that the circumstances to which he referred are not covered by the convention. It relates to revocation.
Lord Monson: In resisting Amendment No. 139ZB, which would leave out subsection (3), the Minister said that he could think of circumstances in which it would be useful for the Minister to have the power to furnish additional information. Can the Minister give specific examples of occasions when that might be useful?
Lord Bassam of Brighton: I provided examples as I ran through the amendments. I said, I think, that it might include information relating to the court proceedings themselves or to the period of disqualification already served in the United Kingdom, which must be taken into account by the driver's state of residence. Does that help the noble Lord?
Lord Monson: Yes, it does.
4.45 p.m.
Baroness Anelay of St Johns: I have much to reflect upon, and I have one or two further questions for the Minister. The Minister gave full answers and tried to be as helpful as possible.
My noble friend Lady Carnegy of Lour raised an important issue about the status of administrative proceedings that may cause a driving disqualification. In our earlier discussion on administrative proceedings, I understood that it might include such an eventuality. As that would not count as criminal proceedings, it would not come under the ECHR and provisions relating to fairness of access to legal advice. There may be some way of defining administrative proceedings that cover driving disqualifications so that they fall within the definition of criminal proceedings. That is not beyond the realms of
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possibility. However, the Minister has not yet told us that, and it would be helpful if he reflected on it between now and Report and gave us a further explanation. When we discussed administrative proceedings before, I thought that I was happy about what they were. There may be further issues to explore.
I have some problems with another issue, to which we may need to return on Report. I shall give the Minister notice of a couple of questions that may lie behind amendments to be tabled at that stage. If a non-UK national has not taken part in proceedings, we must give evidence that he was duly notified, as the Minister said. Thus, we come back to the question of what is good service?
Until I came to the House, I sat as a magistrate, as did my noble friend Lady Seccombe. I have not sat for five years, so I may be out of touch with changes in procedure or in the law. I accept that. However, I sat for 13 years or more on a Bench for an area in which 7 per cent of the local population were—still are—Italian. Those people hold Italian citizenship, not British citizenship, and they and their visitors travel between this country and Italy with great regularity. A significant number of drivers on the roads of Woking hold foreign driving licences. It was not uncommon for our court in Woking—north-west Surrey—to impose a disqualification on persons who had not taken part in proceedings.
Normally, as my noble friend Lady Seccombe reminds me, the first thing to be done if a magistrate thinks that he or she is going to impose a disqualification is to call the person to the court. Certainly, there were occasions on which we imposed disqualification on a person who did not attend, after we offered them goodness knows how many occasions to do so. There could be a lacuna. It could happen that someone who has been disqualified might not have received proper evidence of proceedings, even if we thought that such evidence had been provided. We must consider more carefully how the Bill will bite on such people. What is proper evidence that the document has been received?
The questions that we will ask next time around in the context of our amendments will be the following: what steps will the Government take to ensure that the evidence has been duly notified to somebody, what processes will the Government put in place—they do not exist now in the court system—and what negotiations are the Government having with our EU partners about what will be acceptable evidence, both ways? The Minister has already referred to Spain, which may be the first candidate. I am aware from personal experience that, when the Guardia Civil stop motorists on the roads in Spain, they do not necessarily follow proper procedure. It can be an interesting situation over there, so, if we have reciprocal arrangements, we must ensure that they work properly both ways.
Having given notice of a possible amendment for the purposes of elucidation on Report, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 139ZB and 139ZC not moved.]
Clause 56 agreed to.
Clause 57 [Application of section 58]:
[Amendment No. 139ZD not moved.]
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 139ZDA:
Page 37, line 17, after "disqualifications" insert "(contained in Schedule (Annex to the Convention drawn up on the basis of Article k.3 of the Treaty on European Union on Driving Disqualifications)"
The noble Baroness said: In moving Amendment No. 139ZDA, I shall speak also to Amendment No. 156ZB.
They are, perhaps, the simplest of all the amendments. They are designed to get the Government to explain why they did not, for the sake of clarity, put into the Bill the annex to the convention on driving disqualifications. We go back to the point made by the noble Lord, Lord Clinton-Davis, and by the noble and learned Lord, Lord Lloyd of Berwick, on other issues. For the sake of clarity for those who will have to operate the Bill, it would be helpful if such a schedule were in the Bill. Why did not the Government decide to do it? I beg to move.
Lord Bassam of Brighton: The reason is as simple as the amendment. It would not add to or subtract from the effect of the clause. We specified that an offence fell within the terms of the clause if it was constituted by conduct that fell within any of the paragraphs of the annex to the convention.
There is no good reason for reproducing the annex to the convention in the Bill. The EU convention is a public document, and anyone who wants can access it and find out what is in the annex. That is consistent with the approach that we adopted elsewhere in the Bill. It would be unwieldy to replicate the text of EU provisions in the Bill, unless there were extremely compelling reasons to do so. Comments have already been made about the length and complexity of Bills; I am not sure that, if we did what the noble Baroness suggests, we would do much to keep the Bill as simple as we would like.
Lord Skelmersdale: I have tried to follow the argument. I think that I have now got it correct. I want to take up the point made by my noble friend Lord Renton a few moments ago.
A close member of my family is epileptic. Paragraph 5 of the schedule to be inserted by Amendment No. 156ZB shows that the convention covers driving a vehicle while disqualified. Under the clauses that we are discussing, someone need not go anywhere near a court to be disqualified. I cannot find any reference to a duty on the appropriate Minister to notify a decision by the DVLA to disqualify to the General Secretariat. Surely, that is what should happen.
Lord Renton: My noble friend and I have taken the view that there is such a thing as disqualification without the commission of an offence. The
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disqualification is simply imposed by the DVLA without the person coming before any court. That is relevant to the provisions that we are considering.
If the Government and their advisers have not contemplated such a situation, it would be right for the Minister to give an undertaking that, between now and Report, that situation will be considered. Either, it should be made subject to the same provisions as those relating to a conviction or some other arrangements should be made.
Lord Bassam of Brighton: I confess that I was slightly thrown by the question. I think that the answer is that the situation that both noble Lords described is outside the scope of what we are considering today. The convention applies only to road traffic offences; as I understand it, it does not apply to what both noble Lords described as administrative circumstances. I might be wrong about that, as I am prepared to accept, at all times, that I can be wrong about such things. We need to investigate the points made by the noble Lords in more detail. I think that that is why the disqualification to which they refer is not covered by the convention in the way in which they think it might be.
Baroness Carnegy of Lour: If I run into the back of a lorry in my car, am taken to court and am disqualified because I did it in such a monstrous way, that would be one thing. However, if my doctor advises me that I have become rather old and should stop driving and I hand my licence in, that is another thing. If I hang on to my licence and use it in another country, that would be wrong. However, that is not what we are talking about. Am I right?
There is a difference between being disqualified because one has an illness or because one is old or blind and committing a driving offence. Is that what the Minister is saying? That is what I was thinking.
Baroness Anelay of St Johns: I shall try to be helpful to the Minister. As I understand from having examined driving law, one is disqualified for driving by age, if one is too young, too old or has a disability. However, the offence does not occur until, having been disqualified for driving, one actually drives. That is the difference that the Government are trying to explain between what is in the proposed schedule and the circumstances described by my noble friends.
Lord Bassam of Brighton: We have got to the same point. We have agreement on that.
Baroness Anelay of St Johns: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 57 agreed to.
Clause 58 [Recognition in United Kingdom of foreign driving disqualification]:
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 139ZE:
Page 38, line 21, leave out subsection (7).
The noble Baroness said: I shall also speak to Amendments Nos. 139ZH and 139ZK. I have tabled the amendments to ask the Government when these subsections will be used. The provisions give power to the Minister and the Secretary of State respectively to extend the time for appeals and the production of a licence. I seek clarification of when the Minister thinks that that power would be used. Are there any criteria that would automatically allow for an extension of time? Can the defendant ask for an extension, or is it merely a matter of executive decision? I beg to move.
5 p.m.
Lord Bassam of Brighton: The decision to give effect to a foreign disqualification necessitates giving the offender notice that he is disqualified. Although the offender should have been aware of the proceedings in the state of the offence, the notice given under Clause 58 will be used to inform the driver of disqualification in the UK. We consider that a period of 21 days before the disqualification takes effect is reasonable, sensible and appropriate. As I understand it, the period follows on from the time period allowed in relation to domestic disqualifications and the decision of the magistrates' court. The noble Baroness will of course have more knowledge and insight into magistrates' courts than I could possibly have.
The power to prescribe a period longer than 21 days is needed because it would allow us to make adjustments in line with any changes to the appeal rules and also in the light of experience in the operation of the convention procedures. If experience shows that drivers consistently experience difficulties in complying with the requirements within the 21-day period, we can of course prescribe a longer period. The regulations would not prescribe different time limits for different circumstances. The time limits would be common to all cases. Nor would the regulations prescribe a period shorter than 21 days.
Baroness Anelay of St Johns: I am grateful to the Minister for that most helpful response. I should perhaps add that, in the light of our discussions a few moments ago on the receipt of proof of notice, I think it would be inappropriate for me to move Amendment No. 139ZG today. As I was not able to send a note to Members of the Committee to give them notice of that, I thought that I would inform the Committee now. I think that the questions I was going to ask in that debate would be more properly dealt with on Report, when we return to the issue of how one serves due notice. I beg leave to withdraw Amendment No. 139ZE.
Amendment, by leave, withdrawn.
Clause 58 agreed to.
Clause 59 [Notice under section 58]:
[Amendment No. 139ZF not moved.]
Clause 59 agreed to.
Clause 60 [Appeal against disqualification]:
[Amendments Nos. 139ZG to 139ZJ not moved.]
On Question, Whether Clause 60 shall stand part of the Bill?
Lord Carlisle of Bucklow: I should like to raise one general point. We move now to the right of appeal. As I understand it, if someone was convicted of a motoring offence in a court abroad and disqualified and the conditions of Clause 57 have been complied with, then, under Clause 58, the Minister would give the notice to the offender which effectively told him that he is disqualified for the equivalent period in this country. Clause 60 states:
"A person who is disqualified by virtue of section 58"—
namely, because he has been disqualified by a court abroad and notified of that disqualification in accordance with the provisions of this legislation—
"may, after giving notice to the appropriate Minister of his intention to do so, appeal to the appropriate court against that disqualification".
The appropriate court is said to be the appropriate magistrates' court.
To what is the appeal limited? Is it limited to the technical matters in Clause 58? Subsection (3) says that if the appropriate court is satisfied that Section 58 does not apply to the applicant's case, it must allow the appeal; otherwise it must dismiss the appeal. Or is it a full and wide right of appeal on the facts of the original conviction and the original disqualification?
Let us say that someone was convicted in France of the equivalent offence of dangerous driving. Does the clause say that he has the right to appeal against that conviction in this country? If he has the right to appeal on the facts, how will that appeal be heard? I suspect that the answer is that his appeal will be limited to merely technical matters, but I should be grateful if the Minister would clear that up.
Lord Bassam of Brighton: I am grateful to the noble Lord for the question. As he surmised, the right of appeal does not extend to the circumstances of the original offence and conviction. However, it does allow a driver to appeal on the grounds of any of the criteria for recognising a foreign disqualification which are set out in Clause 57. For example, and as we have already discussed, an appeal could be brought where the offender considered that he had not been properly notified of the proceedings. An appeal could also be brought on the grounds that an appeal is outstanding in the state of the offence—the effect of which has consistently been considered in relation to the convention.
Lord Carlisle of Bucklow: I thank the Minister for that answer.
Clause 60 agreed to.
Clauses 61 to 63 agreed to.
Clause 64 [Production of licence: Great Britain]:
[Amendment No. 139ZK not moved.]
Clause 64 agreed to.
Clauses 65 to 80 agreed to.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 139A:
Before Clause 81, insert the following new clause—
"FIREARMS: INTERNATIONAL CO-OPERATION AND GENERAL DUTY OF THE SECRETARY OF STATE
(1) It shall be the duty of the Secretary of State to facilitate the work of —

