Sitting of 1 July 2003

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

  MERSEY TUNNELS BILL (By Order)
  Order for further consideration, as amended, read.
  To be further considered on Tuesday 8 July.

Oral Answers to Questions
  HEALTH
  The Secretary of State was asked—
  HEALTH

    Kidderminster Hospital
    Dr. Richard Taylor: If he will make a visit to inspect the new diagnostic and treatment centre at Kidderminster hospital when it is completed next year.␣[122416]
    The Parliamentary Under-Secretary of State for Health (Dr. Stephen Ladyman): Phase 1 of the Kidderminster diagnostic and treatment centre will open in December 2003 and it is scheduled to be fully operational by April 2004. I can certainly promise to visit the centre, because I want to thank the delivery team for the excellent work that it is doing on this important project.
    Dr. Taylor: May I thank the Minister for his reply and welcome him to his seat, as well as the whole team for their first session of Health questions?
    Given the threat to hospitals throughout the country from the European working time directive and the struggle that hospital staff now have to maintain continuity of care, will the Minister ensure that the diagnostic and treatment centre at Kidderminster, which, like others, is distant from the acute general hospital that serves it, can provide medical cover through a reasonable selection of intermediate elective surgery to meet the needs of the local community and tackle waiting list problems in the wider area?
    Dr. Ladyman: I am grateful to the hon. Gentleman for welcoming me to the Dispatch Box.
    Yes, I can assure the hon. Gentleman that we shall take a keen interest in the way in which that particular diagnostic centre works. We shall take on board the issues that he raises about the challenges posed by the
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    working time directive. I think that he can be reasonably confident that the centre will be very popular locally. Past experience suggests a 98 per cent. rate of satisfaction with such centres, and I have no reason to believe that his centre will be any less successful.
    Mr. Jim Cousins: I welcome the Minister to his duties.
    Will the diagnostic and treatment centre at Kidderminster have a system for ensuring that the profits of the operator are returned to the NHS and shared with it, and that there will be a cap on the number of private patients that it takes? Will that be the practice generally for all other diagnostic and treatment centres?
    Dr. Ladyman: I am grateful to my hon. Friend for his welcome.
    The Kidderminster diagnostic centre is an NHS centre, so the issues that my hon. Friend raised will not be of concern there. On the general issue that he raised, I shall certainly reflect on his comments. If he wishes to talk to me about his concerns, I shall be happy to discuss them with him.
    Mr. Peter Luff: May I, too, welcome the Minister to the Dispatch Box?
    Will the Minister reflect carefully on the wise words of the hon. Member for Wyre Forest (Dr. Taylor)? The previous Secretary of State for Health told me that there was a capacity problem in the Worcestershire health economy. That is certainly the case, and it means long waiting lists and lots of problems for patients. The centre at Kidderminster is a very important part of the solution to that problem and I hope that he will reflect carefully on what the hon. Gentleman said.
    Dr. Ladyman: The hon. Gentleman is right; the diagnostic centre will be a very important part of building that capacity and getting waiting lists down. I welcome the interest that he has taken in this matter and in the general issues of the local health economy. However, if we are to tackle the issues that he raises, we must do so by getting investment into the national health service, and not cutting it.
    Mr. Simon Burns: May I add my congratulations to the Minister?
    Will the Government use a standard tariff for treatments carried out at centres such as Kidderminster and other centres around the country, or will privately run centres be able to charge the NHS more for the same procedures?
    Dr. Ladyman: I am grateful to the hon. Gentleman for his welcome.
    I am afraid that I have to admit that I have no idea about that matter, but I shall look at it very carefully in the coming days, and I shall certainly respond to the hon. Gentleman. What I can tell him is that the Kidderminster centre is being set up with the full cooperation of the local primary care trust and strategic health authority. We expect it to have a strong impact on local waiting times and we have no reason to believe that in the fullness of time it will not prove to be an extremely successful operation.

    Primary Care Trusts (Funding)
    Andrew Selous: What assessment he has undertaken of the funding of different primary care trusts in relation to funding targets. [122417]
    The Secretary of State for Health (Dr. John Reid): We consider our allocations policy for each round of allocations in the light of all the circumstances at the time. Allocations for the period 2003–06 were announced last December and took account of the position of all primary care trusts in relation to their target share. The allocations made were the biggest three-year increases to go into the national health service in its history.
    Andrew Selous: Why do the Government persistently fund some PCTs at way below their own national formula for determining the health needs of an area, while funding others consistently above it? In my area, the Bedfordshire PCTs are £22 million below the Government's formula target, yet two PCTs in the same health authority are funded at £25 million above that target. When will the Government bring about a fair allocation of health resources?
    Dr. Reid: First, I welcome any support from Conservative MPs for the idea of targets, as they are not always so supportive of them. Secondly, the hon. Gentleman will remember that we have to strike a balance between the amounts that we spread across all the PCTs, given the infinite demand for them and the limited resources. Thirdly, those resources are vastly increased over anything that the Conservative party, or anyone else, ever put in.
    Mr. Simon Burns: And Bedfordshire?
    Dr. Reid: I am going to answer the question specifically in relation to Bedfordshire. [Interruption.] I am glad that Conservative Members are so keen to get the answer, because it is as follows: Bedford PCT's allocation will increase by no less than 32 per cent.; Bedfordshire Heartlands PCT's allocation will increase by 31.7 per cent.; and Luton PCT's allocation will increase by 32.74 per cent. Those are staggering increases. The truth of the matter is that by comparison with the 30 per cent. increases under this Government, Conservative Members would take 20 per cent. away.
    Mr. Eric Illsley: Is my right hon. Friend aware that my local PCT, Barnsley, which is one of the biggest in the country, is moving further away from its target funding because of the deficit that exists and is about £6 million behind its budget position? Given that Barnsley is one of the areas of greatest need, yet one of those with the lowest funding, will he look again at that situation?
    Dr. Reid: I am always prepared to look particularly at areas of need, because that is one of the elements that form the criteria by which we allocate money, so I shall do so. However, I think that my hon. Friend would be the first to admit that, both historically and in terms of
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    what any of our international competitors are doing, the amount of investment that is going into the national health service is unprecedented—£45 billion for 2003–04, £49.3 billion for 2004–05 and £53.9 billion for 2005–06. Those are staggering amounts of money. Even in my first couple of weeks in the job, I have been absolutely staggered by the amount of investment. I can tell my hon. Friend that the three-year announcements on 11 December represented the biggest ever investment handout by the state in this country since the dissolution of the monasteries.
    Mr. Burns: What?
    Dr. Reid: The dissolution of the monasteries was an early version of invest and reform. The investment is staggering in its historical context.
    Mr. Richard Bacon: I am delighted to hear the Secretary of State say that he is prepared to look at specific areas of need. While he is considering the funding requirements of different primary care trusts, will he look specifically at the retinal laser treatment known as photodynamic therapy? Two of my constituents, a Mrs. Scott and a Mrs. Brooks, are expected by the brand new flagship Norfolk and Norwich University hospital to travel to Liverpool for that treatment, though they are elderly and find it difficult to see, because the local PCTs have not yet given their approval to have the treatment locally. Does he agree that it is unfair to expect elderly people to fund the costs of travelling so far, from Norwich to Liverpool, and will he look into it?
    Dr. Reid: Obviously, I am not aware of the specific case that the hon. Gentleman raises, but yes, I will look into it.
    Mr. Patrick Hall: On distance from targets, my right hon. Friend knows that I was part of a delegation of all Bedfordshire and Luton Members of Parliament who recently met his predecessor. While we acknowledge the considerable increase, year on year, in resources for the national health service throughout the country, including Bedfordshire, we highlighted three issues at the meeting. First, Bedfordshire health services have been below target for 25 years or so—indeed, they are near the bottom of the national league table. Secondly, that has contributed to weakness over the years in building decent primary and community care services. Thirdly, although the Government acknowledge that there is a gap and that it needs to be closed, on current figures, the pace of change means that it will take almost 20 years. Does my right hon. Friend accept that the needs of my constituents and residents in Bedfordshire and Luton, and the challenge of the NHS plan to modernise and improve require the gap to be closed much more quickly?
    Dr. Reid: I know that my hon. Friend is a stalwart fighter for his constituents. I would expect nothing other than that. Of course, we pay great attention to need, which exists not only in Bedfordshire but throughout the country, especially after two decades of starvation of investment in the NHS. However, the allocation policy must take account of several factors, including the

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    overall resources available and the priorities for their use. Although my hon. Friend finds Bedford's allocation unsatisfactory, it will increase by £34.7 million, or 32.1 per cent., in the next three years. As I said earlier, Bedfordshire Heartlands' allocation will be increased by 31.7 per cent., which is £52.1 million, over three years. Although my hon. Friend, like many others, does not find his allocation satisfactory, I believe that he would be the first to agree that, by historical and international standards, the increases are staggering in proportion and amount.
    Tim Loughton: I welcome the Secretary of State to his latest challenge. He has held down the post for two weeks, which is good going, and he has clearly already discovered his predecessor's collection of scratched old records at the bottom of his desk.
    My hon. Friend the Member for South-West Bedfordshire (Andrew Selous) asked how the relative funding problems in Bedfordshire have been affected by the Department's age-sex standardisation technique. Does the right hon. Gentleman have any plans to revise that formula?
    Dr. Reid: I thank the hon. Gentleman for his overgenerous welcome. I have been here only two weeks—
    Sir Patrick Cormack: Too long.
    Dr. Reid: As I look at the standard of the Opposition, I believe that I shall be here for much longer.
    Of course, I shall continually review the criteria for allocating resources. Allocation is based on several criteria, including need, population and the start level of resources. I shall bear the hon. Gentleman's comments in mind.

    Cancer Fund Distribution
    Dr. Ian Gibson: What plans he has to continue the exceptional tracking exercise carried out recently for cancer fund distribution. [122418]
    The Parliamentary Under-Secretary of State for Health (Miss Melanie Johnson): This was an exceptional tracking exercise. The NHS is receiving £12.7 billion extra from 2003–04 to 2005–06. It is for primary care trusts in partnership with strategic health authorities and other local stakeholders to determine how best to use their funds to meet national priorities, including cancer targets.
    Dr. Gibson: I thank the Under-Secretary for her reply. I welcome the openness and transparency represented by that exercise to find where the cancer money went. Will we ensure in future that all the money—not only 60 per cent., which some authorities spend—will be spent on cancer, as should happen?
    Miss Johnson: I know that my hon. Friend is aware that, apart from some central funding, the money is principally routed through the primary care trusts. The research and the report that the national cancer director published on 22 May show that, after some initial
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    problems, there has been additional major spending on new cancer drugs and significant investment in other important aspects, such as expanding the cancer work force and extending services such as radiotherapy and screening. There is clear evidence that the money is getting through and making a difference, but it is up to local decision making.
    Mr. David Tredinnick: Is it not a fact that many cancer patients need nutritional supplements? Given that the Lords rejected the food supplements regulations last night and that 300 nutrients are about to be taken off the shelves, does that not mean that the Government have failed to bat for Britain in Europe? The Minister claims that in the light of the so-called dossier, those nutrients can go back on the market, but is it not true that only 15 supplements have been put forward for that dossier, and that 280 odd will therefore not be put forward? What does the Minister have to say about that?
    Miss Johnson: I am not entirely clear as to the direct relevance of those questions, but as you are allowing them, Mr. Speaker, I shall do my best to respond. The point is that we have negotiated the best possible deal with other European member states, and we have a long lead-in for some of the changes. Many issues have yet to be decided, and I think that we all agree that the only reason to ban any supplements is, effectively, that they are unsafe—[HON. MEMBERS: "No."] Well, that is the Government's ground for taking action, and on the basis of evidence. I trust that we can work with the industry to secure the best possible outcome for UK consumers. That is our main objective, and I believe that our best interests are served by working together.
    Laura Moffatt: My hon. Friend is right to say that the tracking exercise has been incredibly useful. I have seen its effect on my network, allowing those concerned and me, as a Member of Parliament, to understand where the money is going. Visiting the United States also made clear just how well we are doing in terms of cancer treatment. Does she agree that this exercise is one way in which central Government can keep an eye on the money spent and ensure that local teams are spending it where they should? It also allows Members of Parliament to have confidence in the process.
    Miss Johnson: I agree with my hon. Friend that it has been a useful exercise. Some differences in experience have clearly been encountered throughout the country, in terms of the money going to where we hoped it would go. But I hope that she and other Members will understand that it is quite difficult permanently to track in detail the money going into cancer services. Much of the money may go to specialisms, in which case only some of the money relates to cancer treatment. Given the ongoing bureaucracy, form filling and returns required to get a detailed picture, such a process is not sensible. However, we have overall targets and we are doing well on all of them, which is evidence that the

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    money is getting to where it needs to be. I trust that Members will continue to take a lively interest in this issue.
    Mr. Julian Brazier: Does the Minister accept that, ultimately, all cancer services in the community and in hospital outstations are underpinned by the regional cancer centres? When will the Government publish the independent review panel report on the future of acute health services in east Kent and, in particular, of the joint cancer centre at the Kent and Canterbury hospital? In practice, will we see a vital and excellent cancer centre eroded and ultimately closed by stealth?
    Miss Johnson: We are looking at all of these issues carefully in the light of the panel's recommendations, but I can assure the hon. Gentleman that the report will be published shortly. He will have to wait to see what is in it, but the Government are of course totally committed to having a very high standard of care in excellent centres throughout the country. I am sure that he will join me in working towards that objective.

    NHS Patients (Wales)
    Ian Lucas: What the Government's policy is towards the treatment of NHS patients from Wales in England. [122420]
    The Minister of State, Department of Health (Mr. John Hutton): It is the responsibility of local commissioning bodies to ensure proper access to NHS services for their local populations. NHS trusts in England will continue to provide a range of services to patients from Wales in accordance with these arrangements.
    Ian Lucas: I am grateful to my right hon. Friend for that reply. Is he aware that many of my constituents and others in north-east Wales currently receive much of their medical treatment from hospitals in England, such as those in Chester, Gobowen, Liverpool and Manchester? My concern is that the Health and Social Care (Community Health and Standards) Bill does not place an obligation on foundation hospitals to continue to treat patients from Wales. Will my right hon. Friend therefore consider an amendment to ensure that hospitals in England continue to have an obligation to treat patients from Wales?
    Mr. Hutton: I do not think that we will be considering an amendment to do what my hon. Friend suggests. However, there was some argument in the Standing Committee about the Bill's provision in connection with the treatment of patients from Wales by NHS foundation trusts in England. It was always argued that NHS foundation trusts in England were fully able, and legally empowered, to treat patients from Wales. We have tabled some further amendments in Committee to make that perfectly clear. To put the matter beyond doubt for my hon. Friend, I assure him that there is nothing in the Bill, if it is approved by this House, to
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    prevent NHS foundation trusts, once they are established, to treat patients from his constituency. I think that that is the right way to deal with this matter.
    Chris Grayling: Will the Minister confirm that the Bill means that English hospitals that treat Welsh patients will be subject to two separate inspection regimes by two sets of inspectors in the same year?
    Mr. Hutton: We have made it clear that we want the new audit and inspection arrangements to be as minimally invasive and bureaucratic as possible. It is perfectly possible for the National Assembly for Wales and the commission for health care audit and inspection to co-ordinate and co-operate to determine how the investigations and monitoring arrangements work in practice. That is the sensible way to proceed, but the fundamental problem for Opposition Members is that they do not accept the devolution settlement. They do not accept that it is perfectly possible for the National Assembly for Wales to exercise those functions in a devolved way. Yes, there will be two inspection bodies, but that is no reason to argue that there cannot be proper co-ordination between them. That is the right way to proceed. It reflects the constitutional settlement agreed by this House, which is working well in the interests of the people of Wales and England.
    Mr. Jon Owen Jones: My hon. Friend the Minister uncharacteristically misunderstands the question asked by my hon. Friend the Member for Wrexham (Ian Lucas). The point is not that English foundation hospitals will not have the ability to treat Welsh patients but that, although the Bill as constructed gives them a legal responsibility to treat English patients, it does not give them a similar responsibility to treat Welsh patients. Will the Minister carefully consider whether the Bill could be amended so that patients in Wales and in England enjoy equal rights?
    Mr. Hutton: With the very greatest respect to my hon. Friend, I must tell him that he is wrong on that point. The Bill makes it evident beyond any reasonable doubt that NHS foundation trusts in England will be perfectly able, legally, to treat NHS patients from Wales. The point that my hon. Friend has not understood is that whether an English hospital treats patients from Wales is a matter for the commissioning bodies and the trust to negotiate. Once the agreements are in place, there is nothing in the Bill to make it impossible for an NHS foundation trust—or any other NHS acute service provider in England—to provide services to patients from Wales.

    Water Fluoridation
    Mr. Simon Thomas: What recent representations he has received regarding the extension of fluoridation in the public water supply. [122421]
    Andy Burnham: If he will make a statement on water fluoridation. [122424]
    The Parliamentary Under-Secretary of State for Health (Miss Melanie Johnson): We have received representations from the water industry requesting that the legislation on fluoridation be amended to make strategic health authorities solely responsible for deciding, where their populations are in favour, that a new fluoridation scheme should be introduced. We will table a relevant amendment to the Water Bill tomorrow, for debate on 9 July before Third Reading of the Bill in another place.
    Mr. Thomas: I am grateful to the Minister for that reply. I welcome the new team in the Department of Health to their remaining duties in Wales and Scotland.
    Fluoridation is one such matter. In my constituency, 69 per cent. of people do not have access to an NHS dentist. The incidence of lip and mouth cancer is among the highest in western Europe, and we have an above-average incidence of decay in children's teeth. My constituents tell me that they do not want fluoride in the water as a matter of compulsion; they want to be able to opt to take fluoride as a supplement. Will the Minister give them the guarantee that the NHS will deal with the dentistry that needs to be performed, but that fluoridation will be a matter of personal choice for the consumer?
    Miss Johnson: We are enabling local communities to decide what they want to do on this matter. I appreciate the hon. Gentleman's points about dental services, but those are a matter for the National Assembly for Wales and I cannot comment on them. I hope that hon. Members accept that we are looking to give local communities the decision-making power. I am sure that the hon. Gentleman, who believes strongly in devolution, accepts that that is the right way to go on these matters.
    Andy Burnham: Has not Parliament spoken in favour of water fluoridation but mistakenly left the final decision in the hands of plcs, not the people? I thank my hon. Friend—and her predecessor, my hon. Friend the Member for Salford (Ms Blears)—for ignoring the bluster of the flat earth society and agreeing to table an amendment that will help us to improve children's health. Will she give a firm assurance that, regardless of what happens down the Corridor, this House will get a chance to vote on the issue and clear it up once and for all?
    Miss Johnson: I am grateful for my hon. Friend's support for the proposal. I emphasise that no fluoridation scheme will take place unless there has been wide-ranging consultation in which both the proponents and opponents of fluoridation have been encouraged to participate and in which the majority of the population have indicated that they are in favour. Ultimately, this matter should be decided locally, but we recognise the difficulties that water companies have faced and are proposing to table the amendment in accordance with suggestions put to us on many fronts over recent months.
    Dr. Andrew Murrison: Countries as diverse as Finland, Cuba, Canada and Germany are now abandoning water fluoridation, but are not finding
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    that tooth decay has increased or decreased. Why should we consider bucking that trend in this country by introducing this illiberal measure?
    Miss Johnson: I have said that the amendment is enabling and will not necessarily lead to any more fluoridation schemes, which will depend on what people decide locally. There is a strong correlation between fluoridation and reducing tooth decay; that is an important fact. Large chunks of England down the east side—roughly from Hartlepool to Essex—have fluoridation occurring naturally at the sort of levels that might be put into matter, and 5 million other consumers already receive fluoridated water in Birmingham and other areas.
    Dr. Brian Iddon: A very long time ago, the people of Bolton voted in a referendum against fluoridation, but it was a very long time ago. Bolton metropolitan council also voted against fluoridation, but that was some time ago as well. Will my hon. Friend give consistent guidance to all councils and people across the country so that everyone can have a say in this emotive matter, the guidance is upheld and up-to-date consultations are carried out if and when Parliament decides on the issue?
    Miss Johnson: The detailed guidance will be a matter for regulations. At the moment, we are only at the stage of tabling an amendment to the Bill in another place. Local people will decide how they engage with the options covered by the regulations, which will be a matter for them.
    Mr. Charles Hendry: Does the Under-Secretary understand the concern of many that there is already too much interference in what we eat and drink? Fluoridation is one concern, but there is concern also about far too many colourings and additives and the effect that they have on children's behaviour, about the reduction of basic vitamins and minerals in food, and about GM food. I accept that there is a positive dental benefit from fluoridation, but should not the Government concentrate on the real cause of the problems: the amount of sugar consumed by children?
    Miss Johnson: As the hon. Gentleman knows full well, we are doing that as well.
    Mr. Simon Burns: How?
    Miss Johnson: We are doing things to improve diet and decrease the intake of sugar and salt. I reiterate to the hon. Member for Wealden (Mr. Hendry) that 5 million people already receive fluoridated water at one part per million, the proposed level of any scheme, and large chunks of the population receive it naturally through the water supply. The idea that it is purely an artificial additive is clearly wrong.

    Digital Hearing Aids
    Ms Joan Walley: What the take-up of NHS digital hearing aids is. [122422]
    The Minister of State, Department of Health (Ms Rosie Winterton): By the end of May 2003, 98,540 digital hearing aids had been fitted to 62,865 people as part of the modernising hearing aid services project. We have recently announced that an additional £94 million will be made available over this and the next financial year to support national roll-out of a modernised hearing aid service providing digital hearing aids.
    Ms Walley: I welcome my hon. Friend to her new post and wish her well in it. I also welcome what the Government are doing on digital hearing aids, but I must tell her that it is not happening quickly enough in North Staffordshire. Does she agree that there is an unsung hero in North Staffordshire—my constituent, Mr. Longstaff—who will not be satisfied until everyone who needs a digital hearing aid can get one? He does not want people to have to wait until 2005. Could the Minister contact the Treasury and ask whether it could free up the £10 million or so in balances that existed under the old health authority? If we could free up that money and get it moving over to the new primary care trusts more quickly, we could roll out the digital hearing aid programme that much more quickly for constituents in North Staffordshire.
    Ms Winterton: I thank my hon. Friend for her kind comments and welcome, and I understand the point that her constituent makes. The programme that we have set in train on digital hearing aids has been widely welcomed. I understand that the North Stoke primary care trust is commissioning this work on behalf of the other four PCTs in the area, working with the local service provider—the University hospital of North Staffordshire—and the project team. Funding is being examined and they are trying to establish how best to provide those services as quickly as possible. In fact, we look to PCTs to provide only about 25 per cent. of the funding; in a typical area, that will amount to about £6,000 per PCT. In view of the increase in PCT funding, we believe that they should try to match the 75 per cent. provided centrally to help introduce the service.
    Mr. Henry Bellingham: I too congratulate the hon. Lady on her appointment and I am sure that she will add sparkle to the Front-Bench team and do very well. She will be aware that digital hearing aids can help people to stay in work and revolutionise people's lives. Is she aware of the disappointment in west Norfolk that the Queen Elizabeth hospital was not part of either the first or the second pilot scheme? Can she give us any idea of when my constituents will be able to get these worthwhile and important aids?
    Ms Winterton: I thank the hon. Gentleman for his kind comments. Digital hearing aids will be in place by March 2005. It has been done in waves, with different trusts signing up to the programme at different times, but it obviously takes time because various things have to take place. The proper equipment must be installed and audiologists must be trained. We need to ensure that, once the service goes out, it is able to deal with people's individual needs. I hope that the hon. Gentleman's constituents will accept that we are moving as quickly as we can. No one would be happier than we
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    if it could be done more quickly, but real practical problems must be addressed. Nevertheless, the service should be rolled out nationally by April 2005.
    John Cryer: I welcome my hon. Friend to her new position and I also welcome the fact that, as a result of the Government's investment in the health service on an unprecedented scale, this technology has been made available. However, is she aware of age-based discrimination in certain areas where older people who have old-style analogue hearing aids are not receiving the new digital aids? Will she make it clear that the Government will not tolerate that sort of discrimination in any NHS trust, and that the service should be freely available at the point of use so that older people can have access to digital aids?
    Ms Winterton: I thank my hon. Friend for his comments. I completely agree that there should be no discrimination. The approach taken has been that people who require new hearing aids or are obtaining them for the first time have been prioritised for digital hearing aids. Provision is then worked through so that people who have had hearing aids longest get the new ones, and that may be people who have had them four years, then three years, then two. We are renewing the oldest analogue hearing aids by replacing them with digital hearing aids. That may be why my hon. Friend's constituent believes there is discrimination, but that is not the case. We are simply working through the system to deal first with those who have had hearing aids longest before we move on to others.
    Mr. Archie Norman: I add my welcome to the Minister, but while she has a fresh pair of eyes, will she look again at the facts behind her brief? Her words will sound hollow to people like my constituent Tony Warner, who is 83 and who had to wait 23 months to have a digital hearing aid fitted because of the lack of audiological technicians in the area. Does she realise that it is no good making digital hearing aids available if there is no one available to fit them? The hearing aids must be fitted by technically qualified people, but the number of audiological technicians qualifying last year was half the number in the previous year. The gap between supply and demand is widening, and the waiting lists will lengthen, not shorten.
    Ms Winterton: I thank the hon. Gentleman for his welcome. I understand his constituent's frustration at any delay. As I have said, we are moving as quickly as we can to institute proper training and to put equipment in different areas. The hon. Gentleman has certainly drawn attention to a real problem in the training of audiologists. We have instituted new training programmes in recognition of the fact that there is a difficulty, and we are working with other sectors to see whether more can be done to train people. There is a difficulty, but we are working hard to redress it. I hope that that will give some comfort to the hon. Gentleman's constituent.
    Mr. Peter Pike: Does my hon. Friend accept that many people who are partially deaf, as I am, have stopped using the analogue hearing aids issued by

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    the national health service because they pick up too much noise that we do not want to hear, meaning that we cannot hear what we do want to hear? We want the new generation of digital hearing aids to be introduced as soon as possible because they make a great difference to what people hear.
    Ms Winterton: Yes, I am well aware of the differences between analogue and digital, although it might be quite handy in this place to hear some things and not others. My hon. Friend has hit the nail on the head. It is absolutely true that the new digital hearing aids allow much greater personalised tuning to serve the problem of the person concerned. Through computerisation, people are better able to adjust the hearing aids to deal with particular problems. My hon. Friend is right to say that we need to have systems in place as soon as possible, and I assure him that that is what we are working to do.
    Derek Conway: I too welcome the Minister to her post. She has had a remarkable first outing. By the way, the jacket that I am wearing is not a hospital jacket, so she need not worry too much about that.
    May I press the Minister on the timing of the roll-out programme? Will Queen Mary's hospital in Sidcup, which has its service provided by Lewisham, be dealt with at an early stage of that programme? The hospital feels that it is getting postcode treatment and facilities at the moment, and I hope that it will be dealt with early rather than at the tail end in 2005.
    Ms Winterton: I thank the hon. Gentleman for his kind comments; I assure him that he has no need to apologise for his white coat.
    I understand that there will be concerns about the roll-out in different areas, but as I said, we have worked closely with primary care trusts in different areas to ensure that the programme can be properly met by 2005. We are encouraging other areas to come forward; we shall then work closely with them to ensure that they have the proper training and equipment so that, once the service is up and running, they can deal with people quickly and ensure that they have the benefits of digital hearing aids.

    Foundation Hospitals
    Mr. Nick Gibb: If he will make a statement on the accountability of foundation hospitals. [122425]
    The Secretary of State for Health (Dr. John Reid): NHS foundation trusts will be fully part of the national health service and run locally, not nationally. The Health and Social Care (Community Health and Standards) Bill sets out various strands of accountability for NHS foundation trusts.
    Mr. Gibb: As currently drafted, the Bill provides for foundation hospitals to appoint their own auditor, with no public auditor—neither the Audit Commission nor the National Audit Office—and no public scrutiny of the annual audit reports. Given that foundation hospitals will be spending billions of pounds of public money,
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    voted by the House, should not they be ultimately accountable to Parliament rather than to an amorphous group of local worthies? Does not the Secretary of State share my concern that, when things go wrong, as they always do from time to time, no one will be to blame and no one will be held accountable to Parliament for the billions of pounds of taxpayers' money that is being spent?
    Dr. Reid: I am surprised, because the whole tenor of what has been said from the Opposition Benches is that foundation hospitals do not have sufficient freedoms and are over-burdened. I believe that is wrong, but it is interesting that some Conservative MPs are saying that the hospitals should have extra burdens and that there should be more intervention. The truth is that we have a fair balance; NHS foundation trusts will have more freedom to take their own decisions locally, while nevertheless being fully part of the national health service and accountable not only to those who commission health provision—mainly the local primary care trusts—but also to their members, to those in the area who use them, to the NHS foundation trust through the board of governors and, of course, to the new independent regulator. In addition, they will be accountable to the new Commission for Healthcare Audit and Inspection. That is a balance between the desire to have a diverse form of supply inside the NHS and maximising freedom. There is plenty of surveillance, oversight and transparency and we should not go further by interfering and inflicting more obligations on the freedoms of the NHS foundation trusts.
    Mr. Keith Bradley: If Christie hospital in my constituency becomes a foundation trust, what will be the electorate for its governance?
    Dr. Reid: I do not know specific details about my right hon. Friend's local hospital, but I can tell him that the electorate will include not only the locality but the patients who use the hospital.
    Dr. Evan Harris: Should not foundation hospitals be accountable to the rest of the NHS for their borrowing powers? In the Standing Committee, the hon. Member for Birmingham, Hall Green (Mr. McCabe) put that point well. He said that we needed to know
    "whether the extra that the trusts can borrow comes off the NHS total. If it does, it suggests that there could be a preference for those trusts at the expense of other parts of the NHS. That is a pretty central anxiety for a great many of us".—[Official Report, Standing Committee E, 22 May 2003; c. 367–68.]
    Even those of us on the Liberal Democrat Benches who support the principle of alternative providers for hospital services do not think that that should be at the expense of existing providers. Is not it unfair and unjustifiable for there—
    Mr. Speaker: Order. One supplementary question is fine.
    Dr. Reid: Setting priorities is not a new phenomenon inside the national health service, or any other expenditure portfolio, and when priority is given to one subject, one area, one person or one operation, it can be argued that it has therefore been taken from another area or person. There is nothing new in that, but we have tried to ensure—I think, successfully—that foundation trusts will represent a new form of publicly accountable health service. They will be truly part of the NHS, but, alternatively, they will have freedoms that have not previously existed to meet the different needs, ambitions and expectations of today's working people.
    We will have centrally provided resources and standards. We will have local decision making and, as far as we can, we will give patient power and choice to individuals, so that they can exercise it among the plethora of diverse suppliers of services. We have done so to get national standards, more capacity than has been provided in the NHS ever before and a range of diversity and choice for individuals because, at the end of the day, while every hon. Member so far has concentrated on the suppliers of health care, the benchmark for all our decisions should be the receivers of health care—the patients—and they should come first.
    Geraint Davies: I warmly welcome my right hon. Friend to his new post, but may I ask him to cast a new pair of eyes on the views of the Public Audit Forum, which is made up of the Comptroller and Auditor General and the Auditors General for Wales, Scotland and Northern Ireland, who say that the proposed arrangements for auditors in foundation hospitals are, in fact, inconsistent with Lord Sharman's guidelines for public accountability and that the appointment of auditors should be independent of the foundation trusts, so that auditing is consistent and comparable across the NHS? As a minimum, will my right hon. Friend allow foundation hospitals to consider bids from public sector auditors, not just private firms, so that there is transparency and accountability for the taxpayer and no danger that the focus will be on presenting the accounts in the best light?
    Dr. Reid: I will certainly look again at my hon. Friend's request, but as of today, I am satisfied that there is in place sufficient oversight, which balances the need for transparency and accountability to the public sector. For example, the foundation trusts will be overseen, among other bodies, by the Commission for Healthcare Audit and Inspection. Given the 14 days that I have been in my new job, I am not truly versed in the minutiae and every detail of Lord Sharman's advice. Why not? Perhaps it has been laggardly of me not to put that at the top of the pile, but I have been trying to deal with a number of other issues, such as people who are sick. They come at the top of our priorities, but I will certainly look at the issues raised by my hon. Friend.
    Dr. Liam Fox: How much will it cost to elect foundation hospital boards and to maintain foundation hospital membership? Will that money be top sliced or come from individual trust budgets?
    Dr. Reid: It will be a lot less costly than either reducing the NHS budgets by 20 per cent. or adopting a policy of providing health care in this country largely through the
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    private sector. We will not go down either of those roads, and we will make sufficient financial provision to ensure that the NHS foundation trusts' freedoms are balanced by accountability, locally and nationally.
    Dr. Fox: The new Secretary of State will have to do an awful lot better. When the previous Secretary of State did not know the answer, it was a lot less obvious. No doubt he will pick up that skill in time, but since he does not know how much his proposals will cost, let me help him. It is estimated that the cost of advertising for membership will be about £60,000, that the cost of running an initial ballot will be about £17,000, and that the cost of servicing the membership thereafter will be between £145,000 and £250,000 per trust. Those figures are based on the current estimates, by the foundation trust candidates, that it will cost between £4 and £5 a year to service each member of the trust. How does diverting £250,000 per trust square with the Government's pledge to put money into front-line care, not the bureaucracy?
    Dr. Reid: Since the hon. Gentleman thinks that I am not sufficiently well versed in deception, I promise him that I will study those on the Opposition Front Bench in an attempt to improve myself; but if I have a degree of honesty about my presentation at the Dispatch Box, I do not regard that as a disadvantage. We in the Labour party do not think that a disadvantage, but perhaps those in other quarters do.
    Dr. Fox: Answer the question.
    Dr. Reid: If the hon. Gentleman would stop intervening, I will try to answer his question.
    The expenditure laid out in the estimates that the hon. Gentleman gives is as nothing. Some £250,000 is as nothing compared with the thousands of millions of pounds that would be taken from the NHS if Conservative Members had their way. I have to say—
    Mr. Speaker: Order. We cannot go into what Opposition Members would do if they were in government; they are in opposition.
    John Mann: Thirty-five thousand people voted in the ballot that I called on proposals to downgrade the accident and emergency department at Bassetlaw hospital. If all those 35,000 people choose to join the proposed foundation hospital as members, will they have the power to vote out the chief executive and the board if they ever come back with such ill-advised proposals in future?
    Dr. Reid: Those powers will reside with the governors, who will be elected. I hope that my hon. Friend would, like me, welcome the introduction of further decentralised accountability and democracy inside the national health service. I also hope that he would support me in saying that patients are ultimately the arbiters of whether the health service works as well as we want, which is why we are committed to both decentralisation and a patient-centred health service.
    Mr. Peter Lilley: Would not the most effective way to raise the quality of care in our hospitals be to make them directly accountable to patients by giving them the right to choose any NHS hospital in this country and ensuring that taxpayers' money follows patient choice by giving them a patients passport equal to the cost of the operation that they need? Therefore, why have the Government removed, for the first time in the history of the NHS, the right of patients to choose any hospital other than the one to which their local primary care trust has contracted to send them? When will the Secretary of State repeal circular—
    Mr. Speaker: Order.
    Dr. Reid: I was almost on my way to agreeing with the right hon. Gentleman when he said that we should extend real choice to people, but he reverted to talking about the theoretical choice that is always espoused by Conservative Members: people may have the right to choose to buy a Rolls-Royce, but it is a pity if they do not have enough money to exercise that right. Labour Members want to give patients real choice by putting the necessary financial resources into the health service so that—in London, for example—if people do not have an operation of a specified type in six months, they will be able to choose to go to another national health service, or private, hospital. Indeed, if the operation is not provided in this country, people could go abroad to have it done because the patient is the centre of all our considerations. I want to roll that out. Mrs. Thatcher said several years ago that she wanted the choice to have the treatment for her family that she wanted, at the place and time that she wanted. I half agree with her, but the difference is that I want that for every family in this country.

    Pharmacies
    Richard Younger-Ross: What assessment he has made of the implications for health care of the proposals from the Office of Fair Trading on the regulation of pharmacies. [122426]
    The Minister of State, Department of Health (Ms Rosie Winterton): Pharmacy is an integral part of the NHS. We are carefully considering the OFT report in the wider context of the important part that pharmacy plays in our plans to modernise NHS services, to reduce health inequality and to improve access and choice for patients.
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    These principles, together with the 2,500 letters we have received on the OFT proposals, will frame our response, which my right hon. Friend the Secretary of State for Trade and Industry is co-ordinating.
    Richard Younger-Ross: I thank the Minister for what appeared to be a positive response. When the Government respond to the OFT, I hope that they will take account of the views of pharmacists and doctors, especially those in my constituency who work in small villages such as Bishopsteignton and Shaldon and fear that the pharmacy will close if the OFT proposals go ahead. Will she tell the OFT that pharmacists and doctors throughout the country are not happy with the proposals as they are at the moment?
    Ms Winterton: The hon. Gentleman makes an important point about access to pharmacies, especially those in rural areas. I assure him that we take those concerns seriously. The role of pharmacists should be expanded so that they become more of a part of the primary care team. When we respond to the OFT report, we shall consider publishing a new draft framework for the national pharmacy contract. We are considering sitting down with pharmacists to decide what other services may be provided and how we may draw up a contract that takes account of their views and the need to expand their vital service as a greater part of the primary care team.
    Mr. Bob Blizzard: The thousands of people in my constituency who have contacted me on the issue very much welcome the fact that the Government have not just fully accepted the OFT proposals. They look forward to discovering what the Government think is the best way to recognise the importance of pharmacies in local communities. However, there is, of course, a period of uncertainty. Will my hon. Friend, whom I welcome to the Dispatch Box, ensure that we receive the Government's idea of the way forward as soon as possible?
    Ms Winterton: I thank my hon. Friend for his welcome. He makes an important point. We need to respond to the report in the near future. In making that response, we also wish to take account of the Health Committee report, which was extremely helpful in explaining both the important part that pharmacists play in the wider primary health care team and the need to improve the current system, perhaps by introducing wider choice in some of the areas that pharmacists cover.

Speaker's Statement
12.31 pm
Mr. Speaker: I have a short statement to make about today's Order Paper.
There is an error in the rubric printed in italics on item 5, set out on page 2480. The Order Paper should state that item 5, the Hunting Bill (Programme) (No. 4) motion, is debatable. Debate may continue for up to 45 minutes.
A corrected version is being placed in the Vote Office.

Points of Order
12.32 pm
Annabelle Ewing: On a point of order, Mr. Speaker. May I draw your attention to the astonishing reports that are emerging that the Scottish Executive were not consulted on plans for a new UK supreme court prior to their announcement by the Prime Minister in his statement on the reshuffle last month? Given that the proposals will have a direct and significant bearing on the administration of justice in Scotland, which is, of course, devolved, does that not reflect a breathtaking contempt on the part of the Prime Minister towards the Scottish Parliament and democracy in Scotland? Does it not also amount to a breach of the UK Government's internal guidelines, including the devolution guidance notes issued by the Office of the Deputy Prime Minister in 2002? They state inter alia that
"The Memorandum of Understanding and Concordats are intended to promote exchanges of information and prior notification, so as to minimise the scope for surprises both north and south of the border."
In view of the gravity of the situation, would it not be in order for a Minister at the new Department for Constitutional Affairs to come before the House to make an urgent statement?
Mr. Speaker: That has nothing to do with the Chair. The hon. Lady is discussing devolved matters. There is nothing to prevent her from asking a Minister to come to the Dispatch Box or from tabling questions, but it has nothing to do with me.
Mr. David Lidington: On a point of order, Mr. Speaker. I gave you notice that I wished to raise a point of order on the legislative mess in which the Government have left the House following last night's proceedings on the Hunting Bill. I ask for your guidance on two items in particular. The first is on the proceedings concerning the recommittal of the Bill to a Standing Committee. As the House will have noted from the terms of the programme motion on the Order Paper, the Government intend to ram through those further Standing Committee proceedings by the close of business next Monday 7 July.
In that context, are you, Mr. Speaker, able to respond to the question raised yesterday at column 42 by my hon. Friend the Member for Mid-Worcestershire (Mr. Luff)? He asked Mr. Deputy Speaker whether the former Standing Committee would simply be reformed to consider the amendments agreed yesterday and their implications, or whether the Committee of Selection would have to meet later this week to appoint a new Standing Committee, perhaps with—or perhaps without—the same membership. Your response to this point, Mr. Speaker, clearly has implications for the Government's planned rapid timetable for consideration on recommittal.
Secondly, Mr. Speaker, I ask for your guidance on whether the Committee will be able to consider issues arising out of new clause 14, which the House also agreed last night. It states:
"Registration under Part 2 shall not be effected in respect of the hunting of mink."

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It is identical, other than giving the name of a different species, to new clause 11, which dealt with foxes. I would have assumed that it had the same consequence as new clause 11 in requiring that the matter be referred back to a Standing Committee for further consideration, yet the recommittal motion agreed last night would appear to exclude the Committee from considering any matters arising from new clause 14 because it refers only to new clause 11.
Will you advise us, Mr. Speaker, whether the Committee will be able, within the bounds of order, to consider issues arising out of new clause 14, or do the Government have to introduce a further recommittal motion to put right another bit of a mess that they have made for themselves?
Sir Patrick Cormack: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. The point of order of the hon. Member for Aylesbury (Mr. Lidington) was so long that it would help me if I could be allowed to respond to it.
I thank the hon. Gentleman for giving me notice of his point of order. Last night, the House agreed that the Hunting Bill be recommitted to the Standing Committee to which it previously stood committed. I think that that answers his first point
On the hon. Gentleman's second point, the recommittal motion authorises the Standing Committee only to make such amendments as it considers necessary in consequence of the addition of new clause 11. There is no reference to new clause 14 relating to mink.
Sir Patrick Cormack: With great respect, Mr. Speaker, the Bill is now significantly different from the Bill that was considered by the Standing Committee at some length, and which came before the House yesterday. As you know, we were given no notice of the Government's volte face on their own amendment, new clause 13. Is it not unprecedented and a discourtesy to the House and to you, Mr. Speaker, for the Government to railroad the Bill through so quickly? Would it not be more sensible for the Government to give one other week for this process?
Mr. Speaker: This is now a matter for the Standing Committee. It is not a matter for me.
Mr. David Cameron: Further to the point of order of my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack), Mr. Speaker. Given that the Bill is so different now—it is almost an entirely new Bill, proposing a total ban rather than regulated hunting—and given that it is to be discussed in less than a week by the Standing Committee and for only two hours, as I understand the programme motion, on the Floor of the House, one hour of which will be presumably Third Reading, can you give us any guidance on the exercise of the Parliament Act in circumstances in which the Bill will have been so little discussed in the House?
Mr. Speaker: The programme motion is to be debated later today. The hon. Gentleman may wish to raise these matters then. I would not wish to comment on the Parliament Act today.
Dr. Evan Harris: On a point of order, Mr. Speaker. Yesterday, the Department
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of Trade and Industry made an announcement via a written statement on civil partnerships. Given its nature, it should have been made first to the House. Indeed, you reiterated that point to the Department on 9 December. However, the announcement was extensively trailed in The Observer, including quotations from the Minister for Industry and the Regions, who then appeared on the "Today" programme before the written statement was available. The hon. Lady talked extensively about the content of the consultation document. Even then, copies of an 88-page document were not available throughout yesterday from any of the Vote Offices. When I entered the Chamber today, it was still not available, despite multiple requests by many hon. Members through the Vote Office to the responsible Department. Can you do anything to reiterate your urging on behalf of Back Benchers and Front Benchers who wish to know the content of these announcements in good time, and, indeed, to stress to Departments that such documents must be available to hon. Members through the Vote Office in the normal way, instead of being kept back, apparently for the purposes of media management?
Mr. Speaker: The House knows that I deprecate statements being made to the media about new policy announcements before they have been made to the House. In the case of the document to which the hon. Gentleman referred, I understand that what was published yesterday was a consultation paper, and that its publication was made known to the House in a written statement yesterday by the Deputy Minister for Women.
Dr. Liam Fox: On a point of order, Mr. Speaker. As you will know, the Government were defeated last night when the House of Lords voted overwhelmingly to call on them to revoke the Food Supplements (England) Regulations 2003 and renegotiate with the European Commission. Have you had an indication from Ministers, Mr. Speaker, about whether they want to clarify the Government's position? The need for such a statement is given greater urgency by the astonishing claim by the Under-Secretary of State for Health, the hon. Member for Welwyn Hatfield (Miss Johnson), during health questions today that supplements are being removed because they are unsafe, and it would give Ministers a chance to explain that supplements will remain on sale until they are banned by Europe.
Mr. Speaker: As the hon. Gentleman said, that was raised in Question Time today, and there is nothing to stop any hon. Member putting questions to the Minister concerned.
Mr. Tim Boswell: On a point of order, Mr. Speaker. I have given you prior notice of my point of order, and have advised the Members concerned. I wish to draw your attention to remarks by the hon. Member for Harrogate and Knaresborough (Mr. Willis) in last Monday's debate on student fees. At column 730, he said
"when we asked the House of Commons Library to comment on the Conservative proposals, it said:
`We couldn't understand the logic'."—[Official Report, 23 June 2003; Vol. 407, c. 730.]

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That point was reiterated in a debate last Wednesday by the hon. Member for Newbury (Mr. Rendel) at column 1081 and outside the House in the pages of the Romsey Advertiser by the hon. Member for Romsey (Sandra Gidley).
I was concerned that the Library, which has a hard-won and universal reputation for scrupulousness and accuracy, should have been quoted in such a way. I today received a response from the Librarian, who rightly preserved the confidentiality of exchanges between herself and the hon. Member in question. However, she concluded that
"the response as a whole was balanced and gave a fair assessment of an admittedly complex policy area."
She also commented that she was
"satisfied that Mr Willis misquoted somewhat selectively and out of context from the information we gave."
The hon. Member for Harrogate and Knaresborough, who is not here at the moment, may wish in due course to set matters straight, but I hope that you, Mr. Speaker, can remind all hon. Members that the absolute integrity and independence of Library briefings should not be compromised in any way.
Mr. Speaker: I should like to consider this matter. I will look into it and reply to the hon. Gentleman.

FINANCE BILL [WAYS AND MEANS]

  Intangible Fixed Assets
  Ordered,
  That provision be made in the Finance Bill amending Schedule 29 to the Finance Act 2002.—[Dawn Primarolo.]

  Inheritance tax: gifts with reservations
  Ordered,
  That provision be made in the Finance Bill amending section 102 of the Finance Act 1986.—[Dawn Primarolo]

Finance Bill (Programme) (No. 5)
Motion made, and Question proposed.
That in accordance with the resolution of the Programming Committee of 30th June 2003 and pursuant to the Programme Order of 6th May 2003 relating to the Finance Bill:
(1) Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion 8 hours after the commencement of proceedings on the first of the Ways and Means motions relating to the Bill set down this day.
(2) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion 9½ hours after the commencement of the proceedings on that motion.
(3) Paragraph (2) of this Order has effect notwithstanding the practice of the House as to the intervals between stages of Bills brought in upon Ways and Means Resolutions.
(4) The proceedings on consideration shall be taken in the order shown in the following Table, and each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in the second column.

TABLE

Proceedings

Time for conclusion of proceedings

New Clauses and new Schedules, except those relating to stamp duty land tax or stamp duty.

3½ hours after the commencement of the proceedings on the motion referred to in paragraph (1) above.

Amendments relating to Clauses 1 to 41 and Schedules 1 and 2; amendments relating to Clauses 130 to 211 and Schedules 21 to 42.

5½ hours after the commencement of those proceedings.

New Clauses and new Schedules relating to stamp duty land tax or stamp duty; amendments relating to Clauses 42 to 129 and Schedules 3 to 20; remaining proceedings.

8 hours after the commencement of those proceedings.

—[Dawn Primarolo.]
12.44 pm
Mr. Eric Forth: I do not understand why the Minister does not see fit to explain to us why on earth so little time is being allocated to such important material. The Government seem at least to be acting consistently in their wish to deny the House proper opportunity to debate the matters before it.
I suspect that were the Minister to seek to catch Mr. Speaker's eye, she would make some spurious claim about the programme motion being agreed in the Programming Committee. That, from my information, may be technically true, but the Minister knows that, in effect, the Opposition had no choice. We were offered inadequate time or potentially no time at all. Faced with such an option, my hon. Friends on the Programming Committee were probably right to accept, reluctantly and under the Government's pressure, inadequate time, because we would otherwise get even less time. I hope the Minister will not say that the Opposition signed up to the programme motion and were content with it. We are not.

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The reason we are not content is straightforward. The Finance Bill is always a special Bill, not only because of its content and the effect it has on everybody's daily lives, both individual and corporate, but because there exists no safety net in the House of Lords, as exists for other Bills. That puts the Finance Bill in a special category. I have never accepted an excuse that may be offered from time to time by the Government and others that if, by some mismanagement, we do not have adequate time in this House to scrutinise a Bill and hold the Government to account, there is always the safety net of the House of Lords.
As we know, their lordships do a wonderful job of scrutinising legislation. They sit for more hours and more days than we do, and they do the job that we should be doing. The reason we cannot do it is that the Government do not let us do it. Systematically, and this is another case in point, the Government take an arbitrary view of how much time the House requires to scrutinise the Government, and then feign surprise when we fail adequately to do so, in spite of the sterling efforts of my right hon. and hon. Friends. The Finance Bill is therefore in a special category. We have no safety net and no alternative to the scrutiny that the House can bring to bear. That is the general point.
What are the Government seriously suggesting in the programme motion? Not only are they arbitrarily imposing an overall time limit on our proceedings, but they compound that error by claiming to know how long the House will require for each grouping within, as we call it in this place, the knives. In the first grouping there are, by my calculation, nine distinct and separate issues to be considered in a mere three and a half hours. Those include items such as ISAs and PEPs, children's tax credit for persons subject to immigration control, capital allowances for small and medium-sized enterprises, and a very controversial issue that affects many people—vehicle excise duty on historic vehicles.
One could argue that each of those issues would merit three and a half hours. I am sure that hon. Members could take up that time subjecting those matters to proper scrutiny, but the Government tell us that all those issues together will be allowed only three and a half hours. There is the potential for several hundred Members of Parliament to want to contribute to a debate on behalf of their constituents on issues that may affect them individually, whether through their investments in ISAs and PEPs or their much loved historic vehicle, but they will be allowed only that limited amount of time.
In the next group there are seven major issues and 30 Government amendments. The Government are at this stage introducing substantial amendments to their own Finance Bill, yet they have the gall and the impertinence to tell us that only two hours will be allowed to consider those seven separate issues covered by 30 Government amendments. That is an insult to the House.
Finally, and perhaps worst of all, the Government are allowing us only two and a half hours to consider, of all things, stamp duty and stamp duty land tax—a major and extremely important issue covered, by my reckoning, by about 90 separate amendments. I hope that the point has by now become clear: whereas historically we have always been allowed two days for this stage of proceedings on the Finance Bill to consider such matters, the Government have taken it upon
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themselves to say, as they did originally, that one day should suffice, and they have only grudgingly given us a little extra time so that we now have eight hours in total to deal with all the matters that I have just adumbrated.
Why do the Government take the view that we have to finish our work and deliberations here in the House of Commons at 10 or 11 o'clock tonight? What is so magical about that hour? Does the Paymaster General turn into a pumpkin? Are we no longer able properly to consider the Finance Bill at later hours, as many of us who have been around for a while used to do routinely? Are the Government now telling us that so delicate are Labour Members, so lacking in stamina, so lacking in commitment to the parliamentary process, that they insist on bunking off at 10 or 11 o'clock at night regardless of whether the measure before the House has been given proper scrutiny? That is the only conclusion that we can draw—it really is. Instead of saying, "Let us examine the size, scope and nature of the issues and then attempt to agree on what constitutes a reasonable amount of time", the Government march along in hobnailed boots—I am sure the Paymaster General rarely wears such footwear, but I suspect that on this occasion she did so—and tell us that this arbitrary amount of time is the time that we will take: three and a half hours for nine major issues, two hours for seven further issues, and two and a half hours for a group encompassing 90 separate amendments. The figures speak for themselves.
Mr. John Burnett: I endorse the right hon. Gentleman's observations. I hope that he agrees with me that, given the shortage of time in Committee and in view of the matters being drawn to our attention by business people throughout the country, surely now is an opportunity to have at least two or three days for Report and Third Reading.
Mr. Forth: The hon. Gentleman is right. I suspect that even Committee stage did not take as much time as has often and traditionally been allotted in the past. He makes a wholly valid point, and I admit to him and to my colleagues that I might have been rather selfish in concentrating on the parliamentary aspects of the programme. Outside interests legitimately take as much interest in and have as much to say about the Finance Bill as about any other measure, and perhaps more than most. At this stage, given the new material being introduced by the Government, such outside interests should be able to expect Members of Parliament to have ample time in which to reflect their legitimate views.
I suspect that people outside this place looking in on the parliamentary process can only draw the same conclusion as I have drawn. The Government do not really care what they have to say and do not see any need for anyone outside this place or, indeed, Members of Parliament to show a proper interest in the contents of the Finance Bill. Instead, we have the usual Government assumption that because they will it, it must be so, and there is no need for proper scrutiny. This is yet another sad episode in what I can only perceive to be the decline of opportunities for the House of Commons properly to scrutinise the Government's business.
I hope on this occasion, as I always do, that the House will resist the programme motion—or even that the Paymaster General will have a last-minute change of

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heart. I am always optimistic about such things and the compliant look on her face makes me even more optimistic. I hope that she is about to tell us that, having heard my argument, she is prepared to give us more time. That is my earnest wish. If that is not the case, those outside the House can draw only one conclusion.
12.54 pm
Mr. David Laws: I am not quite as optimistic as the shadow Leader of the House, but I rise to pick up some of his comments without wanting to eat further into the precious time available to us today.
It is fair to say that this year's Finance Bill has not been politically high profile. Perhaps that tempted the Government to think that they could accelerate the progress of the Bill through Parliament, including the proceedings to be dealt with today. However, the Bill's lack of a high political profile does not mean that it does not contain a tremendous amount of very important detail that is important to individuals, businesses and those who have to use the tax system. This is the fourth longest Finance Bill on record, and those who have examined the Committee proceedings will know that although we were able to cover a substantial proportion of the Bill, parts that arose during the earlier sittings in particular were not touched upon. Given that those parts deal with some of the issues that are most important to us, and which might create problems for the tax system in future, we must be concerned.
Also of concern is the fact that we are faced with an accelerated timetable in circumstances in which we cannot rely on the other place to mop up some of the aspects that we are unable to cover. We have to be able to cover all of the issues contained in the Finance Bill in adequate time during proceedings in this place. Given the length of this year's Finance Bill, it is not obvious why we are to have only nine and a half hours today to debate the range of issues encompassed by the amendments, compared with approximately 13 and a quarter hours of debate last year. Even if I do not share the optimism expressed by the shadow Leader of the House that the Paymaster General will suddenly announce that the House will sit into the early hours of the morning, I ask her at least to put on the record the fact that this year's curtailment to one day of the final stages of the Finance Bill does not set a precedent for future years.
12.56 pm
Pete Wishart: I will be brief. I always find debates on programme motions intriguing in that they eat into the time that hon. Members say they desperately require.
I take issue with the shadow Leader of the House who, when listing the important amendments before the House, failed to mention the oil and gas industry-related amendments tabled by Scottish National party Members. That was uncharacteristic of him: as a Scot, he knows that the industry supports approximately 250,000 people and has brought £160 billion to the Treasury over the past 25 years.
My point is direct and straightforward. In Committee, SNP Members tabled two amendments: one on the whisky industry and the other relating to our
182
concerns about the changes to the fiscal regime covering the North sea oil and gas industry. The amendments were submitted in good faith and we were given a reasonable assurance through the usual channels that we would get our usual time during Committee stage to debate those issues. However, our amendments were put way down the list and our time was squeezed by a developing row between the Opposition and Government Front Benches that resulted in a series of inconsequential amendments being tabled and debated at length. Although we had time to debate our whisky amendment, our amendment on oil and gas fell without debate.
We believed that we would therefore have the opportunity to debate that subject on Report, so we tabled a similar amendment. However, such are the rigours of the programme motion that it seems likely that we will be disappointed once again. It is no great secret that the programme motion will pass, so let me make an appeal—a plea—to Front Benchers and others who seek to catch your eye during the debate, Mr. Speaker: give us this opportunity to debate oil and gas, even though it is way down at the bottom of the list of matters for debate.
Mr. Stephen O'Brien: I want to put on the record something that the hon. Gentleman, who was not a member of the Programming Committee, may not know. A strong submission and argument was made by Her Majesty's official Opposition, supported by the Liberal Democrats, that there should be no knife after new clause 9 and that we should have a package of time running from the beginning of our consideration of amendments to the start of consideration of the amendments relating to stamp duty. Had that been allowed, the hon. Gentleman would not have to suffer the concerns that he has expressed. As he knows, the order in which new clauses are considered depends to some extent on the time of their tabling, so it behoves him to try to get his new clauses tabled rather more quickly. None the less, it is important that he recognise that the Opposition did all we could to assist him. It was entirely the Government's edict that demanded that a knife fall at the point that gives rise to his complaint.
Pete Wishart: I am grateful to the hon. Gentleman, and I appreciate his assistance in the Programming Committee. I go further and thank him for the assistance that Conservative Front Benchers gave us in the Standing Committee: they rushed through business so that we had an opportunity at least to discuss our concerns about the whisky industry. I hope that similar consideration is given today.
I am sure that you, Mr. Speaker, agree that debates on the Finance Bill should be open and accessible to hon. Members of all parties, regardless of size. The oil and gas industry is a massive industry of substantial significance to Scotland. I hope that we will secure assistance and that we will reach our amendments, which are of fundamental importance to Scotland.
12.59 pm
The Paymaster General (Dawn Primarolo): To give the hon. Member for North Tayside (Pete Wishart) the assistance that he seeks, I shall be brief.

183
The record shows that the motion was agreed to without a Division. If the shadow Leader of the House checks the draft programme motion that was circulated to his representatives last Thursday, he will see that the Government, in discussions with the Opposition, ensured that the nine and a half hours allocated for debate, including of the ways and means and programme motions, were protected. The motion provides the equivalent of one and a half days and sets out three groupings for debate—the new clauses, the amendments and a very substantial section 3 on stamp duty.
Mr. David Wilshire: Will the Paymaster General give way?
Dawn Primarolo: I should like to finish my comments. The hon. Gentleman was present in the Committee, where there was discussion about the division of time, but no dispute about how much time would be taken in respect of the first group, which consists of new clauses, and the second group, which consists of amendments. There was a question about the inclusion of the programme and the way in which we proceeded. If less time is taken on the new clauses, more time will roll forward into the amendments—
Mr. Wilshire: Will the right hon. Lady give way?
Dawn Primarolo: I am explaining the position. If 45 minutes are not taken in debating the programme motion, the time will roll forward and there will be more time for the new clauses.
Mr. Wilshire rose—
Mr. Stephen O'Brien rose—
Dawn Primarolo: I say to the hon. Gentlemen that every effort was made in seeking from the Opposition indications that they wished the business to follow a particular pattern.
Mr. Wilshire: Will the right hon. Lady give way?
Dawn Primarolo: No. Opposition Members asked for two days. It is not always possible to have two days' debate on the Finance Bill, which, like all Government business, is dealt with on the basis of the availability of time and the business of the House in looking at the due process of consideration.
Mr. Wilshire: Will the right hon. Lady give way?
Dawn Primarolo: I will not do so, because I am explaining that, as has been discussed, as the record demonstrates, and as those who were present in the Committee can testify, after considerable informal discussion we finally reached agreement without a Division on today's business. That is why I moved the motion formally.
Mr. Wilshire: On a point of order, Mr. Speaker. Is it in order for a Member of this House to present a picture of what took place at a meeting elsewhere that is not in accordance with what actually occurred?
Mr. Speaker: That is a point for debate. Hon. Members have an opportunity to rebut any case that is made.
Mr. Stephen O'Brien rose—
Mr. Speaker: Does the hon. Gentleman wish to raise a point of order?
Dawn Primarolo: I wished to give way to the hon. Gentleman.
Mr. O'Brien: I am grateful to the Paymaster General for at last giving way; I had not realised that she was doing so, as it appeared that she had concluded her speech.
The Paymaster General will recall that, in the Programming Committee yesterday, after extensive formal and informal discussions, and in the absence of the Government being prepared even to consider allowing the usual two days for Report and Third Reading of the Finance Bill, Her Majesty's official Opposition, under protest and recording their displeasure at the arrogant approach taken by the Government in confining today's business to one parliamentary day, albeit with a few extended hours, and with some dispute on where the knives fell, decided that it was better when faced with that situation that we should pragmatically and responsibly seek to ensure that there was some form of workable programme for today. We did so under protest at not being able to secure two days. Furthermore, as she knows, it would therefore have been wholly inappropriate for us merely to play gesture politics by voting "no" after we had come through informal discussions on our secondary line of argument about getting the programme that we wanted for today.
Finally, as the Paymaster General well knows, the important concession extracted from the Government was to get at least some time by way of protected business. That formed a central part of the negotiations. I hope that the record will show that the primary argument is about having two days—[Interruption.] This may be an intervention, but I am making sure that the record is set straight about the fact that two days are required and that it is under protest that we agreed to the proposals, pragmatically and responsibly, to ensure that today's programme can at least work, despite the falling of the first knife, which we do not regard as necessary.
Dawn Primarolo: There we have it. The Opposition agreed to the programme motion as a workable programme for today. They said that they wanted two days and the Government have met their concerns and given them more time. That is what is being proposed and the hon. Gentleman confirms that.
Mr. John Redwood: Will the Paymaster General give way?
Dawn Primarolo: No.

185
The hon. Member for Eddisbury (Mr. O'Brien) was present in the Programming Committee, which is why I gave way to him, and he has confirmed—I quote him—that the Opposition agreed in a pragmatic way that the programme was workable for the business today. I commend the motion to the House.
1.6 pm
Mr. David Wilshire: I shall be as brief as I possibly can. We have heard some inaccuracies from the Government Front Bench. I was present in the Programming Committee yesterday afternoon. The version of events that we have heard from the Paymaster General does not represent what genuinely took place. The meeting started with a discussion of whether there should be two days of debate. That is all that the debate was about. I personally made the point that we believe that two days are necessary. We discussed that point and continued to do so until she said, in words of one syllable, "There will not be another day"—[Interruption.] I do not want to give way to the Paymaster General; she would not give way to Opposition Members, so I shall return the compliment. I have learned my lessons from her.
The first part of the discussion was about the need for two days. We got an emphatic no and were told that there would not be two days. Such an approach leaves an Opposition with two options—to be responsible or to take a wrecking approach. Faced with an intransigent and arrogant Government who were not prepared to respect democracy, we had no choice but to make the best of a bad job. That was explained at the meeting, and it is to my regret, and I hope that of the House, that the Paymaster General did not do the decent thing and say exactly what happened rather than give her own version, saying "Ah well, they agreed with it." We did not do so; we objected to what went on and I object to what is going on now. The real version should be the version that is in the record, and not her contrived version.
1.7 pm
Mr. John Redwood: I have declared my interests in the register.
I am amazed by the Government's attitude and conduct in this matter, and I am very disappointed, as I had thought that the Paymaster General was one of those rarer Ministers in this Administration who understood the feelings of the House and tried from time to time to adjust the script accordingly. Today, she is failing us badly, but I should like to have one quick go at persuading her to adopt a new way of handling this business in view of the great unease among Opposition Members about the shortage of time and the truncated programme that we are being asked to approve.
I see on the Order Paper that, towards the end of our proceedings today, there will be a relatively short debate on what amounts not merely to a completely new tax, but to a completely new way of handling that new tax and running our economy. We are invited to approve within two and a half hours a complete rejigging of stamp duty and stamp duty land tax and, I assume, its use—at a much higher level than we have been accustomed to in this country regarding property
186
taxes—as a regulator of the economy, instead of the normal monetary and interest rate methods, in preparation for joining the euro.
I think that that is worth a day's debate on its own, and separate legislation. It is a massive change in the conduct of economy policy that will have a huge impact on homeowners and house values throughout the country if the Government are planning, on the back of that legislative change, to impose much higher rates of stamp duty to bring us into line with our European partners and to try to take the heat out of the housing market, of which euroland does not seem to approve.
I would therefore suggest to the Paymaster General, at this late stage, that she allow us sufficient time today to do all the business, up to and including that on insurance companies, which must be completed in five and a half hours but could probably be done within the eight hours that we have overall. The stamp duty provisions should be brought back at a later stage as separate legislation to allow us to have a proper debate on a new and very dangerous method of running our economy.
Question put:—
The House divided: Ayes 273, Noes 155.

Division No. 262]

[1:10 pm

AYES

Ainger, Nick

Clark, Paul (Gillingham)

Ainsworth, Bob (Cov'try NE)

Clarke, rh Tom (Coatbridge &

Allen, Graham

Chryston)

Anderson, rh Donald (Swansea E)

Clarke, Tony (Northampton S)

Atherton, Ms Candy

Clelland, David

Atkins, Charlotte

Clwyd, Ann (Cynon V)

Austin, John

Coffey, Ms Ann

Bailey, Adrian

Cohen, Harry

Baird, Vera

Cook, Frank (Stockton N)

Barnes, Harry

Cook, rh Robin (Livingston)

Battle, John

Corbyn, Jeremy

Bayley, Hugh

Cousins, Jim

Begg, Miss Anne

Cox, Tom (Tooting)

Bell, Stuart

Cranston, Ross

Benn, Hilary

Cruddas, Jon

Bennett, Andrew

Cryer, Ann (Keighley)

Benton, Joe (Bootle)

Cryer, John (Hornchurch)

Berry, Roger

Cummings, John

Best, Harold

Cunningham, rh Dr. Jack

Betts, Clive

(Copeland)

Blackman, Liz

Cunningham, Jim (Coventry S)

Blears, Ms Hazel

Cunningham, Tony (Workington)

Blizzard, Bob

Dalyell, Tam

Borrow, David

Darling, rh Alistair

Bradley, rh Keith (Withington)

Davey, Valerie (Bristol W)

Bradley, Peter (The Wrekin)

David, Wayne

Brennan, Kevin

Davidson, Ian

Brown, Russell (Dumfries)

Davies, rh Denzil (Llanelli)

Burden, Richard

Davies, Geraint (Croydon C)

Burgon, Colin

Davis, rh Terry (B'ham Hodge H)

Byers, rh Stephen

Dawson, Hilton

Campbell, Alan (Tynemouth)

Denham, rh John

Campbell, Mrs Anne (C'bridge)

Dhanda, Parmjit

Campbell, Ronnie (Blyth V)

Dismore, Andrew

Caplin, Ivor

Dobbin, Jim (Heywood)

Casale, Roger

Dobson, rh Frank

Cawsey, Ian (Brigg)

Donohoe, Brian H.

Challen, Colin

Doran, Frank

Chapman, Ben (Wirral S)

Drew, David (Stroud)

Clapham, Michael

Eagle, Angela (Wallasey)

Clark, Mrs Helen (Peterborough)

Efford, Clive

Clark, Dr. Lynda (Edinburgh

Ellman, Mrs Louise

Pentlands)

Etherington, Bill

187

Farrelly, Paul

Lepper, David

Field, rh Frank (Birkenhead)

Leslie, Christopher

Fitzpatrick, Jim

Levitt, Tom (High Peak)

Fitzsimons, Mrs Lorna

Lewis, Ivan (Bury S)

Follett, Barbara

Lewis, Terry (Worsley)

Foster, rh Derek

Linton, Martin

Foster, Michael Jabez (Hastings

Lloyd, Tony (Manchester C)

& Rye)

Love, Andrew

Foulkes, rh George

Lucas, Ian (Wrexham)

Gerrard, Neil

Luke, Iain (Dundee E)

Gilroy, Linda

Lyons, John (Strathkelvin)

Godsiff, Roger

McAvoy, Thomas

Goggins, Paul

McCabe, Stephen

Griffiths, Jane (Reading E)

McDonagh, Siobhain

Griffiths, Nigel (Edinburgh S)

McDonnell, John

Griffiths, Win (Bridgend)

McFall, John

Grogan, John

McIsaac, Shona

Hain, rh Peter

McKechin, Ann

Hall, Mike (Weaver Vale)

Mackinlay, Andrew

Hall, Patrick (Bedford)

Mactaggart, Fiona

Hamilton, David (Midlothian)

McWalter, Tony

Hamilton, Fabian (Leeds NE)

Mahmood, Khalid

Hanson, David

Mahon, Mrs Alice

Harris, Tom (Glasgow Cathcart)

Mallaber, Judy

Havard, Dai (Merthyr Tydfil &

Mandelson, rh Peter

Rhymney)

Mann, John (Bassetlaw)

Healey, John

Marris, Rob (Wolverh'ton SW)

Henderson, Ivan (Harwich)

Marsden, Gordon (Blackpool S)

Hendrick, Mark

Marshall, David (Glasgow

Hepburn, Stephen

Shettleston)

Hesford, Stephen

Martlew, Eric

Hewitt, rh Ms Patricia

Meale, Alan (Mansfield)

Heyes, David

Merron, Gillian

Hinchliffe, David

Michael, rh Alun

Hodge, Margaret

Miliband, David

Hoey, Kate (Vauxhall)

Miller, Andrew

Hood, Jimmy (Clydesdale)

Moffatt, Laura

Hoon, rh Geoffrey

Mole, Chris

Hopkins, Kelvin

Moran, Margaret

Howarth, George (Knowsley N &

Morgan, Julie

Sefton E)

Mountford, Kali

Howells, Dr. Kim

Mudie, George

Hughes, Beverley (Stretford &

Murphy, Denis (Wansbeck)

Urmston)

Murphy, Jim (Eastwood)

Hughes, Kevin (Doncaster N)

Naysmith, Dr. Doug

Humble, Mrs Joan

Norris, Dan (Wansdyke)

Hurst, Alan (Braintree)

O'Brien, Bill (Normanton)

Hutton, rh John

O'Brien, Mike (N Warks)

Iddon, Dr. Brian

O'Hara, Edward

Illsley, Eric

Olner, Bill

Irranca-Davies, Huw

O'Neill, Martin

Jackson, Glenda (Hampstead &

Osborne, Sandra (Ayr)

Highgate)

Pickthall, Colin

Jackson, Helen (Hillsborough)

Pike, Peter (Burnley)

Jenkins, Brian

Pope, Greg (Hyndburn)

Johnson, Miss Melanie (Welwyn

Prentice, Ms Bridget (Lewisham

Hatfield)

E)

Jones, Helen (Warrington N)

Prentice, Gordon (Pendle)

Jones, Jon Owen (Cardiff C)

Primarolo, rh Dawn

Jones, Lynne (Selly Oak)

Purchase, Ken

Kaufman, rh Gerald

Quinn, Lawrie

Keeble, Ms Sally

Rammell, Bill

Keen, Alan (Feltham)

Reid, rh Dr. John (Hamilton N &

Kemp, Fraser

Bellshill)

Khabra, Piara S.

Robertson, John (Glasgow

Kidney, David

Anniesland)

Kilfoyle, Peter

Roche, Mrs Barbara

King, Andy (Rugby)

Rooney, Terry

King, Ms Oona (Bethnal Green &

Ross, Ernie (Dundee W)

Bow)

Roy, Frank (Motherwell)

Knight, Jim (S Dorset)

Ruane, Chris

Kumar, Dr. Ashok

Russell, Ms Christine (City of

Ladyman, Dr. Stephen

Chester)

Lammy, David

Ryan, Joan (Enfield N)

Lawrence, Mrs Jackie

Salter, Martin

Laxton, Bob (Derby N)

Sarwar, Mohammad

188

Savidge, Malcolm

Turner, Dennis (Wolverh'ton SE)

Sawford, Phil

Turner, Dr. Desmond (Brighton

Sedgemore, Brian

Kemptown)

Shaw, Jonathan

Turner, Neil (Wigan)

Sheridan, Jim

Twigg, Derek (Halton)

Skinner, Dennis

Vis, Dr. Rudi

Smith, rh Andrew (Oxford E)

Walley, Ms Joan

Smith, rh Chris (Islington S &

Wareing, Robert N.

Finsbury)

Watson, Tom (W Bromwich E)

Smith, Geraldine (Morecambe &

Watts, David

Lunesdale)

White, Brian

Smith, Jacqui (Redditch)

Whitehead, Dr. Alan

Smith, John (Glamorgan)

Williams, rh Alan (Swansea W)

Southworth, Helen

Williams, Betty (Conwy)

Starkey, Dr. Phyllis

Winterton, Ms Rosie (Doncaster

Steinberg, Gerry

C)

Stevenson, George

Woodward, Shaun

Stewart, Ian (Eccles)

Woolas, Phil

Stinchcombe, Paul

Worthington, Tony

Stoate, Dr. Howard

Wray, James (Glasgow

Stuart, Ms Gisela

Baillieston)

Sutcliffe, Gerry

Wright, Anthony D. (Gt

Tami, Mark (Alyn)

Yarmouth)

Taylor, Dari (Stockton S)

Wright, David (Telford)

Thomas, Gareth (Clwyd W)

Wright, Tony (Cannock)

Thomas, Gareth (Harrow W)

Wyatt, Derek

Tipping, Paddy

Touhig, Don (Islwyn)

Tellers for the Ayes:

Trickett, Jon

Mr. John Heppell and

Truswell, Paul

Vernon Coaker

NOES

Ainsworth, Peter (E Surrey)

Evans, Nigel

Allan, Richard

Ewing, Annabelle

Amess, David

Fabricant, Michael

Atkinson, David (Bour'mth E)

Field, Mark (Cities of London &

Atkinson, Peter (Hexham)

Westminster)

Bacon, Richard

Flight, Howard

Baldry, Tony

Flook, Adrian

Barker, Gregory

Forth, rh Eric

Baron, John (Billericay)

Foster, Don (Bath)

Barrett, John

Fox, Dr. Liam

Bellingham, Henry

Francois, Mark

Bercow, John

Garnier, Edward

Beresford, Sir Paul

George, Andrew (St. Ives)

Blunt, Crispin

Gibb, Nick (Bognor Regis)

Boswell, Tim

Gillan, Mrs Cheryl

Bottomley, Peter (Worthing W)

Goodman, Paul

Brake, Tom (Carshalton)

Grayling, Chris

Brazier, Julian

Green, Damian (Ashford)

Breed, Colin

Greenway, John

Brooke, Mrs Annette L.

Grieve, Dominic

Browning, Mrs Angela

Gummer, rh John

Bruce, Malcolm

Hague, rh William

Burnett, John

Hammond, Philip

Burns, Simon

Hancock, Mike

Burt, Alistair

Harris, Dr. Evan (Oxford W &

Butterfill, John

Abingdon)

Cable, Dr. Vincent

Harvey, Nick

Calton, Mrs Patsy

Hawkins, Nick

Cameron, David

Heath, David

Campbell, rh Menzies (NE Fife)

Hendry, Charles

Carmichael, Alistair

Hermon, Lady

Chapman, Sir Sydney (Chipping

Horam, John (Orpington)

Barnet)

Howarth, Gerald (Aldershot)

Chidgey, David

Jack, rh Michael

Clarke, rh Kenneth (Rushcliffe)

Jenkin, Bernard

Clifton-Brown, Geoffrey

Keetch, Paul

Collins, Tim

Key, Robert (Salisbury)

Conway, Derek

Kirkbride, Miss Julie

Cormack, Sir Patrick

Kirkwood, Sir Archy

Curry, rh David

Knight, rh Greg (E Yorkshire)

Davey, Edward (Kingston)

Laing, Mrs Eleanor

Djanogly, Jonathan

Lamb, Norman

Doughty, Sue

Lansley, Andrew

Duncan, Peter (Galloway)

Letwin, rh Oliver

189

Liddell-Grainger, Ian

Shepherd, Richard

Lidington, David

Simmonds, Mark

Lilley, rh Peter

Simpson, Keith (M-Norfolk)

Loughton, Tim

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

McIntosh, Miss Anne

Kincardine)

Mackay, rh Andrew

Soames, Nicholas

Maclean, rh David

Spink, Bob (Castle Point)

McLoughlin, Patrick

Stanley, rh Sir John

Malins, Humfrey

Streeter, Gary

Maples, John

Stunell, Andrew

Marsden, Paul (Shrewsbury &

Swire, Hugo (E Devon)

Atcham)

Syms, Robert

Mawhinney, rh Sir Brian

Taylor, John (Solihull)

May, Mrs Theresa

Taylor, Dr. Richard (Wyre F)

Murrison, Dr. Andrew

Taylor, Sir Teddy

Norman, Archie

Thomas, Simon (Ceredigion)

O'Brien, Stephen (Eddisbury)

Thurso, John

Ottaway, Richard

Tonge, Dr. Jenny

Page, Richard

Tredinnick, David

Paice, James

Trimble, rh David

Price, Adam (E Carmarthen &

Turner, Andrew (Isle of Wight)

Dinefwr)

Tyrie, Andrew

Prisk, Mark (Hertford)

Viggers, Peter

Pugh, Dr. John

Walter, Robert

Randall John

Waterson, Nigel

Redwood rh John

Watkinson, Angela

Robathan, Andrew

Weir, Michael

Robertson, Angus (Moray)

Widdecombe, rh Miss Ann

Robertson, Hugh (Faversham &

Wiggin, Bill

M-Kent)

Williams, Hywel (Caernarfon)

Willis, Phil

Robertson, Laurence (Tewk'b'ry)

Winterton, Ann (Congleton)

Robinson, Peter (Belfast E)

Winterton, Sir Nicholas

Roe, Mrs Marion

(Macclesfield)

Rosindell, Andrew

Wishart, Pete

Ruffley, David

Young, rh Sir George

Russell, Bob (Colchester)

Sanders, Adrian

Tellers for the Noes:

Sayeed, Jonathan

Mr. Mark Hoban and

Selous, Andrew

Mr. David Wilshire

Question accordingly agreed to.

Orders of the Day
  Finance Bill
  As amended in the Committee and the Standing Committee, considered.
  Finance Bill
    New Clause 6

      INTANGIBLE FIXED ASSETS: TAX AVOIDANCE ARRANGEMENTS AND RELATED PARTIES
      (1) Schedule 29 to the Finance Act 2002 (c. 23) (gains and losses of a company from intangible fixed assets) is amended as follows.
      (2) In paragraph 111 (tax avoidance arrangements to be disregarded)—

      (a) in subparagraph (1) for the words following "in determining" substitute "whether a debit or credit is to be brought into account under this Schedule or the amount of any such debit or credit", and

      (b) in subparagraph (2)—

      (i) for "under paragraph 9" in paragraph (a), and

      (ii) for "under Part 4" in paragraph (b), substitute "under this Schedule".

      (3) In paragraph 95(1) (cases in which persons are "related parties") at the end add—

      "Case Four

      P is a company and C is another company in the same group."

      (4) The amendments in this section—

      (a) have effect in relation to the debits or credits to be brought into account for accounting periods beginning on or after 20th June 2003, and

      (b) in relation to the debits or credits to be brought into account for any such period shall be deemed always to have had effect.

      (5) For this purpose an accounting period beginning before, and ending on or after, that date is treated as if so much of that period as falls before that date, and so much of that period as falls on or after that date, were separate accounting periods.'.—[Dawn Primarolo.]
      Brought up, and read the First time.
      1.24 pm
      The Paymaster General (Dawn Primarolo): I beg to move, That the clause be read a Second time.
      Last year, after extensive consultation, the Government introduced new tax rules for companies' good will and intangible assets, such as patents, brand names and copyrights, which are vital for a modern, knowledge-based economy. The new rules, which are in schedule 29 of the Finance Act 2002, broadly allow companies to claim tax relief for those assets as they write them down in their accounts. Companies may alternatively elect to treat them as though they were written down at 4 per cent. per annum. The rules are meant to apply only to assets created by or acquired from an unrelated party after 31 March 2002.
      There is clear evidence of marketing tax avoidance schemes that are intended to bring assets that already existed on 31 March 2002 into the new regime to claim relief under the alternative 4 per cent. option. We estimate that there are approximately £400 billion to £600 billion of potentially eligible assets. If only a small fraction were brought into the new tax regime, the cost

      191
      would be enormous, apart from the fact that that was not the intention. The cost would continue for the next 25 years.
      The avoidance schemes rely first on the fact that the anti-avoidance rule does not currently apply to the 4 per cent. relief. They then try to exploit a mismatch in the definitions of "related persons" in the intangibles rules and of a group for capital gains purposes. To put it simply, they try to transfer assets in a group for capital gains purposes so that no capital gains tax arises, while arranging matters so that the transfer is between unrelated persons for intangible assets purposes. Thus, the asset is treated as acquired from an unrelated person and can be brought within the new regime.
      The new clause would block such schemes by widening the scope of the anti-avoidance rules in schedule 29 of the 2002 Act and by tightening the definition of "related persons". It is a modest and proportionate response to an attempt to exploit a new relief. I underline our determination to act against tax avoidance speedily and firmly.
      I commend the new clause to hon. Members and I am happy to respond to any questions.
      Mr. Stephen O'Brien: The Paymaster General told us in a written statement on 20 June after the Committee had concluded its proceedings on 17 June that such a new clause would be tabled. It prompts us to ask why the Treasury and the Inland Revenue were unable to formulate it before the Finance Bill was considered or during the Committee's proceedings. That would have been more appropriate than taking up time now.
      It is clear that the changes will have an immediate effect and the new clause therefore smacks of panic by the Treasury and the Government. It is part of a transparent and notable theme that will become apparent in our proceedings today, in that it reflects a panic in the Treasury, which has splurged and wasted so much money that it now has to gather much, make every part of the tax system sweat and, above all, change the balance between the rights of the citizen taxpayer and those of the Government. I do not wish to explore that more general theme now because there will opportunities to do that later.
      The background note to the new clause is useful and I daresay that it would not have attracted controversy if it had been tabled when we considered the Bill in Committee. Paragraph 22 of the background notes states:
      "There is now clear evidence",
      to which the Paymaster General referred,
      "that companies are seeking to overcome the restrictions in Schedule 29, by exploiting a perceived mismatch between the definition of related persons in the intangibles rules and the definition of a group for capital gains purposes as well as the fact that the anti-avoidance rules in paragraph 111 of Schedule 29 do not extend to cover the optional 4 per cent. scheme."
      The new clause therefore tries to remove the mismatch. It has been decided that the provision will not be retrospective—a major issue with which we had frequently to contend in Committee. We may dispute the Government's ability to deploy money or doubt whether they deserve to receive so much taxpayers' money, given the way in which it is deployed—let alone wasted—on behalf of taxpayers.
      192
      None the less, because the proposal is not retrospective and because the changes seem to be in line with the consultation—had it been considered in a timely manner in Committee, it might have attracted our broad non-objection—we may on this occasion have to accept that the Government are entitled to introduce it, notwithstanding those reservations.
      1.30 pm
      Mr. John Redwood: I have declared my interest in the register. I am rather perplexed by this proposal. I can quite understand why the Government need more and more money—as my hon. Friend the Member for Eddisbury (Mr. O'Brien) rightly said, they are wasting so much of it—but I am not sure that this is the final answer. The Government are legislating at the last minute in a panic, and my hon. Friend is right to ask why a whole year has elapsed since the previous legislation, why nothing was forthcoming if the matter was this urgent, and why nothing was forthcoming when the original Bill was considered in Committee. Why is this proposal being introduced from 20 June, as if huge gaps appeared in the revenue from that date onwards but no such problem had existed previously?
      If the Paymaster General is right in saying that she is going to lose revenue unless she makes this particular change, is she not running the risk—if the change is adopted—of losing revenue in other ways following the bolting of this particular stable door? For example, might not many more exchanges of brand assets and other intangibles take place between groups of companies? I believe that it is becoming quite fashionable for certain large companies owning lots of brands to concentrate on their top six or 12 and to sell their other brands. Those other brands may be very advantageous or interesting to competitors or other companies in related fields, which, by dint of acquisition from an external group, could then trigger the advantages of the Finance Act 2002.
      Is the Paymaster General worried that this change might simply shift the method of making sensible tax-planning arrangements from transfers of brands and intangibles between companies in the same group, to transactions between different groups of companies? Has she considered that if the closure of this loophole leads to the tax-planning advantages becoming much greater for one system than for the other, the legislation itself might trigger changes in corporate structure? Might it not be better for shareholder value for the boards of companies owning a substantial number of brands to de-merge different companies within the group, and then to transfer brands and assets of an intangible nature afterwards, so that they can get round this particular closing of the loophole?
      I fear that the Paymaster General has not come up with the final answer, and that what she is really seeking to do is to repeal schedule 29, but has yet to realise that the insatiable demand for revenue requires that the Government take such action. As a result, she has brought a half-baked half-measure to the House today, and I doubt whether it will be found sufficient. I ask her to address my worry that closing one door simply opens

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      up others that industry and commerce will take advantage of, because of the obvious tax-planning advantages in so doing.
      Dawn Primarolo: I should point out to the right hon. Member for Wokingham (Mr. Redwood) that this regime was introduced last year with the support of his party, following extensive consultation with business. The facility that it provides within the tax system—a facility that did not exist under his Government or in the first years of this Government—has been widely welcomed.
      The right hon. Gentleman asked me the $64,000 question: will tax planners continue to try to tax plan? Well, I expect that they will. As a Minister, the issue for me is this. I have seen marketed specific suggestions and arrangements that would lead to a loss of revenue to the taxpayer, collected on the Government's behalf, in respect of what was introduced last year as essentially a relieving measure. I should point out to the right hon. Gentleman that the proposals are specific and targeted and will deal with those avoidance measures.
      Mr. Redwood: I realise that the regime was introduced last year with our agreement; indeed, I welcomed it at the time and thought it an excellent idea. My understanding was that the whole idea was to charge less tax on companies and therefore, from the Treasury's point of view, to lose revenue. My worry this afternoon is that the Government seem to be trying to reverse that. They appear to regret the fact that they lost revenue through a measure that I thought was introduced as a tax relief. My suspicion is that what they are really seeking to do in due course is to scrap the whole thing, which I would regret deeply.
      Dawn Primarolo: I can assure the right hon. Gentleman that that is not the case. If he looks at the legislation he will discover the specific intended use of the 4 per cent. annual deduction, which, as I explained in my opening remarks, is being abused. We are therefore seeking to prevent that by introducing anti-avoidance measures.
      Mr. John Bercow: Will the Paymaster General give way?
      Dawn Primarolo: If I may, I shall first answer the questions from the hon. Member for Eddisbury (Mr. O'Brien). Perhaps I did not hear him correctly, but my understanding from what he said is that the Opposition will not be dividing the House on this issue.
      Mr. Stephen O'Brien indicated assent.
      Dawn Primarolo: I thank the hon. Gentleman. His first question was why the proposal has been introduced now and not in the original Bill. Regrettably, I was not able to table the new clause in time: the Revenue has only recently received the relevant information, which requires us to act immediately. As he knows—we have discussed this issue before—it was the practice of the previous Government and of other Governments that
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      anti-avoidance legislation becomes effective from the date of its announcement, and that is the practice of this Government.
      I know that the hon. Gentleman shares my view about the importance of the issue of retrospection. Whatever the view of schemes introduced before 20 June, there is no retrospection in this proposal. It deals immediately with what we understand to be the perceived problem with the arrangements, in terms of exploiting an aspect of this legislation. This House never intended that the arrangements be used in this way, and I am grateful to him for his support on this issue.
      Mr. Bercow: I am very grateful to the Paymaster General for giving way. She is bringing a certain world-weary cynicism to today's exchanges, and I can tell that she is very taxed by, and disappointed by, the incidents of abuse that she believes she has identified. However, for the edification of the House and in order to satisfy the legitimate curiosity of my constituents in Market Hill, Buckingham, this weekend, would she care to identify three examples of especially grave abuse that the new clause is designed to tackle?
      Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I should point out to the hon. Gentleman that there was probably a shorter way of putting that point.
      Dawn Primarolo: I can do better than that—I can explain to the hon. Gentleman, so that he can explain to his constituents, why the new provisions are needed and the otherwise potential loss to the Treasury, to which I referred in my opening remarks. He will surely agree with me that it is better to prevent loss of revenue through speedy action than to sustain such loss in the first place. The provisions are needed because of the way in which the aims of two parts of the legislation seek to be achieved. The provision on the related party is clear and effective where it applies. It gives certainty to the meaning of the law—a meaning that all of us understood, and therefore agreed with, in passing this legislation last year.
      However, there are a variety of possible schemes, as I said. I am sure that the hon. Member for Buckingham (Mr. Bercow) is not suggesting that I wait until they are in action. They are designed to refresh old assets, as they are politely called in the trade. The purpose of the legislation was to operate forwards from last year, not backwards from the date of the legislation. Some fresh old assets—if such a term could be used—will not need to use the related-party mismatch. To deal with those, and also to close the door on schemes that have yet to be designed—that is, to anticipate subsequent exploitation—we also need the general cover provided by the wider anti-avoidance rule.
      The House is rightly sensitive about the use of wider anti-avoidance rules, and it expects Ministers to be sensitive about that as well, but the rules are needed in this case. By virtue of its less mechanistic approach of testing the main object of the scheme, the provision can apply in a wider range of circumstances. In simple cases, it is easier to test for the group relationship than to examine the various possible objectives of transactions.

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      From that, I am sure that it is immediately obvious to the hon. Member for Buckingham how much mischief could be made with regard to those two rules, and that he will be able to think up many examples for himself. I commend the new clause to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 7

      INHERITANCE TAX: GIFTS WITH RESERVATION
      '(1) Section 102 of the Finance Act 1986 (c. 41) (gifts with reservation) is amended as follows.

      (2) In subsection (5) (section not to apply where disposal is an exempt transfer by virtue of any of the provisions of the Inheritance Tax Act 1984 specified in the paragraphs of that subsection) at the end of paragraph (a) (section 18: transfers between spouses) insert", except as provided by subsections (5A) and (5B) below".

      (3) After subsection (5) insert—"(5A) Subsection (5)(a) above does not prevent this section from applying if or, as the case may be, to the extent that—

      (a) the property becomes settled property by virtue of the gift,

      (b) by reason of the donor's spouse ("the relevant beneficiary") becoming beneficially entitled to an interest in possession in the settled property, the disposal is or, as the case may be, is to any extent an exempt transfer by virtue of section 18 of the 1984 Act in consequence of the operation of section 49 of that Act (treatment of interests in possession),

      (c) at some time after the disposal, but before the death of the donor, the relevant beneficiary's interest in possession comes to an end, and

      (d) on the occasion on which that interest comes to an end, the relevant beneficiary does not become beneficially entitled to the settled property or to another interest in possession in the settled property.

      (5B) If or, as the case may be, to the extent that this section applies by virtue of subsection (5A) above, it has effect as if the disposal by way of gift had been made immediately after the relevant beneficiary's interest in possession came to an end.

      (5C) For the purposes of subsections (5A) and (5B) above—

      (a) section 51(1)(b) of the 1984 Act (disposal of interest in possession treated as coming to end of interest) applies as it applies for the purposes of Chapter 2 of Part 3 of that Act; and

      (b) references to any property or to an interest in any property include references to part of any property or interest.".

      (4) The amendments made by this section have effect in relation to disposals made on or after 20th June 2003.'.

      —[Dawn Primarolo.]
      Brought up, and read the First time.
      Dawn Primarolo: I beg to move, That the clause be read a Second time.
      This new clause introduces the changes announced on 20 June to the inheritance tax rules on lifetime gifts. The changes come in response to a recent Court of Appeal decision in the Eversden case. Everyone who has commented on the case has noted the wide-ranging tax-avoidance opportunities that it opens up. Almost all have gone on to say that they were too good to last and were bound to be tackled by early countervailing legislation. I agree with that assessment, and the Government have introduced this clause to achieve it.
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      I shall set out the relevant factors briefly. The Court of Appeal confirmed that married wealth owners could make what are called gifts with reservations. They are permanently free of the normal tax consequences, so long as the gifts are made to a trust and the trust initially provides an interest in possession to the donor's spouse. That means that married couples could remove assets from their inheritance estates, effectively without limit, by making lifetime gifts into the trust in the way that I have described, without losing any effective ownership. They could do so by using schemes where the interest for the donor's spouse is quite blatantly inserted purely to get the desired tax effect and is predestined to disappear after the shortest decent interval once it has served its purpose.
      The schemes were of wide appeal, at least among the minority of people wealthy enough to have prospects of paying inheritance tax. The only essential requirement was that the donor should be married and have the prospect of wealth at death of more than £250,000.
      Mr. Redwood: Will the Paymaster General give way?
      Dawn Primarolo: I just want to introduce the new clause, after which the right hon. Gentleman will of course want to speak. I shall be happy to respond to his points.
      I remind the House that we are talking about the inheritance tax rules that were introduced in 1986, under the previous Conservative Government, and about the ways that people try to get around them.
      The schemes could be used for all sorts of assets at all levels of wealth. They could allow married couples to remove the family home from inheritance charge on death, yet to continue to live in it during their lifetimes. That aspect has received much attention in the press, and among some of those who market these schemes.
      1.45 pm
      However, the schemes could be used equally well to shelter all sorts of other assets, including—notably—financial assets wrapped up in the form of an insurance bond. As for the amounts involved, the sums become a little more complicated if the couple's total wealth is significantly more than £1 million or so. Although executing one of these schemes at that level would not necessarily remove a couple from inheritance tax forever, it would remain a very attractive proposition.
      The Government are not stopping, as some have suggested, an innocent piece of self-help for couples with modest homes who might be taken into inheritance tax by inflation in property prices. Even if that were true, tolerating tax avoidance would not be a sensible way to deal with the issue of house prices. In reality, however, the potential avoidance goes much wider, as I said. It goes all the way up the scale of wealth, undermining all the revenue from those who pay inheritance tax and account for the lion's share of the total yield. That is not fair to the wider body of taxpayers, nor to the balance of prospective inheritance tax payers, who cannot afford this sort of avoidance, or who do not engage in it.

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      Following on from the Court of Appeal ruling, it is essential that we stop now any possible future loss to the Exchequer. That is what the clause seeks to achieve, operational from 20 June.
      Mr. Howard Flight: As happened with new clause 6, the Government are introducing this significant piece of legislation on Report. No doubt they will give the excuse that they wanted to hear the ruling in the Eversden case, but I submit that, had they wished to make changes as radical as the ones that they propose, they could easily have addressed the matter in the body of the Bill.
      The use of defeasible life interest trusts in relation to homes has not been a matter of tax avoidance, as the Paymaster General suggested. It has failed her own test, which she set out in Committee, regarding the difference between accepted tax planning and tax avoidance. It has been widely known about, and the law has provided for inheritance tax gifts with reservations to be made.
      Therefore, the new clause introduces what is, essentially, a new tax. The Paymaster General may be concerned that what has been used purely to protect the family could be used in other areas, but so far the scheme has been used solely in respect of family homes. Indeed, her own comments highlighted the problems described to me by constituents.
      As we warned in the debate on last year's Finance Bill, the problem is based in particular in the rise in home values in the south of England. The Government have done and said nothing to deal with the knock-on problems that that creates for inheritance tax. I suggest that it is very much part of British culture for people to want to be able to hand on to their children the house that they own, or the value that they have built up in it. In the south of England in particular, there are a growing number of reasonably ordinary properties whose value is in excess of the inheritance tax threshold. The number has been estimated at between 1.5 million and 2 million properties. To date, the specific defeasible life interest trust has been used by people to gift their home to their children while retaining a right for the surviving spouse to live there until death. That is hardly a wicked thing to do; most families presented with the problem would want to do that.
      Mr. Bercow: Given the need to make this debate on new clause 7 intelligible to the wider public, does my hon. Friend agree that the Paymaster General has a basic responsibility to tell us in broad terms the sort of revenue to the Exchequer that the new clause would deliver?
      Mr. Flight: Yes, but she advised the press that the measure was designed to protect a significant part of the £2.4 billion per annum inheritance tax revenue. I suspect that it will do no such thing. One of our concerns, of which the Paymaster General will be aware, is that a likely reaction to not being able to achieve what most people want—what more and more couples who manage to stay together and bring up their children want—is a boost to the equity release market, in which
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      older people can sell all or part of their homes and retain the right to stay in them, thus releasing the cash value from their homes and then donating the cash released to their children.
      There are inherent dangers in such schemes, which the Government are unwilling to regulate. With so many people's pensions wrecked by the actions of the Government, many people are looking to those schemes for a source of income in old age.
      Mr. Redwood: I detected a moral judgment in the Paymaster General's statement. How does my hon. Friend think the morality of such schemes compares with the morality of using offshore trusts in the creative and perfectly legal way that a number of former and present Government Ministers have done? As one who thinks that to be perfectly reasonable, I ask my hon. Friend how he feels the relative moral charge sheet rests from the Government's point of view.
      Mr. Flight: My right hon. Friend has made his point. The middle England vote that the Labour party has been keen to retain is largely made up of citizens who believe that it is natural to want to hand on their house or its value to their children. That is much more straightforward than some of the fancy antics that certain past Labour Ministers got up to.
      New clause 7 will turn out to have unintended consequences, and the Bill is full of many such examples. I referred earlier to the fact that it is extremely unlikely to achieve the bolstering of inheritance tax revenues that the Paymaster General is expecting.
      The Paymaster General's letter refers to the fact that the Government are pursuing an application for leave to appeal to the Lords on the question of how gifts already made should be taxed. In other words, the Government are hoping to introduce retrospection; there would be no point in pursuing such an appeal were that not so. Specifically, the Government are seeking to get a ruling that the gifts of family homes made by older people who have entered into defeasible trusts will be brought back within the inheritance tax net.
      Such an initiative will be seen by ordinary middle-class voters as a means of picking on them as they carry out a straightforward action in the interests of their children, which they feel entitled to do. I have to suggest to the Government that it is reasonably unlikely that they will win, but there seems to be an element of spite in seeking to introduce a retrospective element to this new tax.
      We are not going to burn up yet more time that we do not have on a vote that we know we cannot win, but we leave the Government to reap their own bitter harvest of the growing hostility of home owners in middle England, arising from a measure that will be seen as spiteful and which will not be effective in raising inheritance tax revenue. It is understood that there is a case for preventing the use of such trusts in wider financial affairs, but the Government's approach to the fundamental wish of people to hand on their family home goes against the family and against British instincts.
      Mr. David Laws: My hon. Friend the Member for Torridge and West Devon (Mr. Burnett)

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      anticipated this debate in Committee on 17 June when he asked the Paymaster General whether she would introduce proposals at any stage on inheritance tax, to which she replied:
      "I will certainly keep him informed of developments in due course."
      On 20 June, we had the announcement of this change. I commend my hon. Friend on his precipitation and wisdom in raising the issue, and for anticipating the thrust of the new clause when he said during the same exchange that inheritance tax
      "is a tax levied on those who do not have sufficient money or assets to avoid it legitimately."—[Official Report, Standing Committee B, 17 June 2003; c. 613.]
      That is a growing perception of people in and beyond the tax world: that, increasingly, people who have large estates and can afford good tax accountants can get round paying inheritance tax altogether, whereas a much wider group of people are being absorbed into the inheritance tax net, not least as a result of the increase in property prices in the past few years.
      We welcome the fact that the Government are addressing some of those loopholes in the new clause, as those steps ensure that inheritance tax does not simply become a tax that falls on those who are not wealthy enough to afford good tax advice, but ensure that the purpose of inheritance tax is maintained and that the tax that we anticipate collecting is collected as far as possible.
      The hon. Member for Arundel and South Downs (Mr. Flight) raised a number of legitimate issues in relation to inheritance tax, but did not state whether the Conservative party's former desire to abolish it altogether still holds. He raised a number of issues that flow from the avoidance of inheritance tax, and not least from the increase in property prices in the last few years.
      Before the 1997 election the debate—in my case, it was not conducted from within this House—was about a proposal by the then Prime Minister to abolish inheritance tax. At that time, the then Chancellor of the Exchequer was keen to emphasise that inheritance tax and capital gains tax were minority taxes paid by a small proportion of the population. I suspect that we were talking about tens of thousands of people in 1997. The criticism from the Labour party at the time was that the abolition of such taxes would simply benefit a small number of people.
      I suspect that the Paymaster General is aware that concern about inheritance tax is now rising among a much broader proportion of the population and it may be that, in future, she will wish to address that concern in an amendment, a new clause or in a future Finance Bill. Property prices over the past few years have increased to such an extent that people who could by no means be considered wealthy have been caught in the inheritance tax net.
      Mr. John Burnett: Does my hon. Friend agree that with the dive in the value of people's pensions, their principal private residence is often the only thing they have left—especially if they are self-employed—to keep them going in old age?
      Mr. Laws: My hon. Friend is right to identify the fact that many elderly people's primary assets are the properties in which they live. Other financial assets, including shares, may have depreciated in value as a consequence of recent changes.
      The new clause is welcome, but in future it would be sensible for the Paymaster General to consider the wider issues of inheritance tax, particularly the number of people who will be pulled over the threshold in the next few years. For the reasons provided by the hon. Member for Arundel and South Downs, she should also consider reviewing that tax policy, particularly in respect of the potential to shift tax avoidance from one vehicle—we hope that that loophole has been closed by the Government—into others such as equity release schemes in which people can, through perfectly legitimate and legal tax-planning devices, seek to undermine the intention behind Government tax policy and tax legislation.
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      Other issues that should be considered as part of any review of inheritance tax include not only the implications of rising property prices and avoidance techniques such as equity release schemes, but the wider issue of whether it is sensible to levy inheritance tax on estates as currently operated. In future, the Government should consider levying inheritance tax differently on recipients of the assets rather than on the estate itself. That might encourage people to spread wealth and provide incentives for people who may not be paying the upper rate of 40 per cent. that is applied to inheritance tax. If the Paymaster General cannot respond categorically to all those points, I hope that she will at least remember the fact that it may be worth reviewing this form of tax in the future.
      Mr. Redwood: I am glad that the hon. Member for Yeovil (Mr. Laws) reminded the House of the excellent Conservative policy of getting rid of inheritance tax, and I trust that when we reach manifesto time, it will be one of the strong runners.
      Mr. Laws: I accept that the right hon. Gentleman is not currently a member of the Conservative shadow Cabinet, but he will receive all the briefing papers on Conservative tax policy. Will he tell us whether it remains Conservative tax policy to abolish inheritance tax?
      Mr. Redwood: The position is well known in the House—although I fear that we might be deviating a little from the new clause, Mr. Deputy Speaker. The Conservative party will come forward with tax proposals nearer the time of the election, when it is clearer how much money the Government are wasting and how much necessary expenditure a future Conservative Government will need to incur. Many demands will be made to the shadow Cabinet of the day to offer all sorts of tax relief and tax reductions after the present Government's tax binge, which we are debating this afternoon. The Government are finding more and more ways of taking money off people, so that they can

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      waste it on schemes such as "Notwork Rail"—with a £15 billion loss so far, and much more to come as the dreadful nationalisation policies get under way.
      Mr. Deputy Speaker: Order. May I remind the right hon. Gentleman not to broaden the debate too far?
      Mr. Redwood: You are right, Mr. Deputy Speaker. I am naughty and sorry, so let me return to the point at issue—inheritance tax. Conservative Members approach the subject from the proposition that as a wealth tax it is not a very desirable tax. It does not seem pleasant to tax people even in death who have been taxed quite enough during their lifetime while they were earning and saving the money in the first place.
      Mr. Burnett: It is a lifetime tax as well.
      Mr. Deputy Speaker: Order. I must tell the hon. Gentleman that he should know the procedures of the House by now, and that if he wishes to intervene, he must do so with the permission of the right hon. Gentleman who has the Floor.
      Mr. Redwood: I am grateful once again for your wise guidance, Mr. Deputy Speaker.
      I wish to take up with the Paymaster General her extraordinary statement that inheritance tax is moral and fair, so that anyone who tries to pass on their primary residence to their children is somehow guilty of an immoral act against the state that should be stopped by the imposition of the tax. People work extremely hard over many years in this country to buy their primary residence. They take great pride in their ownership of it and they want to be able to pass it on to their child or children in death. I see nothing wrong in that: it is an excellent expectation and an important part of the property-owning democracy from which we all benefit. I therefore take exception to the idea that it is somehow against the rules or unsporting. The Paymaster General has not understood how far house prices have risen and how even modest dwellings throughout the south and in parts of the north and midlands are now well above the tax threshold for inheritance tax.
      Mr. George Howarth: I am listening carefully in an attempt to understand the logic of the right hon. Gentleman's argument. To follow it a little further, if someone dies with a property in negative equity—in other words, the amount still owed on it is greater than its value—does the right hon. Gentleman believe that the child who inherits the property should be charged with making up the difference between what is owed and what the property is worth?
      Mr. Redwood: No, I do not. I do not think that children should have the sins of their parents visited on them, and it would be a foolish bank or building society that allowed circumstances to develop in that way without having any other security or guarantee. I strongly urge banks and building societies to lend only a reasonable proportion of a property to protect
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      themselves in the likely event of the Government creating a boom-and-bust in housing to go along with their boom-and-bust in telecommunications, manufacturing and pensions, which we have seen to our cost in recent years. My worry about the measures before us is just that—that the Government are now targeting the housing market with a view to getting prices down, but that they may be too successful and produce exactly the sort of problems to which the hon. Gentleman referred. That will not be to his political advantage. On the specific matter that he raised, children should not have to make good those payments unless they were party to the transaction and offered guarantees or pledges of their own free will when the agreement was originally designed.
      I urge the House to get the Paymaster General to think again about this matter. She is being mean-minded and I do not believe that the schemes that we are talking about are immoral or unreasonable. They meet a perfectly sensible need in the marketplace for people to plan their tax affairs and pass on some of the assets that they have worked hard to accumulate over the years. To answer my own intervention on my hon. Friend the Member for Arundel and South Downs (Mr. Flight), I should have thought that those schemes are less immoral, in the Government's own terms, than some elaborate offshore schemes. I take no exception to offshore schemes, which can be sensible and are usually perfectly legal, but it is odd that a Government who set such store by stopping any tax loopholes, as they call it, but who allow in their ranks Ministers who freely use offshore schemes, should then say that much poorer people struggling to buy a semi-detached house in an expensive part of the country are not allowed to use a perfectly reasonable scheme to pass that on.
      I hope that the Paymaster General has realised how high house prices have risen in Bristol recently, because many of her constituents will be affected. I can assure her that in Wokingham, where people are not rich but work hard and have to pay a lot of money to live because of the cost of housing and the cost of living, many of my constituents will be caught by inheritance tax, yet no one could say that they were rich in the way that some of the Paymaster General's right hon. and hon. Friends in the Government are rich. I hope that the right hon. Lady will withdraw this petty and mean-minded new clause.
      Mr. Jonathan Djanogly: I support the views of my right hon. Friend. The Paymaster General gave an accurate but complicated explanation of a position that affects many thousands of people in this country and relates to the income and estates of many.
      I should like to describe the position in plain English. Grandma gifts her house to her son, who decides to live with granny and look after her. As a result, grandma has not made the gift for tax purposes, it stays in her estate, and everyone except the taxman is the worse for it. That seems utterly ridiculous. To avoid the tax, the family has to split into two homes, breaking up the family unit into two houses. Granny will probably be looked after by social services, the cost of which will be more than the tax paid out in the first place. If granny happens to live in the south of England, she is taxed for being a southerner. House prices are more expensive in the south, so the tax will be greater.