(a) police forces in Great Britain;

(b) the Police Service of Northern Ireland;

(c) the National Criminal Intelligence Service;

(d) the National Crime Squad;

in preventing the unlawful importation of firearms into the United Kingdom by ensuring effective international co-operation between those bodies and other foreign and international law enforcement agencies.
(2) When the Secretary of State is—

(a) preparing a National Policing Plan under section 36A of the Police Act 1996 (c. 16);

(b) determining objectives for the policing of the areas of all police authorities under section 37 of that Act;

(c) determining objectives for the National Criminal Intelligence Service under section 26 of the Police Act 1997;

(d) determining objectives for the National Crime Squad under section 71 of that Act;

he shall have regard to the desirability of ensuring effective cooperation with foreign and international law enforcement agencies to prevent the unlawful importation of firearms into the United Kingdom."
The noble Baroness said: This amendment would insert a new clause on international co-operation and the general duty of the Secretary of State in relation to firearms. The issue of firearms-related crime has been much in the press recently. It is an issue on which there is no division between the parties—it is not a party political matter at all.
We were all shocked by the events of New Year's Eve, when four teenagers—innocent bystanders— were caught up in a gangland shoot-out on our streets. On Monday evening this week, Tasawar Hussain was tragically killed in Bradford, in West Yorkshire. He was shot in cold blood in a city street in the early evening after giving chase to two armed robbers. It was another reminder, if one were needed, of how dangerous some of our streets have become for honest citizens. I am sure that, over the past few days, we have all thought about the families and how tragic the events have been for them.
The question is what we should do about gun crime. We very much look forward to the government proposals that will be coming before the House. I do not know whether we will see those proposals soon, and I do not want to enter the realms of testing the Government on when they will be presented. The proposals will, however, be given proper and due consideration when they are brought forward.
In considering the Bill, the Committee has looked very much at international co-operation on criminal matters. I have tried to link my proposals with that. In this amendment, I have looked at focusing on the work done by the Home Office and the law enforcement agencies in preventing the importation of firearms into the United Kingdom. I pay tribute to the work already
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being undertaken in this field by the men and women of the National Criminal Intelligence Service, the National Crime Squad, the police and other law enforcement agencies, not least Customs and Excise, which is at the front end of trying to find these items.
The amendment would require the Secretary of State to facilitate the work of law enforcement agencies in this field by ensuring effective international co-operation between the police forces of the United Kingdom and the authorities in other countries. It would also require the Home Secretary to have regard to the desirability of ensuring such effective cooperation to prevent the importation of firearms when he is setting the priorities, plans and objectives for police forces under the legislation, which authorises him to set those priorities, plans and objectives.
Sadly, there is no shortage of foreign countries from which firearms can be illegally imported. In the Sunday Times of 6th January, an article entitled "Silenced by the rule of the gun" listed several sources. It stated:
"Nobody knows the exact number of handguns illegally circulating in Britain: experts estimate the figure could be anything from 250,000 to 10 million".
It is a horrifying number. The article continued:
"Many weapons have been smuggled into the country from places such as eastern Europe, the central Asian republics and the Balkans, sometimes traded for drugs by organised crime groups".
The National Criminal Intelligence Service's annual report entitled Threat Assessment of Serious and Organised Crime, published last July, stated at paragraph 7.16:
"There have been recent recoveries in the UK of illegal firearms originating from Argentina. Australia, South Africa, Israel, Croatia and Switzerland, and especially the USA. There appears also to have been an increase in firearms traced to Central and Eastern European countries".
The report goes on to state that, as a result of the recent adoption of the United Nations Protocol Against the Illicit Manufacturing and Trafficking in Firearms, Their Parts and Components and Ammunition, foreign governments may rush to sell their surplus firearms stocks before the protocol is incorporated into law in the signatory countries and they are prevented from doing so. The report also reveals that there has been a recent seizure in this country of a consignment of firearms manufactured in the 1950s, unused and in their original packaging, believed to have come from the surplus stock of a foreign government. So that potential source of imported firearms must also be of concern.
I have proposed this new clause now to give the Government an opportunity to put on the record the approach that they intend to take to the problem of firearms which are already in the United Kingdom and the conversion of replica weapons and airguns. The amendment seeks to prompt an explanation from the Government of what work they and the law enforcement agencies are carrying out to stop guns coming into the United Kingdom from abroad. I think that that objective puts the provision very firmly within the scope of the Bill. It is also a call for the Government to address the issue of creating a long-term strategy to prevent firearms getting into this

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country and on to our streets. When the Government come forward with such a strategy, they will find support for it from these Benches. I beg to move.
Lord Goodhart: The use and carrying of unlawful guns is clearly a rapidly growing problem which, in recent months, has become increasingly serious in many of our cities and across the country. I therefore certainly welcome and support Amendment No. 139A. The Government must plainly see that effective international co-operation is an important step. Although there is, unfortunately, a very large supply of weapons already in the United Kingdom, there is every possibility that those dealing in these awful things may seek to import them from abroad as well. I, too, certainly hope that the Minister will be able to tell us more about the Government's plans for co-operation in preventing the inward trade of weapons from foreign countries into the United Kingdom.
5.15 p.m.
Lord Stoddart of Swindon: I shall be very interested in the reply to this timely and useful amendment. If the Committee does not mind, I should like to go back to 1997, when there were two firearms Bills, which subsequently became two firearms Acts. Some of us who opposed those Bills, which penalised decent innocent people, pointed to the fact that the real danger was from smuggled arms. We urged both governments at the time—a Conservative government followed by a Labour government—to concentrate on stopping the importation of illegal arms rather than penalising the decent, honest citizens who wished to have pistols for their sport of shooting.
Now the innocent have been punished, but the guns are still coming in and will continue to come in from all over the world. They are being smuggled not only from places such as Russia, where virtually everybody seems to own a gun, but from France and Switzerland, where gun laws are much more lenient than here. It is essential that the Government turn their attention to the issue. Let us not make any mistake about the fact that this will need additional staff. We will need more Customs officers and more police on the streets. However, it is essential to deal with the real problem and to catch the guilty rather than punish the innocent, which I fear is what will be done in response to the recent shocking shootings in a couple of communities. We are not going to deal with the importation problem. Instead, we are going to stop the manufacture of replica weapons and the carrying of toy water pistols. Please forgive me for using the Committee to get this off my chest. The amendment gives an opportunity to remind the Committee and Parliament of the mistakes that have been made in the past and to put those mistakes right now, to ensure that these awful weapons are not imported into this country, where they can be used illegally.
When we banned pistols, they were held legally by decent people. I hope we are not going to go along the same path. One way of ensuring that we do not is to take note of the amendment. I am sure that it will not
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be pressed, although I would support it if it were. I think everyone in the Committee and far and wide shares the views expressed in the amendment.
Lord Lloyd of Berwick: I suppose I should declare an interest, although it seems rather remote, as president of the Sussex Rifle Club. For reasons given by other noble Lords, I fully support the amendment.
Lord Filkin: I am glad of the opportunity to respond to the amendment, which, as the noble Baroness, Lady Anelay, said, gives the Government an opportunity to put on the record what they are doing about this issue and to trail some of the wider measures that she indicated an interest in as potential elements of the Criminal Justice Bill when it comes before this House. I shall do so.
Clearly, we are utterly committed to working with our international partners to prevent the unlawful importation of arms and to minimise the use of the many weapons already in this country. We would be foolish if that were not so. I know the former from my direct role as the Home Office's EU Minister. A regular topic of conversation is how we can better work with our international partners and other member states to try to address our domestic challenges. That is the central thrust of our thinking in Europe. We want to use Europe to address our domestic problems rather than some more utopian objectives.
We already have some of the toughest gun controls in the world. We have been working with the police to ensure good security of legally held weapons to prevent them being stolen. We are looking at the need to establish stricter controls on deactivation standards. We want the same standards to apply throughout Europe. We have been working closely with the European Commission to that end.
UK law enforcement agencies represent us on the United Nations panel of experts for small arms and light weapons tracing and marking. The UN protocol resulting from this work is expected to lead to tighter controls. We also sit on the EU small arms policy committee.
The National Crime Squad and the National Criminal Intelligence Service are playing a key role in the intelligence-led approach to gun crime in London as elsewhere. NCIS has a national firearms tracing service that provides intelligence on the source and use of guns used in crime. This will be complemented by a new national computerised forensic firearms intelligence database, set up with funding from the Home Office. This is to be run within the Forensic Science Service. It will help to track the provenance of guns and ammunition used in crime and will be able to identify any links with a gun that may have been used in a number of crimes.
The objectives of the National Criminal Intelligence Service already require it to,
"provide high quality assessments and actionable intelligence in order to increase disruption of criminal enterprises engaged in other forms of serious and organised crime … and maximise mutual support and co-operation with law enforcement agencies at … international level".