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      Indeed, at a time when we need to share our houses more and should be keeping family units together by encouraging people to stay with their families even if only because—there are lots of other good reasons too—we are short of houses, particularly in the south, we are in fact encouraging the break-up of families for no good reason. This tax, particularly as it affects homes, is unfair and senseless and should be abolished instead of being patched up by this lousy new clause.
      Mr. Bercow: My hon. Friend the Member for Huntingdon (Mr. Djanogly) movingly describes the plight of over-taxed granny under the Labour Government, and he is entirely correct. I do not myself have a granny, but I feel sure that if I did, she would strongly oppose new clause 7 and would have good reasons to justify her position.
      I was rather taken aback both by the fact of the introduction of the new clause and the manner in which the Paymaster General sought to commend it to the House. It seemed obvious that there was considerable irritation in the Inland Revenue and in Her Majesty's Treasury about the alleged sauce—I use that word advisedly—of taxpayers who had sought to avoid or minimise a burden by a contrivance that was perfectly legitimate under the law. In other words, Ministers are upset because they have not been able to plan, with Kantian perfect information, for every scenario. There are eventualities in which citizens are able either entirely to avoid a burden or to keep it to a much lower level than the Government would favour.
      I say three cheers to that, and I confess that one reason—probably the principal reason—why I oppose new clause 7 is that I oppose the whole monstrous apparatus of inheritance tax. I do not seek to argue my case according to the intricacies of the tax or the arguments about revenue raised or forgone. My view is that it is fundamentally immoral and unethical.
      My only criticism of my right hon. Friend the Member for Wokingham (Mr. Redwood)—I scarcely volunteer criticism of him on any occasion—is that he was guilty of a certain understatement of his case. If he had said what he said a little more forcefully—perhaps with a degree of crudity that was lacking from his presentation—his stance on this important matter would be all the clearer.
      I am glad that the hon. Member for Yeovil (Mr. Laws) urged something of a wider review and debate. He was justified in doing so. He challenged my party—without giving any particular idea of the stance of the Liberal Democrats—to say where we stood overall on inheritance tax. I am against it, and I want to scrap it.
      Mr. Deputy Speaker: Order. I understand the temptation felt by the hon. Member for Buckingham (Mr. Bercow), but the hon. Member for Yeovil (Mr. Laws) began to lead us astray on this matter, and I must remind the House that we are dealing not with inheritance tax as a whole but with new clause 7.
      Mr. Bercow: You know, Mr. Deputy Speaker, that I never knowingly behave badly. My poor conduct is always entirely inadvertent, and there is nothing better than to be brought to book by your kindly but authoritative ministrations. That is what has happened to me, and I make no protest about it.
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      On behalf of my constituents, many of whom have already raised their anxieties about new clause 7—others can be confidently expected to do so on Saturday in Market Hill—I inveigh in the strongest possible terms against new clause 7. If people are using the device of gifts without reservation to circumvent the frankly sinister and oppressive designs of this tax-raising, pocket-plundering, petty-minded, socialistic-oriented Government, I say three cheers to them. Unite, and fight new clause 7.
      2.15 pm
      Mr. John Baron: I wish to raise a couple of points with the Paymaster General. The ramifications of any new clause—indeed any legislation—need to be properly thought through. What thought has been given to the effect that new clause 7 will have on the equity release market? There is little doubt in my mind—my hon. Friend the Member for Arundel and South Downs (Mr. Flight) briefly touched on the point—that it will lead to a dramatic increase in equity release mortgages, schemes and loans.
      We all know that the industry got off to a bad start not so long ago, with many sharks operating in the market. Has any consideration been given to whether the market should be regulated to ensure, at the least, that fair play is done and seen to be done? The schemes will be considered by many vulnerable people in the autumn of their years who are thinking about how best to release equity from what, given that the equity markets have not done so well recently, is probably their main investment. What are the Government going to do to ensure that their nudging forward of the equity release market—the interest in the market will be quite significantly increased in some instances—will not mean that vulnerable people will be taken advantage of, particularly given that many of them may live on their own and need good advice? The industry needs to be properly run and regulated, and I ask the Paymaster General to tell us her thoughts about that. What action do the Government intend to take to ensure that there is fair play in the market?
      Secondly, I want to discuss the idea that it is somehow perfectly immoral to avoid this tax. None of us wants to see legitimate tax avoided, but I think that the Paymaster General has completely underestimated the extent to which house prices have increased. My hon. Friend the Member for Arundel and South Downs mentioned that between 1.5 million and 2 million houses fall into the inheritance tax bracket. Statistics and studies exist that suggest that the figure is greater than that. No one really knows. It is completely wrong, however, to suggest that when people who have paid tax throughout their lives and simply want to hand on their assets to their children, it would be somehow immoral not to tax them. The Government need to re-examine their thinking. The new clause would tighten matters even further. It is, in effect, a new tax, whatever the Paymaster General may say.
      Mr. Bercow: My hon. Friend is aiding our deliberations. In referring, as the Paymaster General did, to people who are rich enough to pay inheritance

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      tax, was she including in her categorisation every member of the Cabinet and most members of the Government?
      Mr. Baron: I completely agree with that. The Paymaster General would also include in that threshold a large swathe of teachers, nurses and all those who work in public service, particularly in the south of England. I should appreciate her deliberations on whether that is right.
      My hon. Friend the Member for Huntingdon (Mr. Djanogly) made the excellent point that not enough thought has been given to the effect that the new clause may have on the break-up of families and homes. The Government are in complete crisis with regard to the care home sector, in which something like 45,000 to 50,000 beds have been lost because of the bureaucracy and regulation that they have introduced. This measure will not help that situation. No one knows the exact figures or the extent, but it could lead to a premature break-up of a home simply because the arrangement will no longer be available whereby a parent—an elderly person, perhaps—could live within the home that had been gifted. That may make the premature selling of the house to realise assets a reality. I hope that the Government have given that some thought, and I look forward to hearing from the Paymaster General.
      Dawn Primarolo: The new clause applies to an avoidance scheme used by married couples. It has nothing to do with grannies, grandsons or children; it specifically deals with the exploitation of the inheritance tax rules, especially by married couples.
      Mr. Djanogly: Will the right hon. Lady give way?
      Dawn Primarolo: If the hon. Gentleman will wait, I shall be happy to give way in a moment, but we need to set out a few facts clearly.
      We are not discussing whether the Conservative Opposition are in favour of inheritance tax, although I should be delighted to have such a debate. Despite the fact that inheritance tax was introduced by their Government—
      Mr. Djanogly: Will the right hon. Lady give way?
      Dawn Primarolo: No. I will give way to the hon. Gentleman in a moment, but I want to make a few points so that we can be clear about what we are discussing, rather than what Opposition Members think—
      Mr. Djanogly: On a point of order, Mr. Deputy Speaker. It is right to point out that the provision may relate to grannies and that husbands and wives—
      Mr. Deputy Speaker: Order. I must tell the hon. Gentleman reprovingly that he has been a Member of this place long enough to know the difference between a point of debate and a point of order. That was not a point of order.
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      May I remind the Minister that I had already suggested that discussion of inheritance tax in principle is outwith the scope of the new clause?
      Dawn Primarolo: I agree, Mr. Deputy Speaker: whether individual hon. Members like or dislike inheritance tax is not the subject of the debate. The subject of the debate is whether tax rules that were introduced in 1986 and have been variously amended should fairly apply to all taxpayers. Some taxpayers comply with their tax obligations, so the Government have responsibilities when others find ways around their compliance obligations.
      The point is whether the Government of the day should be required to ensure fairness between taxpayers. I understand the issue in terms of fairness. Tax rules should apply fairly to taxpayers who are subject to them and it is the Government's duty to ensure that that happens.
      Mr. Flight rose—
      Dawn Primarolo: I shall give way to the hon. Gentleman, but then I shall deal with house prices, equity release schemes and some of the other points that have been made.
      Mr. Flight: Will the Minister confirm that, putting it in simple language, the provision is about, for example, a couple who, hoping that they will both live for another seven years, give their house worth £400,000 to their children, but set up a trust so that whoever outlives the other is still able to live in the house until they die? I think that describes the main circumstances, and no one would regard that as either cheating the system or avoidance.
      Dawn Primarolo: There are many sections in the inheritance tax rules; one is called "Gifts with Reservations". The Court of Appeal decision in the Eversden case paved the way for artificial schemes that enable married couples to put their assets beyond inheritance tax estates while retaining the enjoyment of them for their lifetime. We want to correct that. As I said, the new clause is specifically about that issue. Opposition Members are getting too worked up. Although I understand the views of Opposition Members about other aspects of inheritance tax, we are discussing only whether a set of rules should apply to all equally.
      Mr. Laws rose—
      Dawn Primarolo: I want make a point about property prices and the inheritance tax threshold. If that does not answer the hon. Gentleman's point, I shall be more than happy to give way to him—as always.
      The inheritance tax threshold is still about twice the average UK house price. Only about 5 per cent. of estates will pay inheritance tax this year. However, let us look at the question the other way round: how much has the inheritance tax threshold moved since its introduction in 1986, and what has happened to house prices in that period?

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      The latest statistics, for quarter one, show that house prices have risen since 1986 at much the same rate as the threshold—about 250 per cent. The UK average house price is about £140,000. Even in London and the southeast, prices are still below the threshold. The figure for Greater London is £215,000 and for the south-east, excluding London, it is £190,000. The rules are consistent with the movement of the threshold since its introduction in 1986 and its reflection in house prices. The question of property prices is not directly relevant to the new clause; the point at stake is that the movement of the threshold is keeping pace with prices.
      Mr. Laws: The Paymaster General said that she estimates that about 5 per cent. of estates are above the threshold and will be caught by inheritance tax. Will she tell us how that has changed over the last 10 years? What is the size of the increase?
      Dawn Primarolo: I have seen the figure, but I apologise to the hon. Gentleman for being unable to give it to him immediately. I shall be happy to send him the figures. By estates, I mean the number liable to pay inheritance tax, which may not necessarily be on property. Significant numbers of people pay inheritance tax that is not on property. Currently, about 29,000 estates are in the category; movement is more or less static, although I cannot remember the exact figure.
      Mr. Bercow: The Government tend to increase thresholds in line with inflation, whereas the overall rise in property prices over a period is appreciably greater than that. I hope that the Paymaster General will reflect on that point in further deliberations. However, if the right hon. Lady's main criticism of Opposition Members is that we have identified the wrong member of the family tree, and that it is not in fact granny, but mummy, daddy, hubby and wife who are being clobbered, that is cold comfort.
      Dawn Primarolo: May I tell the hon. Member for Yeovil (Mr. Laws) that, if my memory serves me right, the number in the threshold rose by about 3,000 last year—more than indexation or the rate of inflation would have required? It is not unreasonable to look back over a period and to take 1986 as the base year.
      Mr. Baron rose—
      Dawn Primarolo: May I answer the hon. Member for Buckingham (Mr. Bercow) before moving on? On the point that he makes about the application of the new clause, I was simply seeking to help Conservative Members. I understand that they wish to abolish inheritance tax, and I look forward to finding out where the £2.4 billion that the Government currently raise from inheritance tax would come from. The hon. Gentleman will want to question many aspects, but I was seeking to correct Conservative Members by saying that the new clause does not deal with those issues; it specifically and narrowly deals with issues that arose from a particular case involving married couples.
      2.30 pm
      Mr. Baron: The Paymaster General is being slightly selective in her figures. It is all very well to go back to 1986, but I am sure that she will accept that the period
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      included one of the biggest house price falls in recent memory. House prices fell from their peak in about 1988 and bottomed in 1994–95, after which they picked up slowly, so such a comparison does not give the complete picture. I hope that such a price crash will not happen again. Recent history—the past eight or nine years—shows that inheritance tax thresholds lagged far behind the rise in house prices.
      Dawn Primarolo: The facts speak for themselves in respect of the average house price throughout the country and in specific regions where house prices are much higher. The hon. Gentleman should consider the role of the Conservative party when in office in establishing the inheritance tax threshold. As I have demonstrated, the increase in the threshold has kept pace with the increase in house prices, but it is not the role of inheritance tax to help to regulate house prices; its role is fairly to tax assets according to rules that operate for all the people who are caught by them.
      Mr. Burnett: The Paymaster General talks about the rules being interpreted fairly, but the capital taxes office sometimes interprets the rules in a draconian manner. I ask her to give some thought to such matters because, sometimes, entirely innocent transactions are caught—for example, the outright gift of a dwelling by parents to their children, where the parents move out, but move back two years later to be nursed by the children. Surely the capital taxes office should not apply the reversion of benefit rules, which will be amended by the new clause today, in such cases?
      Dawn Primarolo: I will certainly reflect on the point, but I am trying to explain the new clause and its narrow application to married couples.
      I wish to make two final points, the first of which relates to what the hon. Member for Billericay (Mr. Baron) said about home reversion plans. He may not know this, but his hon. Friend the hon. Member for Eddisbury (Mr. O'Brien) is aware—we debated it in a statutory instrument Committee only a few days ago in relation to the transfer to the Financial Services Authority of the regulation of mortgages and other financial products—that the Chief Secretary to the Treasury announced that a consultation paper, in which the options for regulating the sale of home reversion schemes would be examined, would be published this autumn.
      Various aspects of the home reversion market will be considered, as mortgage-backed equity release schemes will fall within the scope of the FSA. So the answer to the hon. Gentleman's question is, yes, the Government are considering those wider points, and we enter the consultation with an open mind to hear what the industry has to say about the important role of such products and what their future may be. That issue was also raised the hon. Member for Arundel and South Downs (Mr. Flight) and the hon. Member for Eddisbury, who takes a particular interest in it and is knowledgeable about it.
      Mr. Baron: May I urge on the Paymaster General the importance of the issue and the urgency of the situation? If one believes the latest figures, there is no doubt that the whole industry is growing very rapidly, as is the

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      practice of using equity release schemes. Often, as we all know, very vulnerable people are involved, so I ask her to ensure that the Government put their full weight behind the issue and that it is looked at very quickly indeed.
      Dawn Primarolo: If the hon. Gentleman scrutinises the record of debates in the Statutory Instrument Committee he will see that the new FSA regulatory regime was discussed. Hon. Members on both sides of the Committee agreed that the Government must ensure that future regulation of this important and complex area is correct. We recognise the importance of the issue, so to legislate in haste may not be the best way forward. The Chief Secretary to the Treasury issued more details in a press release on 5 June, and I am sure that the hon. Gentleman will be interested in reading it.
      The hon. Member for Arundel and South Downs referred to the fact that the new clause will come into force only from June 2003. The tax-effectiveness of earlier Eversden-type schemes is still dependent on the courts' final view of whether schemes work under the old law. The House of Lords will decide whether to agree to a further appeal, but my advice is that, although the Inland Revenue is confident about the interpretation of the old law it believes that enough tax is at stake to lead us to act now to prevent any subsequent arrangements from being made. However, pre-June 2003 issues are clearly matters for the courts.
      Mr. Baron: I wish to return to the potential for an increase in the break-up of homes. Has any assessment been made of whether the new clause will have any tangible effect on the tendency to break up or disperse family units, or certainly family homes, as the Government would have to pick up the cost of that?
      Dawn Primarolo: Again, I remind the hon. Gentleman that we are dealing with plans, which are at an early stage, to provide lifetime protection from any inheritance tax on those estates.
      I understand that such plans are made considerably in advance of any discussion or requirement regarding the vulnerabilities that might exist in the household in future. The proposals are long planned and for the lifetime, as I have suggested. They are an attempt to remove from inheritance tax rather than a response to specific circumstances. The measure on specific avoidance by married couples is narrow. It is sensible and it is fair to taxpayers who comply with their obligations. That is the aim of the new clause and I commend it to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 1

      TAX CREDITS FOR INDIVIDUAL SAVINGS ACCOUNTS AND PERSONAL EQUITY PLANS
      '.—Section 76(1)(a) of the Finance Act 1998 (c. 36) shall cease to have effect.'.—[Mr. Stephen O'Brien.]
      Brought up, and read the First time.
      Mr. Stephen O'Brien: I beg to move, That the clause be read a Second time.
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      This year's Red Book stated:
      "Individual Savings Accounts … are the Government's primary vehicle for tax-advantaged saving outside pensions."
      However, the Finance Bill contains no provisions to prevent the 10 per cent. tax credit for individual savings account and personal equity plan dividends from being removed after April 2004. As we well know, the removal of the dividend tax credit for pensions—worth £5 billion a year in tax—has resulted in typical personal pension savers retiring on half what they would have received only five years ago.
      It was not surprising that the director general of the PEP and ISA Managers Association and the director general of the Investment Management Association wrote to the Chancellor of the Exchequer on 4 June. The letter said:
      "We were highly disappointed that there was no announcement in the Budget that the 10 per cent. dividend tax credit for stocks and shares ISAs would be extended beyond April 2004.
      Our research, which we have shared with the Financial Secretary, among consumers and ISA providers clearly demonstrates that abolishing the dividend tax credit will significantly discourage, rather than encourage, equity based savings through ISAs. In the present investment climate, this is precisely the wrong incentive to be giving people needing to build their long-term savings."
      The letter continues:
      "In excess of 12 million ISA and PEP account holders will be disadvantaged, not to mention those potential savers that have already been dissuaded by the looming abolition of the tax credit, as ISAs will, according to the FSA, lose their tax-free status in 2004."
      The letter urges the Government, at this late stage, to consider approving new clause 1 and says that it is important
      "to extend the life of the tax credit and thereby the sustainability of Stocks and Shares ISAs for other than high rate tax payers."
      I shall illustrate why we find ourselves in such an extraordinary situation. The Government are long on rhetoric by saying, "For the many, not for the few", but they are deliberately taking action to avoid prolonging an important tax credit with the intended effect—they cannot pretend that it is unintentional—of preferring the few higher rate taxpayers rather than the many, despite the fact that there is such a blight on all income groups' savings.
      A PIMA press release was published on the same date as the letter and said:
      "However, this figure of 12 million"—
      people—
      "is not taking into account the number of potential savers that have already been dissuaded … Recent evidence shows that stocks and shares ISA Subscriptions have slumped by 40 per cent. in April 2003 compared to the same period last year, in spite of a surge in investment in bonds.
      By removing the tax credit, PIMA research has shown that the Chancellor will significantly discourage rather than encourage, equity based savings through ISAs."
      Mr. Tony Vine-Lott, the director general of PIMA, said:
      "PIMA will continue to lobby for this recommendation throughout the passage of the Finance Bill. 12 million accounts is a significant amount and the Chancellor needs to recognise that the removal of the tax credit will do more harm than good for consumers and the savings industry alike".

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      2.45 pm
      I have examined carefully the representations that we received, which happens with all representations received by the Opposition. It is important for those who observe our proceedings to have the opportunity to submit representations and for them to be reflected. I have given the comments careful thought. As hon. Members will note from the amendment paper, I, like several of my colleagues, have a registered interest, which I put on the record. It is no surprise that many of us hold PEPs and ISAs as part of our best efforts to save during our earning lifetime. We try to be responsible so that we will not be dependent on the state when we are no longer in a position to earn.
      A representation that we received said that because
      "the Government have promised to abolish the 10 per cent. tax credit that ISAs receive on dividend distributions … investment in Equity ISAs will only be attractive to higher rate taxpayers."
      Perhaps the easiest way to explain the situation is to go through an example. Like always, it would be easier to use a slide-show presentation while dealing with figures, but as I cannot do that, I shall have a go at outlining my point.
      Let us consider a basic rate taxpayer who receives a cash dividend from a company—outside an ISA—of £90. Under the current rules, which are familiar to most people, a notional tax credit of a ninth—£10—is added, which gives a notional gross dividend of £100. The situation is exactly the same for a higher rate taxpayer: £90 plus £10 equals £100. The basic rate taxpayer is taxed at 10 per cent., which means that there is a 10 per cent. deduction. The £10 tax credit is deducted from that, which effectively means that there is no tax liability. The cash dividend was £90, there was a notional tax credit of £10 and £10 of tax was deducted, so we return to a situation of no tax and £90 cash.
      The situation is different for a higher rate taxpayer. After receiving a notional gross dividend of £100 made up of a cash dividend of £90 and a notional tax credit of £10, a higher rate taxpayer pays tax at a rate of 32.5 per cent. Therefore, he or she is liable to £32.50 of tax on the £100. The £10 tax credit is taken off that—although it is notional, it is removed—so the tax liability on a higher rate taxpayer is £22.50, meaning that the cash receipt is not the £90 received by a basic rate taxpayer, but £67.50.
      Why is that important? In a basic rate taxpayer's equity or stocks and shares ISA, a cash dividend of £90 attracts a notional tax credit of £10, which adds up to £100. Of course, there would be a cash equivalent of £90. The situation is exactly the same as before: there is £90 real cash and lots of 10 per cents. flow all over the place for the purposes of the tax regime, meaning that basic rate taxpayers end up with £90 in their hands. A higher rate taxpayer also ends up with £90.
      Let us consider what will happen after 2004 when the notional tax credit is removed from equity ISAs. The basic rate taxpayer would receive £90 cash but not receive the tax credit, and thus end up with £90 rather than £100, which was the case with the notional tax credit. The tax position would be reduced to £90, yet the cash outside an ISA would also be £90. What is the incentive for the basic rate taxpayer if the measure is removed? A higher rate taxpayer would end up with £90, nevertheless, versus £67.50. So there is a huge incentive for a higher rate taxpayer to remain in the scheme given
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      that instead of receiving £67.50 outside an equity ISA, they will receive £90, whereas the removal of the £10 notional tax credit gives the basic rate taxpayer no incentive whatsoever. Unsurprisingly, the higher rate taxpayer will benefit. Why should the basic rate taxpayer, for whom the scheme has been an important part of their thinking and activity in terms of saving and the incentive to save, be penalised?
      Mr. Djanogly: Surely the purpose of products such as ISAs is to get lower rate taxpayers into investments.
      Mr. O'Brien: I am grateful to my hon. Friend for making that point and I have data to illustrate it. Sadly, I have become used to Ministers not wanting to hear the facts from us, but they should want to hear them from those whose evidence is less partisan. Every citizen of this country, not just the members of so-called middle England, have a right to think that the Government are trying to help them to save and to be responsible for themselves. Instead of that, however, we have a demeaning and individual-defying attempt to thrust everyone into dependency on the state by means-testing. The Government want people to be thankful for what they are doing rather than realising that they are getting in the way of their lives and freedoms.
      When the Government unveiled ISAs in 1997, the then Paymaster General spoke of a tax system for savings that was
      "to benefit the many, and not just the few".
      The equity ISA tax credit does benefit the many, not the few, which is the point of the argument about seeking to retain the 10 per cent. The new clause is important because it would remove the scrapping of the tax credit, which gives a significant incentive for basic rate taxpayers to save and has proved extremely popular among that target group. ISAs are a well-known tax-free product which has become a familiar feature in the savings marketplace. Increasing the tax levels will increase confusion and may increase financial exclusion among the public.
      I have referred to the helpful note issued by the two organisations. It says:
      "The tax credit encourages investment in stock markets, which ultimately benefits the economy by providing additional capital to industry".
      We should not lose sight of that fact. The benefits to the Government are that the
      "tax credit encourages people to save money and build up a pool of savings to supplement their pensions."
      We could have a wide debate on that, but you would be correct to haul me up for straying down that path, Mr. Deputy Speaker. However, the claim resonates loud and clear not only with my right hon. and hon. Friends, but with Labour Members, too, if only some of them were decent enough to listen to our proceedings. Surely Labour Members recognise that their constituents are hammering on their doors about the attack on pensions. Our constituents are deeply anxious about the lack of security for their futures. How on earth will they cope when they can no longer make up for all the Government's mistakes and the shortfalls in the market when their earning lifetimes are over? I know that all parties are worried about that. It is very important.

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      The note also says:
      "The ISA range is now well established in the public mind. ISAs have increased savings of people on lower incomes. The change proposed by the Chancellor will undermine investors' confidence in ISAs as a tax efficient form of savings and may reverse this savings trend … PEPs and ISAs have led the growth of retail funds over the past 10 years"—
      I stress, led the growth—
      "while investment in mutual funds outside PEPs and ISAs grew from £20.1 billion to £51.1 billion, PEP and ISA funds grew from £3.3 billion to £57.9 billion over the same period."
      The Government have urged people to save and to make adequate provision for their retirement. They have tried to make savings products simpler. ISAs are a successful and simple savings product and should be at the centre of their strategy to encourage long-term savings. This is not the time to undermine them.
      If the Government stick to their plans, equity ISAs will be disadvantaged compared with other ISAs. When we consider the importance of the composition of any portfolio and spread of risk, it is critical that the equity market is not disadvantaged in that way. We have already experienced the recent challenging and unnecessary pension tax grab by the Chancellor of £5 billion a year, which even on a notional basis amounts to £30 billion when one considers the compounding effect and the application of the stock market price earnings. The untold damage that the Chancellor has done to the stock market needs to be repaired by encouraging confidence in an equity ISA. That would bring people, not least those from the basic rate taxpayer target group, back into the market, which is critical if we are to take a responsible view of futures and pensions. If the proposal succeeds, people will be given an incentive to invest in cash and bonds, not shares, and that might not be the most appropriate investment for people's needs.
      We also have to consider whether the Government have been consistent. In their response to the Sandler report—much trumpeted by the Government, although we cannot be sure whether they will get their stakeholder plans off the ground—the Government emphasised the importance of helping ordinary people to save more in the long term. Yet their plans would remove that savings incentive for ordinary basic rate taxpayers, precisely the people they want to target. ISAs and PEPs have been successful in achieving greater penetration of savings in every income group when compared with the penetration of PEPs and TESSAs. From the great founding of the PEPs and TESSA movement under the previous Government, which has been well regarded and understood, ISAs have made an even greater penetration, not least because of the 10 per cent. tax credit, which is critical.
      The evidence for that comes from the Government's figures. We have only to refer to column 844W of the Official Report of 3 March 2003 for confirmation of the success of ISAs on building on TESSAs and PEPs in encouraging people in all income groups to save. For example, of those earning under £10,000 a year, one in five have chosen to save in an ISA. Recent research shows that if the tax-free status is withdrawn, the success in increasing the savings habit will be at risk of a dramatic reversal.
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      Research has been commissioned by the two organisations I mentioned and others. It found the following:
      "If the tax-free benefit is reduced or abolished on stocks and shares ISAs, only a third of existing customers would continue to invest in these products. A knock-on effect for the rest of the equity markets could also be expected, as only two-fifths of customers would expect to invest in these commodities. Six in 10 consumers expect to seek alternative, tax-free investments in ISAs, with high interest accounts, pensions and cash ISAs being the likely beneficiaries. Seven people in 10 are of the view that the proposal would be seen as another Government stealth tax."
      That is the opinion of independent research on the proposal. The people involved in the research obviously have an interest in terms of the marketplace, but they are rightly worried because they have ensured that the market has been well served and popular. The Government want to strike away that achievement. Unless they reverse their decision, I shall divide the House on the new clause.
      Mr. Jim Cousins: I shall make only a short contribution, which perhaps befits my position as the only Labour Back Bencher in the Chamber.
      The hon. Member for Eddisbury (Mr. O'Brien) did not acknowledge all the Government's achievements. ISAs have been an extremely effective savings instrument, and we should protect them. Some of the information supplied by the hon. Gentleman illustrates that some ISAs are held inappropriately by non-taxpayers. That should give sections of the financial market cause to think about their selling methods. None the less, he did acknowledge that ISAs have been a huge success.
      The hon. Gentleman was not entirely fair to the Government when he said that they were deliberately taking action on that. The opposite is true. When ISAs were introduced, the Government reserved the position of the dividend tax credit in ISAs until April 2004.
      So far as I am aware, the Government have not struck a position on the future of the dividend tax credit or on any successor arrangement that might preserve the benefits of the DTC after April 2004. For the record, I do not possess any equity ISAs. I was one of the fortunate people who got out about six months before the stock exchange reached its height. However, we are talking about a feature of the ISA scheme that the Government should seek in some form, albeit not necessarily in its present form, to preserve. Those who hold equity ISAs have had a bad time on the markets. That being so, there is great reluctance to continue to invest in equity ISAs. It would be unfortunate if the DTC were withdrawn, and there was a market perception that that was a reason either not to invest or to sell up. That would be singularly unfortunate and might have the effect of producing market distortion at what I suspect, in April 2004, might be quite a sensitive moment.
      3 pm
      There is another feature that needs to be examined, and that is that the dividend tax credit, as its name suggests, is given to dividends. People who invest in stocks and shares ISAs and hold them in the form of bonds are unaffected. It would be unfortunate at this

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      stage in the development of the bond market if there were to be an apparent tax quirk that favoured building up investments in the form of bonds rather than in the form of straightforward equities. That would be an unintended distortion of the market, and it cannot be the Government's objective to allow that.
      I hope that the Government will consider how the dividend tax credit within the equity ISA can be preserved in some form, albeit not necessarily in its existing form. I am not aware that the Government have yet struck a position on that. I hope that they will consider these issues extremely carefully and be able to come up with a scheme that will preserve the good common sense of the present arrangement.
      Mr. Laws: The hon. Member for Eddisbury (Mr. O'Brien) has raised an important point about one of the anomalies relating to the way in which the Government tax different forms of savings and financial assets. To some extent, my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins)—
      Mr. Cousins: Not hon. Friend.
      Mr. Laws: The hon. Gentleman is a former colleague on the Treasury Select Committee, even if he is not an hon. Friend. He has acknowledged the points made by the hon. Member for Eddisbury (Mr. O'Brien).
      I shall raise one specific issue that perhaps the hon. Member for Eddisbury was not able to cover. Perhaps it is appropriate for the Paymaster General to respond on the substance of the matter because she may have access to information that the hon. Gentleman would not have had when he made his comments.
      First, what would be the cost of the new clause and the amendments that are essentially being proposed by the hon. Gentleman? We should know how much money we are talking about if we are to make the changes that the hon. Gentleman proposes. Secondly, what effect would his proposal have both on the total stock of savings and on the distribution of savings between different classes of assets? Perhaps we could not have expected the hon. Gentleman to be able to address that issue.
      Mr. Stephen O'Brien: On the second point, I think that the movement would be upwards. That is the idea and the purpose. The hon. Gentleman wonders whether the Paymaster General will deal with specific cost. I, too, will be interested to hear what she has to say on that. In former times, it was expected that that might have been about £180 million. Over recent times, that is estimated to have come down to about £130 million. I put that on the record as an answer, to compare and contrast with whatever we may get from the Paymaster General.
      Mr. Laws: I am grateful to the hon. Gentleman. That intervention was extremely helpful on two fronts, the second of which related to the effect on the total stock of savings, to which I shall return briefly. The first front related to the cost of the proposed measure. One beneficial effect of the hon. Gentleman's intervention may have been to give the Paymaster General time to gather her thoughts on the cost issue. I hope that she will be able to give us a detailed estimate of the cost.
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      In raising the issues of cost and the effect on the stock of savings, I wish to concentrate on what the effects of the hon. Gentleman's proposal may be. Although he has indicated that he believes that the effect will be to increase the stock of savings—presumably in a significant way, otherwise he would not have bothered to table and introduce the new clause—he will probably know that many independent economic commentators who have assessed the effects of tax relief on savings over many years, both in respect of PEPs and TESSAs, and also in respect of ISAs—have often expressed scepticism in their economic research about the effects of these tax incentives in terms of the total stock of savings.
      In other words, evidence has often indicated that while tax reliefs can often benefit those who have savings, and while they may certainly effect the distribution of savings between particular financial assets, they do not always result in a significant increase in the total stock of savings. We may be talking about how tax relief is distributed across a particular group of taxpayers who are wealthy enough to be able to save, but the hon. Gentleman will be aware that the vast majority of taxpayers have incomes that are so low that they are not able to save. When we consider the new clause, we should have in mind not only what effect it will have and what its cost will be in terms of existing savers. We should surely be reflecting also on how the moneys might be used to restructure the entire system of savings and pensions—a very big issue at present—to help those at the bottom end of income distribution who, at the moment, do not benefit from the reliefs that we are discussing, and who, in a substantive sense, are too poor to save.
      Mr. O'Brien: In addition to the citation from Hansard about what the Government said about the increase in savings in ISAs in 2001 over every income group, including, most significantly, the lower income groups, there was the increase in savings in TESSAs and PEPs during 1998–99. That gives some credence to the overall take-up. It is interesting that there is evidence to show that from 1992 to 2000 there was an exponential increase in retail funds under management, and therefore savings. We can chart the acceleration of growth in relation to the introduction of tax savings and tax attractive schemes throughout all income levels. With the higher rate preference, as it were, the proposal is rough on those who pay the basic rate of tax.
      Mr. Laws: I am grateful to the hon. Gentleman for his intervention. Of course, I do not want to take us too far away from the new clause. I am sure that the hon. Gentleman would accept that it is one thing to demonstrate that particular forms of savings increased rapidly during a period when financial markets were buoyant, when people may have been switching savings between particular asset classes, and another thing to show that the total stock of savings has been increased by these types of relief. The evidence from many independent commentators, such as the Institute for Fiscal Studies, suggests some scepticism about the effect of these sorts of relief on the total stock of savings rather than on distribution between different forms of financial assets. I hope that the Paymaster General will say

      217
      something on that. Her response may help us to understand whether these types of relief in themselves are useful and efficient.
      Mr. Redwood: The tax relief has been welcome, and I disagree with the hon. Member for Yeovil (Mr. Laws), the Liberal Democrat spokesman, in that to me it is self-evident that if people are offered an incentive to do something financially, they are more likely to do it. All these schemes have been actively marketed by City firms on the basis of the tax relief that is available, and they have been very successful. I have saved through TESSAs, PEPs and ISAs, and I know many others who have done similarly. That is because we do well by forgoing taxation on some of our savings out of income that has already been heavily taxed. We see that as an advantage.
      I therefore welcome the decision of my hon. Friend the Member for Eddisbury (Mr. O'Brien) to highlight that as a major issue for debate, and to set out the Opposition's case for more savings and continuing with a family of tax reliefs to encourage that. One of the most worrying features of the Government's economic policy is the precipitate and continuous decline in the savings rate during their years in office. People have found it more difficult to save, as income has been taken away from them through stealth taxes of all kinds. They have recently suffered the double whammy of national insurance and council tax hikes, so they have less disposable income available to save. However, they have also faced a collapse in the returns on their savings. The Government have presided over a massive boom and bust in the equity market, which they did a lot to extend through their decision to take huge sums of money out of that market near its peak through their taxes on telecoms and pensions. We have moved into an era of low returns on bonds and deposits, which has been welcomed by borrowers but which, of course, has been upsetting for people who had saved for their old age, but who now discover that their deposit income is a modest fraction of what it was 10 years ago, through no fault of their own.
      One would have thought that at this juncture the Government would want, first, to increase savings overall, responding to the collapse that they have helped to generate and, secondly, to increase savings through equity-type vehicles, claims on real assets and investments in productive British companies. One would expect them to want to do so now because the equity market has fallen a great deal over the preceding three years, so better values are now available, and because British companies have been starved of cash for some time and, in many cases, need to be refinanced. A better flow of new moneys from the share market in Britain to those companies would be welcome, and would enable them to begin to see again the opportunity both to strengthen their balance sheets and for new investment.
      The new clause is not just about the question of the saver but the use that the money can be put to by companies through the UK marketplace. Another worrying feature of the Government's mismanagement of the economy is the fact that in recent years there has been a shortage of new money going into companies
      218
      through the stock market. It would therefore be perverse in the extreme for the Government to remove one of the last remaining tax incentives for Mr. and Mrs. Everyman to save through company shares at exactly the point at which companies may again see the advantage of turning to stock markets and raising capital for their investment programmes. The House should therefore urge the Government strongly to pledge that they will not go ahead with their plan to remove that important last remaining tax relief.
      My hon. Friend the Member for Eddisbury made it clear that it would be perverse of the Government to persist with their intentions, not least because helpful tax relief would be taken away from people on average or about average earnings who pay standard-rate tax. However, some benefit would be left for people on higher earnings. The Minister, in discussions on the Bill has been keen to close every conceivable loophole for people on above average earnings or who own assets of above average value. It would be interesting to hear why, in this case, she thinks that it is good idea to help people who are doing a bit better than average and clobber those who are not. I urge her to do the decent thing and affirm in the House that the Government do not wish to hit hard people on about average earnings who pay standard-rate tax, and that the tax relief will remain.
      If the Minister cannot make that pledge or guarantee—I fear that she may not—she owes the House and the country an explanation of why the Government have such a downer on savings and savers and why they do not want to have any pro-savings policy at all. The Government have wrecked the telecoms industry with a £22 billion telecoms tax and the pensions industry with a £5 billion a year pensions tax—[Interruption.] Government Members are laughing, but they ought to talk to the people who lost their jobs, shareholdings and family livelihoods as a result of those punitive taxes. The Government are now offering to remove an important tax relief for non-pension savings.
      Mr. Cousins: I am probably wrong to be tempted to intervene, but I am grateful none the less to the right hon. Gentleman for giving way. He ought to acknowledge two things. First, his last speech was about rising housing asset values, so he should acknowledge that asset values possessed by ordinary British people have never been greater than they are now in all their various forms. Secondly, the telecoms sale was, indeed, a sale—the £22 billion was a market response. It turned out to be thoroughly ill judged, but it was a market response none the less.
      3.15 pm
      Mr. Redwood: It was a market response in a rigged market, where the Government decided to sell the air, for heaven's sake. Our air is always for sale with this Government, and I suspect that they will put a tax on breathing when they have run out of ways to raise money for their nefarious and often wasteful purposes. The hon. Gentleman made one sensible point—of course house prices have gone up, which has led to increases in paper wealth for many people and practically all home owners. However, unless people resort to massive borrowing against the perhaps insecure foundations of that inflated asset price, they are not better off. They still need to live in their own home,

      219
      and do not have the real wealth generated by the ownership of a PEP, TESSA, ISA or any other asset that can be freely traded and spent when the need for money arises. The hon. Gentleman should therefore accept that many of us do not think that borrowing a lot against the security of our homes is a particularly good idea for consumption purposes, and particularly not as people get closer to retirement.
      People are being driven into such behaviour by the wreckage and carnage of their pension funds, which was caused by the £5 billion a year tax and the Government's insouciance about equity values. I therefore urge the Government to accept the advice of my hon. Friend the Member for Eddisbury and add to the Bill his new clause, or a Government variant drafted as they see fit. That would show for the first time during their term in office that they recognise the plight of the saver and want to rescue something at least from the disaster that they have created.
      Mr. Djanogly: The Government's proposal to abolish the 10 per cent. tax credit that equity ISAs receive on dividend distributions is one of the most ill considered measures in the Budget, and clearly shows that the Government have simply lost touch with what the people of country want and what business needs.
      My right hon. Friend the Member for Wokingham (Mr. Redwood) rightly mentioned the savings ratio, which has collapsed in recent years, reducing the large number of savers whom Labour inherited from the Conservative Government. Low interest rates may be good for floating rate mortgages which, of course, the Chancellor wants to abolish. However, for every borrower there are many savers, including millions of pensioners, and it is they who have been suffering under the Government. Indeed, under the leadership of this Government, our savings culture has been transformed into a debt culture, with credit card debt sky-rocketing to unprecedented levels, despite a stagnant economy.
      The Government have dealt with that serious problem by hitting savers once again and smashing one of the few remaining tax breaks. The savings culture and, dare I say, prudence have been chucked out of the window in the Chancellor's desperate attempt to raise more money to spend on the black hole of our unreformed public services.
      Mark Tami: Is the hon. Gentleman suggesting that the Conservatives are the party of high interest rates, and will they advocate that at the next election?
      Mr. Djanogly: Interest rates reflect international markets. However, one of the last remaining tax breaks which gave the average low taxpayer a small window of opportunity is now being locked firmly shut by the hon. Gentleman's Government.
      Business remains concerned about the continuing slump in equity prices, and increased concern for the market is stopping investment in companies and reducing their ability to move forward. Businesses have been calling for measures such as the abolition of stamp duty on shares, but the Government are having none of that. Not only does stamp duty stay, but they are regressing by discouraging investment in shares. Let us
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      not forget that business investment was 8 per cent. lower in 2002 than in the previous year—the largest fall since 1991. I repeat that the measure is bad for savers and will be bad for business. It is the measure of a Government who have lost their touch.
      Mr. Baron: I am concerned about the abolition of the 10 per cent. tax credit for a number of reasons. The first is the simple unfairness of it. The only people for whom equity ISAs will remain attractive, as we have heard, are higher rate taxpayers. They will be the only people to benefit from the tax break in future, because they will not have to pay the difference between the higher and lower rate tax. Is that fair? I believe it is not. When the Government unveiled ISAs in 1997, we heard the Paymaster General shout from the rooftops that it was a tax system for savings that was to benefit the many, not just the few. Why do the Government appear to be discriminating against basic rate taxpayers in this form of saving?
      Secondly, the measure goes against the Government's stated policy of encouraging long-term savings and encouraging people to make adequate provision for retirement. The current tax credit offers a significant incentive for basic rate taxpayers to save, and has proved to be extremely popular among that target group. The Government's own figures, for example, show how successful ISAs have been, building upon TESSAs and PEPs, in encouraging people in all income groups to save. I give one example. Of those earning under £10,000 per year, one in five has chosen to save in an ISA. That is an incredible figure.
      There is little doubt that the tax credit encourages people to save money and build up a pool of savings to supplement their pensions, as they increasingly have to do, bearing in mind the pension tax that has sucked £5 billion out of the system and had a disproportionate effect on the stock market. I mentioned that one in five of those earning less than £10,000 was saving through an ISA. Looking at the broader income scales, we see that of those earning between £20,000 and £25,00, one in four saves in an ISA, and in the next group, those earning between £25,000 and £30,000, one in three uses an ISA as part of their long-term savings. The Government should not ignore those figures if they are serious in their intent to encourage savings for the longer term.
      Mr. Bercow: Does my hon. Friend agree that the Treasury is classically guilty in this case, as so often, of short-termism in its thinking? If it pursues a policy that deters people on low incomes from saving in order in the short term to maximise its revenue, the chickens will come home to roost and the Government will ultimately face a higher bill to public funds in the form of means-tested benefits, as sure as night follows day.
      Mr. Baron: That is an excellent point. There is a short-termism about the tax measure that worries me. It will contribute to a decline in savings over the longer term and add to the pension problems that the Government are manufacturing by way of the pensions tax. It is a problem that the Government will have to face over the longer term.
      There is little doubt that the tax change proposed by the Chancellor will undermine investors' confidence in ISAs as a tax-efficient form of savings, and may reverse

      221
      the savings trend that we have seen. ISAs are a well-known "tax-free" product, but the tax levels will increase confusion among the public. That will serve no one's interest—neither the Government's, nor the public's, as I have suggested. It is interesting that in the United States, the Government seem to be moving in the opposite direction. The US is cutting tax payable on dividends and encouraging savings and wider share ownership, because it realises the benefits of so doing. The American economy has performed well, and we should look at that example as a means of encouraging savings and wider share ownership.
      The measure goes against the Government's longer-term aim of changing the proportion of public and private retirement savings from 60:40 to 40:60. The measure will not serve that purpose at all. I shall be interested to hear from the Minister how the Government believe the tax measure will help to achieve that stated objective. Recent research suggests that if the tax-free benefit is reduced or abolished on stocks and shares in ISAs, only one in three savers will continue to invest in that tax-free environment. That figure must worry the Government, if they are intent on improving the balance between public and private retirement savings.
      I shall put two other brief points to the Minister, and I look forward to the reply. There is another sense in which the measure will distort the market. A number of other hon. Members have touched on the point. By reducing the tax incentive for people to invest in equity ISAs, the Government will increase the incentive to invest in cash and bonds, not shares. That probably will not be appropriate for most people's investment requirements. There is a danger that the Government will inadvertently create a scenario where the tax tail is wagging the investment dog.
      People will increasingly see that there is no tax incentive to invest in equity ISAs, and may think that investing in cash or bond ISAs producing a higher short-term income is more appropriate, and certainly more attractive. Over the longer term, equities have proved to be the better investment. People of the younger generation especially should have a good element of their overall investments in equities, rather than bonds and cash. I ask the Minister to address the issue, because there is a danger that by removing the tax incentive for equity ISAs, the Government will inadvertently distort the market.
      One or two other hon. Members have touched on my final point, which is about the way in which equity investment in the longer term benefits the economy. The United States fully appreciates that, which is why it has very recently reduced the tax paid on equity dividends in that country. We all know that economies and the business environment are becoming increasingly competitive. Companies must be able to look to stock markets to raise additional capital, but if shareholders shun the equity markets, that process becomes more difficult. Ultimately that has real economic implications for our standard of living and for the profits that pay for the public services that we all want.
      222
      To revert to the intervention by my hon. Friend the Member for Buckingham (Mr. Bercow), I emphasise that a short-term measure such as the Government propose will in the longer term produce a negative effect on the economy as a whole and the standard of living of us all. People will shun equity markets, which will ultimately have a detrimental effect on companies wanting to raise additional capital on the stock markets.
      3.30 pm
      The Economic Secretary to the Treasury (John Healey): We have heard a full and useful exploration of the issues behind and surrounding new clause 1. The hon. Member for Eddisbury (Mr. O'Brien) is right to say that the ISA is the Government's primary vehicle for savings. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) pointed out that ISAs have been a great success. In fact, there are 14 million, not 12 million, investors in ISAs in this country—6 million more than the number of investors in TESSAs and PEPs at their peak—and ISAs are starting to reach those groups that were underrepresented in terms of saving through PEPs and TESSAs. About 7.5 million investors have accounts with stocks and shares and thus attract the current tax credit.
      The hon. Member for Eddisbury hugely overstates the likely impact of the proposed measure, which his new clause is designed to prevent. Referring to a point he made based on the PIMA analysis, it is true that there has been a switch into corporate bonds in recent times. However, that principally reflects the state of the markets. Bonds may be seen to be a safer investment. However, as the hon. Member for Billericay (Mr. Baron) pointed out, bonds do not have the same potential for long-term growth that equities have. Investors will return to equities when they feel more confident about doing so, and the hon. Gentleman emphasised that he wanted that to happen.
      My hon. Friend the Member for Newcastle upon Tyne, Central explained his concern about recent investors in equity ISAs. I shall examine the considered points that he made in his short contribution, and I am sure that my hon. Friend the Financial Secretary will do so as well when she returns to take up the reins of this portfolio.
      Mr. Flight: Does the Minister not agree that as a matter of principle, it is undesirable to have tax signals that could drive investment decisions? There are all sorts of reasons why people might buy bonds or equities, but the Government should recognise that a better deal on taxation of income being available on bond interest than on equity dividends will have an impact on the way in which moneys flow. In principle, that is not a good thing.
      John Healey: I think that the hon. Gentleman is referring to the fact that corporate bonds attract a relief at 20 per cent. and the tax credits are currently set at 10 per cent. However, I hope he understood my earlier point that that has not been a major driver of the recent switch to bonds.

      223
      The hon. Member for Eddisbury accuses the Government of imposing a stealth tax. A measure that was the subject of a high-profile announcement and was confirmed in the 1998 Budget, and one for which there is a long lead time and a five-year transition provision, can hardly be described as a stealth tax.
      The hon. Member for Yeovil (Mr. Laws) asked the direct question about cost. The Treasury estimate of the cost of the new clause is approximately £200 million. The hon. Gentleman took me to task, claiming that the tax relief creates no new saving and that ISAs simply affect the distribution of existing savings. That is simply not the case. ISAs have been an undoubted success. More than £115 billion has been subscribed into ISAs since they began in April 1999; about 14 million investors—almost one in four adults in this country—hold ISAs—
      Mr. Laws: Will the Economic Secretary give way?
      John Healey: Let me finish my point. I might preempt the hon. Gentleman's intervention. He is especially concerned about those on low incomes. In fact, the holding of ISAs has increased at all income levels.
      Mr. Laws: I am grateful to the Economic Secretary for addressing my specific concerns. Given the amount that the Treasury is spending on ISAs through tax relief, will he tell us whether it has made any estimate of the effect in terms of increasing the overall stock of saving, rather than shifting between different forms?
      John Healey: I have no estimate with me as to the narrow point that the hon. Gentleman raises.
      Mr. Alex Salmond: I am afraid that I do not think that it is a narrow point. Unless those on the Treasury Bench know about the impact not only on one savings instrument, but across the range of savings, how on earth can they analyse and direct policy? If the Treasury does not know about that issue now, perhaps it should study it and investigate the effect on not only one aspect of savings, but on the overall savings ratio.
      John Healey: The hon. Member for Yeovil asked me whether I could give him an estimate of the precise calculation and I responded that I could not do so. I hope that that is clear.
      At the risk of suggesting that the right hon. Member for Wokingham (Mr. Redwood) overstated his case, I say to him that the scale of incentive, especially for the majority of investors—perhaps this does not apply to him—is modest. I shall explain the detail a little later. He asked what pro-savings policies the Government were putting in place—an issue that is relevant to the comments and concerns of the hon. Member for Billericay about balance between public and private pension provision. I could reel off a long list of such policies, but I shall not bore the House. A short list would include the Inland Revenue's simplification of tax treatment for pensions, the development following Sandler of a suite of simplified financial products to
      224
      encourage saving, the child trust fund introduced by the Chancellor, the saving gateway—a savings account targeted at low-income or younger individuals, with Government match funding for all the money saved—and the Financial Services Authority's decision to proceed with the abolition of the polarisation regime.
      Mr. Baron: I appreciate that the Economic Secretary is addressing each point in turn, but may I suggest to him that this is a question of proportion and effect? The point is that the number of ISAs has grown exponentially in recent years. While he lists a series of other initiatives that would encourage saving, the bottom line is that they are dwarfed by the total moneys that are currently contained in ISAs. The Treasury should bear that in mind.
      John Healey: I am glad that the hon. Gentleman pays tribute to the success and growth of ISAs. Of course, the point that he makes is being borne in mind as we consider future policies.
      I should like to deal now with some of the points that the hon. Member for Eddisbury made in the more measured parts of his contribution. He outlined his reasons for tabling his new clause and spoke about extension of the 10 per cent. tax credits payable on UK dividends in ISAs and PEPs beyond 5 April next year, when they are due to finish. He described the effect that he considers that ending the payable tax credit will have on savers who are basic and lower rate taxpayers, as well as on equity ISAs as a whole.
      I say to the hon. Gentleman that the ISA and PEP payable tax credit cannot be considered in isolation. It has to be considered in the context of the major and carefully balanced 1997 package of corporation tax reforms designed to rebalance the effect of corporation tax on the economy. Before that, the payable tax credits on dividends acted to make distributing profits more attractive than reinvesting for growth. We removed that distortion while reducing the rate of corporation tax. As part of the changes, pension funds' payable tax credits ceased in 1997 and individual non-taxpayers have not been paid the credit since April 1999. Charities' payable tax credits also ceased in 1999, although we gave charities transitional relief on a sliding scale until April 2004 to help them to adjust. We also wanted to allow ISA and PEP investors sufficient time to adjust their investment portfolios to take account of the change. Exceptionally, the 10 per cent. ISA and PEP payable credit has therefore been available for a period of five years, from April 1999 until April 2004.
      Mr. Flight: Does the Minister accept that when these changes, whatever their merits, were made, the taxation of dividends received by individuals was adjusted to end up much as it had been? It is therefore inconsistent not to leave at least a modest tax advantage on equity investment within ISAs. There is no consistency between the two aspects.
      John Healey: I hope in a moment to explain the impact of the move that we have made.
      The withdrawal of payable tax credits for ISAs and PEPs does not represent a new or additional tax: it simply means that an additional payment is no longer to

      225
      be made. Of course, tax credits remain and continue to cancel out any tax liability for individuals liable to tax at lower and basic rates.
      Mr. Baron: Will the Economic Secretary please address the point that I and other hon. Members have made, namely that many people feel that the removal of the tax credit discriminates against basic rate taxpayers because they gain no advantage whatsoever from investing in equity ISAs, whereas an advantage remains for higher rate taxpayers? The Government seem to be discriminating, however inadvertently or unintentionally, against basic rate taxpayers. Would the Economic Secretary address the unfairness of that situation?
      John Healey: I shall explain why the threat posed by the removal of this payable tax credit has been hugely overstated and why the claims about severe discrimination against those on lower incomes and lower and basic rate taxpayers are similarly overstated.
      Mr. Bercow: Will the Economic Secretary give way?
      John Healey: Although the hon. Gentleman's Front Benchers are reluctant for me to give way, I shall of course do so.
      Mr. Bercow: I am extremely grateful to the Economic Secretary. While he is dealing with the salient point raised by my hon. Friend the Member for Billericay (Mr. Baron), will he also reveal to the House what assessment he has made of the likely increase in take-up of means-tested benefits as a result of the extremely short-sighted stance that the Government have adopted?
      John Healey: I have to be honest with the hon. Gentleman: I did not make that specific assessment as part of my preparations for dealing with the new clause.
      Retaining the ISA and PEP 10 per cent. payable tax credit beyond April 2004 would unbalance the general package of reforms that we have rut in place, which the hon. Member for Eddisbury described as the looming abolition of tax credits. Although he suggests that the ending of this payable tax credit will put off savers, especially those who are basic and lower rate taxpayers, from investing in equity ISAs, the average tax credit per person per year is only £25. For the majority, it translates into a reduction in tax benefit of less than that, and for more than 40 per cent. the reduction amounts to less than £10 a year. Two thirds will experience a reduction of payable tax credits amounting to less than £20 a year. Only 3 per cent. of basic rate taxpayers will experience a reduction in tax benefits amounting to more than £100. In recent times, a major factor in connection with confidence in equity investments has been the general state of the markets, not the threat of the ending of this payable tax credit.
      After April 2004, ISA and PEP investors will still pay no income tax on the investment returns from their PEPs and ISAs. Other tax benefits, such as exemption from capital gains tax on long-term capital
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      appreciation, and the fact that they do not have to return details of their PEPs and ISAs to the Inland Revenue, will remain attractive for many investors, including those who are lower and basic rate taxpayers.
      For all those reasons, I am unable to accept the new clause. I hope that in the light of this useful debate, the hon. Gentleman will not press it to a vote; if he does, I shall have to ask my hon. Friends to vote it down.
      3.45 pm
      Mr. Stephen O'Brien: The debate has been useful and notable because hon. Members from several parties have contributed. That includes the curiously supportive as well as curiously critical contribution of the hon. Member for Yeovil (Mr. Laws). It was slightly "On the one hand, on the other". The hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) made a helpful contribution, and that description applies especially to the speeches of my hon. Friends. The figure of 14 million people has been mentioned, and lower income groups are targeted by another potential Government stealth tax. It has been said—not by me—that the Government's success over all income levels is now threatened. The ultimate issue was whether there would be a question mark over overall savings or shifts between different sorts of savings products. The Economic Secretary did not know. The last thing that Parliament should do is to risk diminishing savings; we should always try to enhance them. Removing section 76(1)(a) of the Finance Act 1998 and thereby retaining the 10 per cent. tax credit on the products that we are considering, especially for basic rate taxpayers, would be beneficial. The hon. Member for Banff and Buchan (Mr. Salmond) expressed that well. We give that priority and I urge hon. Members to support the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 189, Noes 301.

      Division No. 263]

      [3:46 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Cable, Dr. Vincent

      Allan, Richard

      Calton, Mrs Patsy

      Amess, David

      Cameron, David

      Atkinson, David (Bour'mth E)

      Campbell, Gregory (E Lond'y)

      Atkinson, Peter (Hexham)

      Campbell, rh Menzies (NE Fife)

      Baker, Norman

      Carmichael, Alistair

      Baldry, Tony

      Cash, William

      Barker, Gregory

      Chapman, Sir Sydney (Chipping

      Baron, John (Billericay)

      Barnet)

      Barrett, John

      Chidgey, David

      Beith, rh A. J.

      Chope, Christopher

      Bellingham, Henry

      Clappison, James

      Bercow, John

      Clarke, rh Kenneth (Rushcliffe)

      Beresford, Sir Paul

      Clifton-Brown, Geoffrey

      Boswell, Tim

      Collins, Tim

      Bottomley, rh Virginia (SW

      Conway, Derek

      Surrey)

      Cormack, Sir Patrick

      Brake, Tom (Carshalton)

      Cotter, Brian

      Brazier, Julian

      Curry, rh David

      Breed, Colin

      Davey, Edward (Kingston)

      Brooke, Mrs Annette L.

      Davis, rh David (Haltemprice &

      Browning, Mrs Angela

      Howden)

      Bruce, Malcolm

      Djanogly, Jonathan

      Burnett, John

      Dodds, Nigel

      Burns, Simon

      Doughty, Sue

      Burnside, David

      Duncan, Peter (Galloway)

      Burt, Alistair

      Duncan Smith, rh lain

      Butterfill, John

      Evans. Nigel

      227

      Ewing, Annabelle

      Murrison, Dr. Andrew

      Fabricant, Michael

      Norman, Archie

      Fallon, Michael

      Oaten, Mark (Winchester)

      Field, Mark (Cities of London &

      O'Brien, Stephen (Eddisbury)

      Westminster)

      Osborne, George (Tatton)

      Flight, Howard

      Ottaway, Richard

      Flook, Adrian

      Page, Richard

      Forth, rh Eric

      Paice, James

      Foster, Don (Bath)

      Portillo, rh Michael

      Fox, Dr. Liam

      Price, Adam (E Carmarthen &

      Francois, Mark

      Dinefwr)

      Garnier, Edward

      Prisk, Mark (Hertford)

      George, Andrew (St. Ives)

      Pugh, Dr. John

      Gidley, Sandra

      Randall, John

      Gillan, Mrs Cheryl

      Redwood, rh John

      Goodman, Paul

      Reid, Alan (Argyll & Bute)

      Grayling, Chris

      Robathan, Andrew

      Green, Damian (Ashford)

      Robertson, Angus (Moray)

      Green, Matthew (Ludlow)

      Robertson, Hugh (Faversham &

      Greenway, John

      M-Kent)

      Grieve, Dominic

      Robertson, Laurence (Tewk'b'ry)

      Gummer, rh John

      Robinson, Peter (Belfast E)

      Hague, rh William

      Roe, Mrs Marion

      Hancock, Mike

      Rosindell, Andrew

      Harris, Dr. Evan (Oxford W &

      Ruffley, David

      Abingdon)

      Russell, Bob (Colchester)

      Harvey, Nick

      Salmond, Alex

      Hawkins, Nick

      Sanders, Adrian

      Heath, David

      Sayeed, Jonathan

      Heathcoat-Amory, rh David

      Selous, Andrew

      Hendry, Charles

      Shepherd, Richard

      Hermon, Lady

      Simmonds, Mark

      Holmes, Paul

      Simpson, Keith (M-Norfolk)

      Horam, John (Orpington)

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

      Howard, rh Michael

      Kincardine)

      Howarth, Gerald (Aldershot)

      Soames, Nicholas

      Hunter, Andrew

      Spelman, Mrs Caroline

      Jack, rh Michael

      Spicer, Sir Michael

      Jenkin, Bernard

      Spink, Bob (Castle Point)

      Johnson, Boris (Henley)

      Spring, Richard

      Keetch, Paul

      Stanley, rh Sir John

      Kennedy, rh Charles (Ross Skye &

      Streeter, Gary

      Inverness)

      Stunell, Andrew

      Key, Robert (Salisbury)

      Syms, Robert

      Kirkbride, Miss Julie

      Tapsell, Sir Peter

      Kirkwood, Sir Archy

      Taylor, Ian (Esher)

      Knight, rh Greg (E Yorkshire)

      Taylor, John (Solihull)

      Lamb, Norman

      Taylor, Matthew (Truro)

      Lansley, Andrew

      Taylor, Dr. Richard (Wyre F)

      Laws, David (Yeovil)

      Thomas, Simon (Ceredigion)

      Leigh, Edward

      Thurso, John

      Letwin, rh Oliver

      Tonge, Dr. Jenny

      Lewis, Dr. Julian (New Forest E)

      Tredinnick, David

      Liddell-Grainger, Ian

      Trend, Michael

      Lidington, David

      Trimble, rh David

      Lilley, rh Peter

      Turner, Andrew (Isle of Wight)

      Llwyd, Elfyn

      Tyrie, Andrew

      Loughton, Tim

      Viggers, Peter

      Luff, Peter (M-Worcs)

      Waterson, Nigel

      McIntosh, Miss Anne

      Watkinson, Angela

      Mackay, rh Andrew

      Webb, Steve (Northavon)

      Maclean, rh David

      Weir, Michael

      McLoughlin, Patrick

      Whittingdale, John

      Malins, Humfrey

      Wiggin, Bill

      Maples, John

      Willetts, David

      Marsden, Paul (Shrewsbury &

      Williams, Hywel (Caernarfon)

      Atcham)

      Winterton, Ann (Congleton)

      Maude, rh Francis

      Wishart, Pete

      Mawhinney, rh Sir Brian

      Young, rh Sir George

      May, Mrs Theresa

      Younger-Ross, Richard

      Mitchell, Andrew (Sutton

      Coldfield)

      Tellers for the Ayes:

      Moore, Michael

      Mr. David Wilshire and

      Moss, Malcolm

      Mr. Mark Hoban

      228

      NOES

      Adams, Irene (Paisley N)

      Dalyell, Tam

      Ainger, Nick

      Davey, Valerie (Bristol W)

      Ainsworth, Bob (Cov'try NE)

      David, Wayne

      Alexander, Douglas

      Davidson, Ian

      Allen, Graham

      Davies, rh Denzil (Llanelli)

      Anderson, Janet (Rossendale &

      Davies, Geraint (Croydon C)

      Darwen)

      Davis, rh Terry (B'ham Hodge H)

      Armstrong, rh Ms Hilary

      Dawson, Hilton

      Atherton, Ms Candy

      Dean, Mrs Janet

      Atkins, Charlotte

      Denham, rh John

      Austin, John

      Dhanda, Parmjit

      Bailey, Adrian

      Dismore, Andrew

      Baird, Vera

      Dobbin, Jim (Heywood)

      Banks, Tony

      Donohoe, Brian H.

      Barnes, Harry

      Doran, Frank

      Battle, John

      Drew, David (Stroud)

      Bayley, Hugh

      Dunwoody, Mrs Gwyneth

      Beard, Nigel

      Efford, Clive

      Beckett, rh Margaret

      Ellman, Mrs Louise

      Begg, Miss Anne

      Etherington, Bill

      Bell, Stuart

      Field, rh Frank (Birkenhead)

      Bennett, Andrew

      Fisher, Mark

      Benton, Joe (Bootle)

      Fitzsimons, Mrs Lorna

      Berry, Roger

      Follett, Barbara

      Best, Harold

      Foster, rh Derek

      Betts, Clive

      Foster, Michael Jabez (Hastings

      Blackman, Liz

      & Rye)

      Blears, Ms Hazel

      Foulkes, rh George

      Blizzard, Bob

      George, rh Bruce (Walsall S)

      Borrow, David

      Gerrard, Neil

      Bradley, rh Keith (Withington)

      Gilroy, Linda

      Bradley, Peter (The Wrekin)

      Godsiff, Roger

      Bradshaw, Ben

      Goggins, Paul

      Brennan, Kevin

      Griffiths, Jane (Reading E)

      Brown, Russell (Dumfries)

      Griffiths, Nigel (Edinburgh S)

      Buck, Ms Karen

      Griffiths, Win (Bridgend)

      Burden, Richard

      Grogan, John

      Burgon, Colin

      Hain, rh Peter

      Burnham, Andy

      Hall, Mike (Weaver Vale)

      Byers, rh Stephen

      Hall, Patrick (Bedford)

      Campbell, Alan (Tynemouth)

      Hamilton, David (Midlothian)

      Campbell, Mrs Anne (C'bridge)

      Hamilton, Fabian (Leeds NE)

      Campbell, Ronnie (Blyth V)

      Hanson, David

      Caplin, Ivor

      Harman, rh Ms Harriet

      Casale, Roger

      Harris, Tom (Glasgow Cathcart)

      Challen, Colin

      Havard, Dai (Merthyr Tydfil &

      Clapham, Michael

      Rhymney)

      Clark, Mrs Helen (Peterborough)

      Healey, John

      Clark, Dr. Lynda (Edinburgh

      Henderson, Doug (Newcastle N)

      Pentlands)

      Henderson, Ivan (Harwich)

      Clarke, rh Tom (Coatbridge &

      Hendrick, Mark

      Chryston)

      Hepburn, Stephen

      Clarke, Tony (Northampton S)

      Heppell, John

      Clelland, David

      Hesford, Stephen

      Clwyd, Ann (Cynon V)

      Hewitt, rh Ms Patricia

      Coffey, Ms Ann

      Heyes, David

      Cohen, Harry

      Hinchliffe, David

      Coleman, Iain

      Hodge, Margaret

      Connarty, Michael

      Hoey, Kate (Vauxhall)

      Cook, Frank (Stockton N)

      Hood, Jimmy (Clydesdale)

      Cook, rh Robin (Livingston)

      Hoon, rh Geoffrey

      Cooper, Yvette

      Hopkins, Kelvin

      Corbyn, Jeremy

      Howarth, George (Knowsley N &

      Corston, Jean

      Sefton E)

      Cousins, Jim

      Howells, Dr. Kim

      Cox, Tom (Tooting)

      Hughes, Kevin (Doncaster N)

      Cranston, Ross

      Humble, Mrs Joan

      Cruddas, Jon

      Hurst, Alan (Braintree)

      Cryer, Ann (Keighley)

      Hutton, rh John

      Cryer, John (Hornchurch)

      Iddon, Dr. Brian

      Cummings, John

      Illsley, Eric

      Cunningham, rh Dr. Jack

      Ingram, rh Adam

      (Copeland)

      Irranca-Davies, Huw

      Cunningham, Jim (Coventry S)

      Jackson, Glenda (Hamstead &

      Cunningham, Tony (Workington)

      Highgate)

      229

      Jackson, Helen (Hillsborough)

      Olner, Bill

      Jenkins, Brian

      O'Neill, Martin

      Johnson, Miss Melanie (Welwyn

      Palmer, Dr. Nick

      Hatfield)

      Picking, Anne

      Jones, Helen (Warrington N)

      Pickthall, Colin

      Jones, Jon Owen (Cardiff C)

      Pike, Peter (Burnley)

      Jones, Lynne (Selly Oak)

      Pollard, Kerry

      Keeble, Ms Sally

      Pope, Greg (Hyndburn)

      Keen, Alan (Feltham)

      Pound, Stephen

      Kemp, Fraser

      Prentice Ms Bridget (Lewisham

      Khabra, Piara S.

      E)

      Kidney, David

      Prentice Gordon (Pendle)

      Kilfoyle, Peter

      Primarolo, rh Dawn

      King, Andy (Rugby)

      Prosser, Gwyn

      King, Ms Oona (Bethnal Green &

      Purchase, Ken

      Bow)

      Quinn, Lawrie

      Knight, Jim (S Dorset)

      Reed, Andy (Loughborough)

      Kumar, Dr. Ashok

      Reid, rh Dr. John (Hamilton N &

      Ladyman, Dr. Stephen

      Bellshill)

      Lammy, David

      Robertson, John (Glasgow

      Lawrence, Mrs Jackie

      Anniesland)

      Laxton, Bob (Derby N)

      Robinson, Geoffrey (Coventry

      Lepper, David

      NW)

      Leslie, Christopher

      Roche, Mrs Barbara

      Levitt, Tom (High Peak)

      Rooney, Terry

      Lewis, Ivan (Bury S)

      Ross, Ernie (Dundee W)

      Lewis, Terry (Worsley)

      Roy, Frank (Motherwell)

      Linton, Martin

      Ruane, Chris

      Lloyd, Tony (Manchester C)

      Ruddock, Joan

      Love, Andrew

      Russell, Ms Christine (City of

      Lucas, Ian (Wrexham)

      Chester)

      Luke, Iain (Dundee E)

      Ryan, Joan (Enfield N)

      Lyons, John (Strathkelvin)

      Salter, Martin

      McAvoy, Thomas

      Sarwar, Mohammad

      McCabe, Stephen

      Savidge Malcolm

      McCafferty, Chris

      Sawford, Phil

      McDonagh, Siobhain

      Sedgemore, Brian

      McDonnell, John

      Shaw, Jonathan

      MacDougall, John

      Sheridan, Jim

      McFall, John

      Short, rh Clare

      McGuire, Mrs Anne

      Singh, Marsha

      McIsaac, Shona

      Skinner, Dennis

      McKechin, Ann

      Smith, rh Andrew (Oxford E)

      McKenna, Rosemary

      Smith, rh Chris (Islington S &

      Mackinlay, Andrew

      Finsbury)

      McNulty, Tony

      Smith, Geraldine (Morecambe &

      Mactaggart, Fiona

      Lunesdale)

      McWalter, Tony

      Smith, Jacqui (Redditch)

      Mahmood, Khalid

      Smith, John (Glamorgan)

      Mahon, Mrs Alice

      Smith, Llew (Blaenau Gwent)

      Mallaber, Judy

      Southworth, Helen

      Mandelson, rh Peter

      Starkey, Dr. Phyllis

      Mann, John (Bassetlaw)

      Steinberg, Gerry

      Marris, Rob (Wolverh'ton SW)

      Stevenson, George

      Marsden, Gordon (Blackpool S)

      Stewart, Ian (Eccles)

      Marshall, David (Glasgow

      Stinchcombe, Paul

      Shettleston)

      Stoate, Dr. Howard

      Martlew, Eric

      Stringer, Graham

      Meacher, rh Michael

      Stuart, Ms Gisela

      Merron, Gillian

      Sutcliffe, Gerry

      Michael, rh Alun

      Tami, Mark (Alyn)

      Milburn, rh Alan

      Taylor, Dari (Stockton S)

      Miller, Andrew

      Thomas, Gareth (Clwyd W)

      Mitchell, Austin (Gt Grimsby)

      Tipping, Paddy

      Moffatt, Laura

      Touhig, Don (Islwyn)

      Moran, Margaret

      Trickett, Jon

      Morgan, Julie

      Truswell, Paul

      Mountford, Kali

      Turner, Dennis (Wolverh'ton SE)

      Mudie, George

      Turner, Dr. Desmond (Brighton

      Mullin, Chris

      Kemptown)

      Murphy, Denis (Wansbeck)

      Turner, Neil (Wigan)

      Murphy, Jim (Eastwood)

      Twigg, Derek (Halton)

      Naysmith, Dr. Doug

      Tynan, Bill (Hamilton S)

      Norris, Dan (Wansdyke)

      Vaz, Keith (Leicester E)

      O'Brien, Bill (Normanton)

      Vis, Dr. Rudi

      O'Hara, Edward

      Walley, Ms Joan

      230

      Ward, Claire

      Woodward, Shaun

      Wareing, Robert N.

      Worthington, Tony

      Watson, Tom (W Bromwich E)

      Wray, James (Glasgow

      Watts, David

      Baillieston)

      White, Brian

      Wright Anthony D. (Gt

      Whitehead, Dr. Alan

      Yarmouth)

      Williams, rh Alan (Swansea W)

      Wright, David (Telford)

      Williams, Betty (Conwy)

      Wright, Tony (Cannock)

      Winnick, David

      Wyatt, Derek

      Winterton, Ms Rosie (Doncaster

      Tellers for the Noes:

      C)

      Jim Fitzpatrick and

      Wood, Mike (Batley)

      Paul Clark

      Question accordingly negatived.

    New Clause 2

      DEBITS AND CREDITS TREATED AS RELATING TO CAPITAL EXPENDITURE
      '.—(1) Paragraph 14 of Schedule 9 to the Finance Act 1996 (debits and credits treated as relating to capital expenditure) is amended as follows:

      (2) After subparagraph (1) insert—

      "(1A) This paragraph also applies where any debit or credit given by an authorised accounting method for any accounting period in respect of a loan relationship of a company is allowed by generally accepted accounting practice to be treated, in the accounts of the company, as an amount brought into account in determining the value of a financial asset.".

      (3) After subparagraph (3) insert—

      "(4) For the purpose of subparagraph (1A) above a `financial asset' is as defined by Financial Reporting Standard 5 issued in April 1994 by the Accounting Standards Board, as from time to time amended.".'.— [Mr. Flight.]

      Brought up, and read the First time.
      4 pm
      Mr. Flight: I beg to move, That the clause be read a Second time.
      This is a technical proposal to sort out a continuing anomaly from the Finance Act 1996, and is designed particularly to sort out some problems for PFI companies. PFI companies can account for the cost of construction assets for the public sector as either fixed assets or financial assets depending on the interpretation and application of financial reporting standard 5, application note F. The corporate tax treatment does not always follow the accounting treatment and, with either accounting treatment, the cost of construction can be taxed on a capital basis.
      The current loan relationship legislation under the 1996 Act provides that where interest is capitalised into a fixed asset for accounting purposes, a corporate tax deduction can be taken in the accounting period in which the interest is incurred. Where interest is capitalised into a financial asset, the Revenue's view is that the corporate tax deduction should be spread over the life of the asset, with the profile of the deductions following the write-down of the asset in the balance sheet. The tax deduction will not be taken at a time when there is an equivalent debit to the profit and loss account and does not follow the accounting treatment.
      The pricing of PFI contracts takes into account the time value of money. An interest deduction is worth more and will reduce the price to the public sector if it is available sooner rather than later. Many PFI companies

      231
      have priced on that basis. The current rules prejudice companies that account for the construction costs as a financial asset. New clause 2 is designed to correct this anomaly, providing that the timing of the deduction for capitalised interest is not dependent upon the interpretation of accounting guidelines. The new clause amends the loan relationship legislation as enacted by the Finance Act 1996.
      Dawn Primarolo: I am a little surprised that the hon. Gentleman is still pushing this new clause, particularly as I understand that it was prompted by a practitioner group seeking clarification of the operation of the existing legislation. That clarification has been provided and accepted by that group. The new clause is unnecessary. I shall ask the House to reject it, but I should briefly explain the position regarding existing legislation. The practitioner groups to which the hon. Gentleman has referred have accepted the guidance from the Revenue.
      The new clause provides for an interest deduction to be allowed to a company when that interest is accrued, even though the interest may not be debited to the company's profit and loss account. That can occur quite properly in accordance with the UK generally accepted accounting practice as part of the capitalisation of the construction costs of a major capital project.
      The new clause is intended to ensure that where interest and associated construction costs are accounted for as financial assets, the interest costs can be deducted for tax purposes as they accrue. The new clause is unnecessary. The loan relationships legislation in the Finance Act 1996 already provides for capitalised interest to be deducted as it accrues despite not having been taken into the profit and loss account.
      As I said, I understood that the new clause, tabled some weeks ago, was related to clarification for particular practitioner groups. Following the tabling of the new clause, constructive dialogue took place between the Revenue and the external representatives of the head office, PFI contracts group. I am sorry that the hon. Gentleman has not been informed that that reassured the group that existing legislation already provides the certainty that it requires—specifically, that the Revenue accepts that, where a PFI property is a fixed asset for tax purposes, it will fall within the definition of a fixed capital project in paragraph 14 of schedule 9 of the Finance Act 1996. That ensures that relief for interest is properly given as it accrues. The Revenue has confirmed the provision and will confirm it again in new guidance in the very near future. I ask my hon. Friends to vote against the new clause, should it be put to the vote. It is unnecessary because the current legislation is quite clear.
      Mr. Flight: I am grateful for the Paymaster General's comments, which had not been relayed to me. The briefing behind the new clause was not the group to which she referred. As it appears that the Government picked up the point from the new clause that we tabled, it would have been helpful if the Government could have advised us. However, on the basis that the problem has been dealt with, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 3

      CONTINUATION OF CHILDREN'S TAX CREDIT FOR PERSONS SUBJECT TO IMMIGRATION CONTROL
      '(1) Where this section applies—

      (a) the repeal of section 257AA of, and Schedule 13B to, the Taxes Act 1988 (children's tax credit) by sections 1(3)(a) and 60 of, and Schedule 6 to, the Tax Credits Act 2002 (the 2002 Act); and

      (b) the repeal of the references to "section 257AA" in section 257C of the Taxes Act 1988 by section 60 of, and Schedule 6 to, the 2002 Act shall not apply.

      (2) This section applies where the claimant is wholly or partly excluded from entitlement to child tax credit or working tax credit (or both) by reason of being a person subject to immigration control within the meaning of section 42 of the 2002 Act and regulations made thereunder.'.—[Mr. Flight.]
      Brought up, and read the First time.
      Mr. Flight: I beg to move, That the clause be read a Second time.
      This is a probing new clause, which provides for children's tax credit to continue under the new child tax credit arrangements for persons subject to immigration control. We are essentially seeking Government comment, and perhaps an undertaking to review the tax credits regime as it applies to immigrant workers and impacts on their children. Practical issues are lurking, and nothing in the new child tax credit guide says that migrant workers who were previously entitled to children's tax credit will not be entitled to the new child tax credit. That is likely to result in applications being made in ignorance of the changes to payments and then to potential problems in recouping the moneys paid from parents who may not be able to afford it. In those circumstances, do the Government intend to pursue reclaims? There is also an issue of whether it is right to prejudice the children of genuine migrants, especially when the Chancellor's Budget speech specifically mentioned improvements to skilled migrants' programmes and to the skills needed.
      Mr. Laws: We support the new clause and commend the hon. Gentleman for bringing it forward. The low income tax reform group has also helped to highlight the issue. The most important aspect of the new clause is that it aims to restore the position of certain skilled migrants to what pertained before the abolition of the children's tax credit and the introduction of the child tax credit in April this year. It seems that there have inadvertently been some losers as a consequence of the changes introduced in the Budget. Among those losers are skilled migrants from non-EU countries who lose entitlement under the new regime to a tax credit that they previously enjoyed. In some cases, individuals could be as much as £10 or even £20 worse off per week, which is unfortunate given that we are talking about a group of people who may already be on low incomes.
      The situation gives rise to three issues of fairness, the first of which is the fairness of where we are now under Government regulations by comparison with where we were before the changes were introduced. It appears that a particular group of workers has been put in a worse position with no apparent justification. The second potential unfairness is the comparative treatment of EU

      233
      and non-EU individuals working in this country, with only the EU individuals receiving child tax credit, even though they may be in exactly the same jobs as the non-EU individuals. The third issue is the need to flush out Government thinking about why particular individuals should be denied a tax credit when they are paying tax on the earnings from the employment that they are entering into in this country. That calls into question the thrust of the Government's approach on tax credits and whether they are supposed to represent the reimbursement of tax already paid or constitute some kind of benefit that the Government can withhold on the basis that tax credits are regarded under existing rules as being public funds to which individuals subject to immigration controls are not entitled to have recourse. That seems to be the basis on which the Government are withholding child tax credits from the individuals in question. This is an important matter, and we have too little time to explore it. I hope we have given the Paymaster General enough time to address some of the issues.
      Dawn Primarolo: The issue is quite straightforward, and the new tax credits follow the practice adopted with the working families tax credit and the disabled person's tax credit. The child tax credit replaces elements of both those tax credits as well as children's tax credit relief. From 2004, the child elements of out-of-work benefits from income support and jobseeker's allowance will build on the benefits of child benefit itself.
      It is a long-standing requirement of immigration rules that those who come to the United Kingdom should be able to support themselves without recourse to public funds. For that reason, persons subject to immigration controls are not able to claim the new child tax credit, as they were previously not able to claim the working families tax credit and the disabled person's tax credit. The new child tax credit incorporates elements from a range of systems of support—tax, tax credits and social security. It is inevitable, therefore, that there will be changes in comparison with the existing system.
      The issues for income tax relief, such as the children's tax credit, are different in this area from those for the payable tax credits, because the value of the relief can never exceed the income liability. On that point, the working families tax credit—the main method of support in the last Parliament for working families on lower incomes—provides a precedent for how to proceed in these circumstances. The rules for the new tax credits need to fit within the same wider policy framework as those for working families tax credit.
      The child tax credit is the means by which we now support children. In terms of immigration laws, we are simply following the long-established policy that some people are allowed to remain here subject to certain conditions, which means that they must be able to support themselves. Conditions attached to leave to remain are a matter for the Home Office, not for our regulations. Within the wider policy framework, we have worked to ensure that the rules are fair and work fairly between couples.
      Mr. Laws: The Paymaster General says that there are long-established conventions, but will she acknowledge
      234
      that a category of individual skilled migrants will be worse off as a consequence of the changes being implemented?
      Dawn Primarolo: Reliefs can change, as can the tax system. Behind the new tax credits, and the requirements that are not subject to change by me as a Treasury Minister, are the policies that the Government, and previous Governments, have pursued with regard to conditions that are placed on people who have leave—
      It being three and a half hours after the commencement of proceedings on the first Ways and Means motion relating to the Bill, MR. DEPUTY SPEAKER, pursuant to Order [this day], put forthwith the Question already proposed from the Chair.
      Question negatived.
      4.15 pm
      Mr. Salmond: On a point of order, Mr. Deputy Speaker. On two occasions, first in the Committee of the whole House and now on Report, we have lost a vital amendment that affects my constituents and many others who are concerned about North sea oil exploration and the thousands of jobs that depend on it. As you know, Mr. Deputy Speaker, I am not a paranoid sort of guy, but I am beginning to wonder whether there might be something so powerful in the amendment that the Government are resorting to these underhand and shabby techniques to avoid debating it. If not, is not the whole timetabling of the Finance Bill deficient if important amendments, duly selected, are not being considered?
      Your knowledge of Standing Orders is much greater than mine, Mr. Deputy Speaker, so my point of order is this. Is there anything in our Standing Orders to state that if an amendment is selected for the third time it must be debated? Do we have a "three strikes and you're in" policy in the House and, if we do not, should we have such a policy to stop vital amendments being lost in that fashion?
      Mr. Deputy Speaker (Sir Michael Lord): I understand the hon. Gentleman's concern, and I am sorry that new clause 9 was not reached this afternoon. However, he will understand that the Chair can do nothing about that; I am purely the servant of the House in such matters and we are only doing what the House has already decided it will do today. I am sure, however, that the hon. Gentleman has put his point firmly on the record.

    Clause 9

      BINGO DUTY
      Mr. Stephen O'Brien: I beg to move amendment No. 3, page 6, line 22, leave out "15" and insert "5".
      Mr. Deputy Speaker: With this it will be convenient to discuss the following: amendment No. 1, in page 7, line 8, at end insert
      "less the amount of value added tax paid or payable by the person on those payments".

      235
      Government amendment No. 4.
      Mr. O'Brien: If proof were needed that there was no need for the knife to have fallen, the point of order made by the hon. Member for Banff and Buchan (Mr. Salmond) provided it. It is well known that I was deeply opposed to the timetable. Given the progress that we are making, it would have been possible to cover all the new clauses.
      The amendments relate to bingo duty. Hon. Members will recall the extended debate on the issue in the Committee of the whole House. We highlighted a number of serious shortcomings and a complete mismatch between the Chancellor's rhetoric in his Budget speech and the Government's actions in the Finance Bill.
      Our amendments have a common aim: to put in law the Chancellor's promises to all bingo players in this country. In his Budget speech, the Chancellor said:
      "I turn now to bingo. I will abolish the bingo tax … just as I have abolished direct taxes on the pools and on betting on horse racing."
      The phrase "just as I have" was clearly intended to give bingo players and clubs a promise from the Government. The Government successfully created the expectation among all those interested in bingo—the providers or the millions who play the game—that there was to be direct equivalence. The Chancellor continued:
      "The tax on bingo players' stakes and the tax on bingo prizes will be replaced in the same way as the tax on betting and the pools."—[Official Report, 9 April 2003; Vol. 403, c. 278.]
      When the Chancellor used language such as "just as I have" and "will be replaced in the same way", were not bingo players and clubs right to think that he intended to create an expectation that there would be direct equivalence? Indeed, that expectation was built up well before the Budget speech, when the bingo industry and players were led to believe, from discussions with Customs and Excise, that the tax system would make participation fees VAT exempt and that the new gross profits tax would be levied at 15 per cent., "just as", or in the same way as for betting and the pools.
      It is with the deepest regret—although, unfortunately, it is no surprise with this Chancellor—that we find that the Chancellor has not lived up to the words in his Budget speech. The Finance Bill made it clear not only that VAT would remain but that it would not be treated as expenditure in the GPT calculation, which will result in double taxation. Faced with that reality, the bingo industry will not be able to meet players' expectations of increased prizes. That deliberate and intended consequence shows that the Chancellor's actions are the opposite of his words.
      Amendment No. 1 would remove the double taxation. It would not be necessary if the Government lived up to their promises and introduced an amendment to make participation fees VAT exempt. The House will appreciate that I am not permitted to table such an amendment, but the Government could easily address the matter. I note that the Government have tabled a similar amendment—amendment No. 4—clearly prompted by my call on the Floor of the House on 13 May.
      236
      When the Government tabled the amendments and issued the Treasury press release, they claimed all sorts of wonderful things for bingo, but we can show that their words do not match their deeds. Frankly, that would be too much to expect. Indeed, it never happens. No credit whatsoever is given to parliamentary procedure, to accountability or, of course, to Her Majesty's official Opposition, who have pressed the point to the extent that, with deep embarrassment, the Government have had to admit to the fact that they have failed to live up to their promises.
      I welcome Government amendment No. 4, and I am delighted that the Economic Secretary has been persuaded by my arguments. If the Government assure me that they will move their amendment, I will be able to seek the leave of the House to withdraw amendment No. 1, but, yet again, I will have to wait to hear whether Ministers can live up to their words. I will have to wait to see whether the Economic Secretary moves that amendment.
      I also tabled a second amendment, amendment No. 3, which is tied to the fact that I am not permitted to table an amendment to make participation fees VAT exempt. The reason I am not allowed to do so is plain for all to see: such matters have, in effect, been delegated to the European Union, and we cannot hold the Government to account about them on the Floor of the House.
      The Chancellor created an expectation that the bingo industry would be put on a level playing field with the rest of the gaming industry and suffer an effective GPT rate of 15 per cent., with VAT-exempt participation fees. I understand that, as participation fees remain liable to VAT, the net VAT cost to the bingo industry is approximately 10 per cent. Under amendment No. 3, we would reduce the GPT rate to 5 per cent., so the effective rate of tax would be kept at 15 per cent.
      Amendment No. 3 is less elegant than simply making participation fees VAT exempt, and I trust that, as with double taxation, the Economic Secretary will be similarly persuaded by my arguments and will agree to make participation fees VAT exempt. That is entirely within his gift; I cannot do it, but I can certainly introduce my amendment, which would have the same effect. Why deal with the issue in a more difficult way when it is in the Government's gift to ensure that things happen in the most appropriate, straightforward and elegant way that would be easily understood by all bingo players throughout the country, as well as the clubs themselves?
      Mr. John Greenway: I am grateful to my hon. Friend for the interest that he has shown in this matter. Until yesterday, I was the shadow Minister with responsibility for gambling—I had been for some time—and I can tell him that the bingo industry is deeply annoyed and angry at the way in which the Government have treated it over this issue. However, may I clarify what he is saying? He says that he cannot commit the Conservative party to a VAT exemption, but is he saying that it is our policy to ensure that there would be tax equalisation between bingo and other forms of gambling, because that would certainly be a worthy aim that this country's 7 million bingo players would deeply appreciate?
      Mr. O'Brien: I am grateful to my hon. Friend for that intervention, and I know that he takes a tremendous interest in and supports not only the bingo industry, but all the gaming industries, which are so important to constituents throughout the country.
      I am sure that my hon. Friend followed the technical position in relation to the Finance Bill: as members of Her Majesty's Opposition, it is not in our terms of reference, or in the Standing Orders, to table amendments that adjust VAT rates, so we have had to look for an alternative. By doing so, we are seeking to ensure that the Chancellor lives up to his promise, which was the bingo industry's incentive to move from GPT to bingo tax, as that may happen with the consent of pools and betting on horse racing, but against the express wishes of the bingo industry. To get those in the bingo industry to agree, they were promised a level playing field.
      We have to hold the Chancellor to account for his words. I am waiting for the Government to deliver. It is up to them to find the resources to match their promises with the deeds on taxation that they should have implemented in the first place. If they do the honourable thing and step up to their promises rather than having to be dragged inch by inch in such an appalling way, we will inherit that position after the next general election. We have absolutely no intention of changing that position if the Government live up to their promises.
      The Economic Secretary might well argue that the Government's measures deliver benefits to the bingo industry worth £35 million. He might also argue that the bingo industry will always want more, but every industry would. He might argue that the Government must make difficult decisions on the scope and size of tax cuts and draw the line, but that misses the point. The Chancellor's Budget speech raised the expectation of a level playing field with the rest of the gaming industry. Indeed, the expectations of the industry and bingo players were raised before the speech was made. The line was drawn before and during the Budget speech but, as has happened so often during consideration of the Bill, the Government moved the line.
      When I moved an amendment to implement my call for the removal of double taxation at a benefit of £10 million per annum, the Treasury issued a press release saying that
      "the tax reforms will now mean around £125 million a year more in prizes or other player benefits".
      That raised false expectations. It is fair to note the fourth note to editors in the press release, which said that the reform will mean
      "half a million more visits to bingo clubs, and a £30 million increase in the industry's profits in 2007."
      It was interesting to read the bingo industry's reaction, because it had rightly been involved in negotiations with the Government. That is no surprise because the Government's technique is to try to get anyone who is about to criticise them into new Labour's big tent by saying, "Come and have a chat with us. Don't get offside because if you start to get too difficult we will not be able to deliver anything because we cannot stand up to that."
      238
      The Government claimed that a £10 million boost would deliver £125 million of benefits, but an article written by Susie Mesure, which was published in The Independent on 20 June, said:
      "Sir Peter Fry, the chairman of the Bingo Association, said: `You don't have to be a mathematical genius to work out that a net saving of £35m won't give £125m in extra prizes yet that is the impression that is being given. There is no way the £125m in extra prizes can be claimed in anything like the near future."
      The article continued:
      "While Sir Peter acknowledged that an additional £10m was helpful, he said the Treasury's suggestion that this would create £125m in extra prizes was false. 'This will cause aggravation among bingo members', he said. Not to make it clear that the extra £125m would not happen today but was years off happening was rather naughty.'"—
      I think that he was exceptionally measured and that he pulled his punches by saying that. It is clear that the Treasury's intention was to try to see off the industry but not to give it the level playing field promised by the Chancellor.
      It is an absolute outrage that we have had to table an amendment and drag the Government along kicking and screaming—I fear that they will scream rather than kick their proposal into touch and adopt ours, although I would be jolly glad if they did. I do not anticipate that they will do that because they cannot bring themselves to accept that there is some democracy in this country and that there is a purpose of having an official Opposition who can spot when the Government are playing fast and loose. It is time for them to step up to meet their promises.
      It is critical that the Government accept the amendments. The mention of bingo in the Budget speech gave the Chancellor his only opportunity to make a joke—it fell completely flat—and he raised expectations. I call on him to live up to his promises and create a level playing field for the bingo industry, rather than playing with numbers and bingo players' expectations, so that this country's bingo players get the fair deal that they deserve, and they can be assured that they would get that from the Conservatives. I urge hon. Members to accept the amendments because it is a matter of honour to meet the expectations created by the Chancellor. Depending on whether we receive a satisfactory response from the Economic Secretary, I hope that hon. Members will join me in the Lobby.
      4.30 pm
      Mr. Greenway: I shall be brief because I do not want the House to experience the problem highlighted by the hon. Member for Banff and Buchan (Mr. Salmond) of not having time to debate the most important amendment—in this case, arguably, on insurance companies—which is in the last group.
      The Minister addressed the Bingo Association conference the other day and I had the pleasure of speaking soon after. In their cack-handed way, the Government have done two things. First, they have united a bingo industry that, in most other respects, is divided. The two big bingo club organisations, which have about half the bingo clubs between them, support the Government's proposal for bingo in casinos. That also means that a casino could be in a bingo hall if their deregulation plans are successful. It will be interesting to see how that develops. However, the rest of the

      239
      industry—all the smaller clubs—do not want that to happen. They would rather protect bingo as it is, but to do that the game has to compete with other forms of gambling. That is why the industry is united in its opposition to the Government's proposal. When I intervened on my hon. Friend the Member for Eddisbury (Mr. O'Brien), I said that it is annoyed and angry, but that is putting it mildly. As he argued, the Chancellor made a promise that he has not kept.
      The second consequence of the Government's actions is, in social terms, deeply disturbing. I do not suggest that only men go into betting shops and only women go into bingo halls, but the majority of punters who go into betting shops are men and the large number of people who go into bingo clubs are women. I hope the House accepts that generalisation. As a result of the change to gross profits tax for bets in betting shops, when the husband has a bet on the 3 o'clock at Doncaster he will pay less tax on the outcome of that race than his wife will pay when she spends an evening in a bingo club, because she will be taxed twice—on the VAT on the participation fee and as a result of the 15 per cent. profits tax that bingo proprietors will have to pay. That has been explained to the Government and I cannot understand why, having heard that message, they continue to set their face against the change.
      The Minister said something interesting at the Bingo Association conference. It came as a surprise to most bingo proprietors present when he said that the Government did not intend to equalise the tax across different forms of gambling. That is not the impression given to the bingo industry in the suggestion that there should be a gross profits tax.
      I am left with two thoughts. The first is that whatever the House decides to do, we have not heard the last of this. It would not surprise me to find that next time we debate the subject, the Labour Benches are not deserted. Right hon. and hon. Members from all over the country will be in the Chamber because their bingo club members, whose votes they will wish to garner at the next general election, will have urged them to be here.
      My second thought is to question how the Chancellor could introduce this measure. What is he up to? What is the point of this proposal? Apart from the tidiness of moving to a gross profits tax for bingo, as for other forms of gambling—I can understand that and think, in general, it should be welcomed—what were his motives? The truth is—this is a general point in relation to the overall debate on the Finance Bill—he is saying, "I realise that I am for ever raising taxes. I want to announce a cut in tax." The proposal was sold on the day of the Budget as a cut in tax. The reality, however, is that there is no cut in tax. There is a cut in tax for people who go to the betting shop—that has been delivered—but there is no cut in tax for the 7 million people who play bingo. Gradually, as they discover that they have been cheated by the Government, they will be deeply angry.
      I believe that the House will want to reconsider the measure. I hope that the Minister thinks long and hard before he rejects amendment No. 3. He should consider what the Government need to do about the problem now. If they do nothing, they will lose face in future.
      Mr. Djanogly: In the face of a strong showing from the bingo industry and after much hard graft by my hon. Friend the Member for Eddisbury (Mr. O'Brien) the Government have announced an extra £10 million tax cut for bingo. The Government have not been shy in suggesting that that should create an extra £125 million in prize money, or as the Daily Express, obligingly for Labour, put it on 19 June:
      "Bingo—it's a £125 million bonus".
      However, as with so much else that we see from the Government, when the initial media stunts and spin calm down, the catches and inaccuracies begin to creep out of their dark holes.
      It seems that, to achieve their £125 million, the Government are maintaining that by cutting the tax 500,000 extra people will rush out and play bingo. Perhaps the Government have based that conclusion on the thousands of people who will now be looking for a return on their money following the Government's demolition job on ISAs. Whatever the Government's pie-in-the-sky reasoning may be, I can only note, as did my hon. Friend the Member for Eddisbury, the disbelief of the chairman of the Bingo Association in the Government's figures. He said that the £125 million would not happen today but was years off, and would be ruined in any event if the Government increased the tax on machines in bingo clubs.
      This might be a good opportunity to ask the Minister whether the Government have any such intention. One wonders whether the Daily Express will now print "Bingo—it's a £125 million fraud." Somehow I doubt it.
      John Healey: I welcome Opposition Members' contributions, especially that of the hon. Member for Ryedale (Mr. Greenway). I welcome his declared interest, he having stepped down from the Opposition Front Bench to take an interest in and devote more time to the gambling industry. I am glad that he participated in the debate.
      I say to the hon. Member for Eddisbury (Mr. O'Brien) that whatever the wishes and whatever the expectations, especially within the industry, there is no mismatch between what my right hon. Friend the Chancellor of the Exchequer said in the Budget and what is delivered in the Bill. There was no promise to deliver direct equivalence between the gambling regimes, and no promise to abolish VAT on participation fees. The words "level playing fields" were not those of the Chancellor, and they were not mine. They were the hon. Gentleman's, and they might also have been those of some of his contacts in the industry.
      Of course the bingo industry wanted more from the tax reforms. Indeed, it argued for more during consultation. It argued, unsurprisingly, as does the hon. Member for Eddisbury, for the full removal of VAT from players' participation fees. That would have cost at least another £50 million more than the proposals set out in the Budget and in the Bill.
      I shall respond to some of the detailed points that have been raised and explain the purpose behind Government amendment No. 4.
      Mr. Burnett: Before the Minister does that, perhaps he will help the House by telling us whether it is the Government's long-term aim to move to equality between bingo and betting and the pools. If it is their aim, when does he seek to achieve it?
      John Healey: The short answer is no. The hon. Member for Yeovil (Mr. Laws) presses the same argument in relation to the excise regime for alcohol. It is certainly an objective to have a fairer balance between the different gambling and alcohol regimes, but it is not the Government's objective or policy to seek direct equivalence. I hope that that makes the matter clear and categoric for the hon. Gentleman.
      I understand why the hon. Member for Eddisbury wants to claim credit for Government amendment No. 4 and for my decision that lies behind it. I made it clear during the debate on bingo duty reform in the Committee of the whole House that I was already in discussion with the bingo industry. I undertook that, following those discussions, I would consider how the calculation of the gross profits tax interacts with the treatment of VAT on bingo participation fees.
      To recap briefly, our reform of bingo taxation was driven by our desire to boost the bingo industry and give players a better deal. The current tax structure discouraged innovation and penalised bingo companies that lowered their margins. My right hon. Friend the Chancellor announced in the Budget that we would therefore abolish duties on bingo players' stakes and added prize money and replace them with a 15 per cent. tax on bingo companies' gross profits—the difference between the amount spent on the playing of bingo and the amount paid out in prizes. The reform would have delivered a £25 million tax cut to the bingo industry.
      During discussions with officials after Budget day, the bingo industry argued that the new tax structure would produce an unfortunate consequence in the interaction between the gross profits tax and VAT on the participation fees that bingo companies charge players for running games of bingo, and asked us to consider amending clause 9 to remedy that flaw. It also asked us to extend the period for the introduction of reforms, which were scheduled for 4 August, saying that it would take three months to put the arrangements in place. It said that it would prefer a new start date, and 27 October has been specified in the Bill. After discussions with the industry, and at its request, we have altered the definition of the accounting period for the purposes of the new tax so that it better fits the industry's accounting arrangements and record keeping. That demonstrates my commitment to consider carefully the arguments that the industry makes to the Government.
      Mr. Greenway: The Minister accepts that the placing of a bet in a betting shop carries no VAT, but the stake on a game of bingo, because it involves a participation fee—the entrance fee for the evening's games—attracts VAT. I understand the niceties of that. However, if the bingo industry told the Minister that it would reexamine its charging structure for playing bingo to achieve equivalence with the stake in a betting shop or a gaming machine, would he consider that carefully? It appears from what he is saying that he has set his face
      242
      against a reduced VAT rate for bingo, which will remain standard rated as long as the route of participation fees is taken.
      John Healey: The hon. Gentleman has made a serious point. It is correct that the gross profits tax on the betting industry is set at 15 per cent, but he will know better than any other Member that that is not the full picture, because bookmakers are required to add a levy from the gross profits that they make on horse racing as a contribution to supporting the industry, thus increasing in many respects the effective tax rate. Curiously but historically, VAT has been levied on bingo playing, but not betting, since the introduction of the VAT regime.
      The hon. Gentleman referred to a speech that I made to the Bingo Association at its annual general meeting in May. I made it clear then that the reforms that we are putting in place are not necessarily a full stop for bingo tax reform. Just as happened with our reforms to gambling, betting and the lottery, we have monitored the present reforms carefully and are ready to consider good evidence and a well-argued case for further reform. Indeed, the Bill makes further reform to duty and tax, particularly on betting exchanges. We had a long discussion of that in Committee.
      As a result of the discussions that the industry had with me and with officials following the Chancellor's Budget statement, amendment No. 4 has been tabled for consideration by the House. It builds on our original reform and will increase the tax cut for the industry from £25 million to £35 million, and reduce the effective tax rate—that is, tax as a percentage of profits—on the playing of bingo from 31 to 24 per cent., similar to the effective tax rates for the national lottery, casinos and gaming machines. The hon. Member for Ryedale cannot deny that that is a cut in the tax for the industry, as he seemed to do in his remarks.
      4.45 pm
      I have spoken to the bingo industry about the amendment, which I know it welcomes. In the Bingo Association's press release of 19 June, Sir Peter Fry, its chairman, said:
      "The revision will make a significant difference, especially for smaller operators."
      John Kelly, the chief executive of Gala, the biggest bingo operator, said that the change would benefit players. The industry, through its work with the Henley centre, has predicted that it can build on this initial £35 million tax cut, and estimates that by 2007 there could be an extra 500,000 visits per year and an extra £125 million in prizes and other benefits to players, compared with its predictions for the same date if we had continued under the old tax system. I can tell the hon. Member for Eddisbury that the industry also projects that this should improve its profitability.
      I welcome the fact that the Opposition have indicated that they can support amendment No. 4 and the change. I believe that it achieves what their amendment No. 1 tries to do, so it may help if I explain why I would be reluctant to accept their version. [Interruption.] The hon. Member for Eddisbury encourages me to move on, so I shall simply say that Opposition amendment No. 1 would have produced a perverse outcome. It would have

      243
      delivered only about three quarters of the revenue benefit delivered to bingo companies by our approach in amendment No. 4, and companies that have smaller margins or invest more would receive proportionally less benefit than companies that do not.
      As I explained when rejecting a similar amendment in the Committee of the whole House, although we appreciate that the bingo industry wanted a bigger tax cut, we have delivered what we believe will boost bingo, give players a better deal and is affordable in the current situation of fiscal neutrality. To accept amendment No. 3 would require us to increase taxes elsewhere or to reduce spending elsewhere. We are not prepared to do either.
      It is a curious reflection—I put it no stronger than that—that a party that is not prepared to match the investment that we are making in health, education and other vital areas of public services, should choose to make this a priority for a future regime.
      Mr. Stephen O'Brien: The Minister is quoting again from the Labour lie machine handbook.
      John Healey: In that case, I quote the hon. Gentleman's boss, the shadow Chancellor, who said:
      "We are not bound by any of the pledges of the last election"—
      pledges to match the Labour party's commitment to increase investment in health and education. The hon. Gentleman's leader said:
      "I explicitly on three separate occasions when asked said we will not match Government spending plans. And I stand by that because our spending on the health service, on education, will be both different from a central Government standpoint and in terms of private and voluntary participation."
      Mr. Deputy Speaker: Order. We are straying a little far from bingo.
      John Healey: I am grateful for your reminder and admonishment, Mr. Deputy Speaker.
      To accept amendment No. 3 would require us either to increase taxes or to make spending cuts elsewhere. We are prepared to do neither. Our bingo reform is designed to deliver a boost to bingo and a better deal for players. Government amendment No. 4 builds on the original £25 million tax cut by further reducing the tax on bingo by £10 million. That is a good deal for the bingo industry and its players. I commend the Government amendment to the House and look forward to the hon. Member for Eddisbury withdrawing amendment No. 1. I hope that, in the light of my comments, he will not press his other amendment; if he does. I will ask my hon. Friends to resist it.
      Mr. Stephen O'Brien: I listened carefully to the Economic Secretary. I am grateful to my hon. Friends the Members for Ryedale (Mr. Greenway) and for Huntingdon (Mr. Djanogly) for their contributions. I understand that any acknowledgement that the Government's decision to table amendment No. 4 was prompted by our actions will not be forthcoming. Of course, if amendment No. 1 was not grouped with other amendments, I would be happy to withdraw it, but as it is not a lead amendment I cannot do what the Minister invites me to do.
      244
      The Minister said that the Government amendment is more generous than ours. That comes as no surprise. As I explained, it is uniquely in the Government's gift to change the rate of VAT. The Opposition had to work extraordinarily hard to find a way that did not contravene the Standing Orders of the House as they apply to the Finance Bill to raise the issue and at the same time make our point about the deep anger and anxiety felt by bingo players and the bingo and gaming industry.
      The Economic Secretary frankly admitted that the playing field was not intended to be level and that no promise of direct equivalence was made, and said that the Chancellor had not used those phrases. However, in his Budget speech, the Chancellor used the phrase "just as" and said that bingo tax would be
      "replaced in the same way as the tax on"—[Official Report, 9 April 2003; Vol. 403, c. 278.]
      other forms of gaming. I understand that Members of Parliament are in the business of words when we trade arguments and make our case, but I am conscious that the words we use have direct intended meanings for those outside this place who listen carefully to what we have to say. I know that if I used the phrases "just as" and "in the same way as" in this context, all those who were listening would perceive my intention to be to produce a level playing field and direct equivalence. That is what the Chancellor hoped would be perceived by the bingo players and bingo clubs of this country.
      As my hon. Friend the Member for Ryedale said, there was tension in the bingo industry between small clubs and the large ones, all of whose interests need to be protected. To the very large number of bingo players in this country the clubs are an important source of entertainment, profit and revenue and community facilities—we should not lose sight of the importance to our local communities of such clubs, not least the Top Ten bingo club in Winsford in my constituency. It is a spurious use of spin to suggest that the Government may use words without being too worried about the precise effect that those words have. Above all, Governments are judged on their actions, and in this respect the Government have been found wanting in not having brought bingo into line with other forms of gaming, namely, pools and betting on horse racing.
      It is a further spurious use of spin to suggest that a £10 million tax reduction will lead almost immediately—no time line was cited—to a £125 million benefit to the bingo industry. Notwithstanding its welcome for the £10 million cut, the industry has been criticised and castigated by commentators. When holding the Government to account, we should emphasise the importance of matching the words in the Chancellor's Budget statement with the deeds that the Government propose through the Finance Bill. That view must be reflected, given the deep anger and anxiety I mentioned earlier and—to answer the point and by the hon. Member for Torridge, and West Devon (Mr. Burnett)—given that there was no commitment and no expectation in respect of time.
      I think that we have flushed out the Government's true belief and intent. Unfortunately, they are not matched by what I believe were the intended consequences of the words that the Chancellor used. It is incumbent on us to hold the Government to account

      245
      on that basis, so I ask my hon. Friends and all those in the House who believe that the future of bingo depends on an equal competitive position in respect of other forms of gaming, as was intended and as was the price for moving to gross profits tax, to join me in the Lobby to support the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 185, Noes 304.