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It is already an explicit part of the service's objectives and responsibilities, as well it should be. Similarly, the National Crime Squad is tasked,
"to dismantle or disrupt criminal enterprises engaged in other forms of serious and organised crime … maximising co-operation with law enforcement agencies at … international levels".
The national policing plan identifies gun crime as a high priority for the police and refers to the critical role they play in tackling it.
More specifically, in addition to the collaborative work with our partner law enforcement agencies, NCIS and NCS and intelligence agencies in-country work to improve our knowledge and understanding of the many complex issues that result in what has increasingly been happening on our streets. We are also working collaboratively in the international context. That includes actively seeking out examples of best practice all over the world from those who face or have faced similar issues. Promulgating and sharing intelligence is frequently the best way of targeting law enforcement resources. It also includes shared operations with international partners.
The FCO, HMCE, DfID and other agencies are assisting governments and law enforcement agencies in those countries that are at the head of the chain and are the source of many of the problems that we are experiencing on our streets, and those that are the major transit areas through which the criminal commodities pass on their way to markets in the UK and western Europe. For example, assistance to countries such as Jamaica, Turkey, the Balkan states, Columbia and Pakistan comprises training; funding for necessary equipment; and help in drawing up appropriate legislation and seeking to reduce the supply at source and taking out of play the major players, disrupting their activities at all stages of the chain. Those are all major objectives, as, especially, is seizing the illegally gained assets. They are being actively pursued directly and through bilateral agreements with other EU member states, the various UN bodies or other countries.
The noble Baroness, Lady Anelay, asked some other questions about what else has been done or will be done. She will know that the Firearms (Amendment) Act 1997 introduced the toughest gun laws in any democracy. That was followed by a 10 per cent drop in the number of homicides. Unfortunately, since then a new pattern of gun crime and gang wars has emerged, usually highly related to extensive patterns of drug abuse in our society. Many of us are especially concerned about that. Some 60 per cent of gun crimes are related to gang feuds in our cities.
To give one example of how that is being tackled, the Metropolitan Police's Operation Trident is a major initiative to crack down on London's black communities where there has been extensive gun crime activity. I shall not give full details, but as of January 2002, 200 suspects had been arrested and charged, 130 guns seized and 500 kilos of class A drugs seized. Operation Trident has increased the detection rate of gun crimes to 80 per cent in those areas, which has been extremely encouraging.
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The Criminal Justice Bill will introduce a mandatory minimum sentence for possession of illegal firearms. We are introducing a ban on the import, manufacture, sale and unlicensed possession of tandem cartridge systems. We are tightening the law on air guns. Going outside the Bill for a minute, following the gun crime summit Her Majesty's Customs and Excise are to undertake a major mapping of supply of weapons and are to be given new powers to prevent the illegal import of banned weapons. We are also working closely with the police to ensure better enforcement of existing legislation. A comprehensive review of all firearms legislation is also being implemented. That will examine whether there is more primary legislation than necessary. Lastly the National Criminal Intelligence Service is expanding its firearms section significantly in the light of these threats.
No one pretends that the scale of these threats means that we can be certain that these measures alone will do everything that can be done. We shall return to those issues when the Criminal Justice Bill comes before the House. The only point that I want to mark is that, while we fully respect the probing amendment giving an opportunity almost for a preliminary Second Reading debate on some of these issues before we come back to them later, the duties that at would impose already exist in practice in the operational forces that are challenged with dealing with the issues. The Government could not be more committed to using international efforts to reinforce our domestic efforts to grip the problem. For these reasons, I invite the noble Baroness to withdraw the amendment.
Lord Carlisle of Bucklow: I hope the Minister will bear in mind the powerful speech of the noble Lord, Lord Stoddart. Looking back over the years, our reaction has often been to put far tighter controls on those who are legally in possession of guns, when the real problem has always been the amount of illegally held guns that have been flooding through the country. I hope the Government will bear that in mind in any legislation that they bring forward.
On a Question in the House the other day, some Members were confessing to having changed their mind on these matters. The one point on which I disagreed with the noble Lord, Lord Stoddart, was his comment about replica guns. This came up in, I think, 1970, when I was a junior Minister in the Home Office. We had a delegation from the gun lobby telling us to take more seriously the issue of replica guns coming into this country. I suspect that we did not give their arguments the careful consideration that they deserved. We may have thought that they were trying to turn the argument to another aspect of gun control. What we now know about replica guns and the ease with which they are converted to real lethal weapons means that we ought to have control over them.
Finally, I was disappointed beyond words to hear the Minister repeat that the Government were intending to go ahead with mandatory minimum sentences. I do not believe they will do any good. They will simply lead to unfairness, as mandatory

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sentencing will always do in the long run. They remove flexibility. On hearing the answers of the noble and learned Lord the Attorney-General and of the noble and learned Lord, Lord Falconer, in a recent debate, I had hoped that the Government were beginning to accept that flexibility was a necessary element in a court's sentencing powers if injustice is to be avoided. When there is already a maximum sentence of life for carrying a gun with intent to commit some other offence, a mandatory sentence of three years will make no difference. A mandatory sentence of three years on conviction for being in possession of a gun in circumstances that are currently tried merely in the magistrates' court seems to be equally out of line.
5.30 p.m.
Lord Renton: We are discussing a new clause dealing with firearms. It has been well supported by a number of Members of the Committee. But it is surely in the national interest that we should consider weapons of mass destruction of various kinds. It would be a tragedy if the British people were protected by a clause dealing only with firearms. Between now and Report the Government should apply their minds to the broader issue. I hope that I am not out of order in referring to that point.
Baroness Anelay of St Johns: I am grateful to the Minister for his response. I thank the noble Lords, Lord Goodhart and Lord Stoddart, and the noble and learned Lord, Lord Lloyd of Berwick, for their support. I am grateful also for the interventions by my noble friends Lord Renton and Lord Carlisle. My noble friend Lord Carlisle raised the important issue of mandatory sentences. We shall have some difficult and interesting discussions on that subject when we debate the Criminal Justice Bill. He was right to focus on it.
As the noble Lord, Lord Stoddart, said in his remarkable and welcome speech, governments of both persuasions have perhaps not always taken the course that they might have done had they thought about these matters for slightly longer. We are left with a situation where huge numbers of illegal firearms are imported, and the Government face a very difficult task in trying to ensure that their importation is stopped. The noble Lord, Lord Stoddart, also raised the important question of the resources that will be involved in ensuring that our borders can be properly secured against the importation of arms.
My noble friend Lord Renton raised the issue of other weapons. I wonder whether the Export Control Act, which completed its passage at about this time last year, might cover that. I should be grateful if the Minister would write to my noble friend on that point between now and Report. There may be provisions which address the point, but they may not address all his concerns.
I should be grateful if, between now and Report, the Minister might answer one detailed question. I was intrigued by his helpful description of international cooperation on matters of best practice. He referred to what we hope will be best practice in this country;
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namely, the creation of an intelligence database tracking guns used in crime. Will the tracking of those guns relate only to crimes committed in this country, or will our agencies have access to information on guns used in crimes overseas? Will that be part of the exchange of information? I do not expect an answer today, but it would be helpful in the context of this Bill, and, more particularly, in our debates on the Criminal Justice Bill.
I agree with my noble friend Lord Carlisle that the issue of mandatory sentences will be a tough one. The Government will have to come up with some persuasive answers and a cogent argument about how these will be put into practice if the Bill is not to have a bumpy ride through this House.
I am grateful for the care and attention that all Members of the Committee have given to this proposed new clause. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 81 and 82 agreed to.
Clause 83 [Foreign surveillance operations]:
Lord Filkin Lord Filkin moved Amendment No. 139B:
Page 55, line 13, leave out from "circumstances" to "an" in line 14 and insert "for a United Kingdom officer to carry out the surveillance in the United Kingdom in accordance with"
The noble Lord said: Before speaking specifically to the government amendment itself, as this is our first opportunity to discuss Clause 83, and as it may aid some of our subsequent discussions, I wondered whether it might help if I set out some of the essential features of Clause 83 and explain why we think that the provision is right, necessary and proportionate. The provision is meant essentially to enhance co-operation so that British police forces are better able to obtain evidence and apprehend those who committed crime, and whom they have under surveillance, in order to bring them to justice.
From our perspective, at heart, the measures will deal with circumstances which have occurred in the past whereby people under surveillance by the British police forces have crossed the Channel and contact with them was lost, frustrating the police's ability to collect the evidence that they thought might assist in bringing prosecutions and convictions. The same is true in reverse. There have been occasions when our neighbours on the Continent had people under surveillance whom they believed had committed an offence. They thought it necessary to continue that covert surveillance in order to collect further evidence for a prosecution. When the people crossed into this country, our neighbours were unable to pursue.
To take it more sharply, most of the cross-border operations will be brought in as a result of the Bill and implementation of Article 40.2 of the Schengen convention. Let me illustrate how the operations will work in practice. Most of the cross-border operations that come from the EU into this country will be pre-planned and authorised in advance. We expect that the vast majority will be of that nature. I am slightly labouring the point because, in pre-planned operations, the surveillance operation will be taken