      Division No. 264]

      [4:55 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Field, Mark (Cities of London &

      Allan, Richard

      Westminster)

      Amess, David

      Flight, Howard

      Atkinson, David (Bour'mth E)

      Flook, Adrian

      Atkinson, Peter (Hexham)

      Forth, rh Eric

      Bacon, Richard

      Foster, Don (Bath)

      Baker, Norman

      Fox, Dr. Liam

      Baldry, Tony

      Francois, Mark

      Barker, Gregory

      Garnier, Edward

      Baron, John (Billericay)

      George, Andrew (St. Ives)

      Barrett, John

      Gibb, Nick (Bognor Regis)

      Beith, rh A. J.

      Gidley, Sandra

      Bellingham, Henry

      Gillan, Mrs Cheryl

      Bercow, John

      Goodman, Paul

      Beresford, Sir Paul

      Grayling, Chris

      Boswell, Tim

      Green, Damian (Ashford)

      Bottomley, rh Virginia (SW

      Green, Matthew (Ludlow)

      Surrey)

      Greenway, John

      Brake, Tom (Carshalton)

      Grieve, Dominic

      Brazier, Julian

      Gummer, rh John

      Breed, Colin

      Hague, rh William

      Brooke, Mrs Annette L.

      Harris, Dr. Evan (Oxford W &

      Browning, Mrs Angela

      Abingdon)

      Burnett, John

      Harvey, Nick

      Burns, Simon

      Hawkins, Nick

      Burnside, David

      Heath, David

      Burt, Alistair

      Heathcoat-Amory, rh David

      Butterfill, John

      Hendry, Charles

      Cable, Dr. Vincent

      Hermon, Lady

      Calton, Mrs Pasty

      Hoban, Mark (Fareham)

      Cameron, David

      Holmes, Paul

      Campbell, rh Menzies (NE Fife)

      Horam, John (Orpington)

      Carmichael, Alistair

      Howard, rh Michael

      Cash, William

      Howarth, Gerald (Aldershot)

      Chapman, Sir Sydney (Chipping

      Hunter, Andrew

      Barnet)

      Jack, rh Michael

      Chidgey, David

      Jenkin, Bernard

      Chope, Christopher

      Keetch, Paul

      Clappison, James

      Kennedy, rh Charles (Ross Skye &

      Clarke, rh Kenneth (Rushcliffe)

      Inverness

      Clifton-Brown, Geoffrey

      Key, Robert (Salisbury)

      Collins, Tim

      Kirkbride, Miss Julie

      Conway, Derek

      Kirkwood, Sir Archy

      Cormack, Sir Patrick

      Knight, rh Greg (E Yorkshire)

      Cotter, Brian

      Laing, Mrs Eleanor

      Cran, James (Beverley)

      Lait, Mrs Jacqui

      Curry, rh David

      Lansley, Andrew

      Davey, Edward (Kingston)

      Laws, David (Yeovil)

      Davies, Quentin (Grantham &

      Leigh, Edward

      Stamford)

      Letwin, rh Oliver

      Davis, rh David (Haltemprice &

      Lewis, Dr. Julian (New Forest E)

      Howden)

      Liddell-Grainger, Ian

      Djanogly, Jonathan

      Lidington, David

      Dodds, Nigel

      Lilley, rh Peter

      Duncan, Peter (Galloway)

      Llwyd, Elfyn

      Duncan Smith, rh lain

      Loughton, Tim

      Evans, Nigel

      Luff, Peter (M-Worcs)

      Ewing, Annabelle

      McIntosh, Miss Anne

      Fabricant, Michael

      Mackay, rh Andrew

      Fallon, Michael

      Maclean, rh David

      246

      McLoughlin, Patrick

      Shepherd, Richard

      Malins, Humfrey

      Simmonds, Mark

      Maples, John

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

      Marsden, Paul (Shrewsbury &

      Kincardine)

      Atcham)

      Soames, Nicholas

      Maude, rh Francis

      Spelman, Mrs Caroline

      Mawhinney, rh Sir Brian

      Spicer, Sir Michael

      May, Mrs Theresa

      Spink, Bob (Castle Point)

      Mitchell, Andrew (Sutton

      Spring, Richard

      Coldfield)

      Stanley, rh Sir John

      Moss, Malcolm

      Streeter, Gary

      Murrison, Dr. Andrew

      Tapsell, Sir Peter

      Norman, Archie

      Taylor, Ian (Esher)

      Oaten, Mark (Winchester)

      Taylor, John (Solihull)

      O'Brien, Stephen (Eddisbury)

      Taylor, Matthew (Truro)

      Öpik, Lembit

      Taylor, Dr. Richard (Wyre F)

      Osborne, George (Tatton)

      Thomas, Simon (Ceredigion)

      Ottaway, Richard

      Tonge, Dr. Jenny

      Page, Richard

      Trend, Michael

      Paice, James

      Trimble, rh David

      Portillo, rh Michael

      Turner, Andrew (Isle of Wight)

      Price, Adam (E Carmarthen &

      Tyrie, Andrew

      Dinefwr)

      Viggers, Peter

      Prisk, Mark (Hertford)

      Waterson, Nigel

      Pugh, Dr. John

      Watkinson, Angela

      Redwood, rh John

      Webb, Steve (Northavon)

      Reid, Alan (Argyll & Bute)

      Whittingdale, John

      Robathan, Andrew

      Widdecombe, rh Miss Ann

      Robertson, Angus (Moray)

      Wiggin, Bill

      Robertson, Laurence (Tewk'b'ry)

      Willetts, David

      Robinson, Peter (Belfast E)

      Williams, Hywel (Caernarfon)

      Roe, Mrs Marion

      Wilshire, David

      Rosindell, Andrew

      Winterton, Ann (Congleton)

      Ruffley, David

      Wishart, Pete

      Russell, Bob (Colchester)

      Young, rh Sir George

      Salmond, Alex

      Younger-Ross, Richard

      Sanders, Adrian

      Sayeed, Jonathan

      Tellers for the Ayes:

      Selous, Andrew

      Hugh Robertson and

      Shephard, rh Mrs Gillian

      Mr. Robert Syms

      NOES

      Abbott, Ms Diane

      Bradshaw, Ben

      Adams, Irene (Paisley N)

      Brennan, Kevin

      Ainger, Nick

      Brown, Russell (Dumfries)

      Ainsworth, Bob (Cov'try NE)

      Buck, Ms Karen

      Alexander, Douglas

      Burden, Richard

      Allen, Graham

      Burgon, Colin

      Anderson, rh Donald (Swansea E)

      Burnham, Andy

      Anderson, Janet (Rossendale &

      Byers, rh Stephen

      Darwen)

      Campbell, Alan (Tynemouth)

      Armstrong, rh Ms Hilary

      Campbell, Mrs Anne (C'bridge)

      Atherton, Ms Candy

      Campbell, Ronnie (Blyth V)

      Atkins, Charlotte

      Caplin, Ivor

      Austin, John

      Casale, Roger

      Bailey, Adrian

      Cawsey, Ian (Brigg)

      Banks, Tony

      Challen, Colin

      Barnes, Harry

      Clapham, Michael

      Battle, John

      Clark, Mrs Helen (Peterborough)

      Bayley, Hugh

      Clark, Dr. Lynda (Edinburgh

      Beard, Nigel

      Pentlands)

      Beckett, rh Margaret

      Clark, Paul (Gillingham)

      Begg, Miss Anne

      Clarke, rh Tom (Coatbridge &

      Bell, Stuart

      Chryston)

      Bennett, Andrew

      Clarke, Tony (Northampton S)

      Benton, Joe (Bootle)

      Clelland, David

      Berry, Roger

      Coffey, Ms Ann

      Best, Harold

      Cohen, Harry

      Betts, Clive

      Connarty, Michael

      Blackman, Liz

      Cook, Frank (Stockton N)

      Blears, Ms Hazel

      Cook, rh Robin (Livingston)

      Blizzard, Bob

      Cooper, Yvette

      Boateng, rh Paul

      Corbyn, Jeremy

      Borrow, David

      Corston, Jean

      Bradley, rh Keith (Withington)

      Cousins, Jim

      Bradley, Peter (The Wrekin)

      Cox, Tom (Tooting)

      247

      Cranston, Ross

      Hurst, Alan (Braintree)

      Cruddas, Jon

      Hutton, rh John

      Cryer, Ann (Keighley)

      Iddon, Dr. Brian

      Cryer, John (Hornchurch)

      Illsley, Eric

      Cummings, John

      Ingram, rh Adam

      Cunningham, rh Dr. Jack

      Irranca-Davies, Huw

      (Copeland)

      Jackson, Glenda (Hampstead &

      Cunningham, Jim (Coventry S)

      Highgate)

      Cunningham, Tony (Workington)

      Jackson, Helen (Hillsborough)

      Dalyell, Tam

      Jenkins, Brian

      Davey, Valerie (Bristol W)

      Johnson, Miss Melanie (Welwyn

      David, Wayne

      Hatfield)

      Davidson, Ian

      Jones, Helen (Warrington N)

      Davies, rh Denzil (Llanelli)

      Jones, Jon Owen (Cardiff C)

      Davies, Geraint (Croydon C)

      Jones, Lynne (Selly Oak)

      Davis, rh Terry (B'ham Hodge H)

      Keeble, Ms Sally

      Dawson, Hilton

      Keen, Alan (Feltham)

      Dean, Mrs Janet

      Keen, Ann (Brentford)

      Denham, rh John

      Khabra, Piara S.

      Dhanda, Parmjit

      Kidney, David

      Dismore, Andrew

      Kilfoyle, Peter

      Dobbin, Jim (Heywood)

      King, Andy (Rugby)

      Donohoe, Brian H.

      King, Ms Oona (Bethnal Green &

      Doran, Frank

      Bow)

      Dowd, Jim (Lewisham W)

      Knight, Jim (S Dorset)

      Drew, David (Stroud)

      Kumar, Dr. Ashok

      Dunwoody, Mrs Gwyneth

      Ladyman, Dr. Stephen

      Eagle, Angela (Wallasey)

      Lammy, David

      Efford, Clive

      Lawrence, Mrs Jackie

      Ellman, Mrs Louise

      Laxton, Bob (Derby N)

      Etherington, Bill

      Lepper, David

      Field, rh Frank (Birkenhead)

      Leslie, Christopher

      Fitzpatrick, Jim

      Levitt, Tom (High Peak)

      Fitzsimons, Mrs Lorna

      Lewis, Terry (Worsley)

      Follett, Barbara

      Linton, Martin

      Foster, rh Derek

      Lloyd, Tony (Manchester C)

      Foster, Michael Jabez (Hastings

      Love, Andrew

      & Rye)

      Lucas, Ian (Wrexham)

      Foulkes, rh George

      Luke, Iain (Dundee E)

      Gapes, Mike (Ilford S)

      Lyons, John (Strathkelvin)

      George, rh Bruce (Walsall S)

      McAvoy, Thomas

      Gerrard, Neil

      McCabe, Stephen

      Gilroy, Linda

      McCafferty, Chris

      Godsiff, Roger

      McDonagh, Siobhain

      Goggins, Paul

      MacDonald, Calum

      Griffiths, Jane (Reading E)

      McDonnell, John

      Griffiths, Nigel (Edinburgh S)

      McFall, John

      Griffiths, Win (Bridgend)

      McIsaac, Shona

      Grogan, John

      McKechin, Ann

      Hain, rh Peter

      McKenna, Rosemary

      Hall, Mike (Weaver Vale)

      Mackinlay, Andrew

      Hall, Patrick (Bedford)

      McNulty, Tony

      Hamilton, David (Midlothian)

      Mactaggart, Fiona

      Hamilton, Fabian (Leeds NE)

      McWalter, Tony

      Hanson, David

      Mahon, Mrs Alice

      Harman, rh Ms Harriet

      Mallaber, Judy

      Harris, Tom (Glasgow Cathcart)

      Mandelson, rh Peter

      Havard, Dai (Merthyr Tydfil &

      Mann, John (Bassetlaw)

      Rhymney)

      Marris, Rob (Wolverh'ton SW)

      Healey, John

      Marsden, Gordon (Blackpool S)

      Henderson, Doug (Newcastle N)

      Marshall, David (Glasgow

      Henderson, Ivan (Harwich)

      Shettleston)

      Hendrick, Mark

      Martlew, Eric

      Hepburn, Stephen

      Meacher, rh Michael

      Heppell, John

      Merron, Gillian

      Heyes, David

      Michael, rh Alun

      Hill, Keith (Streatham)

      Miliband, David

      Hinchliffe, David

      Miller, Andrew

      Hood, Jimmy (Clydesdale)

      Mitchell, Austin (Gt Grimsby)

      Hoon, rh Geoffrey

      Moffatt, Laura

      Hopkins, Kelvin

      Mole, Chris

      Howarth, George (Knowsley N &

      Morgan, Julie

      Sefton E)

      Mountford, Kali

      Howells, Dr. Kim

      Mudie, George

      Hughes, Kevin (Doncaster N)

      Mullin, Chris

      Humble, Mrs Joan

      Murphy, Denis (Wansbeck)

      248

      Murphy, Jim (Eastwood)

      Southworth, Helen

      Naysmith, Dr. Doug

      Starkey, Dr. Phyllis

      Norris, Dan (Wansdyke)

      Steinberg, Gerry

      O'Brien, Bill (Normanton)

      Stevenson, George

      O'Brien, Mike (N Warks)

      Stewart, David (Inverness E &

      O'Hara, Edward

      Lochaber)

      Olner, Bill

      Stewart, Ian (Eccles)

      O'Neill, Martin

      Stinchcombe, Paul

      Osborne, Sandra (Ayr)

      Stoate, Dr. Howard

      Palmer, Dr. Nick

      Stringer, Graham

      Picking, Anne

      Stuart, Ms Gisela

      Pickthall, Colin

      Sutcliffe, Gerry

      Pollard, Kerry

      Tami, Mark (Alyn)

      Pope, Greg (Hyndburn)

      Taylor, Dari (Stockton S)

      Pound, Stephen

      Thomas, Gareth (Clwyd W)

      Prentice, Ms Bridget (Lewisham

      Thomas, Gareth (Harrow W)

      E)

      Tipping, Paddy

      Prentice, Gordon (Pendle)

      Touhig, Don (Islwyn)

      Primarolo, rh Dawn

      Trickett, Jon

      Prosser, Gwyn

      Truswell, Paul

      Purchase, Ken

      Turner, Dennis (Wolverh'ton SE)

      Quinn, Lawrie

      Turner, Neil (Wigan)

      Rammell Bill

      Twigg, Derek (Halton)

      Reed, Andy (Loughborough)

      Tynan, Bill (Hamilton S)

      Reid, rh Dr. John (Hamilton N &

      Vaz, Keith (Leicester E)

      Bellshill)

      Vis, Dr. Rudi

      Robertson, John (Glasgow

      Walley, Ms Joan

      Anniesland)

      Ward Claire

      Robinson, Geoffrey (Coventry

      Wareing, Robert N.

      NW)

      Watson, Tom (W Bromwich E)

      Roche, Mrs Barbara

      Watts, David

      Rooney, Terry

      White, Brian

      Ross, Ernie (Dundee W)

      Whitehead, Dr. Alan

      Ruane, Chris

      Williams, rh Alan (Swansea W)

      Ruddock, Joan

      Williams, Betty (Conwy)

      Russell, Ms Christine (City of

      Wills, Michael

      Chester)

      Wilson, Brian

      Ryan, Joan (Enfield N)

      Winnick, David

      Winterton, Ms Rosie (Doncaster

      Salter, Martin

      C)

      Savidge, Malcolm

      Wood, Mike (Batley)

      Sawford, Phil

      Woodward, Shaun

      Sedgemore, Brian

      Woolas, Phil

      Sheridan, Jim

      Worthington, Tony

      Short, rh Clare

      Wray, James (Glasgow

      Skinner, Dennis

      Baillieston)

      Smith, rh Andrew (Oxford E)

      Wright, Anthony D. (Gt

      Smith, rh Chris (Islington S &

      Yarmouth)

      Finsbury)

      Wright, David (Telford)

      Smith, Geraldine (Morecambe &

      Wright, Tony (Cannock)

      Lunesdale)

      Wyatt, Derek

      Smith, Jacqui (Redditch)

      Smith, John (Glamorgan)

      Tellers for the Noes:

      Smith, Llew (Blaenau Gwent)

      Mr. Fraser Kemp and

      Soley, Clive

      Margaret Moran

      Question accordingly negatived.
      Amendment made: No. 4, in page 7, line 12, at end insert—
      '() where a payment relates to a supply of services on which value added tax is chargeable, the amount of value added tax chargeable shall be disregarded (irrespective of whether or not that amount is paid by way of value added tax),'.—[Jim Fitzpatrick.]

    Clause 17
    Clause 18

      JOINT AND SEVERAL LIABILITY FOR UNPAID VAT OF ANOTHER TRADER
      Mr. Stephen O'Brien: I beg to move amendment No. 52, in page 15, line 15, leave out Clauses 17 and 18.

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      The amendment relates to clauses 17 and 18. We recognise that we have had considerable discussion and debate in Committee, but further developments have arisen on those important clauses and it is therefore important to hold a debate. The Committee considered them in some detail, and in the light of that additional information the only way to ensure that a debate takes place on Report is by having, in effect, a clause stand part debate through the technique of tabling amendments to delete the clauses.
      In expressing the situation in those terms, I may have hinted that I am not keen for the clauses themselves to be deleted here and now. It should be well understood that I realise that missing trader fraud is by far the biggest single fraud confronting tax authorities. It is pan-European in scope and practised by highly sophisticated individuals. The explanatory notes put the total cost of such fraud to the United Kingdom at between £1.7 billion to £2.75 billion in 2001–02. I fully support, therefore, the objectives of clauses 17 and 18, which seek to secure the VAT that would otherwise be lost through missing trader fraud.
      Because of the way in which our procedures work on Report, my amendment, which would delete clauses 17 and 18, has been structured to allow a clause stand part debate. I do not want to get into a false dialogue, however, so I should point out that it is not our intention to strike down the clauses' objectives.
      Mr. Djanogly: Many arguments are circulating to the effect that the Government are to some extent responsible for much of the VAT fraud to which my hon. Friend refers. Investigations are ongoing in that regard, and it seems unfortunate indeed that it is the taxpayer who will have to bear the cost.
      Mr. O'Brien: I am grateful to my hon. Friend for that intervention. We are dealing with a very difficult issue. It is right that any Government be entitled to collect duly levied revenue, and it is not part of our agenda to seek to wreck that. However, we do have to examine the balance between the rights and responsibilities of citizens and taxpayers, and those of the Government—that is part of the democratic accountability that we are elected to provide. I ask my hon. Friend to bear with me, because although I certainly welcome interventions, it is important that I go through this issue with some care—I shall try not to detain the House for too long, but I cannot pretend that this will be the briefest of our episodes on Report—not least because the House of Lords had something to say about it in Committee. It is important to ensure that we give due consideration, given that the other place will not be able to scrutinise this provision in any other way. My hon. Friend will therefore find that the context in which his remarks are placed is a little more proportionate, given the seriousness of the issues with which we are dealing.
      Since our deliberations in Committee, we have continued to receive representations that, as drafted, the proposed legislation may catch legitimate traders. I understand that Her Majesty's Customs and Excise believes that the draconian powers in clauses 17 and 18 are necessary to target the abuse. As I recall, the
      250
      Economic Secretary said in Committee that in practice, the powers will be applied in such a way as to protect legitimate traders. However, the concern remains that the legislation is widely drafted and is not subject to external review before being applied. I am therefore concerned that the necessary separation of powers to protect the innocent appears not to exist.
      The third report of the House of Lords Select Committee on Economic Affairs echoes those comments. Paragraph 5.10 states, in respect of clause 17:
      "With reference to the self-denying undertaking by HMCE"—
      Her Majesty's Customs and Excise—
      "we note that the necessary degree of satisfaction on the part of the Department that all reasonable checks have been applied by a legitimate trader is not subject to any external review. Indeed, under the normal powers of delegation of the Commissioners of Customs and Excise, that discretion could rest with the investigating officer. We have therefore concluded that in the Clause, as drafted, the protection for legitimate traders can be said to be deficient in that their access on appeal to the VAT and Duties Tribunal arises only after HMCE have applied their new power to require security, albeit following a warning. By this stage, the negative economic consequences for their business could already be significant. We considered that a part of the solution could lie in a suggestion made by the ICAEW"—
      the Institute of Chartered Accountants of England and Wales—
      "that, before taking steps to require security under Clause 17, HMCE should be obliged to seek leave from a Tribunal Chairman."
      5.15 pm
      The report continues, in paragraph 5.11:
      "We recommend that consideration be given to creating an enhanced statutory safeguard for legitimate traders, which would ensure that the conclusions related to Clause 17 arrived at by the investigating officer are reviewed at Board level within the Department and by an external judicial authority before the power to require security is exercised. This two-stage review would precede the issue of the preliminary warning letter contemplated as an essential element of Departmental practice in operating the new power. Under the procedure which we envisage, the application, which should be approved by the Commissioners of Customs and Excise themselves, without power of delegation, should be on an ex parte basis. Before giving leave, the Chairman of the VAT and Duties Tribunal would have to be convinced by the HMCE case against the trader that the business was involved or complicit in the alleged fraud."
      To make sure that the scene for the debate is properly set, I shall quote paragraphs 5.20 and 5.21 from the report. They deal with clause 18, which would also be deleted by the amendment. Paragraph 5.20 states:
      "We recognise the considerable educational effort that is being undertaken by HMCE to provide help and guidance for legitimate traders, in order not to find themselves through inadvertence, becoming involved in an "artificial" supply chain. However, we still have some misgivings that, as in the case of Clause 17…the protection afforded to the legitimate trader by challenging the step of being made jointly and severally liable for the unpaid net tax in a supply chain only after the event would be insufficient. We acknowledge that the procedure begins with a "Notification Letter". The trader then has 21 days in which to demonstrate to HMCE a legitimate reason. If he or she fails to do so, at the end of that period a Demand Notice will be issued for the unpaid net tax. But we still see the need to enhance the protection for a legitimate trader from the burden of being faced with a "Notification Letter" in the first place. The detailed arguments that we advanced at paragraph 5.10 in respect of enhanced statutory protection for the legitimate trader apply with equal force in the case of Clause 18."

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      Paragraph 5.21 states:
      "We recommend that consideration be given to providing that, before taking steps to hold a trader liable under the joint and several liability provisions of Clause 18, HMCE should be obliged to seek leave from a Chairman of the VAT and Duties Tribunal. The application, which should be approved by the Commissioners of Customs and Excise themselves, without power of delegation, should be on an ex parte basis. Before giving leave, the Tribunal Chairman would have to be convinced by the HMCE case against the trader that the business was involved or complicit in the alleged fraud."
      The House will note that paragraphs 5.11 and 5.21 end with very similar wording.
      I am sure that that the Economic Secretary will take those comments from the House of Lords seriously. I hope that he will address the concerns of many legitimate traders, learned professionals and Opposition Members. Indeed, similar concerns were raised, in Standing Committee by hon. Members from other parties, and they have also been voiced by those in another place. I look forward to his response.
      I come now to another important matter in connection with clauses 17 and 18. I want to be slightly cautious and make sure that the point is well understood, but I understand that a firm of solicitors has served a letter before claim on the Chancellor of the Exchequer, the Attorney-General, the Treasury and the Chairman of the Board of the Commissioners of Customs and Excise. I understand that they have the opinion of counsel that Parliament does not have the power to legislate in the way clauses 17 and 18 seem to intend, as the clauses are in contravention of Community law. In addition, I understand that those concerned contend that the provisions are not in accordance with the Human Rights Act 1998. Further, those served with the letter before claim have now been put on notice that should they seek to apply the clauses, any loss or damage caused to any business, director or shareholder that is attributable to that application will be sought in accordance with the decision of the European Court of Justice in Frankovich, reference C-6 and C-9/90.
      Given the value of the industry sectors concerned and the fact that the explanatory notes puts the total cost of missing trader fraud to the UK at between £1.7 billion and £2.75 billion in 2001–02, the level of damages from legitimate traders could very well be significant. I understand that the annual turnover for mobile and computer chip traders in the UK is now £50 billion. There are 400 traders, approximately, paying annual corporation tax of £600 million; there are 10,000 jobs, involving national insurance contributions and PAYE. These figures do not take account of major retailers such as Carphone Warehouse.
      I have raised the issue of Community law on the Floor of the House before. When we debated clause 22 on 13 May, I raised many arguments that that clause was incompatible with Community law. It should be noted that these arguments in relation to the Seeling case have not been answered. On clauses 17 and 18, we have significant concerns about the compatibility with Community law. I am not a barrister, nor have I had access to the Government's legal opinion on the compatibility of clauses 17 and 18; nor, for that matter, on clause 22, despite repeatedly asking for it. Nor have I seen counsel's opinion supporting the solicitor's letter concerning the people who have sent the letter before claim, which I understand has been served.
      252
      I do know that we now have uncertainty for the industry and for taxpayers. We have seen case after case where the European Court of Justice has upheld the taxpayers' case against the UK, so we must take these matters seriously. A further concern regarding clauses 17 and 18 is the threat of Frankovich damages. I do not know the merits of the case but, if successful, legitimate traders—a number of whom have already suspended trading as a result of these clauses—can seek to recover any loss or damage caused to any business, director or shareholder. Without overstating the case, this could be in the order of tens of billions of pounds. Who would bear the cost? The taxpayer.
      In Committee, the Paymaster General stated that, as far as Ministers were concerned, parliamentary counsel was "all four aces" when it came to being the final arbiter on the drafting of Bills, adding that Ministers challenged the interpretation at their peril. She went on to say that she sincerely hoped that aspiring Ministers in the decades to come—let us hope it is not anywhere near that long—would also consider such challenges unwise.
      In Committee on 15 May, the Economic Secretary gave assurances that clauses 17 and 18 were in accordance with Community law, but gave scant legal support to those assurances. To that end, I recognise that we have a letter before claim, but we are not sub judice; we are certainly on notice. I have been provided with the documentation, and I know the Government are aware of that. I know that they will be prepared for my arguments.
      As I now understand that another legal counsel has a different opinion and considers clauses 17 and 18 not to be in accordance with Community law, one could say that the Government's aces have been called. The Government have been put on notice. If they are wrong, they are putting UK taxpayers at risk of having to meet significant damages. I do not believe that it is right for UK taxpayers to be put at such risk.
      Let us take the simple example of a planning application. If those considering a planning application are advised that their course of action may be successfully challenged—this could happen to any councillor in any authority in the country—and they proceed, those considering the planning application are held personally accountable. That is often one of the biggest issues in terms of getting an open discussion. In this case, I recognise that it is not thought that Ministers will be held personally accountable in such a case, but this is a direct equivalent. Importantly, neither should the UK taxpayer be held accountable when the Government have been put on notice, just as officials in a local authority would put councillors on notice that they are taking a huge risk for themselves and for local council tax payers. It is therefore incumbent on the Economic Secretary to give a full answer.
      The Paymaster General warned that Ministers challenge parliamentary counsel at their peril. However, ignoring my personal views on that assertion, surely the position changes when another legal counsel—naturally, legal counsel will have different opinions—formally puts forward a clearly different opinion. The Chancellor and others have been served with the letter before claim. Given the importance of those issues, particularly for UK taxpayers, I call on the Economic

      253
      Secretary to make the Government counsel's opinion available to the House, so that we can make an informed judgment about whether the clauses are compatible with Community law. The Economic Secretary knows that precedent exists, not least when the Attorney-General's legal advice was made available in advance of the Government decision to take us to war with Iraq.
      The House should think exceptionally carefully before allowing these clauses to pass without considering the potential burden on the taxpayer. As Sir Humphrey Appleby might have said: "It would, Minister, be very courageous to proceed on this basis." Such advice should be enough to stop any responsible Minister in his tracks. We need a full exposition. Above all, if Ministers decide to proceed, one way of avoiding the very serious peril that I have identified—as I say, I shall not make a judgment on the merits of the legal case—would be to postpone the implementation date until such time as the legal matters have been fully resolved.
      Mr. Burnett: There are real concerns about the draconian nature of clauses 17 and 18. We also endorse the view that something should be done to combat missing trader fraud, which is international and, according to the Treasury, costs a huge sum of money—between £1.7 billion to £2.75 billion. The abuse has to be tackled, but I should like to quote the House of Lords Economic Affairs Committee, which is drawn from all three major parties and includes eminent members from all parties. In its introduction to the report, that Committee made it clear in paragraph 1.9 that
      "a proper balance has to be struck between those efforts and the need to safeguard the rights of legitimate traders."
      The efforts to which it refers are, of course, attempts to crack down on fraud, which the Government are rightly doing.
      Several organisations have highlighted their misgivings about the clauses, and members of the Committee that considers the Finance Bill are fortunate to be sent details of representations from major organisations such as the Law Society, the Institute of Chartered Accountants, the Chartered Institute of Taxation and so forth. I do not want to go into great detail or repeat the further matters raised by the hon. Member for Eddisbury (Mr. O'Brien) in respect of quotations from the House of Lords Economic Affairs Committee report. However, I should like to return to some of the points that were properly raised in the representations of the tax law committee of the Law Society. Ministers receive them and I hope that the Economic Secretary will have had an opportunity to study them carefully.
      The Law Society flagged up several points and I should like to go over three of them. New sub-paragraph (1A) in paragraph 4 to schedule 11 of the Value Added Tax Act 1994, which is inserted by clause 17(3), should make it clear that the amount of security that needs to be provided is proportionate to the amount of tax at risk. It does not do so, but the explanatory notes make it clear that it should. That is how the explanatory notes state that the clause should operate: it does not do so and should be amended in
      254
      order to do so. The new sub-paragraph (1A) in paragraph 4 to schedule 11 should authorise only the requirement for security as regards future input tax claims. As drafted, that means that a business could seek to recover VAT and be informed at that stage that security was required in respect of a prior transaction.
      5.30 pm
      The "relevant goods or services" in the new sub-paragraph (3) of schedule 11 are not defined. I understand that Customs and Excise is to put out a statement of practice that will indicate that the supplies to which it wishes to apply the enhanced security provisions include oil, fashion goods, computers, phones and accessories thereto. Nevertheless, as it would be possible to extend the types of goods affected by the enhanced provisions by an amending statutory instrument, legislation should surely set out the goods and services in question.
      Those are just three of the points made by the tax law committee of the Law Society, and I have raised them not at random but because they are important. I must stress the central points made in the House of Lords Select Committee report. I hope that the Economic Secretary will make it clear that he has understood the importance of a separation of powers and of the report's recommendation, in paragraph 5.11, on the interposition of an external judicial authority. That is, of course, the least of safeguards. I hope that the response to this short debate will give us some comfort and that the Treasury has understood the legitimate criticisms of those of us who, though we understand the necessity for the provisions, believe that the rights of the individual must not be trampled in order to combat a serious fraud on the Exchequer. The human rights considerations cannot and should not be overlooked, and, in the hope that the Economic Secretary has had a chance since Committee to consider the point carefully, I look forward to hearing his considered view.
      John Healey: I welcome the detailed, serious and measured way in which the hon. Members for Eddisbury (Mr. O'Brien) and for Torridge and West Devon (Mr. Burnett) have approached the amendment. I accept their recognition of how serious missing trader fraud is, and I welcome their support for the objectives of clauses 17 and 18, which the hon. Member for Eddisbury also offered in Committee. I intend to deal with the points made as probing points, although it will be up to the hon. Gentleman to decide whether they are. I hope to set out clearly the legal basis on which we propose these measures and the safeguards that we are putting in place, particularly for legitimate businesses that may be concerned about the impact.
      The measures before us are both proportionate and necessary. They are necessary because we must deal with what both hon. Gentlemen have recognised is a systematic and widespread attack on the VAT system, which is costing the British taxpayer billions of pounds a year. We are dealing with a form of VAT fraud, and any misconception that it is some sort of tax evasion that is pushing at the margins of legitimate tax legislation should be clearly nailed. The affected trade sectors—there are two principal sectors—are clearly riddled with this fraud. In many cases, the goods involved have gone backward and forward between member states so often that their boxes are falling apart.

      255
      The level of such transactions is often staggering; for example, sales to Ireland of a certain type of computer chip in the first six months of 2002 exceeded the total market for those chips in the continents of Asia, Africa and Europe. In another case, in a three-month period, a 21-year-old supposedly supplied 10 per cent. of the entire world production of a type of computer chip. As hon. Members will realise, what was happening, in effect, was that the same chips were going around in circles, and huge amounts of VAT were stolen each time.
      The Customs have also intercepted single shipments of mobile phones, in one case weighing 14 tonnes—enough phones to fill a football stadium—which were useless for the legitimate UK market because they were of the two-pin plug variety. That did not matter to the fraudsters, of course, because the phones were not destined for UK customers but only to perpetrate a large-scale fraud.
      Amendment No. 52 would remove both clause 17 and clause 18 and I shall turn to the arguments used to justify the concerns reflected in the proposal. In response to a point made by the hon. Member for Eddisbury, I shall demonstrate that we have the legal vires for the clauses and explain why we reject entirely the case put to us by the firm of solicitors to which he referred.
      I shall try to put to rest the questions about legality in relation to EU VAT directives and to the European convention on human rights by explaining the legal position in some detail. First, on EU legislation, article 22, subsection (8) of the sixth VAT directive provides the vires for clause 17. It states:
      "Without prejudice to the provisions to be adopted pursuant to Article 17 (4), Member States may impose other obligations which they deem necessary for the correct levying and collection of the tax and for the prevention of fraud, subject to the requirement of equal treatment for domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers."
      The imposition of security via clause 17 is for the prevention of fraud. Built into the clause is a safeguard requirement for Customs to satisfy the tribunal that there has been evasion of VAT or an attempt to evade VAT.
      Secondly, on the ECHR, clause 17 is compatible with article 1 of protocol 1—on the protection of property—contained in schedule 1 to the Human Rights Act 1998: because, first, it is prescribed by law; secondly, when used, it will strike a fair balance between the demands of society and the interests of an individual; and, thirdly, it is taken for a legitimate purpose. The proviso to article 1 is that it should not
      "in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties".
      Those powers are not arbitrary and the provisions are proportionate to the pernicious attacks on the VAT system, such as VAT missing trader fraud.
      Finally, clause 17 has inbuilt safeguards. It will be applied only in appropriate circumstances: where Customs can satisfy the tribunal that there has been an evasion of VAT or an attempt to evade it and where it is accompanied by a statement of practice—as the hon.
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      Member for Torridge and West Devon mentioned— which lays down stringent guidelines as to how security is to be applied and introduces even further safeguards. Although the statement of practice itself does not have the force of law, once it is published, Customs will be expected and, if necessary, required by the courts, to follow it.
      Mr. Burnett: On this important matter, is the Economic Secretary assuring the House that, before action is taken, the VAT tribunal will have to be satisfied in all the circumstances that he has outlined?
      John Healey: No, we are not dealing with an application to a tribunal before action is taken. Such action must be based on Customs evidence sufficient to satisfy a tribunal, so those involved in taking the action will be conscious of that test, which a tribunal will apply if the case is brought to tribunal by a trader who wishes to contest the action taken by Customs and Excise.
      Mr. Burnett: Will the Economic Secretary at least consider the issue, referred to by the hon. Member for Eddisbury and myself and raised by the House of Lords, that an application should be made before action is taken? We understand that that should be ex parte, but to an independent judicial authority.
      John Healey: We have received a range of views on these provisions from all sorts of parties, as hon. Members might expect. We have considered the hon. Gentleman's suggestion that Customs should have to seek the tribunal's go-ahead before taking action, but my concern about that is twofold. First, it could delay the ability of Customs to take action. Secondly, he may wish to consider further that any pre-implementation hearing with a tribunal chairman on any ex parte basis could be perceived to compromise the tribunal's very integrity and independence, which is, of course, a mainstay of the system. Of course, when these clauses are in place with the safeguards that I am outlining, we will keep them very closely under review to ensure that they have the intended effect on fraud, not an unintended effect on legitimate businesses. I shall return to the inbuilt safeguards in clause 17 in a moment.
      I come now to clause 18. Article 21(1) and (2) of the sixth VAT directive defines the persons liable for payment of the tax. Article 21(3) of the EC sixth Council directive provides the legal vires for joint and several liability. It states:
      "In the situations referred to in paragraph 1 and 2, Member States may provide that someone other than the person liable for payment of the tax shall be held liable for payment of the tax."
      Or, to put it another way, member states may legislate for someone other than the person liable for the payment of the tax—the missing trader in this case—to be held jointly and severally liable for the payment of VAT.
      On human rights law, clause 18 is compatible with article 1 of protocol 1, which deals with the protection of property, contained in schedule 1 to the Human Rights Act 1998 because, first, it is prescribed by law; secondly, when used, it will strike a fair balance between the demands of society and the interests of individuals; and, thirdly, it serves a legitimate purpose. The proviso to article 1 states that such a provision should in no way

      257
      impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes, other contributions or penalties. Again, these are not arbitrary powers and the provisions are clearly in proportion to the scale of the systematic attack on the VAT system.
      Again, the measure has inbuilt safeguards. It can be applied only in appropriate circumstances—in other words, where Customs can show that a business knew or had reasonable grounds suspect that VAT would be unpaid in its supply chain. Customs has to establish some sort of knowledge—either guilty knowledge, or reasonable grounds to suspect a business. There is a full right of appeal and the right of judicial review.
      Clause 18 is accompanied by a statement of practice, which lays down stringent guidelines on how the measure should be applied, so there are further safeguards. Although the statement of practice does not have the force of law, once published, Customs will be expected and, if necessary, required by the courts to follow it in appropriate cases. I hope that I have cleared up any questions that hon. Members might have about the legal vires of clauses 17 and 18.
      5.45 pm
      I want to deal with the more substantive questions of not only why the measures are justified but, especially, how we will ensure that innocent parties are protected during the operation of the tough new powers that we deem necessary, which was the concern raised by the hon. Member for Eddisbury.
      I shall emphasise that last point first. I made it clear in Committee that I do not underestimate the gravity of the measures that we propose to use under clauses 17 and 18. We fully understand that although they will help to crack down hard on fraud, if appropriate safeguards are not put in place and the measures are not properly targeted and restricted, the impact on legitimate businesses will be unacceptable. Let me spell out clearly, as I did with the clauses' legal basis, how legitimate businesses will be protected under the proposals and why I do not accept that we need additional measures that have been suggested by a range of bodies from all walks of life.
      I start by considering the measures under clause 17. The revised public notice 700/52 is Customs' statement of practice. It outlines the procedures and circumstances in which Customs will require security. Customs will be expected to follow it and, if necessary, required to do that by the courts. The measure is aimed at businesses that are repeatedly involved in supply chains in which there are substantial tax loses. Businesses that are known to have dealt with high-risk businesses or individuals in the past will be given advice by Customs on the steps that they should take to avoid dealing with such businesses. Security will be required only if they continue to do that.
      The measure will not be applied without a formal written warning, which will give businesses the opportunity to mend their ways. A new right of appeal will be introduced—an appellate rather than a supervisory right—that will allow the tribunal to reduce
      258
      or vacate any security requirement. An appeal will be allowed unless Customs satisfies the tribunal that there has been, or is likely to be, evasion in the supply chain. I would fully expect a tribunal to uphold any appeal in which Customs failed to follow its procedures, for example, if no warning were given before applying the measure.
      The measure in clause 18 is limited in law to two trade sectors. It will theoretically affect 50,000 of the 1.7 million businesses that are registered for VAT but, in practice, it is likely to affect no more than 5,000 or 6,000. The law means that Customs will not apply the measure unless it can establish that a business knew, or had reasonable grounds to suspect, that VAT would go unpaid. A business may rebut any presumption if the low price paid for goods is unconnected with unpaid VAT.
      Businesses will be notified if they are caught by the measure before it is applied, which will give them the opportunity to provide an explanation. I make it clear that the measure will not be applied to businesses that demonstrate that they have not become involved in a supply chain in which VAT has gone, or will go, unpaid. Businesses will have the right of appeal to an independent VAT and duties tribunal if they receive a joint and several liability notice.
      I hope that my remarks have helped to reassure hon. Members about their greatest concerns, and demonstrated that there is robust legal basis behind clauses 17 and 18 and that the measures proposed are properly restrained and balanced by comprehensive and effective safeguards to protect the innocent. We do not take the powers lightly. As I explained in Committee, we have examined other options, but none would be as effective as measures set out in clauses 17 and 18. The scale and nature of the fraud, often involving complacency or collusion, require us to take the measures to complement Customs existing actions to clamp down on the VAT fraud.
      In light of the explanation and assurances that I have set out for the hon. Member for Eddisbury and other hon. Members, I hope that he withdraws the amendment. If he wishes to press it to a vote, I must ask my hon. Friends to reject it.
      Mr. Stephen O'Brien: In the interests of time, as other business is pressing, I shall just say that I am grateful to the Minister for the spirit in which he treated the issues raised. As he rightly observed, the gravity of the subject merits that and he did, indeed, treat it seriously. We needed to take a technical approach to have what is, in effect, a stand part debate. Our exchange has been important. It has provided us with the chance to raise concerns.
      On the House of Lords report, no doubt the other place will look to the Government for a response. The debate on whether there is prior, rather than post, protection, and where the balance of rights and responsibilities lies, will develop. Furthermore, on a letter before a claim, that may, or may not, end up being a matter for the courts. It would be irresponsible of me to speculate further on that other than to say that it has been a useful exchange and we have ensured that the issues are well understood.

      259
      The Minister rightly observed, as part of the article 1 and protocol 1 attached to schedule 1 of the Human Rights Act 1998, that we have discussed the fair balance of a judgment to be applied between society and the individual. On that basis, a useful exchange has taken place, and I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

  Schedule 1

    VAT: FACE-VALUE VOUCHERS
    Amendment made: No. 12, in page 143, line 35, at end insert—
    "and other supplies that are not taxable supplies".—[John Healey.]

  Clause 207

    PAYMENTS FOR SERVICE OF NATIONAL DEBT
    Mr. Flight: I beg to move amendment No. 5, in page 138, line 41, leave out subsection (3) and insert—
    "(3) For subsection (3) substitute—
    '(3) For the purposes of making their determination under subsection (1)(b) the Treasury shall be required to apply generally accepted accounting practices in determining whether all or part of any payments represent such interest as is referred to in that subsection.'.".
    Madam Deputy Speaker (Sylvia Heal): With this it will be convenient to discuss the following amendments: No. 6, in clause 208, page 139, line 10, at end insert—
    ", such determination to be made in accordance with generally accepted accounting practice.'.".
    No. 7, in clause 209, page 139, line 17, leave out 'the Treasury consider appropriate' and insert
    "conforms with generally accepted accounting practice.".
    Mr. Flight: There was not time in Committee to address the amendments, which contain important points of principle. Clause 207 allows the Treasury to determine which payments should be classified as payments of interest on the national debt to allow the existing out-of-date definition to be updated, but there is no indication of the way in which the Treasury will decide what should be treated as interest. There is no obligation to determine whether the true nature of a payment is in whole, or in part, disguised interest. Indeed, is it envisaged that part of the payments to Departments should be recategorised as interest when they are effectively borrowing, for example, through the private finance initiative? It can be argued that that should be the case.
    Amendment No. 5 would set an obligation on the Treasury to make any determination on the basis of generally accepted accounting practice. The national debt should be accounted for to the same standard as any other liability. In the wake of the Government's tricks to keep Network Rail off balance sheet, so causing the appalling management problems that have ensued, I regret to say that the good faith of the Government cannot be taken for granted. It is necessary to ensure that they are not tempted to disguise the extent of the cost of servicing the national debt.
    260
    Clauses 208 and 209 allow the Treasury to determine the assets of the national loans fund and the form and content of the accounts of the Consolidated Fund and the national loans fund. Again, that needs to be subject to appropriate constraint. Those are national accounts and the basis of their preparation should not be left to the determination of the Treasury without any requirement to adept generally accepted accounting practices. It should not be possible to move assets and liabilities off balance sheet. Accounts should be accurate and prepared in accordance with accepted principles. I hope that the Minister will at least address those issues by putting on the record an undertaking on both counts.
    John Healey: I welcome the generally sober way in which the hon. Member for Arundel and South Downs (Mr. Flight) has approached these matters. The amendments are directed to clauses that are of central importance to Parliament and the ability of Parliament to hold the Executive to account, and they deserve that recognition.
    I shall explain why the amendments will compromise the objectives that we have for the clauses and why, if the hon. Gentleman wishes to press them to a vote, I would ask my right hon. and hon. Friends to resist. The amendments would require the Treasury to conform to generally accepted accounting practice—GAAP—when counting for the operations of both the Consolidated Fund and the national loans fund. There are three reasons for asking the House to resist the amendments that would put that requirement in the Bill.
    First—I hope that the hon. Gentleman will welcome and accept this—the Government are committed to preparing their accounts in accordance with GAAP, subject to such adaptations that are necessary in the context of the public sector. That is as true for the national loans fund accruals-based account as it is for departmental resource accounts. However, as GAAP is not designed with either the particular needs of Government accounts or the complex legislative framework governing the NLF in mind, the Treasury needs the flexibility to depart from it where strict adherence to GAAP would not be sensible. This is in line with the position already accepted for the debt management account, with which the NLF is closely linked.
    I can assure hon. Members that the Treasury will use its discretion responsibly and will use it in the public interest. Also, Parliament's position is properly protected because the NLF account will still be audited by the Comptroller and Auditor General, who can bring any matters of concern to the attention of Parliament.
    Adam Price: Will the Minister give way?
    John Healey: The hon. Gentleman has only just come into the Chamber but I will of course, give way to him.
    Adam Price: That is kind of the Economic Secretary. Will the Treasury publish reasons for departing from general accounting practice where it needs to do so?
    John Healey: If the hon. Gentleman holds his fire and has a little patience, he will find that I shall go further than that.

    261
    First, the Treasury is currently discussing the format of accounts in detail with the National Audit Office, which is content with the structure of the amending clauses in the Bill. Secondly, the Government see no need at present to draw up the accounts for the Consolidated Fund on an accruals basis. As the hon. Member for Arundel and South Downs knows as well as anyone, the Consolidated Fund is essentially a bank account that receives the proceeds of taxation and funds the spending of Government Departments. The Treasury will therefore continue to account for those flows on a simple receipts and payments basis. Again, the NAO is content with this proposition, which reflects the nature of the account.
    I shall give the House a further reassurance. The Treasury will set out its detailed proposals for the Public Accounts Committee and the Treasury Select Committee before making an order to abolish the requirement to produce the supplementary statements.
    Thirdly, in the context of amendment No. 5, the law currently allows the Treasury to define income items as if they were interest receipts for the purposes of determining the transfer from the Consolidated Fund to the national loans fund in respect of net debt costs. However, there is no flexibility at present within the law whereby expenditure items are similarly treated. Hence we cannot at present treat discounts on gilt issues as expenditure items for the purpose of the standing service payment from the Consolidated Fund to the NLF. The proposed change rectifies that. We have discussed the proposed legislative changes and the income expenditure treatment of individual types of transaction with the NAO, which, once again, is content. In this context, GAAP has no bearing on whether a particular payment should be treated as interest for the purpose of calculating the deficit on the NLF's net debt servicing flows, as that is met by the consolidated fund. The amendment would therefore not achieve the desired effect, so I encourage the hon. Member for Arundel and South Downs not to seek to press it to a vote.
    6 pm
    Mr. Flight: I thank the Minister for his comments. In view of our wish to discuss schedule 21, I shall not respond further, and beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

  Schedule 21

    APPROVED SHARE PLANS AND SCHEMES
    Mr. Flight: I beg to move amendment No. 13. in schedule 21, page 251, line 9, at end insert
    "and insert 'or 4 (in respect of shares acquired under approved CSOP schemes pursuant to rights granted before 9th April 2003)'.".
    Madam Deputy Speaker: With this it will be convenient to take the following amendments: No. 14, in page 251, line 14, after "schemes)", insert
    "pursuant to rights granted on or after 9th April 2003".
    No. 19, in page 251, line 22, at end insert
    262
    "pursuant to a right acquired on or after that date.".
    Mr. Flight: Amendments Nos. 13, 14 and 19 offer alternative ways of addressing an issue raised in Committee. Since then, a number of US multinationals and their legal representatives have expressed strong objections to the Paymaster General's response to matters that we raised with her. The issue, as we all know, is the imposition of employer NICs on approved options granted in the three years until 9 April in this Budget year. The multinationals and, indeed, the Conservatives regard the Government's measures as retrospective, and we object to the Paymaster General's reference to people breaking the rules by exercising options before the three-year period and not paying NIC charges on them. The rules and the law are clear and well known. Indeed, the Government could have applied three recent pieces of legislation, which were designed to apply NICs to unapproved schemes, to the early exercise of approved schemes, had that been their wish and intent. The problem of NICs and options, as well as the Government's failure to address all the issues related to unapproved schemes have taken up a lot of parliamentary time. Because the rules were clear, the Inland Revenue positively objected to the inclusion of tax withholding and NIC transfers from employers to employees in approved option schemes. For a long time, certain benefits have been subject to income tax, but not NICs. Although the Government have narrowed the territory, some still remain.
    It has not been suggested by anyone, let alone the Revenue, that before paragraph 25 of schedule 21 was drafted not paying NICs on benefits not subject to such contributions was equivalent to breaking the rule. In particular, US multinationals frequently included the possibility of early vesting before the three year period in their UK-approved schemes, reflecting standard parent arrangements in the USA. For example, they would allow 25 per cent. of options to be exercised each year after the granting of rights. UK-approved schemes required Revenue approval, and many multinationals discussed early vesting with the Revenue. The tax rules were clear—early vesting resulted in an income tax charge in place of a capital gains tax change on gains that were realised. The view was that the main protection here was the fact that approved schemes were limited to a value of only £30,000 per participant.
    In those circumstances, clever avoidance was not the issue. The law was the law, and the Revenue was well aware that many multinationals had such early vesting provisions. The Paymaster General told me in a recent letter that multinationals were advised in the past by the Revenue that shorter shareholding periods were not in the spirit of the rules for approved schemes. However, that was not generally the case. Some multinationals may recently have received such advice, but certainly that was not general practice going back three years. The fundamental issue is, what was the law at the time? The Government, as I said, had ample opportunity in the past four years to add an NIC employer and employee charge to the early exercise of approved share options.

    263
    Schedule 21 would clearly introduce a stealth tax, as it imposes a retrospective NIC on employers for the early exercise of options granted within the three years up to 9 April. I was greatly surprised that the Paymaster General's letter to me concluded:
    "When employees choose to exercise their approved options within three years and employers have given them that choice, they do so with the full knowledge that income tax and NI is payable".
    That is simply not the case. Schedule 21 makes provision for that, but until it was drafted there was no suggestion from the Government that that would be so. When multinationals included early vesting in their approved schemes in the past three years, that was cleared with the Inland Revenue. The law was the law, and the tax result was quite simple—early exercise resulted in income tax rather than a capital gains tax on employees, and did not result in NIC for employers.
    I am afraid that the provision will introduce retrospective taxation as part of the Government's desperate drive for tax revenues. They have made enemies of many US multinationals, which feel that the Government have acted in bad faith. More generally, deliberate anti-avoidance usage of approved schemes has been limited, as the schemes themselves have tight limits, and circumstances do not usually allow for approved schemes to be used for such purposes—they have to be blessed by the Revenue. Penalising employees retrospectively is wrong and, moreover, there is no evidence that making the proposals prospective would result in any substantial tax cost. I urge the Government to accept one of the routes proposed in our amendments and also to recognise the truth of the situation.
    Dawn Primarolo: I urge my colleagues to vote against amendments Nos. 13, 14 and 19 which, in various ways, seek to stop the application of PAYE and national insurance to company share option plans granted before 9 April 2003. Let me make it clear that the Government believe that it is right that employees should pay their fair share of tax and national insurance on all forms of employment-related remuneration. Bringing options granted after 9 April 2003 within PAYE and NICs rules would mean that companies and employees who have sought to avoid paying their fair share of tax and national insurance will continue to do so.
    Mr. Flight rose—
    Dawn Primarolo: I will not give way to the hon. Gentleman, as I want to put this on the record.
    Such a change would effectively reward employers and employees who have been using company share option plans instead of unapproved options, allowing them to be exercised early to avoid paying NICs. Companies should not be able to gain an advantage over their competitors by failing to operate their company share option plans within the spirit of the legislation. It is right that companies that have used CSOP options as a means of providing short-term, share-based remuneration should be expected to pay PAYE and national insurance. As I said in Committee, I do not accept that the change is retrospective. The hon. Gentleman is wrong to assert such a thing on the Floor of the House. The change is not retrospective. If employees hold their options for three years after grant,
    264
    they will not pay tax and national insurance. That has always been so and is not changed. Where employees choose to exercise their options within three years and employers have given them that choice, they do so in the full knowledge that tax and national insurance is payable.
    The proposed change in the schedule and clause means that businesses will no longer be able to gain an unfair advantage over their competitors by failing to operate within the spirit of the company share option plan legislation. It is right that companies that proceeded to use company share option plan options as a means of providing short-term share-based remuneration should be expected to pay their PAYE and national insurance. Company share option plan options have been used to undermine the principle that tax and national insurance should be paid on such employment remuneration. By tackling that and ensuring that company share option plan options exercised early are subject to PAYE and NICs for both existing and future options, we are correcting the unfair position that has a risen when employers have used company share option plan options as a substitute for unapproved options.
    It is clear that in the name of fairness to taxpayers and the operation of the rules as they are expected to be operated—on the basis of fairness to all taxpayers—the hon. Gentleman seeks, through the amendments, to give a huge advantage to the few, while the rest of us pay for it. That is not acceptable. I ask the House to reject the amendments.
    Mr. Flight: The Paymaster General is quite incorrect to assert that the situations that I described were about tax avoidance. They were cleared with the Revenue, the tax position was understood, and if the Government wanted a regime where employer NICs were payable on early exercise, they should have put that into the law when they changes the general rules on NICs and unapproved schemes.
    What is retrospective is the NIC charge on employers. I can tell the Paymaster General that the overwhelming majority of lawyers in the City of London specialising in these matters agree strongly with that. She has made an enemy of the very type of US multinational companies that we need to go on investing in this country. She is mistaken in her views and there will no great tax gains to the Revenue as a result. We therefore intend to press the amendment to a Division.
    Question put, That the amendment be made:—
    The House divided: Ayes 189, Noes 309.

    Division No. 265]

    [6:12 pm

    AYES

    Ainsworth, Peter (E Surrey)

    Beith, rh A. J.

    Allan, Richard

    Bellingham, Henry

    Amess, David

    Bercow, John

    Atkinson, David (Bour'mth E)

    Beresford, Sir Paul

    Atkinson, Peter (Hexham)

    Blunt, Crispin

    Bacon, Richard

    Boswell, Tim

    Baker, Norman

    Bottomley, rh Virginia (SW

    Baldry, Tony

    Surrey)

    Barker, Gregory

    Brake, Tom (Carshalton)

    Baron, John (Billericay)

    Brazier, Julian

    Barrett, John

    Breed, Colin

    Beggs, Roy (E Antrim)

    Brooke, Mrs Annette L.

    265

    Browning, Mrs Angela

    Kirkbride, Miss Julie

    Burnett, John

    Kirkwood, Sir Archy

    Burns, Simon

    Knight, rh Greg (E Yorkshire)

    Burnside, David

    Laing, Mrs Eleanor

    Burt, Alistair

    Lait, Mrs Jacqui

    Butterfill, John

    Lamb, Norman

    Cable, Dr. Vincent

    Lansley, Andrew

    Calton, Mrs Patsy

    Laws, David (Yeovil)

    Cameron, David

    Leigh, Edward

    Campbell, Gregory (E Lond'y)

    Letwin, rh Oliver

    Campbell, rh Menzies (NE Fife)

    Lewis, Dr. Julian (New Forest E)

    Cash, William

    Liddell-Grainger, Ian

    Chapman, Sir Sydney (Chipping

    Lidington, David

    Barnet)

    Lilley, rh Peter

    Chidgey, David

    Llwyd, Elfyn

    Chope, Christopher

    Loughton, Tim

    Clappison, James

    Luff, Peter (M-Worcs)

    Clarke, rh Kenneth (Rushcliffe)

    McIntosh, Miss Anne

    Clifton-Brown, Geoffrey

    Mackay, rh Andrew

    Collins, Tim

    Maclean, rh David

    Conway, Derek

    McLoughlin, Patrick

    Cotter, Brian

    Malins, Humfrey

    Cran, James (Beverley)

    Maples, John

    Curry, rh David

    Maude, rh Francis

    Davies, Quentin (Grantham &

    Mawhinney, rh Sir Brian

    Stamford)

    May, Mrs Theresa

    Davis, rh David (Haltemprice &

    Mitchell, Andrew (Sutton

    Howden)

    Coldfield)

    Djanogly, Jonathan

    Moore, Michael

    Dodds, Nigel

    Moss, Malcolm

    Duncan, Peter (Galloway)

    Murrison, Dr. Andrew

    Duncan Smith, rh lain

    Norman, Archie

    Evans, Nigel

    O'Brien, Stephen (Eddisbury)

    Ewing, Annabelle

    Öpik, Lembit

    Fabricant, Michael

    Osborne George (Tatton)

    Fallon, Michael

    Ottaway, Richard

    Field, Mark (Cities of London &

    Page, Richard

    Westminster)

    Paice, James

    Flight, Howard

    Portillo, rh Michael

    Flook, Adrian

    Price, Adam (E Carmarthen &

    Forth, rh Eric

    Dinefwr)

    Foster, Don (Bath)

    Prisk, Mark (Hertford)

    Fox, Dr. Liam

    Pugh, Dr. John

    Francois, Mark

    Randall, John

    Garnier, Edward

    Redwood, rh John

    George, Andrew (St. Ives)

    Reid, Alan (Argyll & Bute)

    Gibb, Nick (Bognor Regis)

    Rendel, David

    Gidley, Sandra

    Robertson, Angus (Moray)

    Gillan, Mrs Cheryl

    Robertson, Laurence (Tewk'b'ry)

    Goodman, Paul

    Robinson, Peter (Belfast E)

    Gray, James (N Wilts)

    Roe, Mrs Marion

    Grayling, Chris

    Rosindell, Andrew

    Green, Damian (Ashford)

    Ruffley, David

    Green, Matthew (Ludlow)

    Russell, Bob (Colchester)

    Greenway, John

    Salmond, Alex

    Grieve, Dominic

    Sanders, Adrian

    Gummer, rh John

    Sayeed, Jonathan

    Hague, rh William

    Shephard, rh Mrs Gillian

    Harris, Dr. Evan (Oxford W &

    Shepherd, Richard

    Abingdon)

    Simmonds, Mark

    Hawkins, Nick

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

    Heath, David

    Kincardine)

    Heathcoat-Amory, rh David

    Soames, Nicholas

    Hendry, Charles

    Spelman, Mrs Caroline

    Hermon, Lady

    Spicer, Sir Michael

    Hoban, Mark (Fareham)

    Spink, Bob (Castle Point)

    Holmes, Paul

    Spring, Richard

    Horam, John (Orpington)

    Stanley, rh Sir John

    Howard, rh Michael

    Streeter, Gary

    Howarth, Gerald (Aldershot)

    Stunell, Andrew

    Hunter, Andrew

    Swire, Hugo (E Devon)

    Jack, rh Michael

    Taylor, Ian (Esher)

    Jackson, Robert (Wantage)

    Taylor, John (Solihull)

    Jenkin, Bernard

    Taylor, Dr. Richard (Wyre F)

    Keetch, Paul

    Thomas, Simon (Ceredigion)

    Key, Robert (Salisbury)

    Thurso, John

    266

    Tonge, Dr. Jenny

    Wiggin, Bill

    Tredinnick, David

    Willetts, David

    Trend, Michael

    Williams, Hywel (Caernarfon)

    Trimble, rh David

    Wilshire, David

    Turner, Andrew (Isle of Wight)

    Winterton, Ann (Congleton)

    Tyrie, Andrew

    Wishart, Pete

    Viggers, Peter

    Yeo, Tim (S Suffolk)

    Waterson, Nigel

    Young, rh Sir George

    Watkinson, Angela

    Younger-Ross, Richard

    Webb, Steve (Northavon)

    Weir, Michael

    Tellers for the Ayes:

    Whittingdale, John

    Hugh Robertson and

    Widdecombe, rh Miss Ann

    Mr. Robert Syms

    NOES

    Abbott, Ms Diane

    Cook, rh Robin (Livingston)

    Adams, Irene (Paisley N)

    Cooper, Yvette

    Ainger, Nick

    Corbyn, Jeremy

    Ainsworth, Bob (Cov'try NE)

    Corston, Jean

    Alexander, Douglas

    Cousins, Jim

    Allen, Graham

    Cox, Tom (Tooting)

    Anderson, rh Donald (Swansea E)

    Cranston, Ross

    Anderson, Janet (Rossendale &

    Cruddas, Jon

    Darwen)

    Cryer, Ann (Keighley)

    Armstrong, rh Ms Hilary

    Cryer, John (Hornchurch)

    Atherton, Ms Candy

    Cummings, John

    Atkins, Charlotte

    Cunningham, rh Dr. Jack

    Austin, John

    (Copeland)

    Bailey, Adrian

    Cunningham, Jim (Coventry S)

    Baird, Vera

    Cunningham, Tony (Workington)

    Banks, Tony

    Curtis-Thomas, Mrs Claire

    Barnes, Harry

    Dalyell, Tam

    Battle, John

    Davey, Valerie (Bristol W)

    Bayley, Hugh

    David, Wayne

    Beard, Nigel

    Davidson, Ian

    Begg, Miss Anne

    Davies, rh Denzil (Llanelli)

    Bell, Stuart

    Davies, Geraint (Croydon C)

    Bennett, Andrew

    Davis, rh Terry (B'ham Hodge H)

    Benton, Joe (Bootle)

    Dawson, Hilton

    Berry, Roger

    Dean, Mrs Janet

    Best, Harold

    Denham, rh John

    Blackman, Liz

    Dhanda, Parmjit

    Blizzard, Bob

    Dismore, Andrew

    Boateng, rh Paul

    Dobbin, Jim (Heywood)

    Borrow, David

    Donohoe, Brian H.

    Bradley, rh Keith (Withington)

    Doran, Frank

    Bradley, Peter (The Wrekin)

    Dowd, Jim (Lewisham W)

    Bradshaw, Ben

    Drew, David (Stroud)

    Brown, Russell (Dumfries)

    Dunwoody, Mrs Gwyneth

    Buck, Ms Karen

    Eagle, Angela (Wallasey)

    Burden, Richard

    Efford, Clive

    Burgon, Colin

    Ellman, Mrs Louise

    Byers, rh Stephen

    Etherington, Bill

    Caborn, rh Richard

    Field, rh Frank (Birkenhead)

    Campbell, Alan (Tynemouth)

    Fisher, Mark

    Campbell, Mrs Anne (C'bridge)

    Fitzpatrick, Jim

    Campbell, Ronnie (Blyth V)

    Fitzsimons, Mrs Lorna

    Caplin, Ivor

    Follett, Barbara

    Casale, Roger

    Foster, rh Derek

    Cawsey, Ian (Brigg)

    Foster, Michael Jabez (Hastings

    Challen, Colin

    & Rye)

    Clapham, Michael

    George, rh Bruce (Walsall S)

    Clark, Mrs Helen (Peterborough)

    Gerrard, Neil

    Clark, Dr. Lynda (Edinburgh

    Gilroy, Linda

    Pentlands)

    Godsiff, Roger

    Clark, Paul (Gillingham)

    Goggins, Paul

    Clarke, rh Tom (Coatbridge &

    Griffiths, Jane (Reading E)

    Chryston)

    Griffiths, Win (Bridgend)

    Clarke, Tony (Northampton S)

    Grogan, John

    Clelland, David

    Hain, rh Peter

    Clwyd, Ann (Cynon V)

    Hall, Mike (Weaver Vale)

    Coffey, Ms Ann

    Hall, Patrick (Bedford)

    Cohen, Harry

    Hamilton, David (Midlothian)

    Coleman, Iain

    Hamilton, Fabian (Leeds NE)

    Connarty, Michael

    Hanson, David

    Cook, Frank (Stockton N)

    Harman, rh Ms Harriet

    267

    Harris, Tom (Glasgow Cathcart)

    McKenna, Rosemary

    Havard, Dai (Merthyr Tydfil &

    Mackinlay, Andrew

    Rhymney)

    McNulty, Tony

    Healey, John

    Mactaggart, Fiona

    Henderson, Doug (Newcastle N)

    McWalter, Tony

    Henderson, Ivan (Harwich)

    Mahmood, Khalid

    Hendrick, Mark

    Mahon, Mrs Alice

    Hepburn, Stephen

    Mallaber, Judy

    Heppell, John

    Mann, John (Bassetlaw)

    Hesford, Stephen

    Marris, Rob (Wolverh'ton SW)

    Hewitt, rh Ms Patricia

    Marsden, Gordon (Blackpool S)

    Heyes, David

    Marshall, David (Glasgow

    Hill, Keith (Streatham)

    Shettleston)

    Hinchliffe, David

    Martlew, Eric

    Hoey, Kate (Vauxhall)

    Meacher, rh Michael

    Hood, Jimmy (Clydesdale)

    Meale, Alan (Mansfield)

    Hoon, rh Geoffrey

    Mercer, Patrick

    Hope, Phil (Corby)

    Merron, Gillian

    Hopkins, Kelvin

    Michael, rh Alun

    Howarth, George (Knowsley N &

    Miliband, David

    Sefton E)

    Miller, Andrew

    Howells, Dr. Kim

    Moffatt, Laura

    Hughes, Beverley (Stretford &

    Mole, Chris

    Urmston

    Morgan, Julie

    Hughes, Kevin (Doncaster N)

    Mountford, Kali

    Humble, Mrs Joan

    Mudie, George

    Hurst, Alan (Braintree)

    Mullin, Chris

    Hutton, rh John

    Murphy, Denis (Wansbeck)

    Iddon, Dr. Brian

    Murphy, Jim (Eastwood)

    Illsley, Eric

    Naysmith, Dr. Doug

    Irranca-Davies, Huw

    Naysmith,Dr. Doug

    Jackson, Glenda (Hampstead &

    O'Brien, Bill (Normanton)

    Highgate)

    O'Brien, Mike (N Warks)

    Jackson, Helen (Hillsborough)

    O'Hara, Edward

    Jenkins, Brian

    O'Neill, Martin

    Johnson, Miss Melanie (Welwyn

    Osborne, Sandra (Ayr)

    Hatfield)

    Palmer, Dr. Nick

    Jones, Helen (Warrington N)

    Picking, Anne

    Jones, Jon Owen (Cardiff C)

    Pickthall, Colin

    Jones, Lynne (Selly Oak)

    Pike, Peter (Burnley)

    Kaufman, rh Gerald

    Pollard, Kerry

    Keen, Alan (Feltham)

    Pope, Greg (Hyndburn)

    Keen, Ann (Brentford)

    Prentice, Ms Bridget (Lewisham

    Khabra, Piara S.

    E)

    Kidney, David

    Prentice, Gordon (Pendle)

    Kilfoyle, Peter

    Primarolo, rh Dawn

    King, Andy (Rugby)

    Prosser, Gwyn

    King, Ms Oona (Bethnal Green &

    Purchase, Ken

    Bow)

    Quinn, Lawrie

    Kumar, Dr. Ashok

    Rammell, Bill

    Ladyman, Dr. Stephen

    Reed, Andy (Loughborough)

    Lammy, David

    Reid, rh Dr. John (Hamilton N &

    Lawrence, Mrs Jackie

    Bellshill)

    Laxton, Bob (Derby N)

    Robertson, John (Glasgow

    Lepper, David

    Anniesland)

    Leslie, Christopher

    Robinson, Geoffrey (Coventry

    Levitt, Tom (High Peak)

    NW)

    Lewis, Ivan (Bury S)

    Roche, Mrs Barbara

    Lewis, Terry (Worsley)

    Rooney, Terry

    Linton, Martin

    Ross, Ernie (Dundee W)

    Lloyd, Tony (Manchester C)

    Roy, Frank (Motherwell)

    Love, Andrew

    Ruane, Chris

    Lucas, Ian (Wrexham)

    Ruddock, Joan

    Luke, Iain (Dundee E)

    Russell, Ms Christine (City of

    Lyons, John (Strathkelvin)

    Chester)

    McAvoy, Thomas

    Ryan, Joan (Enfield N)

    McCabe, Stephen

    Salter, Martin

    McCafferty, Chris

    Sarwar, Mohammad

    McDonagh, Siobhain

    Savidge, Malcolm

    MacDonald, Calum

    Sawford, Phil

    McDonnell, John

    Sedgemore, Brian

    MacDougall, John

    Sheridan, Jim

    McFall, John

    Shipley, Ms Debra

    McGuire, Mrs Anne

    Short, rh Clare

    McIsaac, Shona

    Singh, Marsha

    McKechin, Ann

    Skinner, Dennis

    268

    Smith, rh Chris (Islington S &

    Turner, Neil (Wigan)

    Finsbury)

    Twigg, Derek (Halton)

    Smith, Geraldine (Morecambe &

    Twigg, Stephen (Enfield)

    Lunesdale)

    Tynan, Bill (Hamilton S)

    Smith, Jacqui (Redditch)

    Vaz, Keith (Leicester E)

    Smith, John (Glamorgan)

    Vis, Dr. Rudi

    Soley, Clive

    Walley, Ms Joan

    Southworth, Helen

    Ward, Claire

    Starkey, Dr. Phyllis

    Wareing, Robert N.

    Steinberg, Gerry

    Watson, Tom (W Bromwich E)

    Stevenson, George

    Watts, David

    Stewart, David (Inverness E &

    White, Brian

    Lochaber)

    Whitehead, Dr. Alan

    Stewart, Ian (Eccles)

    Williams, rh Alan (Swansea W)

    Stinchcombe, Paul

    Williams, Betty (Conwy)

    Stoate, Dr. Howard

    Wills, Michael

    Stringer, Graham

    Wilson, Brian

    Stuart, Ms Gisela

    Winnick, David

    Sutcliffe, Gerry

    Wood, Mike (Batley)

    Tami, Mark (Alyn)

    Woodward, Shaun

    Taylor, Dari (Stockton S)

    Woolas, Phil

    Thomas, Gareth (Clwyd W)

    Worthington, Tony

    Thomas, Gareth (Harrow W)

    Wray, James (Glasgow

    Timms, Stephen

    Baillieston)

    Tipping, Paddy

    Wright, Anthony D. (Gt

    Touhig, Don (Islwyn)

    Yarmouth)

    Trickett, Jon

    Wright, David (Telford)

    Truswell, Paul

    Wright, Tony (Cannock)

    Turner, Dennis (Wolverh'ton SE)

    Tellers for the Noes:

    Turner, Dr. Desmond (Brighton

    Mr. Fraser Kemp and

    Kemptown)

    Margaret Moran

    Question accordingly negatived.
    It being more than five and a half hours after the commencement of proceedings on the first Ways and Means motion relating to the Bill, MADAM DEPUTY SPEAKER,pursuant to Order [this day], proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.

  Schedule 22

    EMPLOYEE SECURITIES AND OPTIONS
    Amendments made: No. 114, in page 278, line 6, leave out
    'In a case within subsection (1)(a),'.
    No. 115, in page 279, line 33, leave out '428(3)' and insert '428(9)'.
    No. 116, in page 310, line 7, after 'sections', insert `421(2) and'.
    No. 117, in page 310, line 9, after 'for', insert 'the acquisition of.
    No. 118, in page 310, line 20, at end insert—
    '"the employer (in Chapter 5 of Part 7)section 471(5)",'.
    No. 119, in page 314, line 8, leave out from 'Table,' to `insert' in line 9 and insert 'at the appropriate place'.
    No. 120, in page 321, line 2, leave out '428(3) and (6)' and insert '428(6) and (9)'.—[Dawn Primarolo.]

  Schedule 33

    INSURANCE COMPANIES
    Amendments made: No. 121, in page 378, line 29, leave out sub-paragraph (6) and insert—
    '(6) After subsection (6A) insert—
    "(6B) A contract which reinsures risk in respect of insurances to be made only after the making of the contract of reinsurance can constitute a transfer of business by virtue of subsection (6)(c) above only if a potential advantage is conferred on the reinsurer by the contract.

    269
    (6C) And for the purposes of subsection (6B) above a potential advantage is conferred on the reinsurer by the contract if, taking the contract as "the actual provision" for the purposes of Schedule 28AA to the Taxes Act 1988, the effect of making the actual provision instead of the arm's length provision (within the meaning of that Schedule) would have in relation to the reinsurer the effect specified in paragraph 5(1)(b) of that Schedule.".'.
    No. 122, in page 381, line 11, at end insert—
    '(15) The references in subsections (8), (12) and (13) above to an amount being brought into account—

    (a) in a case where the amount taken into account as a receipt of the company under section 83(2) above in relation to the contingent loan or loans in question is an amount brought into account in an account concerned wholly with non-participating business, are to its being brought into account in that account or in any other account concerned wholly with nonparticipating business, and

    (b) in a case where the amount so taken into account is an amount brought into account in an account concerned wholly or partly with participating business, are to its being brought into account in that account or in any other account concerned wholly or partly with participating business.

    (16) Where—

    (a) a transfer to another fund brought into account for a period of account as other expenditure in any account concerned wholly with non-participating business is brought into account as other income in an account concerned wholly or partly with participating business, or

    (b) a transfer to another fund brought into account for a period of account as other expenditure in any account concerned wholly or partly with participating business is brought into account as other income in an account concerned wholly with non-participating business,

    subsection (8) above has effect as if it were a positive amount brought into account as transfers to non-technical account for that period of account in the account in which it is brought into account as other expenditure.
    (17) For the purposes of subsections (15) and (16) above—

    (a) an account is concerned wholly with non-participating business if it relates exclusively to policies or contracts under which the policy holders or annuitants are not eligible to participate in surplus, and

    (b) an account is concerned wholly or partly with participating business if it relates wholly or partly to other policies or contracts.".'.

    No. 123, in page 381, line 48, at end insert—
    `(3B) In subsection (3A)(a) above (and section 89(1B) below) "chargeable gains referable to the company's basic life assurance and general annuity business", in relation to an accounting period, means the chargeable gains so far as referable to that business accruing to the company in the accounting period after deducting—

    (a) any allowable losses so referable accruing to the company in the accounting period, and

    (b) so far as they have not been allowed as a deduction from chargeable gains in any previous accounting period, any allowable losses so referable previously accruing to the company.".'.

    No. 124, in page 384, line 4, at end insert—
    '8A (1) In section 432D of the Taxes Act 1988 (section 432B apportionment: value of non-participating funds), after "value of assets" (in each place) insert "or as other income".
    (2) Sub-paragraph (1) has effect for periods of account beginning on or after 1st January 2003.'.
    No. 125, in page 385, leave out lines 8 to 11 and insert
    The policy holders' share of the franked investment income from investments held in connection with a company's" substitute "So much of the policy holders' share of the franked investment income from investments of a company's long-term insurance fund as is referable to its".
    (3) In section 441(1) and (2) of the Taxes Act 1988 (overseas life assurance business), omit "and section 441A".'.
    No. 126, in page 389, line 7, leave out from 'where' to 'acquires' in line 9 and insert
    ',within a period of 10 days, an insurance company disposes of a number of section 440A securities and (whether subsequently or previously)'.
    No. 127, in page 389, line 34, leave out from 'securities' to 'or' in line 36 and insert
    'which are section 212 assets within the meaning of section 214(1) (rights under authorised unit trusts and interests in offshore funds),'.
    No. 128, in page 390, line 24, at end insert—
    '14A (1) Section 213 of the Taxation of Chargeable Gains Act 1992 (c.12) (spreading of gains and losses under section 212) is amended as follows.
    (2) In subsection (3)—

    (a) for "subsection (3A)" substitute "subsection (8H)",

    (b) in paragraph (b) for "one of the next 6" substitute "either of the next 2" and for "subsection" substitute "section",

    (c) in paragraph (c), for "any intervening accounting period" substitute "the intervening accounting period (if there is one)", and

    (d) in paragraph (ca), for "none of the intervening accounting periods is" substitute "the intervening accounting period (if there is one) is not".

    (3) Omit subsections (3A) and (3B).
    (4) For subsection (5) substitute—
    "(4A) The following provisions apply where an insurance business transfer scheme has effect to transfer business which consists of the effecting or carrying out of contracts of long-term insurance from one person ("the transferor") to another ("the transferee").
    (5) Subject to subsections (5A) to (7) below, any chargeable gain or allowable loss which (assuming that the transferor had continued to carry on the business transferred) would have accrued to the transferor by virtue of subsection (1) above after the transfer shall instead be deemed to accrue to the transferee."
    (5) After subsection (8) insert—
    "(8A) Subsection (8B) below applies where—

    (a) immediately before the transfer the transferee did not carry on business consisting of the effecting or carrying out of contracts of long-term insurance,

    (b) the transferor and the transferee are, at the time of the transfer, members of the same group,

    (c) the net amount for the accounting period of the transferor ending with the day of the transfer, or for the immediately preceding accounting period of the transferor, ("the relevant pre-transfer period of the transferor") represents an excess of gains over losses,

    (d) the net amount for the accounting period of the transferee in which the transfer takes place, or for the immediately following accounting period of the transferee, ("the relevant post-transfer period of the transferee") represents an excess of losses over gains (after taking account of any reductions made by virtue of this section), and

    271

    (e) within 2 years after the end of the relevant post-transfer period of the transferee, the transferor and the transferee make a joint election in respect of the whole or part of the net amount for that period by notice to an officer of the Board.

    (8B) Subject to subsections (8C) to (8E) and (8H) below, the net amounts for both the relevant pre-transfer period of the transferor and the relevant post-transfer period of the transferee shall be reduced by the amount in respect of which the election is made.
    (8C) Subsection (8B) above does not apply if—

    (a) the relevant post-transfer period of the transferee is the accounting period immediately following that in which the transfer takes place, and

    (b) the relevant pre-transfer period of the transferor is the accounting period immediately preceding that ending with the day of the transfer.

    (8D) If—

    (a) the relevant post-transfer period of the transferee is the accounting period immediately following that in which the transfer takes place, and

    (b) the relevant pre-transfer period of the transferor is the accounting period ending with the day of the transfer,

    subsection (8B) above applies only if the conditions in subsection (8F) below are satisfied in relation to the accounting period of the transferee in which the transfer takes place.
    (8E) If—

    (a) the relevant post-transfer period of the transferee is the accounting period in which the transfer takes place, and

    (b) the relevant pre-transfer period of the transferor is the accounting period immediately preceding that ending with the day of the transfer,

    subsection (8B) above applies only if the conditions in subsection (8F) below are satisfied in relation to the accounting period of the transferor ending with the day of the transfer.
    (8F) The conditions referred to in subsections (8D) and (8E) above are that—

    (a) there is (after taking account of any reductions made by virtue of this section) no net amount for the accounting period, and

    (b) the company whose accounting period it is did not join a group of companies in the accounting period.

    (8G) A copy of the notice containing an election under subsection (8A)(e) above must accompany the tax return for the relevant post-transfer period of the transferee; and paragraphs 54 to 60 of Schedule 18 to the Finance Act 1998 (claims and elections for corporation tax purposes) do not apply to such an election.
    (8H) Subsections (3) and (8A) and (8B) above have effect where the company, or the transferee, in question joins a group of companies in the accounting period for which the net amount represents an excess of losses over gains as if a claim or election could not be made in respect of that net amount except to the extent (if any) that the net amount is an amount which, assuming there to be gains accruing to the company or transferee immediately after the beginning of that period, would fall to be treated under paragraph 4 of Schedule 7AA as a qualifying loss in relation to those gains.
    (8I) References in this section to a company joining a group of companies are to be construed in accordance with paragraph 1 of Schedule 7AA as if those references were contained in that Schedule; and in subsection (8A)(b) above "group" has the same meaning as in that Schedule."
    (6) This paragraph has effect where the accounting period for which the net amount represents an excess of losses over gains is an accounting period beginning on or after 1st January 2003.'.
    No. 129, in page 391, line 3, leave out from `transferor")' to 'is' in line 6 and insert—
    '(2) Where the last period covered by a periodical return of the transferor ends otherwise than immediately before the transfer, there'.
    No. 130, in page 391, line 11, leave out 'takes place'.
    No. 131, in page 391, leave out lines 15 to 17 and insert—
    '(2A) Where the last period covered by a periodical return of the transferor (whether or not by virtue of subsection (2) above) ends immediately before the transfer, there is to be deemed for the relevant purpose to be a periodical return of the transferor—

    (a) covering the time of the transfer, and

    (b) containing such entries as would have been included in an actual periodical return covering the time of the transfer,

    (and so making the time of the transfer a period of account of the transferor for the relevant purpose).
    (2B) Where the last period covered by a periodical return of the transferor ends after the transfer, the periodical return covering that period is to be ignored for all purposes of corporation tax other than the relevant purpose.
    (3) In this section "the relevant purpose" means'.
    No. 132, in page 396, line 7, at end insert—
    `(2ZCA) For the purposes of subsection (2ZC) above—

    (a) closing liabilities of the transferee are to be taken not to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferor with the transferee, but

    (b) closing liabilities of the transferee are to be taken to relate to the business transferred to the extent that they are liabilities which, immediately before the transfer, were reinsured by the transferee with the transferor if the business transferred consists of or includes that reinsurance business.'.

    No. 133, in page 397, line 10 [Schedule 33], after `431(2)', insert
    `of the Taxes Act 1988'.
    No. 134, in page 397, line 32, at end insert—
    'Meaning of "period of account"
    '26A In section 431(2) of the Taxes Act 1988 (interpretative provisions relating to insurance companies), after the definition of "periodical return" insert—
    ""period of account" means the period covered by a periodical return;".'.
    —Dawn Primarolo.]

  New Clause 10

    REGISTERED SOCIAL LANDLORDS: TREATMENT OF CERTAIN LEASES GRANTED BETWEEN 1ST JANUARY 1990 AND 27TH MARCH 2000
    '(1) This section applies to a lease in relation to which the following conditions are met—

    (a) it is a lease of a dwelling to one or more individuals;

    (b) it is for an indefinite term or is terminable by notice of a month or less;

    (c) it was executed on or after 1st January 1990 and before 28th March 2000;

    (d) at the time it was executed the rate or average rate of the rent (whether reserved as a yearly rent or not) was £5,000 a year or less; and

    (e) the landlord's interest has at any time before 26th June 2003 been held by a registered social landlord.

    (2) A lease to which this section applies (whether or not presented for stamping) shall be treated—

    (a) for the purposes of section 14 of the Stamp Act 1891 (c. 39) (production of instrument in evidence) as it applies in relation to proceedings begun after the day on which this Act is passed, and

    (b) for the purposes of section 17 of that Act (enrolment etc of instrument) as it applies to any act done after that day,

    as if it had been duly stamped in accordance with the law in force at the time when it was executed.
    (3) If in the case of a lease to which this section applies the Commissioners are satisfied—

    (a) that the instrument was stamped on or before the day on which this Act is passed, and

    (b) that stamp duty was charged in respect of it,

    they shall pay to such person as they consider appropriate an amount equal to the duty (and any interest or penalty) so charged.
    (4) Any such payment must be claimed before 1st January 2004.
    (5) Entitlement to a payment under subsection (3) is subject to compliance with such conditions as the Commissioners may determine with respect to the production of the instrument, to its being stamped so as to indicate that it has been produced under this section or to other matters.
    (6) For the purposes of section 10 of the Exchequer and Audit Departments Act 1866 (c. 39) (Commissioners to deduct repayments from gross revenues) any amount paid under subsection (3) above is a repayment.
    (7) This section shall be construed as one with the Stamp Act 1891 (c. 39).
    (8) The reference in subsection (1) above to the landlord's interest being held by a "registered social landlord" is to its being held by a body that—

    (a) is registered in a register maintained under—

    (i) Article 124 of the Housing (Northern Ireland) Order 1981 (S.I.1981/156(N.I.3)),

    (ii) section 3(1) of the Housing Associations Act 1985 (c. 69),

    (iii) Article 14 of the Housing (Northern Ireland) Order 1992 (S.I.1992/1725 (N.I.15)),

    (iv) section 1(1) of the Housing Act 1996 (c. 52), or

    (v) section 57 of the Housing (Scotland) Act 2001 (asp10), or

    (b) is a body corporate whose objects correspond to those of a housing association and which, pursuant to a contract with Scottish Homes, is registered in a register kept for the purposes by Scottish Homes.

    (9) Section 129 of this Act (relief for certain leases granted on or after 1st January 2000) does not apply to a lease to which this section applies.'.—[Mr. Boateng.]
    Brought up, and read the First time.
    The Chief Secretary to the Treasury (Mr. Paul Boateng): I beg to move, That the clause be read a Second time.
    Madam Deputy Speaker: With this it will be convenient to discuss the following: amendment No. 8, in page 29, line 30, clause 42, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendments Nos. 53 to 57.
    Amendment No. 98, in page 35, line 40, clause 53, leave out 'stamp duty land' and insert 'property transaction'.
    274
    Amendment No. 9, in page 37, line 30, leave out Clause 56.
    Government amendments Nos. 58 to 63.
    Amendment No. 21, in page 42, line 28, clause 62, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendments Nos. 64 to 68.
    Amendment No. 22, in page 47, line 23, Clause 68, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendments Nos. 69 to 76.
    Amendment No. 23, in page 59, line 24, clause 93, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 99, in page 65, line 11, clause 104, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 24, in page 69, line 1, clause 114, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 25, in page 69, line 10, clause 114, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendments Nos. 77 to 79, 143 and 144.
    Amendment No. 26, in page 75, line 2, clause 123, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendment No. 80.
    Amendment No. 100, in page 75, line 22, clause 125, leave out 'SDLT' and insert `PTT'.
    Amendment No. 101, in page 75, line 23, clause 125, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 102, in page 75, line 26, clause 125, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 103, in page 75, line 28, clause 125, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendment No. 81.
    Amendment No. 10, in page 161, line 35, leave out Schedule 5.
    Government amendments Nos. 82 to 86.
    Amendment No. 104, in page 219, line 33, schedule 13, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendments Nos. 87 to 90.
    Amendment No. 27, in page 232, line 37, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 28, in page 234, line 4, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 29, in page 234, line 10, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 105, in page 234, line 26, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 30, in page 234, line 29, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.

    275
    Amendment No. 31, in page 235, line 1, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 32, in page 235, line 4, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 33, in page 235, line 11, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 106, in page 235, line 14, schedule 15, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendments Nos. 91 to 95.
    Amendment No. 34, in page 240, line 17, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 35, in page 240, line 21, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 36, in page 240, line 25, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 37, in page 240, line 27, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 38, in page 240, line 29, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 39, in page 240, line 32, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 40, in page 240, line 37, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 41, in page 241, line 11, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 42, in page 241, line 15, schedule 18, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 43, in page 241, line 21, schedule 19, leave out 'SDLT' and insert 'PTT'.
    Amendment No. 44, in page 241, line 28, schedule 19, leave out `SDLT' and insert 'PTT'.
    Amendment No. 45, in page 241, line 31, schedule 19, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 11, in page 241, line 32, schedule 19, at end insert
    `but no order under this paragraph shall appoint a date earlier than 1st December 2004.'.
    Amendment No. 46, in page 241, line 35, schedule 19, leave out `SDLT' and insert 'PTT'.
    Government amendment No. 96.
    Amendment No. 47, in page 242, line 22, schedule 19, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 48, in page 242, line 26, schedule 19, leave out 'stamp duty land' and insert 'property transaction'.
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    Amendment No. 49, in page 242, line 37, schedule 19, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 107, in page 243, line 10, schedule 19, leave out 'stamp duty land' and insert 'property transaction'.
    Amendment No. 50, in page 243, line 13, schedule 19, leave out `SDLT' and insert 'PTT'.
    Amendment No. 51, in page 243, line 14, schedule 19, leave out `SDLT' and insert 'PTT'.
    Amendment No. 108, in page 243, line 15, schedule 19, leave out 'stamp duty land' and insert 'property transaction'.
    Government amendment No. 97.
    Amendment No. 15, in page 246, line 8, schedule 20, after 'other', insert 'transitional'.
    Amendment No. 16, in page 246, line 9, schedule 20, leave out
    `appear to them appropriate in consequence of abolition'
    and insert—
    `are necessary or reasonably incidental to effect the replacement'.
    Amendment No. 17, in page 246, line 13, schedule 20, leave out
    `appear to the Treasury to be appropriate'
    and insert—
    `are necessary or reasonably incidental to the replacement of stamp duty except on instruments relating to stock and marketable securities; but any such provision or any such regulation which is not necessary or reasonably incidental to such purpose shall not take effect.'.
    Amendment No. 18, in page 246, line 15, schedule 20, leave out
    `annulment in pursuance of a'
    and insert 'an affirmative'.
    Mr. Boateng: No one listening to you read out that little lot, Madam Deputy Speaker, could say that we have not listened. I am afraid that the hon. Members for Arundel and South Downs (Mr. Flight) and for Torridge and West Devon (Mr. Burnett) will say that we have not listened, but we have. We have now reached a group of amendments on stamp duty and stamp duty land tax. I shall deal first with new clause 10, which is one of the many examples of our having listened to the concerns of stakeholders. I shall then deal with the Opposition amendments. Finally, I shall deal with the Government amendments. Some of them are technical, but most again reflect our willingness to listen to concerns that have been expressed in Standing Committee and by stakeholders.
    6.30 pm
    New clause 10 further extends the targeted relief from stamp duty for registered social landlords. Many RSLs have been using a particular form of lease under the impression that it was exempt from stamp duty. However, it now appears that those leases should have been stamped. Recognising the valuable role played by RSLs, we do not believe that it is appropriate now to seek stamp duty on the many lease agreements currently

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    in place, not least because under current stamp duty provisions, it is unclear whether the liability should be met by those RSLs or their tenants.
    The new clause therefore exempts from stamp duty indefinite tenancy agreements granted between 1 January 1990 and 27 January 2000 where the landlord at any time before 26 June 2003 has been an RSL. That means that it will apply to indefinite tenancy agreements both granted by and assigned to RSLs. The new clause also removes the administrative burden of stamping tenancy agreements that have not previously been stamped, which means that RSLs will now have certainty that their tenancy leases comply with stamp duty legislation. I commend this worthwhile new clause to the House.
    I now turn to the Opposition amendments. Amendments Nos. 8, 21 to 51 and 98 to 108 simply attempt to change the name of the tax and would have no effect on its scope or operation. Their aim is clearly to cause unnecessary alarm and confusion among house purchasers and their advisers by suggesting that the Government are introducing a new tax— [Interruption.] Quite so; Opposition Members attempted to make that suggestion throughout the proceedings in Committee. I should have thought that it had been rebuffed sufficiently for them not to want to repeat their folly on the Floor of the House, but I fear that that is not the case.
    Mr. George Osborne rose—
    Mr. Boateng: I fear that we are now about to hear folly in triplicate from the hon. Gentleman.
    Mr. Osborne: I am not sure I am grateful to the Chief Secretary for giving way on that sour note, but perhaps he will answer this question: in what sense is this tax a stamp duty, since it involves neither a stamp nor a duty?
    Mr. Boateng: It is a reflection of a continuing process of modernisation that was begun by the Conservative party, which should welcome it. I am surprised that, having heard the arguments, the hon. Gentleman, who has an open mind, should persist in that one.
    Let me emphasise that those who already pay their way—the vast majority of purchasers and their advisers—will notice little difference as a result of the implementation of SDLT. The rates for residential purchases will remain the same. The main difference will be that payment of SDLT will be accompanied by a return rather than an original document, but the information on the return will be virtually the same as that already provided to the Revenue, so there is no change there.
    The legal and accountancy professions are familiar with the name "stamp duty land tax" as a result of the customer education programme that we have already launched. It would cause a great deal of needless confusion if, in the unlikely event of the amendment appealing to the House, that name were to be changed. Those who will notice a difference are those who have used the archaic features of stamp duty for avoidance purposes. The modernised structure and procedures will
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    ensure that they pay their proper share. I hope that the Opposition will support us in that aim and the changes that are necessary to achieve it.
    This is where I shall labour the point at a little length—
    Mr. Mark Prisk: It will not make any difference.
    Mr. Boateng: That is very unfair. It is important to point out the history to Opposition Members. In 1986, the then Conservative Government introduced stamp duty reserve tax. Precisely the same strictures that the hon. Member for Tatton (Mr. Osborne) threw at me might have been thrown at my predecessor or the Financial or Economic Secretaries of the time. Of course, what was introduced was a tax on transactions involving chargeable securities, which does not involve the physical stamping of a document, but I cannot remember anyone, whether from the Government or the Opposition, suggesting at that time that the name was misleading. [Interruption.] I was not in the House at that time. Indeed, I suspect that the hon. Member for Tatton was still in primary education or, as that is not possible even for one so youthful, in the sixth form.
    Mr. George Osborne: I was doing O-levels.
    Mr. Boateng: The hon. Gentleman was in the fifth remove: no doubt he was the terror of the fifth remove.
    There is absolutely no basis for the amendments that the Opposition have tabled in an attempt to persuade the House of the virtues of a change of name, and I urge the House to reject them.
    Amendments Nos. 9 and 10 are perhaps the more serious Opposition amendments. They would remove the provisions relating to the SDLT charge on the rental element of leases. Of course, Opposition Members are well aware that there is an existing stamp duty charge on the rental element of leases. However, since stamp duty on land transactions will in general be abolished from the implementation of SDLT, the amendments would mean that there was no charge at all—not even the current one—on the rental element of the leases. That in itself is enough to make me urge my hon. Friends to resist the amendments. Indeed, I hope that on reflection Opposition Members will recognise the error into which they have fallen in tabling them.
    Mr. Mark Simmonds: Will the Chief Secretary give way?
    Mr. Boateng: Of course I shall give way to the hon. Gentleman, who may have been reflecting even as I have been speaking and may want to assure us that that is not the intention.
    Mr. Simmonds: I am grateful to the Chief Secretary for giving way. He is being a little disingenuous in suggesting that the stamp duty on leases will disappear altogether. He knows as well as I do that many predictions suggest not only that there will be an increase of four to eight times in the stamp duty payable on an average 10-year lease, but that, in many

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    circumstances and in exceptional cases, the amount payable in relation to longer leases could be very much higher.
    Mr. Boateng: I am afraid I do not accept that analysis, and I shall explain why. As is so often the case when the effect of amendments would by any definition be disastrous, we will no doubt hear from the Opposition spokesman that these are merely probing amendments designed to allow a debate—in this case on the lease duty proposals. As the Opposition denied themselves in the Committee of the whole House by concentrating at length—I do not criticise them for this—on the other, perhaps less significant, aspects of the Bill, it is right for me, as they clearly desire it, to set out in a little more detail the Government's approach to the charge on the rental element of leases.
    Stamp duty payable on the rental element of leases, which is often called lease duty, has long been out of step with the duty payable on purchases, and the existing structure of lease duty distorts commercial decision making. The current charge is on just one year's rent, at rates that vary according to the length of the lease. A lease of 35 years is charged at 2 per cent., whereas one of 36 years is charged at 12 per cent. The Government believe that the decision to own a property leasehold or freehold, or on what type of lease to take, should be business led, not tax led.
    After extensive consultation, we now propose a new lease duty structure to reduce such distortions while securing a fair amount of tax from those transactions. The Government are still open to comment on the proposals. My officials have recently had positive and constructive meetings with interested parties. We are perfectly prepared to consider an alternative structure that meets the Government's objectives equally well. Under the proposals, lease duty will, as now, be a one-off, up-front charge on rents, but based instead on the value of the lease over its term, using total rent discounted to net present value. That approach surely better captures the value of a lease to the lessee and reflects modern commercial practice in the treatment of future payments.
    The £150,000 zero rate threshold for purchases will apply equally to the value of rents on commercial leases, so that leases where the net present value of rent over the term is less than £150,000 will be exempt. That will take 60 per cent. of all commercial leases out of the charge completely; and businesses that do pay more under the proposals will pay at a flat rate of 1 per cent., which is still considerably less than the 4 per cent. on an equivalent purchase. That decision was welcomed by the industry.
    The structure narrows the gap between charges on leasehold and freehold transactions without imposing an unfair burden on large businesses, and removes the burden completely for smaller leases such as those typically used by small businesses and start-ups, where help is most needed and where this Government have done much to assist. Most residential rental leases are currently liable to lease duty, but under the proposals the vast majority will fall below the £60,000 threshold. A small number of residential leases, about 5,000 per year, will be liable—broadly those with the very highest rents. The proposals thus reflect the Government's commitment to fairness, to encouraging enterprise and
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    to reducing regulatory burdens. I ask my hon. Friends to show their support for those commitments by rejecting the amendments decisively.
    Amendment No. 11 aims to defer the introduction of stamp duty land tax until at least 1 December 2004. Hon. Members will be aware that the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) has already written to my right hon. Friend the Chancellor on that subject; the hon. Member for Hertford and Stortford (Mr. Prisk) kindly informed me that my reply to that letter was received yesterday. The terms of that reply were similar to those in which I shall suggest to the House that the amendment should be roundly rejected.
    Deferring the modernisation process for another year simply does not make sense. We have already told the House about the widespread avoidance of stamp duty, which will undoubtedly continue if reform is not pursued. We received general recognition in the course of our deliberations in Committee that the issue was a cause for concern: that ought not to divide the House. We have explained that half of all commercial property transactions worth £10 million or more pay stamp duty at 4 per cent., whereas the other half pay nothing. That cannot be right. The continuation of such unfairness for another year cannot be justified, and would lead to a loss of yield of around £250 million.
    I note that Conservative Members did not seek to defend to my hon. Friends or me in Standing Committee unfair tax avoidance of the sort that we described. Indeed, the hon. Member for Hertford and Stortford said that he supported the Revenue in challenging
    "unreasonable actions that seek to enable someone to avoid their fair tax liabilities."—[Official Report. Standing Committee B, 3 June 2003; c. 312.]
    Why, then, would Conservative Members table an amendment that would leave the door wide open to avoidance for another year—especially given that they tabled the same amendment in Committee of the whole House, then chose not to explore it but instead to have an extended debate on other issues?
    6.45 pm
    A target date of 1 September 2003 aims to strike a balance between the urgent need to tackle avoidance and allowing sufficient time for taxpayers and their agents, including solicitors and other conveyancers, to make the necessary preparations. Deferral would merely ensure that the existing unfairness endures for another year—good for avoiders, but bad for everybody else. I therefore urge the House to reject amendment No. 11.
    Amendments Nos. 15 to 18 seek to restrict the power of the Treasury to make regulations to amend or to repeal enactments relating to stamp duty and stamp duty reserve tax following from the abolition of stamp duty, other than on instruments relating to stock or marketable securities and certain partnership transactions. They would also make the regulations subject to an affirmative resolution of the House. That is undesirable, because limiting the scope of the regulations in that way would prevent the making of regulations that ensure that stamp duty and stamp duty reserve tax on shares work properly together.