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over by British forces—in practice, the National Crime Squad—upon the suspect's entry to the UK. We expect that that is what will happen in the vast majority of cases.
There are, however, urgent cases—the focus of this clause and this issue—where it is not always possible to get either the authorisation or the authorisation and a UK surveillance team in place at the port in time to take over the surveillance operation. It is about putting in place highly limited and circumscribed regulations which, in such tightly circumscribed circumstances, allow the surveillance to continue in the United Kingdom for a limited time, until such time as British police forces can take over the surveillance. So it applies only when it is not possible to get a British force to take over the surveillance immediately, and then only in very tightly circumscribed circumstances. I shall try to illustrate those circumstances.
Foreign officers cannot operate here until they have requested assistance—as soon as it seems probable that the suspects they are following will be crossing into the United Kingdom. So there is a duty to notify NCIS as soon as it seems probable that their suspect will be coming to the United Kingdom. They must also notify NCIS as soon as they have arrived in the United Kingdom. I stress again that that applies only when it has not been possible to arrange through advance notification a joint investigatory team or a UK force at the point of entry. NCIS will be the point of contact for all requests and will authorise or refuse the operation. They have the right of refusal. The National Crime Squad or a local force will be notified by NCIS, and will identify officers to link up with the incoming foreign officers as soon as possible.
The period for which foreign officers may operate alone is strictly limited under the Schengen convention, and under the Bill's provisions, to five hours. There is a maximum of five hours to allow time for the British police forces to take over the surveillance. If they have not done so within that period, surveillance must stop. The UK may require foreign officers to stop at any time within the five hours. So, having given authorisation, they can rescind it if they think it appropriate to do so at any time within that period.
I shall labour the next point because it is germane. Foreign officers may not carry their firearms. They will be prohibited from bringing their guns into the United Kingdom. They may not enter private property. They may not challenge or arrest a suspect. They must submit a report of every operation in which they have entered the United Kingdom at short notice. In all those circumstances, even though it will not always be possible to put in a UK force before they come in, they must notify NCIS before their feet touch UK soil. So we will know that they are coming; we will know who is coming; and we will authorise their entry. We will simply be allowing them to continue for a short period in the very limited number of circumstances where it has not been possible to get our own surveillance forces into place in time. I hope that the Committee will bear with me in setting out those issues, as we are bound to revert to them on subsequent
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amendments. It is the novelty of leading on these amendments rather than responding to them that has led me to behave in that way.
The purpose of the amendment is straightforward. It allows officers from other countries to carry out under tight conditions lawful surveillance of a person suspected of a serious crime. I emphasise that we are talking about only serious criminal offences, not minor offences or misdemeanours. We are making the changes as part of our wider commitment to fight international crime with our EU partners. It will allow better co-operation at every instance. The measure is supported by the Association of Chief Police Officers and the National Criminal Intelligence Service. Other EU countries have been running Schengen arrangements on cross-border surveillance for years. They have managed to make them work well despite some shared difficult histories.
I shall now discuss the substance of the amendments. In the Explanatory Notes, we outlined why foreign officers should be allowed to continue surveillance into the UK, in particular to take account of the time needed to mobilise a UK surveillance team. In reviewing the text of the Bill in response to the proposed amendments from Committee Members, we realised that the text of the Bill as it stands would not allow for situations where the UK authorities are notified before the team enters the UK. These amendments ensure that the five-hour period applies not only where it is not reasonably practicable for foreign officers to make an advance request; it applies also where an advance request is made from abroad but it is not reasonably practicable for our authorities to secure the necessary authorisation before the foreign officers reach the UK. The amendments will also cover cases where a request is made from abroad, and the surveillance by UK officers is authorised in advance, but it is not reasonably practicable for those UK officers physically to take over the surveillance when the foreign officers enter the UK.
Amendment No. 154A simply defines "United Kingdom officer" for the purposes of Amendment No. 139B. The police, Customs, the NCIS or the NCS will take over this sort of surveillance. It also includes the Scottish Drug Enforcement Agency, formerly the Scottish Crime Squad, and anyone who might take over their functions. The wording of the amendment is needed to ensure that Section 76A would cover any other body that might be established under any future collaborative agreements between the Scottish police forces. It will perform the same functions as the SDEA.
We consider that all those cases should count as urgent cases covered by Article 40.2 of Schengen. We do not want to run the risk of being unable to take over surveillance operations because of unforeseen and insurmountable difficulties in getting UK officers to the port within the hour or two it might take for an officer to cross from Calais. The consequences of that might be that important criminal suspects would be allowed to enter the UK without supervision. I cannot believe that the Committee would wish that to happen.
I may respond further to questions from the Committee. I hope that I have set out the broad picture of why we think these measures are essential. I have had to weary the Committee with these amendments simply to ensure that the measures were effective in all respects. I beg to move.
5.45 p.m.
Baroness Anelay of St Johns: The Minister opened his speech about the principles underlying Clause 83 in general terms. As he is aware from comments made from these Benches at Second Reading, we have concerns about the operation of the powers of surveillance. He puts the argument in the context that there is a quid pro quo and that if our police forces are engaged in surveillance that they consider necessary to continue across the Channel, they will wish to have the ability to carry that forward.
We want to ensure that it is possible for criminals who have no respect for borders to be hunted down by democracies whose police forces must have respect for borders. We do not object in principle to what the Government are trying to achieve, but we want to ensure that the quid pro quo is not achieved at too high a price. That is what our amendments are aimed at.
I have a couple of questions. The first relates to the generality of the Minister's introduction. I may have misunderstood something that he said. He rightly explained that the vast majority of operations would be pre-planned and would be taken over by our police in this country. He said that the Bill would cover the rest. They would be small in number, but they might be significant in themselves. The Minister then said, I think, that advance notice would always be given before the officers carrying out the surveillance set foot in this country. That is not what I understood to be the case from the Bill or from the Explanatory Notes.
I understood that they would be able to travel to the country even if they had been unable to give prior notice and give notice once they were in the country. I may have misunderstood the explanation given at Second Reading and the way in which the Explanatory Notes set it out. If so, I would be grateful to be put right by the Minister. Before setting foot in this country to carry out surveillance, must a foreign officer who is not accompanied by an officer from a police force in England, Scotland or Wales have given notification? He will have five hours during which he will not have such permission and will be waiting for it, but must he have made the application before one foot steps on British soil?
The Minister referred to other matters that, we thought, were not sufficiently clear in the Bill. We will come to the relevant amendments later. The Minister said categorically that foreign officers would be prohibited from carrying guns, entering private property or making a challenge. Our amendments would create clarity in the Bill similar to the clarity of the Minister's pledge.
When I read the amendment, I wondered whether there might not still be a problem with it. If it is manifestly impossible for a United Kingdom officer to
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carry out surveillance but it is still possible for telephone calls to be made for authorisation under Part 2 of RIPA, would not the amendment remove the threshold for that? I do not necessarily expect an answer today, but I would be grateful if the Minister could write to me or if we could address it on Report. When such amendments are presented to the Committee new and fresh, it is difficult for us to seize on the details of the Government's explanation and ask the right questions.
Lord Carlisle of Bucklow: I shall follow my noble friend Lady Anelay of St Johns by asking exactly what degree of reciprocity there is in the clause. As I understand it, the Minister said that we were providing the new right to surveillance in this country because we were implementing the Schengen convention. Have all the other signatories to the convention signed up to the new right of surveillance? Does our police force have similar rights in those countries?
Lord Goodhart: We are having a preliminary debate on the surveillance provisions of Clauses 83 to 85, which are in some ways the most controversial element in the Bill. I should make clear that we, as indeed does the noble Baroness, Lady Anelay, support the principle behind this form of surveillance. Cooperation on surveillance, as on other matters, is we believe of great importance.
In Article 40 of the 1990 convention, which implements the Schengen agreement, the power of hot surveillance is more likely to be used on mainland Europe than in the United Kingdom because of obvious geographical issues that arise. It is easy and quick nowadays to cross a border in mainland Europe from one member state to another, whereas in this country—with the exception of the border between Northern Ireland and the Republic of Ireland, to which, as I understand it, Article 40 does not apply—the only way in, whether by boat, aeroplane or by the Channel Tunnel, involves a fair amount of time. Therefore, mostly there will be a chance to notify the authorities in advance and to get someone from a police force in the UK to carry out the surveillance here. I would be interested to know how often the Government expect that these powers will need to be used.
We are particularly concerned to note that a number of the limitations which are contained in Articles 40.2 and 40.3 are not set out on the face of the Bill. The Government have announced their intention that they should be observed, but we feel that they should be on the face of the Bill. That is why the relevant amendments stand in the name of my noble friend Lord Dholakia as well as the noble Baroness, Lady Anelay, and the noble Lord, Lord Kingsland. We shall support, in particular, the amendments which seek to place these restrictions on the face of the Bill.
It was suggested at Second reading that the Government did not wish to see such amendments on the face of the Bill because they were anticipating further changes to the 1990 convention and it might therefore be more convenient if these matters were

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simply dealt with by means of regulations. We should be unlikely to be happy with that, if it is indeed the reason why the Government do not want the full level of restrictions under Article 40 to be on the face of the Bill. This power of surveillance, even if used relatively infrequently, will be controversial and intrusive. Therefore, we think it highly desirable that the restrictions should be on the face of the Bill.
Lord Stoddart of Swindon: It was most helpful of the noble Lord, Lord Filkin, to give a general overview of these clauses. The Committee will welcome the fact that there will be a complete prohibition on the carrying of firearms. Since there is a general prohibition for our own police, it would be absurd if foreign policemen could come to this country with firearms. I should like to know exactly how the restriction will be enforced.
At Second Reading, I raised the problem of a foreign policeman who has a gun and who is in hot pursuit of a criminal having to discard that gun somewhere on his way over here. How and where will he do it? Will he dump it in the sea, chuck it out of the Eurostar window or what? I should welcome further information. It is also good to know that foreign police may not enter private property—that is the subject of an amendment which I hope the Government will accept—and that they may not arrest people.
As I understand it, these provisions do not apply to the Irish Republic; so IRA people who bomb in Northern Ireland and flee to the south will not be able to be hotly pursued by British policeman. Is that right? Perhaps the noble Lord could tell us later.
The Minister referred to operations being pre-planned. Has he any idea exactly how many such operations there will be—tens, fifties, hundreds, or thousands? It would be useful to know, because we should like to know just how many foreign policemen would be operating in Britain at any given time. That is important.
If someone is in hot pursuit—say, from the Continent, America or anywhere else where we have an arrangement—and arrives in this country, I am not quite sure how the person knows who to get in touch with. It is not only a central intelligence agency that needs to know; the local police also need to know, because they are responsible in their own area. It would be useful to know how that is to be achieved and how the five-hour limit will be enforced. For example, when the chap is chasing someone along a road and the five-hour period expires, what happens then? Or what happens if he thinks, "Never mind about the international agreement, I have to go on". How is this provision to be supervised? How is discipline to be enforced? We ought to know.
Finally, I am not sure whether the agreement that we have made with other countries allows the five-hour period to be extended without the introduction of further primary legislation. We ought also to know that. I hope that the Minister will be able to answer all these questions.
6 p.m.
Baroness Carnegy of Lour: The Minister assured us that such hot pursuit would happen only in the case of someone suspected of serious crime. He said that foreign officers would not be allowed to carry guns, nor to enter private property. I was unclear how we would know that. I believe that the noble Lord, Lord Goodhart, raised that point, but I did not know whether those points were set out in previous legislation. Is that what he is telling us?
Baroness Anelay of St Johns: I hope to assist the Minister. In his general introduction to this clause, he has opened up the issue rather more widely than the Government might have anticipated at this stage, given that a substantial number of amendments are to follow. However, Committee Members have very properly seized the opportunity to ask questions.
Perhaps I may assist the noble Lord, Lord Stoddart of Swindon, who asked about the carrying of firearms. We hope to probe the Government closely on Amendment No. 148, which would prohibit the carrying of firearms by a foreign police officer or a Customs officer. We have further amendments—Amendments Nos. 153 and 154—that concern the period during which foreign officers may carry out surveillance within this country. I assure the Minister that when I asked for clarification on his statement that all applications must be made before a foreign officer's foot stepped on this soil, I sought only clarification. I do not expect him to go into any detailed explanation of the policy. Obviously, we shall probe those issues when we come to our amendments. We shall try to require not only that the application be made, but that permission should have been granted before the surveillance may continue.
Lord Filkin: I thank all noble Lords who have spoken. As they have signalled, I, in seeking to set the scene, inevitably opened up discussions on forthcoming amendments that will be considered later. Nevertheless, perhaps I may give some initial responses, as far as I am able, to as many points as I can. That may assist our subsequent consideration of future amendments. However, noble Lords deserve a reply, if I can give one.
I turn to the first question asked by the noble Baroness, Lady Anelay, concerning advance notice or prior notification. There are two circumstances. First, when an operation is pre-planned, clearly, the foreign force is expecting something to happen. Therefore, they telephone the National Criminal Intelligence Service, and there is plenty of time to put in place a UK surveillance operation. That situation is clear. The noble Baroness was correct in saying that I was not simply referring to that situation. I was also referring to the urgent situations when it has not been possible to put in place a plan to take over the surveillance.
As the noble Baroness rightly observed, foreign officers will be expected to request assistance as soon as it seems probable that the suspects they are following will cross into the UK. That will be our general expectation; as soon as the foreign officers are

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aware of that situation arising, they will make contact. In strict legality, they could board the ferry and continue the surveillance into the United Kingdom. As I signalled earlier, and will come to on subsequent amendments, immediately the foreign officers arrive in the United Kingdom they would have to give notification of their presence.
Those circumstances are expected to be few because, while the foreign officers are waiting for their car or whatever to be loaded on to a ferry or a hovercraft, it would be relatively simple to call NCIS on the telephone number in their Schengen handbook and notify it of their arrival.
The noble Baroness, Lady Anelay, also asked a technical question on which she had the grace to signal that she would like a written answer. That I shall give. The question of other Schengen countries was also raised. Please bear with me if I am unable to spot exactly who asked which question. The position is that all other Schengen countries, apart from Ireland, are signed up to the convention. It is not new; the Schengen system has been in operation since 1990.
The noble Lord, Lord Goodhart, is right in saying that surveillance—it is surveillance to which we are referring and not hot pursuit, which I shall turn to later—is much more likely to be used in mainland Europe, for the reasons that he accurately observed. Because of the delay in crossing the Channel, the likelihood is increased of being able to put a UK surveillance team into position at the point of entry of the suspect being tailed. That does not apply to Ireland, which does not want to participate in Article 40 of Schengen—that is entirely a matter for the Irish Government, as the noble Lord, Lord Stoddart, correctly surmised.
How often would the measure be used? It is hard to judge, but for the reasons given by the noble Lord, Lord Goodhart, one would expect that most circumstances would be pre-planned and prearranged, rather than having to take advantage of the particular circumstances that we are debating under this clause.
The limitations of the measures are important; I have signalled them. Clearly, they will be put into legislative force. We intend to do that through secondary legislation. For recollection, in virtually all cases, they will be by the affirmative procedure. But we shall return to those measures in more detail subsequently.
The noble Lord, Lord Stoddart, asked about firearms. The foreign officers will be aware that they must deposit their guns within their own country. That is for two reasons. First, it will be in the Schengen handbook— surveillance officers will be expected to carry a copy. The handbook will set out the rules of entry to the UK. Secondly, it is such—how shall I put it?—a highly apparent issue that it is hard to believe that a French or a Belgian officer would not be aware that they were prohibited from bringing their gun into this country. On the mechanism of doing so, we would expect gun-carrying foreign officers to hand over their
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gun to an appropriate official at the embarkation port while waiting to board the ferry. I can see no reason whatever why they could not do that.
Baroness Anelay of St Johns: Perhaps I should give the Government the opportunity to think about this situation before we reach the firearms amendment. This is a matter that I raised with the Minister when he was kind enough to have a meeting with officials and noble Lords. Does the Minister not foresee circumstances where foreign officers are very properly involved in surveillance in which they are, themselves, under cover? Therefore, it would not be safe for them to carry out the procedure as laid down. In other words, in front of a gang of which they were a part, a foreign officer could not exactly say, "Excuse me while I stop and deposit my gun before I join you on the illegal boat that we are using to cross the Channel". Will those circumstances be taken into account in the firearms amendment?
Lord Filkin: I shall take advantage of the notice rather than respond immediately. We believe that there are practical solutions and that it would be perfectly possible to do so.
Should there be breaches, they will be dealt with in the same way as any other breach of firearms law by UK citizens. If a foreign policeman came into the country in the circumstances described, carrying his firearm covertly, he would be in breach of UK law and, as a consequence, would be open to UK prosecution. In such a situation, he could and would be arrested.
In many circumstances, the suspect may be in a car and the police officer also in a car. The relevance is that it is sometimes operationally difficult to put in place sufficient covert UK police cars to take up the surveillance—it is not a chase—immediately. It cannot be done with just one covert police car. I said that it was not hot pursuit merely for clarification. Hot pursuit is a term to be used when police officers are pursuing a suspect with a view to arrest. That is not what we are referring to; we are referring to the continuation of surveillance operations.
How will the five-hour period be enforced and supervised? Again, as soon as foreign police officers put a foot on British soil, they would be expected to notify NCIS. In most cases, we would expect to be notified from the other side of the Channel. Therefore, we would know the start period of when they are due to arrive and would add five hours to that. If they continued their operation, it would be without legality. They would have no legal authority to operate after the expiry of those five hours, or any shorter period that NCIS has imposed. A question was asked concerning the extension of the five-hour period. There is no intention to extend the five hours. In theoretical circumstances, it would need primary legislation if we changed our mind.
The noble Baroness, Lady Carnegy of Lour, asked what are the serious crimes. They are set out in Article 40.7 of the Schengen convention. Perhaps I may put them on the record now, even though we may touch on them later. Serious crimes are limited to a number of

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generic offences, all of a serious nature. They are murder, manslaughter, rape, arson, counterfeiting, armed robbery and receiving stolen goods, extortion, kidnapping and hostage-taking, trafficking of human beings. elicit trafficking of narcotic drugs and psychotropic substances, breach of the laws on arms and explosives, use of explosives, and illicit transportation of toxic and dangerous waste.
I am sure that noble Lords will say that there are one or two points that I have not answered.
Baroness Carnegy of Lour: Just before leaving that point; I did not actually ask what the crimes were. I asked how we know that it is only serious crime. How do we know that the police cannot carry arms or go on to private property? Is that all in the framework agreement?
Lord Filkin: It will all be in the Schengen handbook, in which we shall have the right to set out the operational effect of UK legislation on applying the framework agreement. Effectively, in the Schengen handbook—I wait to be corrected if I am wrong—there will be a British section which states, "You cannot do X, Y and Z".
The further question asked by the noble Baroness was how will we know that they are following the regulations. In strict—
Baroness Carnegy of Lour: My question was really relevant to my noble friend's forthcoming amendments. If the Minister says that the amendments are not necessary, he will say that all those facts are known. The Minister said that he could assure us that this would occur only as a result of serious crime. He assured us that foreign officers would not go into private property and that they would not carry guns. What is the basis of the Minister's assurance? I believe that I am being told that all that information is in the handbook. Is that correct?
Lord Filkin: You are being told that all that information will be in the handbook. It will be in the handbook as a consequence of us legislating through primary and secondary legislation to make that the application of the convention, which will then give us the right to put those conditions into the Schengen handbook. The handbook will then be a legal obligation on foreign forces, in the limited circumstances that we are describing, to obey when they enter this country. Effectively, the Schengen handbook will be an operational expression of the law that they must obey, if they are not to be in breach of the law.
I turn now to further points. Clause 76A(3) covers that point. It states that "relevant crime" means crime which falls within Article 40.7 of the Schengen convention. I can send the noble Baroness a copy, if that answers her point. However, I am not sure whether it does.
On Question, amendment agreed to.
Lord Filkin Lord Filkin moved Amendment No. 139C:
Page 55, line 15, leave out "for the carrying out of the surveillance"
On Question, amendment agreed to.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 140:
Page 55. line 16, at end insert—
"( ) In subsection (1)(c) it is "not reasonably practicable" to make such request as is mentioned therein only if the duration of the foreign police or customs officer's travel to the United Kingdom is shorter than could reasonably allow for prior authorisation to be sought."
The noble Baroness said: This amendment stands also in the name of the noble Lord, Lord Dholakia. The discussion on the previous group of government amendments has been very helpful in telescoping some of the debate that we shall have on the individual amendments as they arise.
Amendment No. 140 would place on the face of the Bill the wording of the Home Office's description of the United Kingdom's intent in acceding to Article 40 in its own commentary on the Schengen convention in the letter from the right honourable Jack Straw to the presidency of the Council, requesting United Kingdom accession to Schengen, as given to the Lords European Select Committee and printed at annex 2 to its fifth report of 1999–2000.
The letter states in respect of Article 40:
"In view of the United Kingdom's island geography, it is expected that surveillance which takes place without prior authorisation would be limited to those situations where the duration of travel to the UK is shorter than could reasonably allow for prior authorisation to be sought".
This is one of many amendments where I simply ask: why is that clarity, that restriction, not on the face of the Bill? I beg to move.
Lord Goodhart: We support this amendment because we think it desirable that restrictions of this kind, which have been acknowledged by the Government, should be on the face of the Bill.
6.15 p.m.
Lord Filkin: Clause 83 implements the requirement of Article 40.2 of the Schengen convention for officers from one member state to be allowed to cross a border to conduct unaccompanied surveillance in another Schengen member state for up to five hours in exceptional circumstances when the subject has unexpectedly entered the other member state. When the UK applied to participate in Schengen, we chose to opt into this provision because UK law enforcement sees it as a key operational development.
Clause 83 simply ensures that the surveillance that the foreign officers will be carrying out is lawful. We do not expect these situations to arise very often. I touched on these points in previous explanations. We believe that our participation in the Schengen convention arrangements on cross-border surveillance will help to block the loophole where, currently, people coming into the United Kingdom can disappear and traces can be lost, and the reverse happening when we

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have been seeking to keep suspected criminals under surveillance with a view to collecting information for a prosecution.
The amendment, which I recognise as probing would limit these conditions by amending the definition of "reasonably practicable". It would narrow the circumstances in which this type of surveillance was allowed, so it would be "reasonably practicable" for a foreign officer not to request surveillance in advance only if his travel time to the UK would be less than the time that it would take to seek prior authorisation.
Enforcing such a condition would be very difficult. It may be helpful if I explain what we mean by "reasonably practicable". It includes other circumstances besides timing which might prevent prior authorisation being sought. Although it may seem slightly bizarre, it is, for instance, conceivable that an officer might be unable to make contact because of a dead battery in a mobile phone or a radio. Also—and more usually—circumstances might be such that there was not sufficient time both to secure the authorisation in the UK and to arrange for the UK team to take over the surveillance.
The amendment fails to take account of the complexity of mounting surveillance operations at short notice. It would impede the UK's ability to undertake its own cross-border surveillance operations, and to assist Schengen partners with theirs.
Consultation with the operational agencies and the practical implementation of Article 40.2 identified that in view of the UK's wish to take over the handling of all foreign surveillance operations entering the UK, situations would arise which would make implementation difficult if we continued to maintain our original approach.
For example, identification of the appropriate operational agency force to take over the operation and for it to seek authorisation under RIPA may take longer than the time it takes to travel to the United Kingdom, even if we receive the request at the point at which the foreign team are embarking for the United Kingdom.
I hope that I have answered all the questions raised on this amendment.
Baroness Anelay of St Johns: I am grateful to the Minister for his response. I can well understand the Government's approach. They are attempting to ensure that surveillance can continue in cases where serious crime is being investigated, and that surveillance will not be hampered unnecessarily. We are trying to ensure that the proper safety procedures are in place.
The Minister said that enforcing the proposal in the amendment would be difficult. We are not trying to prevent surveillance taking place when it is proper; but, as the Minister is aware, prior authorisation is our preferred option. We are trying to ensure that "where reasonably practicable", that is the right way to go forward.
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If this surveillance power is to be exercised, it must be in circumstances where foreign officers—and indeed British officers carrying out their duties overseas—are carrying out these procedures in the best possible way. Their practices must be water-tight. They must not see this merely as the easy option.
I was disappointed, therefore, that the Minister sought to justify this procedure by saying that it could be the case that someone had a dead telephone battery. I jolly well hope that if these people are carrying out such important international investigations they will charge up their batteries. That was the weakest part of the Minister's argument. I shall take other parts of his argument far more seriously between now and Report. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 141:
Page 55, line 25, after "party" insert "and which is an offence under the law of any part of the United Kingdom,"
The noble Baroness said: This amendment stands also in the name of the noble Lord, Lord Dholakia.
The amendment would require the relevant crime being investigated by foreign officers under the powers given by the clause to be an offence under United Kingdom law where it is one specified by order by the Secretary of State, with the consent of Scottish Ministers, rather than one already specified in the Schengen convention.
All the crimes listed in Article 40.7 of the Schengen convention appear to satisfy this test. But that does not appear to be the case for new Section 76A(3)(b), which allows the Secretary of State to specify further crimes by order. I am trying to ascertain what kind of offences that are not crimes in the UK might be investigated by foreign officers on our soil as a result of these provisions. I beg to move.
Lord Filkin: The amendment—which I recognise is probing—would seek to restrict any subsequent extension of these arrangements to agreements other than the Schengen convention. It would mean that if we wanted to enable this type of surveillance to be carried out in respect of another international agreement besides the Schengen convention, we could do so only if the crimes specified within that further agreement were also crimes in the United Kingdom.
Subsection (3)(b) gives the Government flexibility should we wish to join a new international agreement that included provisions on cross-border surveillance. It is likely that any such agreement would take a similar approach to Schengen and refer to generic offences.
The Committee will be aware that, even where progress has been made in reaching agreement on the definition of an offence in European Union instruments, variations still occur when these are adapted at national level, and it is often good that they do so. Generic descriptions of offences enable member states to take account of variations of detail and they enable international agreements to be reached without the need for harmonisation of the offences covered.