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    Moreover, amendment No. 18 would lead to uncertainty over whether regulations that are in place have full effect. I fear that that would create the danger—to which the hon. Member for Torridge and West Devon (Mr. Burnett) will be acutely alert—of lacunae arising. That of course would never do, so I hope to see the hon. Gentleman in the Lobby with us on this group of amendments, if nothing else.
    Mr. Burnett: Will the Chief Secretary acknowledge that one of the many lacunae in the stamp duty provisions is the fact that there is a continuing raft of legislation? He has even offered to reconsider lease duty. When will it stop? When will we know exactly what are the Bill's provisions on stamp duty?
    Mr. Boateng: I am very fond of the hon. Gentleman, but he really must avoid falling like so many of his Liberal Democrat colleagues into the trap of wanting it each and every way: they want the best of all possible worlds—to have their cake and eat it. Realistically, he cannot take us to task for not consulting enough, then, when we do consult and say that we are open to making new proposals—if they meet our objectives—in the light of those consultations, complain about a lack of certainty. That is unfair. The hon. Gentleman is a fair-minded man, so for him to take us to task for being open and consultative is uncharacteristically unreasonable.
    Mr. Burnett: I am extremely grateful to the Chief Secretary—or should I call him the chief? Hail to the chief. My point is that we do not want continuing stamp duty land tax legislation for perhaps another six months without proper scrutiny or a proper opportunity for this House to debate it in detail. That is what disturbs us.
    Mr. Boateng: I hear the hon. Gentleman, who makes his point in his usual way. However, that argument would not lead us to abandon our commitment to consultation and the careful consideration of alternatives—nor does it make the amendments any more acceptable. The purpose of regulations under schedule 20 is to enable stamp duty legislation to be repealed when it is no longer needed and to ensure that the current effect of the legislation is preserved for stock and marketable securities. Regulations will not be made under schedule 20 to increase the scope of stamp duty or the rate at which it is payable. I hope that that will be of some comfort to the hon. Member for Torridge and West Devon. There is no need to make regulations subject to affirmative resolution. I hope that, on the basis of that assurance, hon. Members will not try to divide the House.
    Hon. Members are anxious to hear from the hon. Member for Hertford and Stortford, so I shall deal with the Government amendments expeditiously. They fulfil the commitments that I made in Committee and clarify other aspects about which we have received representations. Some—for example, those on appeal procedures—are essentially technical. However, most make substantive changes, for example, on the rules for sub-sales, to meet genuine concern; that were shared by all members of the Committee. I should like to take the opportunity to thank all those inside and outside the
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    House who have engaged in constructive dialogue and continue to do so. We had some good sittings in Committee, and they have led to improvements to the measure.
    Amendments No. 96 and 97 cover issues that relate to the transition from stamp duty to stamp duty land tax. Amendment No. 96 ensures that there is no charge on anyone who substantially fulfils a contract before Royal Assent. That deals with anxieties that such a charge could be perceived as retrospective. Amendment No. 97 preserves the current practice whereby an agreement for a lease can be presented for stamping at the same time as the exit duty lease without incurring interest or penalties. Amendments Nos. 53 to 56 deal with the treatment of sub-sales and other circumstances in which the purchaser's rights under a contract are transferred to a third party.
    Clause 45 as drafted would impose a charge on a contracting purchaser, whether or not he completed, at the latest when the ultimate purchaser completed. Hon. Members know that we debated the issue at length in Committee. There was particular concern that there might be a charge on contracting purchasers who do not complete or, indeed, substantially fulfil the contract. I gave an assurance that it was not our intention that such purchasers should be subject to a charge. The amendments would give effect to that assurance.
    Contracting purchasers will not be charged stamp duty land tax solely as a result of completion or substantial performance by the ultimate purchaser. On the other hand, a contracting purchaser who substantially performs, for example, by going into possession, will be charged stamp duty land tax. That charge is fair and creates a level playing field for different classes of taxpayer, but we are anxious to know about specific transactions that might operate unfairly. Hon. Members, as well as the professional associations and others, will doubtless have views to express if such instances arise.
    Amendments Nos. 57 to 59 and 81 amend clause 58 and make consequential amendments to other clauses. The clause allows relief for the acquisition of an existing dwelling by a house builder when a new dwelling is being given in exchange for the existing one. The amendments fulfil the commitment that I made in Committee to extend the relief to cases in which the house that the builder acquires is worth more than the new dwelling and the householder is downsizing. Members of the Committee will remember our specific concerns about senior citizens who try to downsize in preparation for their old age.
    Mr. Stephen O'Brien: Thank us.
    Mr. Boateng: I certainly thank Opposition Members for their contribution to a constructive debate in Committee.
    Amendments Nos. 70, 78, 79, 143 and 144 make the necessary adjustments to ensure that stamp duty land tax works in the context of Scots law and conveyancing practice. I am grateful to my hon. Friend the Member for Glasgow, Maryhill (Ann McKechin) for her contribution to that debate.

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    Amendments Nos. 60 to 67 and 84 to 86 cover our commitment to ensuring that the Bill covers the relevant Welsh institutions and planning institutions. The hon. Member for East Carmarthen and Dinefwr (Adam Price) made an important contribution to our deliberations on those matters in Committee.
    Amendment No. 68 replaces a reference to an obsolete Act, in relation to which we had some fun in Committee. Amendments Nos. 69 and 71 widen the definition of financial institutions to allow for the wider development of alternative property financing arrangements such as Islamic mortgage products. Many inside and outside the House welcomed that.
    Amendment No. 72 clarifies the circumstances in which purchasers need to self-certify when they register land with land registries. Amendments Nos. 73 to 76 deal with applications for deferred payments, clarify the way in which tax is calculated and ensure that there are sufficient powers to provide for appeals, returns and postponements. Amendments Nos. 77,87 and 95 ensure that the appeals regime for stamp duty land tax is in line with that for other taxes.
    Amendment No. 80 covers instruments that will remain within the remit of stamp duty rather than being subject to stamp duty land tax after the tax has been implemented. Those instruments give effect to contracts that are entered into on or before the date of Royal Assent, provided that the contract is not varied or assigned after Royal Assent. Anxiety has been expressed that instruments that complete such contracts would not be within the remit of existing stamp duty and thus might escape charge altogether. That was never the Government's intention. The amendment puts it beyond doubt that instruments that complete such contracts remain within the remit of the stamp duty charge.
    Amendments Nos. 82 and 83 make technical changes to schedule 7, which deals with group relief, in line with the commitments that I made in Committee. I commend all the amendments to the House.
    Mr. Prisk: I draw hon. Members' attention to my entry in the Register of Members' Interests. I thank the Chief Secretary for his remarks. I am not sure that they did not neatly erase some parts of the debate in Committee, but the process was positive and I thank him for his opening comments.
    Before considering the amendments that we tabled, I should like to consider new clause 10 and the 45 other Government amendments. The fact that the Government have to make 46 changes to a single aspect of the measure at this late stage shows the shoddy handling of their proposals for a new land tax.
    I welcome the Government's action in new clause 10 and their belated recognition of an omission. It is a shame that the action had to be rushed at the last minute, but the change is nevertheless welcome. However, I have two concerns and I hope that the Chief Secretary will be able to deal with them in his reply.
    As the right hon. Gentleman said, new clause 10 relates to registered social landlords and subsection (1)(e) sets out one of the five conditions in which the new clause operates. It states that as a condition,
    "the landlord's interest has at any time before 26th June 2003 been held by a registered social landlord."
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    The danger is that that is open to uncertainty and therefore abuse. Perhaps the right hon. Gentleman will answer the following questions. What happens if the registered social landlord holds the property or the interest for only one month? What if that month is before 26 June 2003 but outside the qualifying period of 1990 to 2000? That could lead to uncertainty and possibly abuse. I hope that the Chief Secretary will put on record the Government's interest and intent.
    I also wish to draw hon. Members' attention to subsection (3). It states that the commissioners shall pay to each person
    "as they consider appropriate an amount equal to the duty … so charged."
    There is a potential contradiction with subsection (5), which states:
    "Entitlement to a payment under subsection (3) is subject to compliance with such conditions as the Commissioners may determine".
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    My concern is that this language is somewhat open-ended. I recognise that there is a need for subjective judgment by the Revenue, but can the Chief Secretary explain to the House and put on the record exactly the conditions that he and the Government have in mind? Subject to the answers to such questions, we are willing and happy to support this important correction to the original Bill.
    Government amendments Nos. 54 to 56 refer, as the Chief Secretary said, to what we know as off-plan sales. During the convivial debates—as he seems to remember them—that took place in Committee, there were occasions when, among that conviviality, it appeared that there were very large holes in the Bill. These amendments, among the many others, are intended to till one such hole: the question of how the Government intend to treat off-plan sales. May I be the first to welcome the Government's U-turn on this issue? [Interruption.] I can see that the Chief Secretary does indeed accept what I have just said. I understand from his comments that these amendments will seek to fulfil the terms of our own proposal as presented in Committee, which was that off-plan sales should be exempt. Indeed, we withdrew that proposal in Committee only in order to allow the Government to introduce their own solution.
    As I and other Members have had only 48 hours in which to consider these amendments, along with the other 42 Government amendments, I do have a couple of brief questions, as the Chief Secretary might expect, and I should be grateful if he would respond to them. Which representative bodies did the Government consult in drawing up the amendments, and can he name the organisations that have expressed support for them? Can he confirm whether the Government intend to include all off-plan sales, or are there any that they are seeking to exclude through these amendments?
    The Government have tabled a series of amendments that are intended either to correct previous omissions or to provide clarity. Naturally, we welcome any attempt to clarify this legislation, but it has to be said that had the Government consulted properly in the first place and allowed sufficient time in Committee, many of the amendments would not have been required.

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    In fairness, I do welcome amendment No. 74, which seeks to include provision for appeals under clause 90. I accept that that seems a sensible move. Do amendments Nos. 93, 94 and 95—they apply to schedule 17, which deals with appeals procedures—represent an enhancement or a diminution of an appellant's rights? I appreciate that many people will have assumed that the former is the case, but I should appreciate his confirming that that is indeed so.
    I turn to Government amendments Nos. 58, 57, 59 and 81, which seek to amend clause 58. Members of the Committee will recall that we, Her Majesty's official Opposition, sought to amend this clause. The underlying problem is that the Bill as drafted would permit people to part-exchange their home for a new one, but only if they are trading up to a more expensive property. The result would be the bizarre situation in which a multi-millionaire could benefit from such relief by trading up to a new mansion, but an elderly couple hoping to trade down would in fact face a tax bill. Despite the earlier protestations from Ministers—I remember them, but perhaps the Chief Secretary is happier to gloss over them—they have now at last relented. I should therefore like to welcome the amendments: on this occasion—but perhaps only on this occasion—it is true that the Government have actually listened.
    Mr. Stephen O'Brien: I think that the Chief Secretary missed that.
    Mr. Prisk: Indeed, but I hope that he will be listening later.
    I turn to our amendments and to the substance of the issues behind them. Amendment No. 8 relates to clause 42, which introduces an entirely new tax. I did enjoy the exchanges involving my hon. Friend the Member for Tatton (Mr. Osborne), but the truth is that when something is called a tax, it is a tax; the Chief Secretary will, we hope, learn that soon. Supported by 82 other clauses and 17 schedules, this provision represents the single most important tax element in this year's Budget and in the Bill before us. Amendment No. 8, together with its consequential amendments, would correct the name of this tax to reflect what it is seeking to charge. It also highlights the fact that, despite the Chancellor's promises of last year, this initiative is about not tax reform but raising tax revenues.
    Clause 42 describes this new tax as a "stamp duty land tax", yet any first-year lawyer knows that stamp duty and land tax are two entirely different things, both in law and in practice. Stamp duty is a charge on authorising documents; land tax is applied to real estate—in this case, to land and to property transactions. So the bizarre idea of bolting the two together in the hope that no one will notice is most peculiar: it is to create something that, in tax terms, is both fish and fowl; It is a contradiction in both term and tax. As someone said to me recently, it is an attempt to create a push-me-pull-you tax, but I suppose that it is no surprise that this Government should wish to face both ways at once.
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    The real reason why the Government have chosen this oxymoronic name is to hide the fact that they have broken their promise to modernise stamp duty. Their consultation document promised that the reforms would create a system that
    "better reflects modern commercial practice".
    Most important of all, we were promised that this new reform would deliver fairness for all, and yet, almost immediately after the consultations began last year, things went horribly wrong for the Revenue and the Government. Their choice of discount rate was shown to bear no relation to the open market, and the leading experts on their consultation committees described their preferred charging for leases as
    "the worst of all possible options … which would lead to extreme charges."
    It was then pointed out that the Government had forgotten to account for the thousands of hotels, restaurants and shops that pay variable rents. So by January of this year it was clear that the position was irretrievable. That is why, on 21 January, Ministers instructed the Revenue to stop consultations immediately and without explanation. The result is that this property transaction tax—for that is what it is—is neither fair nor modern. It is an ill-conceived tax, and, after a heavily guillotined parliamentary programme, it remains ill considered.
    I shall give the House two simple examples of why this tax is wrong. When the Government promised us last year that they were going to modernise stamp duty and achieve fairness, everyone assumed that would include removing what is known as the slab effect. This term refers to the tax's rate structure, whereby a single rate applies to the whole purchase price. Thus, a young couple buying their first home at £250,000 would be liable for £2,500 in tax; but were they to pay a pound more, they would have to spend £7,500 in tax—three times the lower figure. This iniquity is repeated at each threshold: at £60,000, at £250,000 and at £500,000. So this was a great opportunity for the Government to sweep away this ancient and unfair tax legislation, yet what do we find? Through this Bill, they have written that iniquity back into legislation. What a wasted opportunity. What a failure to reform.
    Just as bad is the Government's determination to persist with applying this tax on VAT on any consideration. Despite our apparently convivial discussions in Committee, and all the pleas from the professional bodies, the tax as it stands tonight will still be charged on any VAT paid. It is therefore a tax on tax.
    Will the Chief Secretary explain the logic behind the proposal? In what possible way is it modern commercial practice? In what sense is it fair? In respect of the slab effect—the tax on tax—the Government had the opportunity to deliver on their promise of fairness and modernity, but they have failed in both.
    As the Chief Secretary anticipated, our concerns about the tax go further. Most important of all is the way in which the new tax hits leasehold occupiers—hence our amendments Nos. 9 and 10. At present, stamp duty on leases is calculated by reference to the lease length and the average annual rent. Under clause 56 and schedule 5, the new tax will be charged at 1 per cent. of the value of the rent payable over the whole lease term.

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    In practice, as all the outside experts have shown, that would lead to exceptional tax rises. I should add that the Chief Secretary admitted in Committee that those rises were over and above any revenue that would come from clamping down on tax avoidance. This is extra money that businesses will have to pay.
    For example, retailers face an additional tax bill of £130 million on new store openings. Dixons told me that it faces a tax bill of £2 million if the tax is implemented, and B&Q advises me that, for an average store, the tax bill will rise from £35,000 to £285,000—an eightfold increase.
    Mr. Simmonds: My hon. Friend is making a powerful and articulate case. Is he aware that the latest figures from the British Retail Consortium show that the annual additional cost to retailers would be £238 million?
    Mr. Prisk: I am grateful to my hon. Friend. As always, there appears to be a gap between the reality perceived by the Government and the reality that Opposition Members deal with. He is right: this is a bill that businesses will have to pay, and that is the problem.
    With a starting threshold of £150.000, the new tax—despite the Government's warm protestations—will catch most occupiers with an annual rent of between about £12,000 and £15,000. That includes the vast majority of companies in the Chief Secretary's London constituency, and most companies in our major cities. Thus the Royal Institution of Chartered Surveyors has shown that, for example, a factory of 1,000 sq ft in London on average rents for 11 years will pay £5,251 more in tax. An office of 1,000 sq m in Leeds, however, on average rents for a 10-year period, will pay £17,000 more in tax. In Glasgow—and this may be of particular concern to you, Mr. Speaker—a 500 sq m shop on average rents for 15 years will have to pay another £50,537 in tax. That is a fivefold increase.
    Opposition to the Government's plans does not come only from the retail sector. It is much wider than that—pubs, clubs, bars and restaurants are all up in arms. The Association of Licensed Multiple Retailers has highlighted the fact that pubs, for example, tend to operate on longer leases of between 10 and 30 years. Assuming an average pub rent of £30,000 over an average lease term of 20 years, the value of the transaction would be about £600,000. At present, the existing stamp duty would amount to £600, but the new tax would cause the cost to rise tenfold, to £6,000. How does the Minister justify that rise? The ALMR has said that it would result in
    "major market distortions, drastically increasing the entry hurdles for small businesses."
    What is the Chief Secretary's response to that?
    In his Budget speech, the Chancellor specifically cited tax avoidance as the key reason for tackling lease duty, and the Chief Secretary repeated that today. I can perhaps understand that argument when it is applied to the abuse of special purpose companies, but it makes no sense when applied to organisations taking out leases. Is the Chief Secretary seriously telling the House that businesses choose to lease a shop or office just to avoid tax? It is nonsense.
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    Moreover, in his Budget speech the Chancellor also excused the changes by telling the House that
    "there will be no duty on 60 per cent. of commercial rental contracts."—[Official Report, 9 April 2003; Vol. 403, c. 279.]
    Loyal to his boss as ever, the Chief Secretary has repeated that statement today. Yet, when challenged—as it has been in recent weeks—the Revenue has been unable to provide any information about the statement, or even the data on which it was based. Many people suspect that it was wrong.
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    Indeed, as my hon. Friend the Member for Boston and Skegness (Mr. Simmonds) mentioned, the British Retail Consortium has conducted a comprehensive survey. It was released today, and I have a copy here. The survey found evidence that contradicts what the Chief Secretary has said. It covered 125 retailers, 10,000 outlets and 7,584 leases. Its figures paint a picture that is wholly different from the one presented in the Budget. Instead of the much vaunted claim by the Government that 60 per cent. of leases will be exempt, the truth is that 71 per cent. of those surveyed will have to pay. That is the complete opposite of what the Chancellor and the Chief Secretary claimed.
    Will the Chief Secretary tell the House what the basis for his claim was? How many properties and leases were used in the sample? Was it really just a few hundred—including, I am told, lock-up garages? Will the Revenue now publish its data and end the speculation that the Chancellor's Budget statement on this matter has been—to use the common parlance—sexed up?
    The Government's proposals in clause 56 and schedule 5 for taxing leases fail to create a system that is either modern, effective or efficient. Instead, new distortions in the leasehold market will be created. Businesses could have to pay £200 million or more in tax, over and above tax-avoidance measures, and vital market sectors—such as retail, the licensed trade and tourism—will be badly affected. That is why Opposition Members reject clause 56 and schedule 5, and why, with your permission, Mr. Speaker, we intend to press amendments Nos. 9 and 10 to a vote.
    Throughout the outside consultation and the Committee stage of the Bill independent experts have all advised against implementing legislation about which so many unanswered questions remain. What is the true cost of compliance? What will be the impact on private companies participating in private finance initiative and public-private partnership schemes? How will complicated transactions such as sale and leasebacks be treated? Who will be able to apply for the new subsale relief, and who will not? Why has the Treasury chosen a discount rate that bears no relation to the property market? To date, not one of those questions—and there are many others—has been answered satisfactorily. Some of them have not been answered at all.
    I understand that the other place has endorsed the view that the legislation is incomplete. In its 10 June report, the House of Lords Select Committee on Economic Affairs stated that
    "we have heard the strength of the essentially unanimous views of our private sector witnesses urging that the tax would not be in a fit state to introduce on 1 December 2003 … We recommend that the Government should review early in the Autumn of 2003 whether the tax can be got right in time."

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    That is why we tabled amendment No. 11.
    In his Budget speech, the Chancellor recognised the need to get the legislation right and offered to delay implementation until 1 December 2003. Yet it is clear that the proposals are incomplete, and that some sections of them are incoherent. Amendment No. 11 has the support of the leading organisations in business and property. They include the Confederation of British Industry, the Royal Institution of Chartered Surveyors, the Law Society of Scotland, the British Retail Consortium, the Association of Licensed Multiple Retailers, and the British Property Federation. The intent of the amendment is to ensure, whatever our reservations about the underlying principles, that the legislation that is enacted is workable, fair and acceptable to the majority of those whom it affects. After all, bad law leads only to greater tax avoidance.
    Because we consider amendment No. 11 to be a constructive proposal, we gave the Chancellor early notice. My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the shadow Chancellor, wrote to him last week. Yesterday, the Chief Secretary replied. In his letter, he rejected our amendment on the ground of fairness—that old word again—and because it would lead to a loss of yield of around £250 million. There we have it—the rush to push the Bill through is all about the growing hole in the Chancellor's Budget. The Government are beginning to realise that they will need every penny because they are wasting money, and that they will need to spend more and more if they are ever to have a hope of fulfilling their manifesto commitments.
    Mr. Djanogly: The proposed tax increase seems to sit rather oddly with what the Chancellor said in his Budget speech:
    I will freeze stamp duty on homes and business property purchases." —[Official Report, 9 April 2003; Vol. 403, c. 279.]
    How could he possibly say that in the context of the reaction of businesses to the proposals?
    Mr. Prisk: What an appropriate quote. Most Members increasingly realise that what the Chancellor says and what he does are often entirely contradictory. The worry for many now is that with this Government one must always read the small print.
    The Chief Secretary made an admission in his letter: that despite what he said earlier, the Bill was not perfect. He admitted that it was so bad that it will need refining, not just over the next few weeks or months but, inevitably, over the next couple of years. What an appalling admission. Does the Chief Secretary not realise what a message that sends out: that he and his colleagues are perfectly happy to rush through a new tax that is so ill considered it will take years to correct? If the Government's wish truly is to tackle tax avoidance, what possible logic can there be for pushing through a Bill that will take years to correct? What possible confidence can we, or taxpayers, have in the Government, or in what I can only describe as their dodgy duty?
    Given that, and given the lamentable and short reply that the Chief Secretary gave to our amendments, I have grave concerns about the way in which he is
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    approaching the matter. I hope that he will be more positive at the end of the debate. We have many reservations about the Bill, but amendment No. 11 is offered as a genuine way to help to improve the law. I hope that he will reconsider and accept our offer, but if he does not we will—with your permission, Mr. Speaker—be determined to press this matter to a vote.
    Mr. Laws: It pains me to start off this collection of clauses and amendments by welcoming one of the elements with which the Chief Secretary has already dealt—new clause 10, the successor to new clause 6. We are pleased that the Government have listened to our representations, and to those of others such as the National Housing Federation, on the issue. The Chief Secretary will be aware that we originally tabled amendments Nos. 195 to 197 and 201, which emerged initially in new clause 6 and then in new clause 10.
    The proposal is important because it affects many social housing tenants who would have been adversely impacted by the situation as it was in the original Bill, under which many of them would have faced the uncertainty of a system in which they would have to get their tenancies stamped before they were effective in law. That archaic, unfair and impractical requirement would have caused uncertainty and a great deal of cost.
    The Chief Secretary will know that, by custom and practice—and in Inland Revenue guidance—it has been the responsibility of individual social housing tenants whose rent exceeded particular annual thresholds to ensure that their tenancy agreements had been properly stamped. For a period, this seemed to be a rule or regulation that was not heeded, but it became clear over the last couple of years—as a consequence of a number of cases that came to court—that it was vital that this stamping occurred. Without it, there could be legal uncertainties that would affect the social housing tenants and the landlords.
    The payment of stamp duty under the previous circumstances gave the document a legal standing in a court; without it, a judge could refuse to accept the contract as evidence of the tenancy. The Finance Bill initially formalised the previous situation, which had been uncertain under the law—and certainly under the practice—by essentially making the individual tenants legally liable.
    After considerable negotiation between the National Housing Federation and the Inland Revenue, the federation secured a form of words to ensure that new social housing tenancies were effectively exempt from stamp duty. That is extremely welcome. However, many thousands of tenancy agreements held by social housing tenants and landlords remain unstamped. The concern was that without some exemption or backdating, those individuals would be unprotected in law and their court cases might be thrown out in a court case brought by either of the two parties.
    The National Housing Federation was lobbying the Treasury directly, and we are pleased that Treasury officials listened. The federation also made representations to us, leading to our amendments. We welcome very much the fact that the Government engaged in a dialogue that led not only to the clarification of the new social tenancies, but to the putting in place of an exemption that went back not to the 1995 cut-off—as was initially suggested in our amendments—but to 1990, which is extremely helpful.

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    The Chief Secretary will be aware that the concern arising from new clause 6 was that it might not cover those tenancies managed by RSLs where the tenancy had been transferred to the RSL from a local authority. Unfortunately, we were unable to deal with new clause 6 in substance during the Committee, but we are grateful that—in private conversation and correspondence—the Paymaster General was willing to confirm that it was the intention of the Government to make sure that the tenancies in question were also exempt.
    There was a question mark among those on the borders of the Committee—we did not have time to debate the issue in Committee—as to whether new clause 6 offered protection to such tenancies, as envisaged by the Government. The National Housing Federation is again to be commended for detecting the possibility that new clause 6 would not implement in full the Government's intention to exempt such tenancies. We are extremely grateful that the Government have listened to representations, initially by proposing the measures in the original Finance Bill but also by tabling new clause 6 and then new clause 10. The Chief Secretary will want to put it on record today that new clause 10 will provide certainty for RSLs by clearly providing for the fact that the relief will be available both to tenancies granted by RSLs, and to tenancies transferred to RSLs from local authority providers.
    We welcome that element of the new clauses and amendments, but we share the concerns outlined by the Conservative spokesman, the hon. Member for Hertford and Stortford (Mr. Prisk). We welcome the fact that, in Committee, the Government listened to some of the other representations and produced their own proposals to meet matters such as the concerns in respect of trading down.
    However, in spite of the fact that the Government have consulted on this specific matter for perhaps a year, it is clear that the consultation has not been substantial enough and we are left wondering whether the Government's new process—of having a pre-Budget in which serious consultative measures are supposedly brought forward and then implemented in the Budget itself—has really worked in respect of stamp duty land tax. It still seems that we are in for a period of great uncertainty until later this year, when the Government may introduce further proposals on this part of the Finance Bill. As the hon. Member for Hertford and Stortford (Mr. Prisk) touched on, we have the prospect, as the Chief Secretary has himself confirmed, of a further period of uncertainty while the Government contemplate further changes.
    7.30 pm
    A balance has to be struck between the Government's responsiveness to proposed changes and good suggestions that emerge in the course of our proceedings, and introducing proposals that are not properly thought through, leading to a long period of uncertainty, of amendment and the inability of this place to scrutinise all the proposals seriously. Although I welcome some of the Chief Secretary's proposals that address the issues raised in Committee, I hope that he will be willing to accept amendments Nos. 9, 10 and 11, which would delay some parts of the stamp duty land tax. We could then get it right rather than opt for a
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    period of one or two years in which many further amendments would have to be made. That would be destabilising for businesses.
    Mr. Simmonds: The hon. Gentleman makes a pertinent point. The Chief Secretary's earlier dismissal of new clause 11 showed that he did not understand what it is about. It would be possible to close the tax loopholes while at the same time undergoing a full and proper consultation to ensure that the full detail, particularly of the lease duty element, is thoroughly thought through, so that proper and sensible structures go on to the statute book.
    Mr. Laws: I am grateful for that contribution. The hon. Gentleman is right that there is no reason why the Government should not bring forward anti-avoidance and other provisions. However, with changes to tax law as significant as this, it should be thought out, so that we can make sensible amendments in Committee without requiring a further period of consultation and uncertainty for six months and then potentially yet another year of amendment and uncertainty beyond it. When the Government introduced the pre-Budget consultative process, we welcomed the possibility that tax legislation would be better thought through before it came before the House as the Finance Bill, but it has not worked successfully in this case.
    Mr. Djanogly: I shall deal first with the issue of the name of the new tax. I know that considerable time has been spent discussing that. It would be difficult to improve on the simplicity of the explanation of my hon. Friend the Member for Tatton (Mr. Osborne) as to why it is not relevant, and I am not sure that the Chief Secretary can overcome that objection. However, the explanatory notes provide a straightforward explanation of why the tax is new and why the proposed name for it is wrong:
    "Stamp duty is over three hundred years old and the legislation was last consolidated in 1891. It is a charge on documents that transfer property, and when duty is paid, stamps are still impressed physically on the document concerned. Unlike more modern taxes there is no provision for the tax to be collected directly from taxpayers by assessment."
    We have assessment, not a stamp, so I do not understand how we can possibly call it stamp duty. To that extent, I fully support the amendment to change the name to a property transfer tax.
    Based on last year's Budget, the Inland Revenue initiated a series of consultative committees to examine technical issues related to the stamp duty reform programme. The Government have provided no particular reason why that consultation came to an abrupt halt, but for some reason it did so in January. Can the Chief Secretary advise us on why that happened? As my hon. Friends have made clear, professional organisations and company after company told us that more consultation was needed. In that regard, it would be interesting to know exactly how many consultations the Chief Secretary has had. He made light of the implications for business, implying at one point in his speech that business welcomed the changes. I find that hard to believe, but it would certainly be helpful if the Chief Secretary could describe the feedback that he has received from business. I doubt very much that it would have been positive.

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    To understand the importance of having more consultation before introducing legislation, we need look no further than at the 35-odd Government amendments under review today—with promises of even further reviews. It is obvious that the legislation has not been clearly thought out or properly consulted on.
    I move on to the complex issue of stamp duty and leases. Disgracefully, in my opinion, that issue has not been dealt with during the whole course of the Bill until today, largely on account of the lack of time allowed by the Government for scrutiny. I shall refer to clause 56 and schedule 5, and to amendment No. 9, which would delete them.
    In summary, the main result of the provisions will be significantly to increase the stamp duty payable on leases and unnecessarily to increase the complexity of the legislation and to penalise retailers and people in industry who want to enter into long-term leases by depriving them of the security and certainty of their premises. On the contention that the provisions are necessary to combat tax avoidance, the most objectionable tax-avoidance methods using leases have been counteracted by the introduction of stamp duty land tax, so that the transaction rather than the document is made taxable and charges to payments are extended in return for variations of lease. The residual stamp duty avoidance technique, which the provisions could be said to have counteracted, should he capable of being dealt with in a far simpler way, without penalising commercial transactions. In any event, it arose mainly because of the distortion made in commercial transactions by having rates of duty as high as 12 or even 24 per cent. being chargeable in respect of rents on long leases.
    In addition, it should be borne in mind that the inventiveness in the utilisation of stamp duty schemes has primarily been the result of significant increases in stamp duty since 1997, when the Government came to power. Many of the schemes put in place are utilised by taxpayers only on the basis that the current rates of stamp duty payable are seen as an unfair additional cost, which makes a difference between a transaction making economic sense and making no economic sense whatever. As other hon. Members have mentioned, we are talking about an awful lot of taxpayers.
    Stamp duty at 1 per cent. on the value of commercial property transactions was a price that could be regarded as inconvenient, but acceptable. 'The current rates of stamp duty mean that the need to pay it may make a deal uneconomic or may significantly depress the value of the properties owned by the investors.
    In the press notice published on Budget day, the Government gave the example of a 10-year lease with £10,000 rent per annum. Stamp duty of £200 is currently payable on such a lease, but under the new regime, duty of £835 will be payable, which is a fourfold increase. That is because rental payments total £100,000 over the life of the lease, but once discounted, the net present value is £83,166. However, if the lease were for 20 years, the duty would increase sevenfold or eightfold. For a 35-year lease, the duty might be 15 times as much.
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    The Estates Gazette of 3 May stated that an operator such as J D Wetherspoons, which requires 35-year leases and has average rentals of around £150,000 per annum, may be looking at additional costs of £50,000 for each lease after the tax is introduced. I cannot reconcile that with the Minister's statement that businesses were somehow accepting of the new tax. To add insult to injury, if the landlord charges VAT, that is added to the rent in calculating the net present value of the lease.
    The net present value of the rent payable over the term of a lease is calculated by applying one of the most complicated formulas that I have ever seen. In case the Minister has not been told, I must say that most professionals see it as totally ridiculous and way beyond the comprehension of most, if not all, business people. The impact of these changes for companies such as those in the retail and leisure industries, which rely on long leases, will be massive.
    The consultation that the Government carried out on the proposals was, in the end, meaningless, and was shown to be nothing more than the Government having a trawl through the property sector to look for stamp duty loopholes. If the Minister thinks that the industry has not picked up on that, he is mistaken. That is what the industry believes, and I assure him that it will not be forgotten next time he wants consultation on some tax measure.
    Let me look at why I think the changes unnecessary. The most objectionable use of leases for stamp duty mitigation has been counteracted by the introduction of stamp duty land tax. Techniques involved the grant of leases, often to nominees, and their assignment in circumstances in which there was no practical need for stamp duty to be paid on the assignment, resting on the contract schemes. Those schemes would have been counteracted by the fact that stamp duty land tax is a tax on transactions, not documents. After 1 December, it will no longer be an effective means of avoiding the tax. A variant of that was to arrange for a lease to be granted that had a low value because of provisions placed on it that either required the rental rate to be paid or significantly reduced the commercial marketability of the lease. A payment was then made in exchange for the variation of the lease and, under current stamp duty legislation, such payment did not give rise to a charge to stamp duty. Under the new SDLT, such payments will give rise to a charge to tax.
    In addition, taxpayers can no longer rely on the fact that a lease is for a period of less than 21 years to give them the opportunity not to pay stamp duty on the document on the basis that it cannot be registered with the Land Registry and that it might never be necessary for them to rely on it in legal proceedings, which would require it to be stamped. Under the new tax, if SDLT is payable, the tenant is obliged to pay it.
    7.45 pm
    The main scope for stamp duty mitigation, which is not clearly caught by the mere introduction of SDLT, is therefore the use of rent averaging—for example, providing under a lease for between 99 and 999 years that the rent after, say, the first 20 or 35 years should be the greater of market value or £1,000, thus reducing the average rent over the term of the lease by reference to which the stamp duty was calculated. However, that was

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    often used in situations in which the current stamp duty regime would, without such a device, have resulted in an inequitable charge arising.
    For example, where two investors decide jointly to buy a property, one way to structure the transaction is for one joint venturer to acquire a freehold property and the other to acquire a leasehold property in respect of that property. In the case of property that costs £20 million, and assuming a rental return of 8 per cent. per annum, which is £1.6 million, the first purchaser could acquire the freehold interest for £10 million plus VAT and, at the same time, the vendor would grant a leasehold interest to the other purchaser for another £10 million plus VAT, under which amount, equal to half the overall rent, each freehold and leasehold interest would, in general, be equally valuable. One would therefore expect the same amount of stamp duty to be payable in both cases. However, that is not the case. Under the current stamp duty regime, it should be assumed that the acquirer of the freehold would pay stamp duty of 4 per cent. on £11.75 million, which is half the value plus VAT. The amount payable would be £470,000. The acquirer of the leasehold interest would pay the same amount on the premium paid on the grant of the lease, but would also pay stamp duty of 12 per cent. on the rent payable in the case of a lease of less than 99 years, and of 24 per cent. in the case of a lease of more than 99 years. For example, 12 per cent. on £940,000 would be £112,200 and 24 per cent. would be £224,000. That amount could be reduced by drafting the lease so that after the first 35 years, the lease would be reviewed to the greater of market value or £1,000. That, in itself, would significantly reduce the average rent on which duty would be calculated, and there would appear to be no good policy reason why such high stamp duty should be payable in those circumstances.
    I do not deny that these are complicated provisions or, to be frank, that the calculations can be made beyond looking at them on paper. However, from all that I can make out from my own work and from what businesses and professionals tell us, the tax is unfair, the Government have not consulted adequately and the consultation that was carried out has only put up the industry's back. I shall certainly support the amendment.
    Mr. Simmonds: I draw attention to my entry in the Register of Members' Interests, particularly my chairmanship of two surveying practices that provide advice to tenants and landlords in the property market, mainly in the United Kingdom.
    I rise primarily to speak in support of the amendments tabled by my hon. Friends on the Front Bench. The provisions would remove clause 56 and schedule 5 and suggest that implementation should be delayed until December 2004, although I do not have the same confidence as my Front-Bench colleagues that the Government will be ready to put the measure into operation by that time, if the consultation process that ended in January is anything to go by, as well as the lack of discussion and responsible answers to the pertinent and appropriate questions and probing amendments put by my hon. Friends in the Standing Committee, I have no confidence that the Government will be ready by December 2004. Indeed, the fact that the Government have tabled 46 new clauses and
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    amendments demonstrates to Members and to people outside the House what a shambles and a mess this part of the Bill is.
    On Second Reading, I spoke about the stamp duty proposals in some detail. At the time, knowing that I had not been fortunate enough to be selected to serve on the Standing Committee, I hoped that I could illuminate some of the problems emanating from the Bill. I hoped that the Government would take that opportunity to explain the methodology, and that they would close some of the obvious apertures and deal with the discrepancies in the Standing Committee. Needless to say, owing to the Government's apparent disingenuousness and to the inevitable programme motion, few of the issues that I raised were clarified. In fact, the inverse is true: the more time elapses, the greater the confusion, uncertainty and bewilderment.
    I do not want to repeat the Second Reading debate, but the House should note that, in my view, commercial property should be decoupled from residential property. Indeed, the Red Book states that
    "the Government will be able to differentiate between the commercial and residential markets, in order to take into account significant differences in the economic circumstances of the two sectors".
    That makes excellent sense, but it is not what is proposed in the Bill.
    Commercial property is an investment vehicle; it is an investment sector, alongside stocks, shares, gilts and bonds and its stamp duty treatment should be the same as for other investment vehicles. It is generally accepted—at least by everybody except Ministers—that not decoupling residential and commercial property has nothing to do with economic benefit or slowing down the commercial property market; it is purely a revenue-raising and revenue-generating exercise.
    There is another more suspicious, bigger picture. As the Government are taking us—some would say slowly, others would say too quickly—towards possible entry to the European currency, where we would lose control over our economy and our monetary and fiscal policy, one of the few levers remaining in the Chancellor's control is the power to control the taxation of property in its various guises. I suspect that that is one of the main arguments that will be forthcoming as the euro entry discussions heat up and we get closer to that possible— but unacceptable—event. The danger is that a precedent will he created for a retrospective view of property transactions and property taxation, hailing a return to the disastrous 1970s, with such things as purchase tax and development land tax, which ruined the development market.
    I have some specific points about the leasehold stamp duty taxation proposals. It is debatable whether rental can he capitalised as if the lease were an asset. Admittedly, some leases carry values: long leases of up to 99 years, some of the ground leases that underlie many residential tenancy arrangements, and some prime retail leases in our main shopping thoroughfares. Although I support the Chief Secretary in his efforts to close the abuse of tax loopholes, most companies lease premises from occupational necessity. Office tenants require space for workers. Industrial tenants require space for plant and machinery. Retailers require an outlet, or outlets, to sell their products. They do not sign

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    leases to avoid paying stamp duty on the alternative freehold purchase. In my experience, that has never happened. The reverse is true for those occupants; they do not want to tie up capital in property but to release it for investment in their business and in job-generating expansion.
    The Chief Secretary said in his introduction that decisions should be business-led, not tax-led. That is right and it is exactly what happens at present, but it will not happen if the proposals reach the statute book.
    Tenants, whether they are industrial, office or retail, want flexibility to react to the market at a particular time. The retail sector, in particular, is constantly changing and evolving. The proposals would stifle innovation and entrepreneurial dynamism. Indeed, I understand that Marks and Spencer might not have initiated the roll-out of its latest small food stores to compete with Sainsbury Local and Tesco Metro if the stamp duty proposals had been in force at the time of that decision.
    Mr. Prisk: My hon. Friend eloquently highlights the dangers in the commercial market. Does he share my concern that the Government seem to be ignorant that, in the real world, the reason retailers are leasing and not buying is that 40 per cent. of them lack an alternative, as is shown in a British Retail Consortium survey published today? Is not that the case?
    Mr. Simmonds: I am grateful to my hon. Friend for that information. He makes an extremely good point; it is indeed the case. From my experience of involvement in that marketplace before I entered the House—something to which I shall refer later—trends over the past 15 years show that retailers who for historical reasons had many freeholds in their portfolios have engaged in sale and leaseback, released capital to invest in new plant and machinery, new shopfitting and new employment, and have opened new branches. Unless the Chief Secretary can clarify exactly what will happen, such activities will be much less economically advantageous.
    Mr. Djanogly: The problems that my hon. Friend describes are dramatic and he gives useful examples. An article in the Estates Gazette states:
    "Possibly what will evolve is a more liberal association between landlord and tenant, such as a form of partnership or franchise rather than a lease."
    Does my hon. Friend believe that the effect of the proposals will be so dramatic that leasehold could, in effect, go into demise and that people will look for other ways of holding property?
    Mr. Simmonds: My hon. Friend makes a good point. I suspect that, to some extent, that might occur, but depending on the interaction of supply and demand in a particular marketplace, at some point, a retailer or occupier may be prepared to take the decision to pay the stamp duty to get a particular store or industrial unit. However, that does not make the provision right and the direct impact will be to reduce the rent that the occupier is prepared to pay, which will have a knock-effect
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    because if an occupier is prepared only to pay a lesser rent, or is only capable of paying less, the building will be worth less to an investor. In the big league, shopping centres and office blocks are owned by pension funds, so all hon. Members and everyone outside the House who has a pension fund will be affected because the value of the properties in those funds will reduce.
    The stock exchange is not particularly safe bet at the moment, so many investors are reluctant to put their money into stocks. Many private individuals are putting their money into commercial property because they believe that it is a safer bet, especially as the leasehold system only allows rents to increase at the moment, but that it is separate argument and I would not wish to go down that route, Mr. Deputy Speaker, because I am sure that you would rule me out of order if I were to do so. However, as was implied by my hon. Friend the Member for Huntingdon (Mr. Djanogly), imposing severe additional costs on many tenant occupiers would have very serious implications.
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    Mr. Djanogly: Again, my hon. Friend makes an extremely valuable point, tying in the implications of leasehold stamp duty proposals to the wider implications for the economy. Clearly, the economy has been held up in the past few years by retail sales and the property sector. Does he believe that those proposals could turn the property sector, thus destroying one of the last good bits of the economy?
    Mr. Simmonds: I alluded to the severe implications for the property sector, but there are much greater implications that could well have an impact especially on the retail sector, which I shall come to later in my remarks.
    I want to raise two specific issues at this juncture, and I hope that the Chief Secretary to the Treasury will reply to them in responding to the debate. First, why did the Treasury initially say that this element of the Budget would be revenue neutral? It clearly will not be revenue neutral. As I said earlier to my hon. Friend the Member for Hertford and Stortford (Mr. Prisk), the British Retail Consortium has said that retailers alone, not the totality of tenant occupiers in the UK, will have an additional tax contribution of £228 million per annum.
    I shall repeat the figure that struck me as most stark on Second Reading: B&Q has said that the proposals will cost it—one company alone—an additional £5 million per annum. The only way that it could avoid paying a bill of that size is to reduce the length of lease that it is prepared to accept, which would have a knock-on impact on property values.
    We are discussing the details, but these proposals are already having an impact on the marketplace. B&Q and other retailers are already saying that, for deals completed after 1 December 2003, they will be no longer prepared to take leases of 25 years and above. That will cause them internal problems because they traditionally write off their enormous shop-fitting costs over the length of the lease. If the length of lease is shorter, they will need a bigger financial hit per annum. That will have an all-round impact, so the store will be less profitable.

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    If stores are less profitable, retailers can only afford to pay their staff less, or they will have to employ fewer staff.
    Mr. Hugo Swire: Is there any evidence to date to show that these proposals might act as a disincentive to multi-stores, such as B&Q, expanding into areas where their employment is much needed, such as market towns and more rural areas?
    Mr. Simmonds: My hon. Friend makes a very good point. He is absolutely right, and I shall come to that point a little later in my remarks. What happens in the marketplace will have an impact on those marginal decisions where a retailer may, or may not, expand in a certain area. I shall give some specific statistics for areas, such as the parliamentary constituency of East Ham, where 23 per cent. of the working population are employed in retailing. That is just the sort of place where marginal decisions could have a direct impact on employment in retailing. Many people gain jobs in retailing that are not terribly well paid, but those jobs are necessary to support their lifestyles. I am not sure that there would be much alternative employment in those areas without retailing.
    Mr. Djanogly: I wish to return to the total tax take in the retail sector of £350 million, which my hon. Friend referred to slightly earlier. We have concentrated very much on the retail sector, but, of course, there are other sectors. I understand that, under these proposals, the total tax take could be as much as £8 billion, which is more than capital gains tax, inheritance tax and petrol tax added together, so we are discussing enormously significant issues.
    Mr. Simmonds: I agree, and my hon. Friend makes a very good point. I had not heard that statistic before, but the £8 billion figure happens to chime with the black hole that the Chancellor currently faces in his Budget. That may be very pertinent, and my hon. Friend may have hit on something very interesting.
    Mr. Swire: I am grateful to my hon. Friend for giving way again. Is there any evidence to show that inward investors in the property sector are being affected or that foreign investors are having second thoughts about investing in commercial property in this country as a result of these changes?
    Mr. Simmonds: My hon. Friend makes a very good point. I was going to talk partly about that issue, but I decided to leave it out because there is no evidence, as yet, that the Chief Secretary's proposals will have a direct impact on inward investment. However, there is no doubt that, because of the United Kingdom's general economic stability during the past 10 years under Governments of both colours—in my view, the Government are trying to spoil that economic stability—we have received enormous sums of inward investment, as the global economy weakens and especially as money has been invested in commercial property in the UK because of the problems in the middle east. However, there is also no doubt that many foreign investors are looking very carefully at exactly
    300
    what the Government will do in relation to these proposals because they will have a detrimental impact on commercial property values.
    Mr. Prisk: My hon. Friend is teasing out many of the unintended consequences that the Government clearly have not thought of, but is he aware that the British Retail Consortium has highlighted only today the fact that, if the Government's proposals are implemented, 75 per cent. of retailers will limit or stop their expansion?
    Mr. Simmonds: I am aware of that statistic, and it returns us to the intervention made by my hon. Friend the Member for East Devon. The greatest impact of the four-to-eightfold increase in stamp duty on leases will be felt at the marginal sites, assuming that 10-year leases are used. Such leases are short in the prime retail sector, where 15-year leases, if not longer, are normally used, so the multiple will be even higher. These proposals will have a significant impact, but whether the 75 per cent. figure is right will only be provable over time.
    The second question that I should like to ask the Chief Secretary at this juncture is how did he, or his Department, arrive at the net asset value figure of £150,000? That figure seems extraordinarily arbitrary. The basis for that calculation may have been a desire to exempt small businesses—the Chancellor of the Exchequer told us that a figure of 60 per cent. was used in the Budget, as the Chief Secretary confirmed in his opening remarks today—but I support what my hon. Friend the Member for Hertford and Stortford said in his polished remarks: that figure is absolute nonsense. It is very interesting that neither the Treasury nor the Inland Revenue will allow members of the public or hon. Members to study the consultation process that the Treasury underwent to arrive at that figure. That suggests that the consultation was not particularly wide and that, if it was wide, it was not particularly deep.
    The British Retail Consortium has undertaken its own survey, covering businesses that occupy 10,000 units in the United Kingdom, which amounts to 40 per cent. of the retail market. I suspect that that consultation process was much bigger than that undertaken by the Treasury, under the auspices of the Paymaster General and the Chief Secretary to the Treasury. Only 30 per cent. of units will be exempt, which, from my experience, sounds high in itself. Huge numbers of small businesses will be caught not by a marginal increase but by an enormous increase. The minimum increase will be four to eight times the amount paid at the moment, and that is if one assumes that businesses have a 10-year lease rather than the more traditional 15, 20 or 25-year lease.
    What will happen when Debenhams or John Lewis acquires a new department store? Owing to the millions of pounds that must be invested to fit escalators and all things that are required in new outlets, such firms can take 99-year leases. Will they have to pay millions of pounds in stamp duty? I assure the Chief Secretary to the Treasury that they will not, because they will find legal documentation to help them to find a way to avoid paying that unnecessary and unjustified taxation.
    The British Property Federation says that no business in London is likely to be exempt, but surely that was not the intended outcome of the Government's attempt—let

    301
    us be kind—to exempt small businesses. The measure could have a severe impact on the take-up of leases, especially office occupational leases, which is a struggling market, especially in central London. In the second quarter of this year, office supply in central London has continued to increase while take-up has continued to fall. Provisional figures for the second quarter from a major, well established and highly regarded surveying practice show that available office stock throughout central London grew by 10 per cent., to about 27 million sq ft. The take-up during that quarter is expected to be 1.4 million sq ft in the City of London and 1.1 million sq ft in the west end—both figures are well below the long-term average. City office take-up is expected to be down by 56 per cent.
    What does the Chief Secretary to the Treasury think that the Bill will do to the office market in central London, which is at the heart of our financial market? Many firms are trying to sub-let office space and many have reduced their staff because of the state of the stock exchange.
    The Bill could cause not only the office market but the retail market to suffer. My hon. Friend the Member for East Devon made a good point about marginal sites, but not only acquisitions—new stores—in marginal sites might be shelved. The opening of new stores in prime pitches might be cancelled because of the extent of the additional taxation under the Bill. Leases on existing sites might not be renewed, so properties that were occupied might be vacated. That could cause an area to go downhill and it could become impossible to re-let a space if the pitch changed or if there were an economic change in one area compared with others.
    Mr. Swire: There was a seminar this morning on how to renew seaside and coastal towns, some of which have suffered over past years. One of the problems in several of our seaside towns is the proliferation of charity shops, which happens because retail units are empty. Surely we should make it easier for people to take offices and encourage them to do so rather than implementing the Bill's measures, which would represent a move in the opposite direction.
    Mr. Simmonds: My hon. Friend makes a good point. Skegness is part of my constituency, so I was hoping to attend the seminar. Unfortunately, it clashed with the time when I had to go to the Public Bill Office to hand in the title of my ten-minute Bill. I have asked the Chief Secretary's office for any information that emanated from the seminar.
    The main driving force behind the proliferation of charity shops is the fact that they do not pay rates, which means that they have fewer overheads than normal retailers. Although I am not suggesting that we change that situation, charity shops have a competitive advantage that allows them to go into weaker retail pitches than normal retailers that do not enjoy that tax break.
    8.15 pm
    I shall emphasise the importance of retail employment throughout the United Kingdom.
    302
    Fortunately, a document with which the House of Commons Library provided me provides information on the constituencies of the Chief Secretary, the Paymaster General and myself on the same page. In my constituency, 15 per cent. of the work force are employed in retail—that figure excludes the motor trade. In the Chief Secretary's constituency, 10 per cent.—5,000 people—are employed in the retail sector. Twelve per cent. of the work force in the Paymaster General's constituency of Bristol, South are employed in retail. Those statistics are on the high side but they are fairly average. I shall cite a few extremes. In East Ham, 23 per cent. of the work force are employed in retail. The figure is 21 per cent. in Hendon and 24 per cent. in Thurrock—one in four people are employed in the retail trade.
    Retail makes a massive direct and indirect contribution to local communities and economies. Enormous numbers of people rely on a successful, thriving, flexible and expansive retail sector for their economic well-being. The Government's muddled and ill-thought proposals put that at risk. I hope that Labour Members will be prepared to return to their constituencies and explain that the policy to place an additional tax burden on retailers led directly and indirectly to the loss of people's jobs in the retail sector.
    Mr. Djanogly: It is important to make the point that the costs will be passed on. Customers and consumers will also be hit because the prices in the shops that they visit will be higher.
    Mr. Simmonds: My hon. Friend makes an extremely good point, as always. The measures will impact on jobs and job creation, but the implication is that they could also be inflationary. Perhaps only this Government could achieve such a unique combination of negative impacts.
    It is clear that the Government's methodology is confused and no matter what the Chief Secretary says, they are introducing a virtually new tax, not a modernisation. The measures on stamp duty will have a negative impact: first, they will reduce tenant movement in the market; secondly, they will make it more difficult to refurbish buildings; thirdly, they will reduce investment by tenants; fourthly, they will depress the value of land; fifthly, they will increase building obsolescence; and, sixthly, they will lead to buildings being unoccupied. If the Government do not want to be responsible for those negative impacts, they must listen carefully to the professional organisations that they are supposed to be consulting.
    Mr. Swire: My hon. Friend mentioned the serious implications for pension funds earlier, although he did not include that in his list. I suspect that the Treasury has not taken that fully into account as it eyes up money for a smash-and-grab raid.
    Mr. Simmonds: My hon. Friend makes a good point. The closure of the tax loophole, which I am not necessarily defending, will have an immediate impact on pension funds because £200 million will be taken out almost immediately. That will have a detrimental