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One can see where the alternative takes us: to have effective international co-operation, one would be on a slippery slope towards seeing the need for harmonisation of laws. That is not the United Kingdom's position. We are opposed to that, but build our co-operation on the principle of mutual recognition.
Our resistance to the amendment is not any sort of attempt to evade parliamentary scrutiny. Any EU agreement that might be covered by this clause would be deposited for scrutiny by the relevant committee of both Houses, which would provide the opportunity to raise any concerns about its scope.
Broader international agreements would also be subject to parliamentary oversight before they could be ratified. In response to the invitation to identify a specific example—which is possibly dangerous—rather than merely illustrating why we believe the generic terms are the right way forward, perhaps I may give an example. In a case where a United Kingdom police officer was seeking to keep under surveillance someone whom he or she believed had been involved in child molestation or child pornography, our laws would be tighter and stronger than those of some other countries and we would wish still to be able to have that pursuit continue without being limited by what would effectively be a dual criminality requirement—which is clearly what a foreign state would expect if we were insisting that it had to be UK law.
For those various reasons, while respecting the nature of the probing amendment, we do not believe that it is necessary or appropriate.
Lord Stoddart of Swindon: The Minister said that any additions to the Schengen list would have to go through parliamentary procedure. Parliamentary procedure in this instance presumably means scrutiny by this House in particular and by another place.
We know perfectly well that scrutiny in either House means nothing. In the final analysis, if the Government have already made an agreement, whatever Parliament's decision, it does not matter. Indeed, if the discussions of both Houses are against one of the Government's proposals, that in no way binds the Government from making a decision in Europe.
Furthermore, even if Parliament disagrees with a proposal and the Government agree with Parliament and then take the matter to Europe, and the proposal is defeated by qualified majority voting, what Parliament says will mean nothing. Am I right? Or does Parliament really have a say in additions to the Schengen list?
Lord Filkin: The noble Lord invites me to go rather wide of the amendment in discussing the nature of legislative scrutiny of European agreements. Nevertheless, I shall make one or two points.
The foundation of scrutiny of European agreements is essentially based on pre-legislative scrutiny. It is based on the deposit before the relevant committee of each House of the working documents while they are in negotiation and before agreement has been reached.
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That is the first stage of' the process. Those who have taken part in it will know the vigour of that process, and what an influence it has on Ministers when they are considering the stance that they will take in Europe. I speak from direct personal experience of knowing beforehand what this House or another place may think of certain measures because they have seen them. I do not say that the system is perfect, but it works well. The second stage of scrutiny is when the measures are put into primary or secondary legislation by either House.
The formal position is that the Government may have made an agreement, but this House is sovereign. It makes its decision on such matters. The Government would be seriously embarrassed if they did not get their legislation through, but the House will make its decision as it wishes.
Qualified majority voting is not yet relevant for justice and home affairs issues. It may be in the future, but that is not the case at present.
Baroness Anelay of St Johns: I am grateful to the Minister for his response. Again, he is saying: "We want flexibility", and, "Let's trust parliamentary scrutiny", when we know, as the noble Lord, Lord Stoddart, said, that in terms of parliamentary scrutiny, however good our best efforts are, they may not be the best that we should achieve. We get frustrated in those matters.
The Minister refers to the fact that the Government are opposed to the harmonisation of laws. He certainly has our support on that issue. We have concerns when he talks about generic descriptions of offences being the solution. As he knows, when the Government bring the Extradition Bill before this House, there will be debates on the definition of offences such as xenophobia, which appear to be generic in terms but which would not necessarily be applicable in this country. The Minister's explanation has not persuaded me not to return to the matter on Report. There are issues that I shall need to raise at that stage. Within the confines of Grand Committee, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 142:
Page 55, line 27, at end insert—
"( ) A foreign police or customs officer conducting relevant surveillance in the United Kingdom under this section shall ensure that such persons as may be designated by order made by the Secretary of State are immediately informed of the fact that the United Kingdom's border has been crossed."
The noble Baroness said: The amendment stands also in the name of the noble Lord, Lord Dholakia. It replicates the provision in Article 40.2(a) of the Schengen convention regarding informing host authorities once the border has been crossed. Article 40.2(a) states:
"Where, for particularly urgent reasons, prior authorisation cannot be requested from the other Contracting Party, the officers carrying out the surveillance shall be authorised to continue

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beyond the border the surveillance of a person presumed to have committed criminal offences listed in paragraph 7, provided that the following conditions are met:
(a) the authority of the Contracting Party designated under paragraph 5, in whose territory the surveillance is to be continued, must be notified immediately, during the surveillance, that the border has been crossed".
Surely, not only is that the right thing to do, but it promotes operational effectiveness, so that UK police forces will at least know that the foreign police or Customs officers are on their territory carrying out surveillance.
Why is this provision in the Schengen convention, which is a condition of compliance, not on the face of the Bill? The Government state in paragraph 156 of the Explanatory Notes that they will make an order under the powers given in new Section 76A(4) incorporating these conditions into the requirements to be followed by foreign officers. Therefore, why not put them on the face of the Bill as they are mandatory provisions of Schengen?
Finally, my practical question is: how shall we know when the border has been crossed? What will be the level of proof? I beg to move.
Lord Goodhart: I am happy to support the amendment in principle. I should like to know where, for the purposes of the clause, the border is. The customary rule is that the border where there are countries on opposite sides of an arm of the sea, such as the North Sea or the Channel, is halfway between the two. Is that the point at which technically a country becomes bound to notify the authorities here of what is happening? In practice, I assume that it would notify them earlier anyway, even if that is the point at which the border is crossed.
I have a slight doubt about the way in which the amendment is framed. It seems that the information might be provided not by the people actually conducting the hot surveillance, but by their minders who would know what was happening and would transmit the information. That is a matter of detail. In principle, I am happy to support the amendment.
Baroness Carnegy of Lour: Both my noble friend and the Minister will know that there are many places on the coast of Scotland where one cannot use a mobile telephone.
Lord Filkin: I had noticed. I always seem to go on holiday to places where one cannot use a mobile phone, but that may be my perversity.
As the noble Baroness, Lady Anelay, rightly says, the amendment reflects the condition set out in Article 40.2(a) of the Schengen convention, which states that foreign police and Customs officers conducting this type of surveillance must contact the relevant authority in the territory they are entering the moment they cross the border.
The requirement to make contact immediately is an important part of the cross-border arrangements, which is why we intend to specify that condition in the order. The order-making power will be subject to the affirmative procedure.
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The provision is not on the face of the Bill because it is possible that, once we have some practical experience of the handling of this type of surveillance operation, we shall wish to add further conditions. The order-making power would allow us swifter access to Parliament to introduce further conditions if it was felt necessary. I hope the Committee feel that that is desirable to ensure that we have the tightest possible circumstances of control consistent with not frustrating the objective that we jointly seek to achieve.
As to how we shall know the border has been crossed—perhaps it is related to the question of where the border is—without straying into international law, about which I know nothing, operationally that will be hard to define. Therefore, we shall take the stance that as soon as the officers reach UK entry controls they will have to notify. Notwithstanding the comment of the noble Baroness, Lady Anelay, that it may be difficult to communicate if one is keeping someone under surveillance, if one is on a ferry one's suspect will not escape while on that ferry; so it would be perfectly possible to notify the authorities in advance. Therefore, that does not have to be left to the last moment. It may be down to common sense.
The specific legal answer is that, we would say, if the officers went past the entry point they would have breached the agreement and the law. I trust that those remarks address the questions raised on the amendments.
Baroness Anelay of St Johns: I am grateful to the Minister. I shall certainly consider what he has said between now and Report. The response from the Minister about where the border is and when someone shall be judged as having crossed the border was that the border will effectively be when he touches soil rather than where the territorial waters start. If that is the case, one could argue that if officers are carrying out surveillance in this country, having come from France, they will get five hours plus, whereas if they are carrying it out across the border from France to Belgium they will get five hours maximum. That is an interesting point that I had not thought of before because I had always thought that the five hours would start from where the territorial waters began and not when the officers landed on British soil. I need to look at that matter.
The noble Lord, Lord Goodhart, is absolutely right about the drafting of the amendment. It is purely my fault. I drafted this before Christmas and never managed to change it. I left it merely as a device to stimulate debate in Committee.
I was interested when the Minister said that the Government may wish to add further conditions after this provision has operated for a while. I can well understand the need for flexibility on the matter. Of course one wants to be able to add extra conditions if matters are working badly. My worry is that in the mean time we are guinea pigs in a system that may not be the right one and may be open to abuse. We need to consider that further between now and Report.
Lord Stoddart of Swindon: I have probably missed something. The Minister said that he did not want the

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amendment because the Government might want to strengthen the conditions. Is the noble Baroness satisfied that, bearing in mind what the Minister said, they could also weaken the conditions?
Baroness Anelay of St Johns: The noble Lord, Lord Stoddart, raises a vital point. One needs to ask the Government that question or the Minister may be prepared to give the assurance that they would not weaken conditions today. Perhaps I may both assist and harm the Government's case by saying that I can envisage circumstances where the Government might put forward alterations which they maintain would toughen up the conditions but which might unintentionally end up weakening them.
I do not know whether the Minster wishes to reply at this stage, or whether he would like to leave the matter until Report. It looks as though he is going to leave it until then. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 143:
Page 55, line 27, at end insert—
"( ) A foreign police or customs officer conducting relevant surveillance in the United Kingdom under this section shall be prohibited from—

(a) entering a private home or any other place not accessible to the public, and

(b) challenging or arresting a person under surveillance."

The noble Baroness said: Amendment No. 143 stands in my name and that of the noble Lord, Lord Dholakia. At this stage we feel that it is essential that there should be clarity on the face of the Bill. We return to more of the mandatory provisions of the Schengen convention that are not on the face of the Bill. In this case it is Article 40.3(e), which states:
"The surveillance referred to in paragraphs 1 and 2 shall be carried out only under the following general conditions:
(e) Entry into private homes and places not accessible to the public shall be prohibited".
In paragraph 156 of the Explanatory Notes the Government say—and the Minister in his general introduction to Clause 83 repeated and expanded on this matter—that they will make an order under the powers given in new Section 76A(4) incorporating these conditions into the requirements to be followed by foreign officers.
The Minister earlier appeared to be saying that these prohibitions would be subject to statute. We are saying, "Here is the statute. This is the right place to put it and at the moment we cannot see a good reason why these prohibitions should not be inserted on the face of the Bill". I beg to move.
Lord Renton: I warmly support this very important amendment. Even our own police are not always free to enter a person's private house without having prior authority. The Government should regard this matter with great sympathy. There is one very minor drafting
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amendment that I would suggest. At the end of paragraph (a) instead of "and" the word should be "or".
Lord Goodhart: Once again we strongly support the amendment. We support this amendment more than any other in the group. It prevents the exercise of a power that would enable officers carrying out hot surveillance to enter people's houses or to arrest people. Clearly, in no circumstances should they do so. We think that the case is very strong for putting this matter on the face of the Bill. This amendment directly affects individual people. It does not merely regulate the communications between the officers carrying out the surveillance and the authorities in this country; it directly restricts the powers of those carrying out surveillance to do certain things that would impinge directly on the lives of ordinary people. It is spelled out in black and white in the convention and we think the case therefore is overwhelming for putting this issue on the face of the Bill.
Lord Monson: I agree with the noble Lord, Lord Goodhart. This is a vital amendment. The noble Lord, Lord Filkin, will correct me if I am wrong, but as I understand the situation, a police officer in Vermont who pursues a suspect over the border into New Hampshire has no powers of arrest in New Hampshire. Therefore, why should someone coming from France have a power of arrest in the United Kingdom?
6.45 p.m.
Lord Stoddart of Swindon: I support very much this vital amendment. In the light of the comment by the noble Lord, Lord Filkin, at the outset that officers may not enter private property or arrest, I feel sure that he will accept the amendment.
Lord Carlisle of Bucklow: Since the rest of the Committee supports the amendment, I shall add to the unanimity by saying that I do also.
Lord Filkin: There is always one fly in the unanimity ointment. On this occasion, and not for the first time, it will be me.
In essence, there is not much distance between our positions. We are all clear that, in the limited circumstances of foreign officers coming here, they will be prohibited from entering a private home. We intend to prohibit any such action by using the powers in 76A(4) through the affirmative resolution procedure. That is a clear statement of policy commitment by the Government. The matter will come before the House to ensure that it is adequately complied with.
Nothing in the Schengen arrangements makes it possible to challenge or arrest a person under surveillance. Rather, the Schengen handbook makes clear that foreign officers in those circumstances do not have powers of arrest and should not seek either to arrest or to approach a suspect. Therefore, we have no intention to give foreign officers any powers of arrest.

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They have no powers of arrest at present; therefore it does not need to be spelt out that they cannot have one.
Baroness Anelay of St Johns: Naturally, I am very disappointed by the Minister's response. I thank him for his explanation of the Government's approach. I am grateful to my noble friend Lord Renton for his comment on drafting. I always take everything that he says on drafting to heart. I will come back with something better next time—because there will be a next time. I am grateful for the support of the noble Lords, Lord Goodhart, Lord Monson, Lord Stoddart and Lord Carlisle.
As the noble Lord, Lord Goodhart, said, there is an overwhelming case for putting these matters in the Bill. I started by saying that there were questions of quid pro quo. What price do we pay for this yielding of our own rights? It would be a price too far. The Minister says that there is no problem and that we have given a commitment to make the provision by order. It is not appropriate to do so by order. We know about it; the Government have given a clear commitment; it is straightforward; it is right to do it; and so it should be on the face of the Bill.
If we were not in Grand Committee, I would not withdraw my amendment. But I follow the Committee rules. Notwithstanding my protests that I feel I am doing the wrong thing simply because of procedure, I must beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Dean of Harptree): If Amendment No. 144 is carried, I cannot call Amendments Nos. 145 or 146.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 144:
Page 55, leave out lines 28 to 32.
The noble Baroness said: I shall speak also to Amendments Nos. 145 to 147. These amendments are also in the name of the noble Lord, Lord Dholakia.
Amendment No. 144 refers to the conditions that will be laid down by the Secretary of State for the operation of "hot surveillance", as the noble Lord, Lord Goodhart, so rightly called it. Are they the only conditions in the Schengen convention? If so, why not put them on the face of the Bill? The Explanatory Notes do not tell us whether additional conditions beyond those in the convention are being considered. Earlier, in response to other amendments, the Minister said that the Government want flexibility so that if tougher conditions need to be imposed, they may be. But, at this stage, we need to know whether any discussions are going ahead within the remit of these amendments. Are the Government aware that additional conditions might ultimately be imposed?
Amendments Nos. 145 and 147 cover the instance where surveillance is to be "lawful for all purposes" if it complies with the conditions to be laid down in secondary legislation. Can, and will, those conditions allow types of surveillance that would not normally be
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allowed under UK law? Other noble Lords have said in respect of other amendments that it would be improper to give powers to foreign officers and Customs officers that are not available to our own police enforcement agencies and Customs officers.
Amendment No. 146 reflects my concern about whether, under this Bill, the conduct of a foreign police officer can be always lawful. The Bill implies that they can never do anything unlawful. That is extraordinary; it cannot be the case. There must be occasions when foreign officers' actions would be unlawful. For example, what would be a police officer's position if he committed a criminal offence in the course of surveillance? Earlier, the Minister said an officer who carried a gun in this country would be arrested. I assume that some actions would be considered unlawful. I beg to move.
Lord Filkin: The amendments all appear to deal with what would constitute lawful surveillance under the provisions, which is clearly important. I hope to be able to clarify the position.
The purpose of inserting new Section 76A(5) into RIPA is to make lawful the act of cross-border surveillance, both in ECHR terms and under UK law. That type of surveillance would not contravene those fundamental rights. As the Committee will be aware, surveillance in the UK is strictly governed by the Regulation of Investigatory Powers Act 2000, which, therefore, we need to amend to make this type of surveillance lawful, until UK officers either take it over or instruct foreign officers to cease doing so. The clause applies only to types of surveillance that could otherwise be authorised under RIPA. That is affected by the definition of "relevant surveillance" in Section 76A(2). Legality prevails only in those circumstances.
The aim of Amendment No. 147 seems to be a desire for the lawfulness of the surveillance to be conditional on similar surveillance being lawful if undertaken in the UK. However, Schengen requires that, provided that the surveillance is lawful abroad, it should be automatically lawful in the UK, so long as it fulfils the conditions specified in Article 40.2, which I shall deal with. The amendment is inconsistent, therefore, with the concept of automatic authorisation subject to the conditions.
The provisions will not allow foreign officers to conduct themselves in a way that would be unlawful for UK officers. As I have explained, surveillance will be automatically authorised only in limited circumstances. First, it must be lawful in the country of origin, and foreign officers will be obliged to contact UK police as soon as the border has been crossed. Secondly, the type of urgent surveillance may be carried out only if the person under surveillance is suspected of having committed one or more of a limited number of serious extraditable offences, which I referred to earlier. They will be on the record. Thirdly, cross-border surveillance under the Bill will be subject to strict conditions reflecting the wording of the Schengen convention. The conditions include that foreign police and Customs officers conducting this type of surveillance must not enter private homes and

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may not challenge or arrest suspects. As I have noted in our discussions on earlier amendments, we are making that provision through an order-making power subject to the affirmative resolution procedure.
I shall respond to some specific questions. No extra conditions are contemplated. But, as with any such arrangement, it shall be kept under review to see whether it works in practice and is adequate. On the question of whether all an officer's actions must be lawful, paragraph 40.3(a) of the Schengen convention requires the officer to comply with the law of the contracting party in whose territory they are operating. There is no resiling from that in any respect. For those reasons, and although we sympathise with the thrust of the amendment, legality is tightly challenged on a supervising officer, and it is necessary to draft the legislation in this way.
Baroness Anelay of St Johns: I am grateful to the Minister for addressing my immediate questions. I will look carefully at the response. He will be aware from my comments at Second Reading that I get uneasy when we give permission for foreign officers and Customs officers to carry out surveillance here that would be lawful in their own countries but unlawful if carried out by our own officers. There may be some misunderstanding on my part, given the reactions expressed in the Chamber previously. I shall look carefully at the matter between Committee and Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145 to 147 not moved.]
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 148:
Page 55, line 32, at end insert'—
"(4B) Nothing in this section shall render lawful the carrying of a firearm within the United Kingdom by a foreign police or customs officer."
The noble Baroness said: With the leave of the Committee, I shall speak also to Amendment No. 149. The amendments are tabled in the name of the noble Lord, Lord Dholakia also.
These amendments relate to the carrying of guns, to which we referred in the opening statement on Clause 83. They relate to the carrying of guns by foreign officers who are undertaking "hot surveillance" operations. As the Committee will have perceived on reading the two amendments, they are alternatives. Amendment No. 148 would prohibit the carrying of a gun by a foreign officer on UK soil. Amendment No. 149 would allow the Secretary of State acting personally, or a chief officer of police acting personally, to give authorisation for the carrying of firearms on "hot surveillance" operations. That could be given only in circumstances in which such authorisation would be given to a UK police officer.
New subsection (4E) replicates with a slight amendment—inserting "reasonably" instead of "legitimate"—Article 40(3)(e) of the Schengen Convention, which is yet another provision that is not on the face of the Bill. Given that that article of Schengen states that officers can carry their guns
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except when specifically denied permission, does that mean that Parliament cannot pass Amendment No. 149, which would put in place the reverse situation? It would provide that officers cannot carry guns except when specifically granted permission. Will the noble Lord confirm the situation?
The noble Lord, Lord Stoddart of Swindon, earlier raised pertinent questions about the carrying of guns in this country. What happens if someone engaged in hot pursuit, properly, is part of an undercover team? I can see circumstances in which I would wish to argue against the surrender of handguns on entering the country. We need to discuss and resolve the issue between now and Report. I do not want a police officer carrying out a proper undercover surveillance operation to be put in a life-threatening situation whereby legislation requires them to publicly lodge their police-registered firearm before coming here to carry out surveillance in England. There must be a way of preventing them from carrying firearms into this country in the first instance, and then using them, without jeopardising their undercover operations and their lives. The Bill as drafted at present does not properly protect the public in this country. We must also protect police and Customs officers who may be carrying out a very dangerous assignment. I beg to move.
Lord Goodhart: We strongly support the principle behind the amendment; namely that foreign officers carrying out surveillance in this country should not carry arms with them. Equally, there is force in the problem mentioned by the noble Baroness, Lady Anelay, that the requirement on foreign officers to dispose of a weapon they carried lawfully in the country they left may destroy the possibility of surveillance or put their lives at risk.
I want to raise another point, which the Minister may not be able to answer immediately. Would a blanket prohibition on the carrying of weapons by foreign surveillance officers be compatible with the terms of the 1990 convention? Paragraph 3(d) of Article 40 of the convention says:
"The officers carrying out the surveillance may carry their service weapons during the surveillance save where specifically otherwise decided by the requested Party".
That indicates that there is a general right to carry firearms but that, when the application is made under paragraph 1—an advance request for authorisation—or paragraph 2—an urgent request—the requested party may, case by case, say, "No. We will only give you authority provided you do not bring arms with you". I find it difficult to see how a contracting party such as the United Kingdom can say in advance that in no circumstances can anybody carry service weapons, even before a request has been made and considered. That is, arguably, inconsistent with paragraph 3(d).
I appreciate that it may be a difficult legal point. There may be a short answer, or it may need further consideration. I would be interested to know the answer.
7 p.m.
Lord Carlisle of Bucklow: My noble friend Lady Anelay of St Johns said that Amendments Nos. 148 and 149 were alternatives. Amendment No. 149 is the more attractive alternative, not only because of what the noble Lord, Lord Goodhart, said about whether there was a power to give a blanket refusal to allow arms to be carried.
We must be realistic about the degree of violence that occurs today involving not only terrorists but drugs gangs. Someone from another country who is carrying out surveillance in this country for a short time may put his life at risk, if he continues that surveillance without being armed. He will have had permission to be armed in the country from which he comes, and, with the amendment, he could apply for permission to maintain possession of those arms in particular circumstances. There should be some provision for that, if we are to deal with the wider use of firearms against the police.
Lord Stoddart of Swindon: I tend to favour Amendment No. 148, which would prohibit the carrying of firearms in any circumstances, although I understand the reasons behind the following amendment. The reasons why I favour Amendment No. 148 go back to the question of whether we are talking about hot pursuit or surveillance. If it is merely surveillance, there is unlikely to be contact with the criminal. In those circumstances, I cannot see the point of carrying firearms.
I know that that is an arguable point—how close is the surveillance? However, bearing in mind that British police are permitted to carry firearms only in unusual and dangerous circumstances—even then, it will be done only by highly trained people—it would be wrong to allow foreign policemen to carry firearms under less stringent conditions. We must consider that.
Lord Monson: It would be helpful for the Committee to know how often United Kingdom customs officers, as distinct from police officers, carry firearms. I have never heard of them doing so, but I may be mistaken.
Lord Filkin: It has been an interesting and important debate and has taken a slightly different turn from what we might have expected.
With regard to Amendment No. 148, I must say that we already have laws that prohibit such activity, so there is no need for any further legislation to prevent foreign officers from bringing firearms in. I appreciated the thoughtful way in which the noble Baroness, Lady Anelay of St Johns, raised the issue behind Amendment No. 149. She got us to think about the risks in such situations and reflect on the safety of the foreign officer and of our public.
The noble Baroness was right to raise such considerations. The sort of surveillance operations that we are discussing will involve people suspected of serious criminal offences. Frequently, they will be serious, professional criminals, and, frequently, they will be armed. That is the unfortunate reality of life. However, I am, at this point, less persuaded that that
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means that there should be the sort of discretion envisaged in Amendment No. 149. There are several reasons for that. Partly, it is because we take our stance in principle alongside the noble Lord, Lord Stoddart of Swindon, which may surprise him. It seemed right to us that we should have a clear-cut situation. In addition, if the UK considers that there is a high level of risk with someone coming in who is known to be armed, that person can be arrested on arrival at the entry port.
If the surveillance officer is a foreign police officer, he will, in most situations, be in his car tailing another car, until such times as UK undercover cars can pick up the surveillance. The foreign officer would not be seeking to get close to or arrest the person, so, although I will not say that there would be no risk, it would not be a situation of challenge in which the officer is trying to arrest the person or corner him. There is some risk with anyone who carries a gun, but there is less risk in the circumstances that we are discussing. Finally, UK officers will take over the surveillance immediately, in most cases, or within a maximum of five hours or not at all. They will often—if not always—have guns in their car for high-risk situations of the type that we are discussing.
For those reasons, it is not necessary explicitly to prohibit foreign officers from carrying firearms. Current legislation already does that. We are not persuaded that the level of risk that the noble Baroness properly referred to is such as to justify the making of Amendment No. 149.
I cannot tell the noble Lord, Lord Monson, how frequently UK police officers carry arms. It is certainly done more frequently than it used to be, which is of concern to us all.
Lord Monson: I asked about customs officers.
Lord Filkin: I am sorry. I shall write to the noble Lord with as open an answer as I can give in the circumstances.
Lord Carlisle of Bucklow: Has not the Minister, in a way, contradicted his own argument? If the British police officers or customs officers who will take over the surveillance are armed or have the authority to be armed because the risks are so great, it seems hard that the officers carrying out the surveillance in another country cannot be armed on the same basis. The risk to them is as great.
The Minister implied that surveillance officers would usually be armed in serious cases such as those that we are considering. It would be reasonable in such cases to have a means whereby—with permission, in particular cases and for a short period—the officer from another country could have the same protection as we provide for our own police force.
Lord Filkin: The situations are not parallel or identical. Foreign police officers coming in in the limited circumstances that we are describing have only a surveillance role; they have no powers of apprehension, arrest or challenge. They are seeking to have undercover, covered surveillance, without

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making their presence apparent to the person being tailed. I should not stray into operational matters, but I expect that there would be situations in which undercover UK police officers taking over the surveillance would have guns in their car. However, that is a different situation. If the person being tailed did anything that British police officers thought infringed UK laws or posed a risk to citizens, those officers would have a power of apprehension or arrest. The two situations are not the same.
It is perfectly right that UK police officers should have such powers in such circumstances. I see less need— if any—for a foreign officer in a surveillance-only role to have them.
Lord Goodhart: The Minister has not answered my question about whether a general prohibition on carrying weapons was compatible with the Schengen Convention.
Lord Filkin: I am sorry. I had the answer, and, in the shuffling of papers, I overlooked it.
A nation's decisions on the application of Schengen need not be made case by case. It will be permissible for the UK to prohibit the carrying of service weapons in general, rather than make case-by-case judgments.
Lord Goodhart: Is that answer based on our interpretation of Article 40, or is there something specific somewhere other than Article 40 that makes it clear that we have that power?
Lord Filkin: At this point, I shall take the noble Lord's invitation to stop and write to him. That would be the most appropriate way of dealing with that further question about the basis of our judgment.
Baroness Anelay of St Johns: I am grateful to all noble Lords who took part in that short debate on this vital matter. I am sure that we will return to it on Report. I heard what my noble friend Lord Carlisle of Bucklow said about the preferability of Amendment No. 149 and what the noble Lord, Lord Stoddart of Swindon, said about the preferability of Amendment No. 148. We need to resolve some difficult issues before I decide which amendments to bring back and how to draft them.
The noble Lord, Lord Monson, raised a crucial issue. The provisions of the clause affect the role and powers not only of police officers but of customs officers. In reports on the Bill—such as they were— when it was published, I noticed that there was little realisation in the public domain, in the press or on TV that the powers would go to customs officers as well as police officers. That realisation is also not yet established among our colleagues in the House who have not had the advantage of taking part in the Commit tee stage. There ought to be a broader debate on the role of customs officers. I was pleased that the noble Lord highlighted that issue.
I am, as ever, grateful to the Minister for his response, but there are issues that I must consider carefully, to ensure that firearms are not carried inappropriately, although there may be occasions on
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which safety means that they should be carried. That is a dilemma that I must resolve in my amendments, before I try to persuade the Government that they are needed.
The Minister said that surveillance does not involve challenge. The reality of surveillance is that things can go horribly wrong in these groups. One can be betrayed. An undercover officer who is challenged may be uncovered. In those circumstances, for the sake of his life, he may want to use the firearm in his possession. We need to take such circumstances into account and consider how properly to deal with them. At this stage, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 149 not moved.]
7.15 p.m.
The Deputy Chairman of Committees (Lord Dean of Harptree): I should tell the Committee that if Amendment No. 150 is carried, I cannot call Amendment No. 151.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 150:
Page 55, leave out lines 33 to 35.
The noble Baroness said: In moving Amendment No. 150, I shall also speak to Amendment No. 151, both of which are in my name and that of the noble Lord, Lord Dholakia. Both amendments address the issue of exemption from civil liability which is afforded under the proposed new Section 76A(5). Subsection (5) states:
"An officer is not to be subject to any civil liability in respect of any conduct of his which is incidental"—
incidental is the crucial word—
"to any surveillance that is lawful by virtue of subsection (4)".
I have difficulties with the use of the word "incidental" and with how it is defined. The word seems to be applied almost casually. I have therefore knocked out the word and said that the action should be "a necessary element of" the surveillance. Without the change, citizens of this country would not have protection from activities that result from the officer's carelessness rather than from the surveillance. The officer could, for example, come from France and not be particularly accustomed to driving on the left-hand side of the road. He might drive on the right-hand side of the road and knock someone down. Would the injured person therefore have no redress? I beg to move.
Lord Stoddart of Swindon: This simply cannot be right, can it? As the noble Baroness, Lady Anelay, said, a police or customs officer could come over here, drive on the wrong side of the road and kill someone, but not bear any civil liability. That simply cannot be right. I ask the noble Lord, Lord Bassam, to assure us that, if that happens, even if the individual officer has no civil liability, it will be possible for someone who

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has harm caused to his person or property to sue the Government or another authority so that he can be compensated.
Lord Carlisle of Bucklow: If it does mean what the noble Lord, Lord Stoddart, says, surely the provision gives to the officer coming from abroad far more immunity from civil liability than would apply to an officer in this country. There is the well-known case—the name escapes me for the moment, but I am sure that the noble Lord, Lord Goodhart, will remember it; I think that it is Ince—in which an officer knocked over someone at a crossroad when going to answer a 999 emergency call. The case gave rise to a claim for damages and had a lot to do with the Criminal Injuries Compensation Authority. I cannot see why we should enable officers from abroad to avoid liability where their activity, although incidental to a surveillance, is nevertheless negligent.
Lord Bassam of Brighton: It may help the Committee if I explain why we need these provisions and this particular wording.
For UK officers carrying out surveillance, the most obvious example of incidental conduct is trespass. For example, an undercover officer might follow the suspect into a shopping centre or supermarket. As the officer would have no intention of doing any shopping, he might be committing trespass.
Currently, the Regulation of Investigatory Powers Act would give him or her protection from any civil trespass claim that might arise. Consistent with RIPA in wording and spirit, new Section 76A has two elements: the authorised conduct—the actual carrying out of the surveillance—is made lawful for all purposes; and officers are protected from civil liability for any incidental conduct—hence the phraseology—by virtue of subsection (5), the subject of this amendment.
Subsection (5) is designed to give foreign officers authorised under new Section 76A the same protection from, say, trespass in shopping centres as I have described.
I should stress that the order to be made under new Section 76A(4) will provide that foreign officers conducting surveillance under new Section 76A should not enter private homes and places not accessible to the public. So incidental trespass should arise only in very limited circumstances. But it is a possibility, which is why we need to make provision for it. There may also be other cases where foreign officers incur civil liability for conduct incidental to their lawful surveillance.
As we have said before, the key to Schengen cross-border surveillance arrangements is reciprocity. We need to provide foreign officers with the same protection as that afforded to UK officers undertaking domestic surveillance. Article 40.3 of the Schengen convention sets out arrangements on civil liabilities, so we can expect reciprocal arrangements for our officers operating abroad in broadly similar circumstances.
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As for vehicles, we consider that "incidental" will not include negligent or reckless conduct by foreign officers who are conducting surveillance. "Incidental" means acts that are required by the surveillance. We do not consider that it would prevent claims for injuries caused by car accidents involving foreign officers operating here. So there is redress in those circumstances.
Lord Monson: Does the Minister agree that nothing he has said detracts from the merits of Amendment No. 151? The alleged trespass of officers going into a supermarket would be "a necessary element of their entering the supermarket. Amendment No. 151 tightens up the provision and provides extra safeguards. I see no reason for the Government resisting that particular amendment.
Lord Bassam of Brighton: I have set out the position as we see it, and it is important to understand why we have used that particular wording. I think that my comments in response to the specific point and example given by the noble Baroness, Lady Anelay, make it clear that there would be redress. Those circumstances are covered by Clause 85. I think that I have answered the point. However, the point does not necessarily relate to this clause and the way in which it is worded.
Lord Stoddart of Swindon: In order that we can get it on record, the Minister has said that there will be redress, but redress against whom or against which authority? That is the important thing. Where do people go for redress?
Lord Bassam of Brighton: The answer to that is: the Director-General of NCIS.
Baroness Anelay of St Johns: That was helpful; I think that there is a brief reference to it in the Explanatory Notes, but it is very helpful to have it on the record. I shall look carefully at the helpful response from the Minister. However, I still have concerns about use of the word "incidental" when it is saying that any conduct which is incidental to the surveillance may let someone escape liability. The Minister was trying to be helpful by saying that negligent or reckless conduct would not receive the exemption. There could, of course, be lower tests than "negligent" or "reckless" that could still cause damage. I think that we need to consider that. However, it is a complex matter. At this stage of the evening, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 151 not moved.]
Lord Filkin: My sense is that the Committee might find this a convenient time to adjourn until Monday at 3.30 p.m.
he Deputy Chairman of Committees: The Committee stands adjourned until Monday 3rd February at 3.30 p.m.
The Committee adjourned at twenty-four minutes past seven o'clock.

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