    303
    impact on the performance of pension funds, which will affect everyone in the United Kingdom with a pension fund.
    I have spoken for long enough, but I want to raise two final points. I mentioned sale and leasebacks, sub-sales and securitisation on Second Reading but I cannot find any clarification on those matters from the Bill or discussions in Committee. No one seems to have addressed those technical, complex and serious matters. It is completely unacceptable to deal with those matters using delegated legislation because there will be no proper discussion or scrutiny and, probably, no vote. They should be included in the Bill.
    My second point is allied to that concern and relates to clause 57, which enables properties in deprived areas to avoid stamp duty. In principle, I do not have a problem with that. It sounds sensible ' and commendable, but surely it cannot have been the Government's intention to increase the value of some commercial assets in deprived areas by up to £50 million. Meadowhall shopping centre, which is outside Sheffield, is in a deprived residential area. As a result of removing the 4 per cent. charge, £50 million is added to its value—10p of the share value of the company that owns it and 1 per cent. of the net asset value of the whole company. That is ludicrous. Almost the whole of central Birmingham, central Manchester and Canary Wharf are exempt. Is that a proper and justifiable use of taxpayers' money? I think that it should be spent elsewhere and not used in such a way.
    The evidence to back that is clear when one considers that the analysis of the deprived areas is based purely on the affluence—or lack of it—of residents, not on the economic and business activity that occurs in a particular ward. I shall not go into the detail of what happens when ward boundaries change, because that is an argument for another day, but none of those things seems to have been discussed, never mind set out in black and white. That is a further argument for decoupling residential and commercial property.
    I was pleased and impressed when the Paymaster General responded in a constructive and helpful manner o points that I raised on Second Reading. She said:
    "the Government have sought to protect small businesses in a variety of ways through thresholds, which the hon. Member for Boston and Skegness will have ample time to discuss. I should be happy to give him the detail."—[Official Report, 6 May 2003; Vol. 404, c. 630–31.]
    Well, I am still waiting. I have received no such detail. I understand that the Standing Committee did not discuss it and that the House has not received any such information. I would be grateful if the Paymaster General could provide me with the detail of, and the justification for, the extremely detrimental, damaging and problematic proposals, because they could cause severe job losses and create severe problems as the consultation process progresses.
    Mr. Flight: I want specifically to address amendments Nos. 15, 16, 17 and 18, which relate to a section of the Bill that comes after the measures on stamp duty. Before doing so, I pay tribute to the most professional and important contributions by my hon. Friends the Members for Hertford and Stortford (Mr. Prisk), who made a forensic analysis of much of the Bill's shoddiness, and for Boston and Skegness (Mr.
    304
    Simmonds). I hope that the Chief Secretary and, more particularly, his advisers listened carefully to what was said.
    It was only some 13 years ago, when we were in power, that we were forced to reduce and suspend stamp duty to keep the residential property market afloat. In addition to the unresolved problems, the Government's proposals are inviting, at a particular time in the cycle, major damage to the sector. Again, I think with horror of the virtual halving of the equity assets of pension funds. Their property assets could also be severely damaged. Pensioners would never forgive the Administration responsible for that.
    The four amendments relate to the objection in principle, as I mentioned in Committee, to the final paragraph in schedule 20, which gives further powers to the Treasury to amend and repeal primary legislation on stamp duty and stamp duty land tax by negative resolution regulation. In the light of what the Chancellor said subsequently, we are especially concerned that the Government may use the powers to implement their policies further to raise taxation, and stamp duty and stamp duty land tax on home owners, as part of their professed objective to ensure greater convergence of the UK housing market with the market in continental Europe. On that subject, we agree with the Governor of the Bank of England that the greater availability of longer-term mortgages is unlikely to have much impact. However, bearing in mind the bubble in prices of the past three or four years, it is possible that higher taxes and stamp duties on homes could have a major impact on house prices.
    There are similar references in clause 123(2), which states:
    "The Treasury may by regulations make such other amendments and repeals as appear to them appropriate in consequence of the"
    primary legislation. There are other references in clause 109, which gives a general power to vary the implementation of the transitional stamp duty arrangements, and clause 112, which gives the Treasury a power to vary the rate of stamp duty up to the implementation date. When I raised those issues in Committee, the Chief Secretary replied to the effect that the powers were only to be used for the transitional arrangements relating to the abolition of stamp duty and the implementation of stamp duty land tax. In particular, it seemed that the legislation on stock and securities under existing stamp duty arrangements was preserved.
    Regrettably, it has become only too apparent that the electors view the Government as not to be trusted. Our amendments would write into schedule 20 specific limits on the powers to change stamp duty and stamp duty land tax in accordance with the description given by the Chief Secretary of why the powers are being provided. The amendments tighten the powers in line with the Chief Secretary's response. They also change the negative resolution to a positive resolution.
    It is unlikely that we will muster the majority to win if the amendments are put to a vote, but we want the Chief Secretary to give a clear and simple confirmation that the various measures that give the Treasury power to change the rate of stamp duty and stamp duty land tax by negative resolution and secondary legislation are

    305
    specifically concerned with transitional arrangements and will be used only in relation to those arrangements. We also want him to confirm that they are not a devious sleight of hand to enable the Chancellor to have a crackpot scheme to change dramatically the taxation of people's homes, motivated by questionable schemes to achieve convergence with EU property markets.
    8.30 pm
    Mr. Boateng: We have had a full debate in which we have subjected the Bill's provisions and the amendments to them to considerable scrutiny. I say at the outset that it is important in reflecting on the issue of regulations, as the hon. Member for Arundel and South Downs (Mr. Flight) has done, to recall not only the assurances that I gave in Committee, which I affirm, but also to understand that regulations will not be made under schedule 20 to increase the scope of stamp duty, or to increase the rate at which stamp duty is payable. The purpose of the regulations is to ensure that stamp duty continues to apply to stock and marketable securities in the way that it does now. Subjecting the regulations to affirmative resolution, as the amendments propose, is therefore unnecessary. I do not think that I could be clearer than that, and I hope that that satisfies the hon. Gentleman.
    The hon. Gentleman needs to understand that the legislation as drafted enables the Treasury to manage the reduction in the scope of stamp duty in a smooth and effective manner and to make changes when they are needed. It is not our intention in any way to seek to increase the scope of stamp duty through these regulations, but it is intended that we should also use regulations to put in place repeals and amendments when they are needed to ensure that the reduction in the scope of stamp duty is achieved smoothly. I believe that that gives the hon. Gentleman the assurances that he seeks. I welcome the fact that he has been gracious enough to thank me for that assurance.
    In a thorough debate, we have examined the clauses and the amendments in some detail. The hon. Member for Yeovil (Mr. Laws) made a serious contribution. There were serious and lengthy contributions from the hon. Members for Boston and Skegness (Mr. Simmonds) and for Huntingdon (Mr. Djanogly). I regard the contribution of the hon. Member for Boston and Skegness, by virtue of its length alone, to be a job application for the Committee that considers the Finance Bill in 2004. I am sure that Opposition Members who determine such matters will bear him very much in mind. I am only sorry that we missed him during the Committee stage of this year's Finance Bill. No doubt there were good reasons for that.
    We need to reflect on the contributions of the hon. Members for Huntingdon and for Boston and Skegness. I am glad that both hon. Gentlemen took care to make it plain that they recognised the problem of widespread avoidance and that they approved of measures to deal with it. That is why I was disappointed that they were not able to find it in their hearts to approve the measures that we are bringing forward.
    We believe that a lease duty structure that is more in line with commercial practice would significantly reduce distortions of business decisions and would be an
    306
    important part of encouraging compliance and preventing artificial avoidance schemes that are currently used to avoid stamp duty, to the extent of more than £10 million. I am surprised that the hon. Member for Huntingdon complains that the net present value formula is too complex and that he believes that it will lead individuals and practitioners to incur substantial costs in calculating values.
    We addressed the matter at some length in Committee. I made it clear then—I am happy to affirm what I said now—that all necessary help will be available to the public, practitioners and industry in using the net present value formula and applying the relevant legislation. In particular, an electronic help tool is being developed, which will be available from the date that stamp duty land tax is implemented. I hope that these assurances will be of assistance.
    Mr. Laws: Will the Minister give way?
    Mr. Boateng: I shall take up the points made by the hon. Gentleman. He can then return to them, if he wishes, in an intervention.
    Complaint was made of uncertainty being introduced as a result of the measures that we are putting forward. We have taken a bold step in modernising the stamp duty regime. The task was long overdue, and it was an essential one. It was one that Conservative Members fluffed when they had the opportunity to carry it out. They have been only too keen to point out the long pedigree of stamp duty, so it is inevitable that modernisation of 300 years of law and practice will be a complex task. It may be that it is that very complexity that deterred Conservative Members from embarking upon the task when they had the opportunity to do so, despite frequent calls from the industry for them to do so.
    We have addressed the task in a way that is open and consultative, and recognises its seriousness and complexity.
    Mr. Laws: On the calculation of NVP, I think that the Minister said that some type of electronic device or tool would be available. Will he say more about that? Will it be a calculator with NVP capability? Will it be made available from local offices? Will there be a charge? Will he give us more information?
    Mr. Boateng: It is not a calculator with NVP. I undertake to assure the hon. Gentleman that he will be one of the first to receive a demonstration of the tool. I shall draw to the attention of those responsible his interest in it. I look forward to his assessment of the electronic tool when he has the opportunity to reflect on it.
    In Committee, the hon. Member for Huntingdon said that the provisions that we are introducing are not to be regarded as a cleaning-up exercise. I agree—there is a change from a tax on documents to a tax on transactions, which is a fundamental reform. Hon. Members have tried to analyse certain aspects of the Bill as if there were still a document tax, but that is quite wrong. The Bill requires a wholly new way of thinking, and the challenge is to make it work for every transaction. Inevitably, there will be some residual

    307
    uncertainty, as long-held principles are being dismantled and rebuilt so that they are fit for the 21st century. However, the Inland Revenue is working tirelessly to ensure that guidance is issued, and there will be further consultation. We make no apology for that, as I do not regard the fact that we are continuing to consult on the Bill as a sign of weakness. Such consultation is to be welcomed, and the programme of customer education that we have embarked on is designed to ensure that taxpayers' questions are answered and their concerns addressed.
    I turn to the issue that the hon. Member for Huntingdon raised about the consultation itself. I am sorry that he is no longer in the Chamber, as I would like to tell him that consultation has been fairly continuous since the Budget of 2002. We have ensured that it has been detailed and open to everyone who wishes to share their opinions and experience. To be fair, I do not think that the people who have been participating in the consultation have complained or have had any grounds to complain that their concerns have not been taken seriously.
    Mr. Prisk rose—
    Mr. Boateng: I shall give way in a moment, as I want first to address a survey that has been touted during our discussions this evening. I believe that it is an internal document, as I certainly have not seen it.
    Mr. Prisk: It was published today.
    Mr. Boateng: I look forward to having an opportunity to read it—[Interruption.] I shall not do so during my deliberations, although I am tempted.
    The British Retail Consortium has been closely involved in work with Treasury officials on a number of areas, including changes that could be made to the lease duty proposals. Any data that it has to offer will, of course, be considered carefully. It has had discussions with officials, and recent meetings have been constructive. I do not doubt that in due course that that will be reflected in refinements to the proposals in the weeks and months ahead.
    Mr. Prisk: If the Chief Secretary is now sufficiently confident about the sample on which the Revenue has allowed him and the Chancellor to proceed to claim that 60 per cent. of leases will in fact be exempt, will he now confirm to the House that he intends to publish that evidence so that we can see it and make sure that the consultation is as proper as he claims?
    Mr. Boateng: I have already addressed that matter in detail in Committee. It is not our intention to depart from established practice and publish the figures as the hon. Gentleman suggests. However, we have shared data on leases with consultees in recent meetings. They are based on information provided by lessees to stamp offices and land registries, and they are the best data available to us. I hope that the hon. Gentleman will give us credit for our actions, because the consultation, I repeat, has been open and informed.
    It being eight hours after the commencement of proceedings on the first Way and Means motion relating to the Bill, MR. DEPUTY SPEAKER, pursuant to Order
    308
    [this day] proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  Clause 56

    AMOUNT OF TAX CHARGEABLE: RENT
    Amendment proposed: No. 9, in page 37, line 30, leave out clause 56.—[Mr. Prisk.]
    Question put, That the amendment be made:—
    The House divided: Ayes 168, Noes 294.

    Division No. 266]

    [8:45 pm

    AYES

    Ainsworth, Peter (E Surrey)

    Flight, Howard

    Allan, Richard

    Flook, Adrian

    Amess, David

    Forth, rh Eric

    Atkinson, David (Bour'mth E)

    Foster, Don (Bath)

    Atkinson, Peter (Hexham)

    Fox, Dr. Liam

    Bacon, Richard

    Francois, Mark

    Baker, Norman

    Garnier, Edward

    Baldry, Tony

    George, Andrew (St. Ives)

    Barker, Gregory

    Gibb, Nick (Bognor Regis)

    Baron, John (Billericay)

    Gidley, Sandra

    Barrett, John

    Gillan, Mrs Cheryl

    Beggs, Roy (E Antrim)

    Goodman, Paul

    Beith, rh A. J.

    Gray, James (N Wilts)

    Bellingham, Henry

    Grayling, Chris

    Bercow, John

    Green, Damian (Ashford)

    Blunt, Crispin

    Green, Matthew (Ludlow)

    Boswell, Tim

    Greenway, John

    Brake, Tom (Carshalton)

    Grieve, Dominic

    Brazier, Julian

    Hague, rh William

    Breed, Colin

    Hammond, Philip

    Brooke, Mrs Annette L.

    Harris, Dr. Evan (Oxford W &

    Browning, Mrs Angela

    Abingdon)

    Burnett, John

    Harvey, Nick

    Burns, Simon

    Hawkins, Nick

    Burt, Alistair

    Hayes, John (S Holland)

    Butterfill, John

    Heath, David

    Calton, Mrs Patsy

    Heathcoat-Amory, rh David

    Cameron, David

    Hendry, Charles

    Campbell, Gregory (E Lond'y)

    Hermon, Lady

    Campbell, rh Menzies (NE Fife)

    Hoban, Mark (Fareham)

    Cash, William

    Holmes, Paul

    Chapman, Sir Sydney (Chipping

    Horam, John (Orpington)

    Barnet)

    Howarth, Gerald (Aldershot)

    Chidgey, David

    Hughes, Simon (Southwark N)

    Chope, Christopher

    Jack, rh Michael

    Clappison, James

    Jenkin, Bernard

    Clarke, rh Kenneth (Rushcliffe)

    Johnson, Boris (Henley)

    Clifton-Brown, Geoffrey

    Keetch, Paul

    Collins, Tim

    Key, Robert (Salisbury)

    Conway, Derek

    Kirkbride, Miss Julie

    Cotter, Brian

    Kirkwood, Sir Archy

    Curry, rh David

    Knight, rh Greg (E Yorkshire)

    Davies, Quentin (Grantham &

    Laing, Mrs Eleanor

    Stamford)

    Lait, Mrs Jacqui

    Davis, rh David (Haltemprice &

    Lamb, Norman

    Howden)

    Lansley, Andrew

    Djanogly, Jonathan

    Laws, David (Yeovil)

    Dodds, Nigel

    Letwin, rh Oliver

    Duncan, Peter (Galloway)

    Liddell-Grainger, Ian

    Duncan Smith, rh lain

    Lidington, David

    Evans, Nigel

    Lilley, rh Peter

    Fabricant, Michael

    Loughton, Tim

    Fallon, Michael

    Luff, Peter (M-Worcs)

    Field, Mark (Cities of London &

    McIntosh, Miss Anne

    Westminster)

    Mackay, rh Andrew

    309

    McLoughlin, Patrick

    Shephard, rh Mrs Gillian

    Malins, Humfrey

    Shepherd, Richard

    Marsden, Paul (Shrewsbury &

    Simmonds, Mark

    Atcham)

    Simpson, Keith (M-Norfolk)

    Maude, rh Francis

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

    Mawhinney, rh Sir Brian

    Kincardine)

    May, Mrs Theresa

    Soames, Nicholas

    Mercer, Patrick

    Spicer, Sir Michael

    Mitchell, Andrew (Sutton

    Spink, Bob (Castle Point)

    Coldfield)

    Stanley, rh Sir John

    Moore, Michael

    Steen, Anthony

    Moss, Malcolm

    Streeter, Gary

    Murrison, Dr. Andrew

    Stunell, Andrew

    Norman, Archie

    Swire, Hugo (E Devon)

    O'Brien, Stephen (Eddisbury)

    Syms, Robert

    Osborne, George (Tatton)

    Taylor, Ian (Esher)

    Ottaway, Richard

    Taylor, John (Solihull)

    Paice, James

    Taylor, Dr. Richard (Wyre F)

    Portillo, rh Michael

    Trimble, rh David

    Prisk, Mark (Hertford)

    Turner, Andrew (Isle of Wight)

    Pugh, Dr. John

    Tyler, Paul (N Cornwall)

    Randall, John

    Tyrie, Andrew

    Redwood, rh John

    Viggers, Peter

    Waterson, Nigel

    Reid, Alan (Argyll & Bute)

    Webb, Steve (Northavon)

    Rendel, David

    Widdecombe, rh Miss Ann

    Robertson, Hugh (Faversham &

    Willetts, David

    M-Kent)

    Williams, Roger (Brecon)

    Robertson, Laurence (Tewk'b'ry)

    Winterton, Ann (Congleton)

    Robinson, Peter (Belfast E)

    Yeo, Tim (S Suffolk)

    Roe, Mrs Marion

    Young, rh Sir George

    Rosindell, Andrew

    Younger-Ross, Richard

    Ruffley, David

    Russell, Bob (Colchester)

    Tellers for the Ayes:

    Sanders, Adrian

    Angela Watkinson and

    Sayeed, Jonathan

    Mr. David Wilshire

    NOES

    Adams, Irene (Paisley N)

    Byers, rh Stephen

    Ainsworth, Bob (Cov'try NE)

    Caborn, rh Richard

    Alexander, Douglas

    Campbell, Alan (Tynemouth)

    Allen, Graham

    Campbell, Mrs Anne (C'bridge)

    Anderson, rh Donald (Swansea E)

    Campbell, Ronnie (Blyth V)

    Anderson, Janet (Rossendale &

    Casale, Roger

    Darwen)

    Caton, Martin

    Armstrong, rh Ms Hilary

    Cawsey, Ian (Brigg)

    Atherton, Ms Candy

    Challen, Colin

    Atkins, Charlotte

    Clapham, Michael

    Bailey, Adrian

    Clark, Mrs Helen (Peterborough)

    Baird, Vera

    Clark, Dr. Lynda (Edinburgh

    Banks, Tony

    Pentlands)

    Barnes, Harry

    Clark, Paul (Gillingham)

    Battle, John

    Clarke, rh Charles (Norwich S)

    Bayley, Hugh

    Clarke, rh Tom (Coatbridge &

    Beckett, rh Margaret

    Chryston)

    Begg, Miss Anne

    Clarke, Tony (Northampton S)

    Bell, Stuart

    Clelland, David

    Benn, Hilary

    Clwyd, Ann (Cynon V)

    Bennett, Andrew

    Coffey, Ms Ann

    Benton, Joe (Bootle)

    Cohen, Harry

    Berry, Roger

    Coleman, Iain

    Betts, Clive

    Colman, Tony

    Blackman, Liz

    Cook, rh Robin (Livingston)

    Boateng, rh Paul

    Corston, Jean

    Borrow, David

    Cousins, Jim

    Bradley, rh Keith (Withington)

    Cox, Tom (Tooting)

    Bradley, Peter (The Wrekin)

    Cranston, Ross

    Bradshaw, Ben

    Cruddas, Jon

    Brown, rh Nicholas (Newcastle E

    Cryer, Ann (Keighley)

    Wallsend)

    Cryer, John (Hornchurch)

    Brown, Russell (Dumfries)

    Cummings, John

    Browne, Desmond

    Cunningham, rh Dr. Jack

    Buck, Ms Karen

    (Copeland)

    Burden, Richard

    Cunningham, Jim (Coventry S)

    Burgon, Colin

    Cunningham, Tony (Workington)

    Burnham, Andy

    Curtis-Thomas, Mrs Claire

    310

    Dalyell, Tam

    Keen, Alan (Feltham)

    Davey, Valerie (Bristol W)

    Keen, Ann (Brentford)

    David, Wayne

    Kemp, Fraser

    Davidson, Ian

    Khabra, Piara S.

    Davies, rh Denzil (Llanelli)

    Kidney, David

    Davis, rh Terry (B'ham Hodge H)

    Kilfoyle, Peter

    Dawson, Hilton

    King, Andy (Rugby)

    Dean, Mrs Janet

    King, Ms Oona (Bethnal Green &

    Denham, rh John

    Bow)

    Dhanda, Parmjit

    Ladyman, Dr. Stephen

    Donohoe, Brian H.

    Lammy, David

    Dowd, Jim (Lewisham W)

    Lawrence, Mrs Jackie

    Drew, David (Stroud)

    Laxton, Bob (Derby N)

    Dunwoody, Mrs Gwyneth

    Lepper, David

    Eagle, Angela (Wallasey)

    Leslie, Christopher

    Efford, Clive

    Levitt, Tom (High Peak)

    Ellman, Mrs Louise

    Lewis, Terry (Worsley)

    Etherington, Bill

    Linton, Martin

    Ewing, Annabelle

    Lloyd, Tony (Manchester C)

    Field, rh Frank (Birkenhead)

    Love, Andrew

    Fisher, Mark

    Lucas, Ian (Wrexham)

    Fitzpatrick, Jim

    Luke, Iain (Dundee E)

    Fitzsimons, Mrs Lorna

    Lyons, John (Strathkelvin)

    Foster, rh Derek

    McAvoy, Thomas

    Foster, Michael Jabez (Hastings

    McCabe, Stephen

    & Rye)

    McCafferty, Chris

    Foulkes, rh George

    McDonagh, Siobhain

    Francis, Dr. Hywel

    MacDonald, Calum

    George, rh Bruce (Walsall S)

    McDonnell, John

    Gerrard, Neil

    MacDougall, John

    Gilroy, Linda

    McKechin, Ann

    Godsiff, Roger

    McKenna, Rosemary

    Goggins, Paul

    Mackinlay, Andrew

    Griffiths, Jane (Reading E)

    McNulty, Tony

    Griffiths, Nigel (Edinburgh S)

    MacShane, Denis

    Griffiths, Win (Bridgend)

    McWalter, Tony

    Grogan, John

    Mahmood, Khalid

    Hall, Mike (Weaver Vale)

    Mahon, Mrs Alice

    Hall, Patrick (Bedford)

    Mallaber, Judy

    Hamilton, David (Midlothian)

    Marris, Rob (Wolverh'ton SW)

    Hanson, David

    Marsden, Gordon (Blackpool S)

    Harman, rh Ms Harriet

    Marshall, David (Glasgow

    Harris, Tom (Glasgow Cathcart)

    Shettleston)

    Havard, Dai (Merthyr Tydfil &

    Martlew, Eric

    Rhymney)

    Meale, Alan (Mansfield)

    Healey, John

    Michael, rh Alun

    Henderson, Ivan (Harwich)

    Miliband, David

    Hendrick, Mark

    Miller, Andrew

    Hepburn, Stephen

    Mitchell, Austin (Gt Grimsby)

    Heppell, John

    Moffatt, Laura

    Hesford, Stephen

    Mole, Chris

    Heyes, David

    Moran, Margaret

    Hill, Keith (Streatham)

    Morgan, Julie

    Hoey, Kate (Vauxhall)

    Morley, Elliot

    Hood, Jimmy (Clydesdale)

    Mountford, Kali

    Hoon, rh Geoffrey

    Mudie, George

    Hope, Phil (Corby)

    Mullin, Chris

    Hopkins, Kelvin

    Murphy, Denis (Wansbeck)

    Howells, Dr. Kim

    Murphy, Jim (Eastwood)

    Hughes, Beverley (Stretford &

    Naysmith, Dr. Doug

    Urmston)

    Norris, Dan (Wansdyke)

    Hughes, Kevin (Doncaster N)

    O'Brien, Bill (Normanton)

    Humble, Mrs Joan

    O'Hara, Edward

    Hurst, Alan (Braintree)

    O'Neill, Martin

    Iddon, Dr. Brian

    Organ, Diana

    Illsley, Eric

    Osborne, Sandra (Ayr)

    Ingram, rh Adam

    Owen, Albert

    Irranca-Davies, Huw

    Palmer, Dr. Nick

    Jackson, Helen (Hillsborough)

    Picking, Anne

    Johnson, Miss Melanie (Welwyn

    Pickthall, Colin

    Hatfield)

    Pike, Peter (Burnley)

    Jones, Helen (Warrington N)

    Pollard, Kerry

    Jones, Jon Owen (Cardiff C)

    Pope, Greg (Hyndburn)

    Jones, Lynne (Selly Oak)

    Prentice, Ms Bridget (Lewisham

    Jones, Martyn (Clwyd S)

    E)

    Kaufman, rh Gerald

    Prentice, Gordon (Pendle)

    311

    Price, Adam (E Carmarthen &

    Stinchcombe, Paul

    Dinefwr)

    Stoate, Dr. Howard

    Primarolo, rh Dawn

    Stringer, Graham

    Prosser, Gwyn

    Stuart, Ms Gisela

    Purchase, Ken

    Tami, Mark (Alyn)

    Quinn, Lawrie

    Thomas, Gareth (Clwyd W)

    Rammell, Bill

    Thomas, Simon (Ceredigion)

    Rapson, Syd (Portsmouth N)

    Timms, Stephen

    Reed, Andy (Loughborough)

    Tipping, Paddy

    Robertson, Angus (Moray)

    Trickett, Jon

    Robertson, John (Glasgow

    Truswell, Paul

    Anniesland)

    Turner, Dennis (Wolverh'ton SE)

    Roche, Mrs Barbara

    Turner, Dr. Desmond (Brighton

    Rooney, Terry

    Kemptown)

    Ross, Ernie (Dundee W)

    Turner, Neil (Wigan)

    Roy, Frank (Motherwell)

    Twigg, Derek (Halton)

    Ruane, Chris

    Twigg, Stephen (Enfield)

    Russell, Ms Christine (City of

    Tynan, Bill (Hamilton S)

    Chester)

    Vaz, Keith (Leicester E)

    Ryan, Joan (Enfield N)

    Vis, Dr. Rudi

    Salmond, Alex

    Walley, Ms Joan

    Salter, Martin

    Wareing, Robert N.

    Sarwar, Mohammad

    Watson, Tom (W Bromwich E)

    Savidge, Malcolm

    Watts, David

    Sawford, Phil

    Weir, Michael

    Sedgemore, Brian

    White, Brian

    Sheridan, Jim

    Whitehead, Dr. Alan

    Williams, rh Alan (Swansea W)

    Short, rh Clare

    Williams, Betty (Conwy)

    Simpson, Alan (Nottingham S)

    Williams, Hywel (Caernarfon)

    Singh, Marsha

    Wills, Michael

    Skinner, Dennis

    Winnick, David

    Smith, rh Chris (Islington S &

    Wishart, Pete

    Finsbury)

    Wood, Mike (Batley)

    Smith, Geraldine (Morecambe &

    Woolas, Phil

    Lunesdale)

    Worthington, Tony

    Smith, Jacqui (Redditch)

    Wray, James (Glasgow

    Smith, John (Glamorgan)

    Baillieston)

    Soley, Clive

    Wright, Anthony D. (Gt

    Southworth, Helen

    Yarmouth)

    Starkey, Dr. Phyllis

    Wright, David (Telford)

    Steinberg, Gerry

    Wright, Tony (Cannock)

    Stevenson, George

    Stewart, David (Inverness E &

    Tellers for the Noes:

    Lochaber)

    Gillian Merron and

    Stewart, Ian (Eccles)

    Mr. Nick Ainger

    Question accordingly negatived.

  Schedule 19

    STAMP DUTY LAND TAX: COMMENCEMENT AND TRANSITIONAL PROVISIONS
    Amendment proposed: No. 11, in page 241, line 32, at end insert
    `but no order under this paragraph shall appoint a date earlier than 1st December 2004.'.—[Mr. Prisk]
    Question put, That the amendment be made:—
    The House divided: Ayes 173, Noes 291.

    Division No. 267]

    [8:58 pm

    AYES

    Ainsworth, Peter (E Surrey)

    Beggs, Roy (E Antrim)

    Allan, Richard

    Beith, rh A. J.

    Amess, David

    Bellingham, Henry

    Atkinson, David (Bour'mth E)

    Bercow, John

    Atkinson, Peter (Hexham)

    Blunt, Crispin

    Bacon, Richard

    Boswell, Tim

    Baker, Norman

    Bottomley, rh Virginia (SW

    Baldry, Tony

    Surrey)

    Barker, Gregory

    Brake, Tom (Carshalton)

    Baron, John (Billericay)

    Brazier, Julian

    Barrett, John

    Breed, Colin

    312

    Brooke, Mrs Annette L.

    Knight, rh Greg (E Yorkshire)

    Browning, Mrs Angela

    Laing, Mrs Eleanor

    Bruce, Malcolm

    Lait, Mrs Jacqui

    Burnett, John

    Lamb, Norman

    Burns, Simon

    Lansley, Andrew

    Burt, Alistair

    Laws, David (Yeovil)

    Butterfill, John

    Letwin, rh Oliver

    Calton, Mrs Patsy

    Liddell-Grainger, Ian

    Cameron, David

    Lidington, David

    Campbell, Gregory (E Lond'y)

    Lilley, rh Peter

    Campbell, rh Menzies (NE Fife)

    Loughton, Tim

    Cash, William

    Luff, Peter (M-Worcs)

    Chapman, Sir Sydney (Chipping

    McIntosh, Miss Anne

    Barnet)

    Mackay, rh Andrew

    Chidgey, David

    McLoughlin, Patrick

    Chope, Christopher

    Malins, Humfrey

    Clappison, James

    Marsden, Paul (Shrewsbury &

    Clarke, rh Kenneth (Rushcliffe)

    Atcham)

    Clifton-Brown, Geoffrey

    Maude, rh Francis

    Collins, Tim

    Mawhinney, rh Sir Brian

    Conway, Derek

    May, Mrs Theresa

    Cotter, Brian

    Mercer, Patrick

    Curry, rh David

    Mitchell, Andrew (Sutton

    Davey, Edward (Kingston)

    Coldfield)

    Davis, rh David (Haltemprice &

    Moore, Michael

    Howden)

    Moss, Malcolm

    Djanogly, Jonathan

    Murrison, Dr. Andrew

    Dodds, Nigel

    Norman, Archie

    Duncan, Peter (Galloway)

    Oaten, Mark (Winchester)

    Duncan Smith, rh lain

    O'Brien, Stephen (Eddisbury)

    Evans, Nigel

    Öpik, Lembit

    Fabricant, Michael

    Osborne, George (Tatton)

    Fallon, Michael

    Ottaway, Richard

    Field, Mark (Cities of London &

    Paice, James

    Westminster)

    Portillo, rh Michael

    Flight, Howard

    Prisk, Mark (Hertford)

    Flook, Adrian

    Pugh, Dr. John

    Forth, rh Eric

    Randall, John

    Foster, Don (Bath)

    Redwood, rh John

    Fox, Dr. Liam

    Reid, Alan (Argyll & Bute)

    Francois, Mark

    Rendel, David

    Garnier, Edward

    Robertson, Laurence (Tewk'b'ry)

    George, Andrew (St. Ives)

    Robinson, Peter (Belfast E)

    Gibb, Nick (Bognor Regis)

    Roe, Mrs Marion

    Gidley, Sandra

    Rosindell, Andrew

    Gillan, Mrs Cheryl

    Ruffley, David

    Goodman, Paul

    Russell, Bob (Colchester)

    Gray, James (N Wilts)

    Sanders, Adrian

    Grayling, Chris

    Sayeed, Jonathan

    Green, Damian (Ashford)

    Shephard, rh Mrs Gillian

    Green, Matthew (Ludlow)

    Shepherd, Richard

    Greenway, John

    Simmonds, Mark

    Grieve, Dominic

    Simpson, Keith (M-Norfolk)

    Hague, rh William

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

    Hammond, Philip

    Kincardine)

    Harris, Dr. Evan (Oxford W &

    Soames, Nicholas

    Abingdon)

    Spicer, Sir Michael

    Harvey, Nick

    Spink, Bob (Castle Point)

    Hawkins, Nick

    Stanley, rh Sir John

    Hayes, John (S Holland)

    Steen, Anthony

    Heath, David

    Streeter, Gary

    Heathcoat-Amory, rh David

    Stunell, Andrew

    Hendry, Charles

    Swire, Hugo (E Devon)

    Hermon, Lady

    Taylor, Ian (Esher)

    Hoban, Mark (Fareham)

    Taylor, John (Solihull)

    Holmes, Paul

    Taylor, Dr. Richard (Wyre F)

    Horam, John (Orpington)

    Tredinnick, David

    Howarth, Gerald (Aldershot)

    Trimble, rh David

    Hughes, Simon (Southwark N)

    Turner, Andrew (Isle of Wight)

    Jack, rh Michael

    Tyler, Paul (N Cornwall)

    Jenkin, Bernard

    Tyrie, Andrew

    Johnson, Boris (Henley)

    Viggers, Peter

    Keetch, Paul

    Waterson, Nigel

    Key, Robert (Salisbury)

    Watkinson, Angela

    Kirkbride, Miss Julie

    Webb, Steve (Northavon)

    Kirkwood, Sir Archy

    Widdecombe, rh Miss Ann

    313

    Willetts, David

    Younger-Ross, Richard

    Williams, Roger (Brecon)

    Wilshire, David

    Winterton, Ann (Congleton)

    Tellers for the Ayes:

    Yeo, Tim (S Suffolk)

    Mr. Robert Syms and

    Young, rh Sir George

    Hugh Robertson

    NOES

    Adams, Irene (Paisley N)

    Cryer, John (Hornchurch)

    Ainsworth, Bob (Cov'try NE)

    Cummings, John

    Alexander, Douglas

    Cunningham, Jim (Coventry S)

    Allen, Graham

    Cunningham, Tony (Workington)

    Anderson, rh Donald (Swansea E)

    Curtis-Thomas, Mrs Claire

    Anderson, Janet (Rossendale &

    Dalyell, Tam

    Darwen)

    Davey, Valerie (Bristol W)

    Armstrong, rh Ms Hilary

    David, Wayne

    Atherton, Ms Candy

    Davidson, Ian

    Atkins, Charlotte

    Davies, rh Denzil (Llanelli)

    Bailey, Adrian

    Davis, rh Terry (B'ham Hodge H)

    Baird, Vera

    Dawson, Hilton

    Banks, Tony

    Dean, Mrs Janet

    Barnes, Harry

    Denham, rh John

    Battle, John

    Dhanda, Parmjit

    Bayley, Hugh

    Donohoe, Brian H.

    Beckett, rh Margaret

    Dowd, Jim (Lewisham W)

    Begg, Miss Anne

    Drew, David (Stroud)

    Bell, Stuart

    Eagle, Angela (Wallasey)

    Benn, Hilary

    Efford, Clive

    Bennett, Andrew

    Ellman, Mrs Louise

    Benton, Joe (Bootle)

    Etherington, Bill

    Berry, Roger

    Ewing, Annabelle

    Betts, Clive

    Field, rh Frank (Birkenhead)

    Blackman, Liz

    Fisher, Mark

    Boateng, rh Paul

    Fitzpatrick, Jim

    Borrow, David

    Fitzsimons, Mrs Lorna

    Bradley, rh Keith (Withington)

    Foster, rh Derek

    Bradley, Peter (The Wrekin)

    Foster, Michael Jabez (Hastings

    Bradshaw, Ben

    & Rye)

    Brown, rh Nicholas (Newcastle E

    Foulkes, rh George

    Wallsend)

    Francis, Dr. Hywel

    Brown, Russell (Dumfries)

    George, rh Bruce (Walsall S)

    Browne, Desmond

    Gerrard, Neil

    Buck, Ms Karen

    Gilroy, Linda

    Burden, Richard

    Godsiff, Roger

    Burgon, Colin

    Goggins, Paul

    Burnham, Andy

    Griffiths, Jane (Reading E)

    Byers, rh Stephen

    Griffiths, Nigel (Edinburgh S)

    Caborn, rh Richard

    Griffiths, Win (Bridgend)

    Campbell, Alan (Tynemouth)

    Grogan, John

    Campbell, Mrs Anne (C'bridge)

    Hall, Mike (Weaver Vale)

    Campbell, Ronnie (Blyth V)

    Hall, Patrick (Bedford)

    Casale, Roger

    Hamilton, David (Midlothian)

    Caton, Martin

    Hamilton, Fabian (Leeds NE)

    Cawsey, Ian (Brigg)

    Hanson, David

    Challen, Colin

    Harman, rh Ms Harriet

    Clapham, Michael

    Harris, Tom (Glasgow Cathcart)

    Clark, Mrs Helen (Peterborough)

    Havard, Dai (Merthyr Tydfil &

    Clark, Dr. Lynda (Edinburgh

    Rhymney)

    Pentlands)

    Healey, John

    Clark, Paul (Gillingham)

    Henderson, Ivan (Harwich)

    Clarke, rh Charles (Norwich S)

    Hendrick, Mark

    Clarke, rh Tom (Coatbridge &

    Hepburn, Stephen

    Chryston)

    Heppell, John

    Clarke, Tony (Northampton S)

    Hesford, Stephen

    Clelland, David

    Heyes, David

    Clwyd, Ann (Cynon V)

    Hill, Keith (Streatham)

    Coffey, Ms Ann

    Hoey, Kate (Vauxhall)

    Cohen, Harry

    Hood, Jimmy (Clydesdale)

    Colman, Tony

    Hoon, rh Geoffrey

    Cook, rh Robin (Livingston)

    Hope, Phil (Corby)

    Corston, Jean

    Hopkins, Kelvin

    Cousins, Jim

    Howells, Dr. Kim

    Cox, Tom (Tooting)

    Hughes, Beverley (Stretford &

    Cranston, Ross

    Urmston)

    Cruddas, Jon

    Hughes, Kevin (Doncaster N)

    Cryer, Ann (Keighley)

    Humble, Mrs Joan

    314

    Hurst, Alan (Braintree)

    Organ, Diana

    Iddon, Dr. Brian

    Osborne, Sandra (Ayr)

    Illsley, Eric

    Owen, Albert

    Ingram, rh Adam

    Palmer, Dr. Nick

    Irranca-Davies, Huw

    Picking, Anne

    Jackson, Helen (Hillsborough)

    Pickthall, Colin

    Johnson, Miss Melanie (Welwyn

    Pike, Peter (Burnley)

    Hatfield)

    Pollard, Kerry

    Jones, Helen (Warrington N)

    Pope, Greg (Hyndburn)

    Jones, Jon Owen (Cardiff C)

    Prentice, Ms Bridget (Lewisham

    Jones, Lynne (Selly Oak)

    E)

    Jones, Martyn (Clwyd S)

    Prentice, Gordon (Pendle)

    Kaufman, rh Gerald

    Prescott, rh John

    Keen, Alan (Feltham)

    Price, Adam (E Carmarthen &

    Keen, Ann (Brentford)

    Dinefwr)

    Kemp, Fraser

    Primarolo, rh Dawn

    Khabra, Piara S.

    Prosser, Gwyn

    Kidney, David

    Purchase, Ken

    Kilfoyle, Peter

    Quinn, Lawrie

    King, Andy (Rugby)

    Rammell, Bill

    King, Ms Oona (Bethnal Green &

    Rapson, Syd (Portsmouth N)

    Bow)

    Reed, Andy (Loughborough)

    Ladyman, Dr. Stephen

    Robertson, Angus (Moray)

    Lammy, David

    Robertson, John (Glasgow

    Lawrence, Mrs Jackie

    Anniesland)

    Laxton, Bob (Derby N)

    Roche, Mrs Barbara

    Lepper, David

    Rooney, Terry

    Leslie, Christopher

    Ross, Ernie (Dundee W)

    Levitt, Tom (High Peak)

    Roy, Frank (Motherwell)

    Lewis, Terry (Worsley)

    Ruane, Chris

    Linton, Martin

    Russell, Ms Christine (City of

    Lloyd, Tony (Manchester C)

    Chester)

    Love, Andrew

    Ryan, Joan (Enfield N)

    Luke, Iain (Dundee E)

    Salmond, Alex

    Lyons, John (Strathkelvin)

    Salter, Martin

    McAvoy, Thomas

    Sarwar, Mohammad

    McCabe, Stephen

    Savidge, Malcolm

    McCafferty, Chris

    Sawford, Phil

    McDonagh, Siobhain

    Sedgemore, Brian

    MacDonald, Calum

    Sheridan, Jim

    McDonnell, John

    Simpson, Alan (Nottingham S)

    MacDougall, John

    Singh, Marsha

    McKechin, Ann

    Skinner, Dennis

    McKenna, Rosemary

    Smith, rh Chris (Islington S &

    Mackinlay, Andrew

    Finsbury)

    McNulty, Tony

    Smith, Geraldine (Morecambe &

    MacShane, Denis

    Lunesdale)

    McWalter, Tony

    Smith, Jacqui (Redditch)

    Mahmood, Khalid

    Smith, John (Glamorgan)

    Mahon, Mrs Alice

    Soley, Clive

    Mallaber, Judy

    Southworth, Helen

    Marris, Rob (Wolverh'ton SW)

    Starkey, Dr. Phyllis

    Marsden, Gordon (Blackpool S)

    Steinberg, Gerry

    Marshall, David (Glasgow

    Stevenson, George

    Shettleston)

    Stewart, David (Inverness E &

    Martlew, Eric

    Lochaber)

    Meale, Alan (Mansfield)

    Stewart, Ian (Eccles)

    Michael, rh Alun

    Stinchcombe, Paul

    Miliband, David

    Stoate, Dr. Howard

    Miller, Andrew

    Stringer, Graham

    Mitchell, Austin (Gt Grimsby)

    Stuart, Ms Gisela

    Moffatt, Laura

    Tami, Mark (Alyn)

    Mole, Chris

    Thomas, Gareth (Clwyd W)

    Moran, Margaret

    Thomas, Simon (Ceredigion)

    Morgan, Julie

    Timms, Stephen

    Morley, Elliot

    Tipping, Paddy

    Mountford, Kali

    Trickett, Jon

    Mudie, George

    Truswell, Paul

    Mullin, Chris

    Turner, Dennis (Wolverh'ton SE)

    Murphy, Denis (Wansbeck)

    Turner, Dr. Desmond (Brighton

    Murphy, Jim (Eastwood)

    Kemptown)

    Naysmith, Dr. Doug

    Turner, Neil (Wigan)

    Norris, Dan (Wansdyke)

    Twigg, Derek (Halton)

    O'Brien, Bill (Normanton)

    Twigg, Stephen (Enfield)

    O'Hara, Edward

    Tynan, Bill (Hamilton S)

    O'Neill, Martin

    Vaz, Keith (Leicester E)

    315

    Vis, Dr. Rudi

    Wishart, Pete

    Walley, Ms Joan

    Wood, Mike (Batley)

    Wareing, Robert N.

    Woolas, Phil

    Watson, Tom (W Bromwich E)

    Worthington, Tony

    Watts, David

    Wray, James (Glasgow

    Weir, Michael

    Baillieston)

    White, Brian

    Wright, Anthony D. (Gt

    Whitehead, Dr. Alan

    Yarmouth)

    Williams, rh Alan (Swansea W)

    Wright, David (Telford)

    Williams, Betty (Conwy)

    Wright, Tony (Cannock)

    Williams, Hywel (Caernarfon)

    Tellers for the Noes:

    Wills, Michael

    Gillian Merron and

    Winnick, David

    Mr. Nick Ainger

    Question accordingly negatived.
    Remaining Government amendments agreed to.
    Order for Third Reading read.
    9.10 pm
    Mr. Boateng: I beg to move, That the Bill be now read the Third time.
    The Finance Bill has now benefited from scrutiny in Committee and on Report, and I should like to pay tribute to the work of all Members on both sides of the House who have contributed to what has been a thorough and good-humoured study of the Bill and its provisions. We have made considerable headway. A number of amendments were tabled that we felt able to accept, and they have undoubtedly played some part in improving the Bill during its passage.
    The Chairman of our Committee, the hon. Member for Macclesfield (Sir Nicholas Winterton), described our consideration of this Bill as an example of Parliament working at its best, and I am bound to say that I thoroughly concur with him in that assessment. I want to thank those Front Benchers who spoke for the Opposition, and I should also mention those Back Benchers who are new to Finance Bill proceedings. One thinks in particular of the hon. Member for Tatton (Mr. Osborne), who made some extremely amusing and entertaining contributions to our deliberations. We will all remember his tour of the Vale of Tatton, which was one of the highlights. It has whetted many of our appetites for visiting his constituency.
    On a serious note, I want to thank my right hon. Friend the Paymaster General, who was ably accompanied by my hon. Friend the Economic Secretary, for her leadership on the Bill. I should also mention my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), who is happily no longer with us, having joined the Government in another capacity.
    It is right that the Finance Bill should receive careful attention and consideration from Members. It continues our commitment to enterprise and fairness, building a Britain of economic strength and social justice. The context for the Bill has been a continued challenging and uncertain period for the world economy. In recent years, we have witnessed not only a persistent global cyclical downturn but the first world slow-down for 30 years to affect every continent. Many leading countries have experienced recession during the past two years. Now, this Finance Bill positions the
    316
    United Kingdom and our businesses to take advantage of the potential for renewed growth that exists in this country.
    Mr. Redwood: Will the right hon. Gentleman give way?
    Mr. Boateng: In a moment. The Bill builds on our achievements in creating a strong macro-economic framework, to create a more dynamic, flexible and productive economy. We have reformed the tax system to create an environment friendly to enterprise, promoting investment, innovation and skills. The Bill marks the next stage of reform, and I shall come to its detail in moment, after giving way to the right hon. Member for Wokingham (Mr. Redwood).
    Mr. Redwood: I am grateful to the Chief Secretary for giving way. Given the current rate of rise in house prices, does he think that the Government should now apply the regulator that they are thinking of applying—higher stamp duty and capital gains tax on principal residences—this side of the election, or does he see that that might be politically disadvantageous to them?
    Mr. Boateng: I fear that the right hon. Gentleman is returning to his obsessions on the basis of a hypothesis that I simply do not recognise.
    The Finance Bill marks the next stage of reform. Clauses 158 to 161 contain a package of measures to simplify the capital gains tax system. Clause 164 extends for a further year, to March 2004, the 100 per cent. first year allowance available to small businesses for spending on information and communications technology. Clauses 138 to 140 simplify and modernise employee share schemes, making them easier to administer and giving employees more flexibility. Following feedback from business, the Bill improves the way in which research and development tax credit works, allowing more businesses—particularly small and medium-sized enterprises, and more types of expenditure—to qualify. Clauses 132 to 134 freeze corporation taxes at 30 per cent. The main rate is lower than in any other major industrialised country.
    The Bill builds on our policies for enterprise and innovation, but not at the price of fairness. Rather, it underwrites that fairness. To reduce the cost to business of locating and investing in disadvantaged areas and to support the regeneration of brownfield sites, clause 57 removes stamp duty from all non-residential property transactions in the 2,000 enterprise areas. On public services, last year's spending review set out our plans for an extra £61 billion of investment by 2005–06, with three quarters of the additional spending to go on health, education, transport, housing and the fight against crime.
    We are implementing a programme of unprecedented investment linked to reform and modernisation, and this year we have introduced increases in national insurance contributions to fund improvements in the national health service. It is therefore right that the Government ensure that we have a tax system under which everyone pays their fair share. That is why this Finance Bill includes a wider package of measures to ensure a level playing field for taxpayers who fulfil their obligations.

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    The Bill introduces measures to tackle VAT fraud and avoidance—in particular missing trader fraud, which costs us billions of pounds and makes billions of pounds of profit for organised crime. It also takes action to prevent tax avoidance through manipulating share schemes, and provides further support for companies that want to operate schemes fairly. Action has also been taken to counter capital gains tax avoidance through offshore trusts and second-hand life insurance policies, and we have acted too to close a loophole in the controlled foreign company rules that allow some companies to escape UK tax on profits from extended warranties and credit protection insurance.
    One of the most important aspects of this year's Bill is one to which we have given some attention in the course of our deliberations. Certainly, the hon. Member for Hertford and Stortford (Mr. Prisk) has spent a lot of time on it, as have I.
    Mr. Prisk: I got no straight answers.
    Mr. Boateng: The hon. Gentleman complains from a sedentary position that he got no straight answers, but I do not really think that is fair. It is a surprisingly ungracious remark from an hon. Gentleman whom we have rather indulged, at every stage of our deliberations. The hon. Gentleman made some good contributions, although he adopts what I can only describe as the Edgar Lustgarten approach to the promulgation of amendments.
    Mr. Prisk: Is it not true that the claims for the Bill are fiction?
    Mr. Boateng: I hear what the hon. Gentleman says. I do not want to go down that road, although I am glad that he knows about Edgar Lustgarten. I am surprised, though, as he is on the cusp of ignorance about someone who is known to everyone over 40.
    Mr. George Osborne: Explain.
    Mr. Boateng: The hon. Gentleman is nowhere near 40, so I will explain. Edgar Lustgarten was a barrister. In the 1950s and 1960s, as a second string to his bow, he found work providing voiceovers for B-rated movies and television programmes in which there was always a catalogue of heinous offences and wrongdoing. Those responsible were always confounded by the timely and precipitate intervention of the forces of law and order. I fear that the hon. Member for Hertford and Stortford rather cast himself in that role, and I now begin to draw my remarks to the detail of the Bill.
    Mr. Deputy Speaker (Sir Alan Haselhurst): I am extremely relieved that the Chief Secretary is doing that, as I would not want to think that he was filibustering his own Bill.
    Mr. Boateng: I have a rather good example of the approach of the hon. Member for Hertford and Stortford. We spent some time on the issue of subsales in the course of our deliberations. The hon. Member for
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    Hertford and Stortford gave it the Edgar Lustgarten treatment in this sense; there was a question, an answer and then a pause. Then, there was an exclamation and the suggestion somehow that—in responding to representations asking us to make provisions in relation to subsales and to recognise that off-plan sales were important—we had somehow done something wrong or were trying to cover something up, and that he, with determination and zeal, had discovered what that was. Nothing could be further from the truth.
    The consultation process on the Bill has been second to none. We have listened, taken on board the points that have been made and amended the Bill accordingly. Rather than Edgar Lustgarten-like carping, there should be a warm welcome from the hon. Member for Hertford and Stortford.
    Mr. Prisk rose—
    Mr. Boateng: I hope that the hon. Gentleman will now rectify his error.
    Mr. Prisk: I will not tempt you, Mr Deputy Speaker, down any other literary avenues that the Chief Secretary wishes to pursue. Perhaps I could simply bring him back to the subject before us. On Report, he failed to answer a critical question. Having told us that this was a fine, good and solid Bill, why did he write to the shadow Chancellor to say that the Bill was so poor that it would take a couple of years to amend it?
    Mr. Boateng: That was a typical Lustgarten technique. There is no evidence upon which the hon. Gentleman bases his assertion. No such words were used in the letter; instead, there was an affirmation of our commitment to ongoing consultation and to improving the legislation. The hon. Gentleman ought to welcome that, and not cast aspersions.
    One of the most important aspects of the Bill has been the comprehensive modernisation of stamp duty, which we have brought into the 21st century. Over the next few months, we will continue to consult interested parties to ensure a smooth implementation of stamp duty land tax on 1 December. That will be backed up by a comprehensive education programme for solicitors, licensed conveyancers and other interested professionals. I have promised the hon. Member for Yeovil (Mr. Laws) an early opportunity to experience the benefits of the particular electronic tool that is being presented to assist accountants, as he expressed an interest in it.
    Mr. George Osborne: The Chief Secretary persists in calling this new tax a stamp duty. Will he confirm that there is no stamp involved, and no duty?
    Mr. Boateng: We have grown very fond of the hon. Gentleman in the course of our deliberations—[Interruption.] Well, I am of a naturally generous disposition. The hon. Gentleman repeats the same old canard. I referred him to the measures introduced in 1986 by his party, which sought to start the modernisation process but never got anywhere. This Government have had the determination, courage and commitment to modernise and, as a result, we have the SDLT, which we commend to the House, despite

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    unhelpful attempts by Opposition Members to amend it. Where the provisions have been amended in a helpful way, we have accepted the proposals; where the amendments have not been helpful, we have resisted them. So far the House has been with us in resisting the Opposition's attempts to delay an important and welcome act of modernisation.
    The Finance Bill also meets our environmental responsibilities to use our resources sustainably. To ensure that we carry out our responsibilities to future generations, it contains a carefully calibrated tax and economic incentives to encourage that, while not undermining the necessary incentives to promote the competitiveness of British business.
    Mrs. Gillian Shephard rose—
    Mr. Boateng: I give way to the right hon. Lady, whose particular interest in biofuels will, I hope, be shared with us in tonight's proceedings.
    Mrs. Shephard: My intervention will provide me with that opportunity. I am listening to the Chief Secretary talk about the Bill's environmental credentials, so I remind him that the proposed fuel duty reduction of 20p on bioethanol is in no way sufficient to match the Government's own objective to meet the biofuels directive. In that respect, I intend to meet the Economic Secretary—hopefully, with his encouragement—shortly.
    Mr. Boateng: I know that the Economic Secretary looks forward to meeting the right hon. Lady. It will be good to see her back in the Treasury again, although I am bound to say that according to my recollection of her time as a Treasury Minister, that period was not characterised by the same environmental and fiscal incentives that have, in all fairness, characterised the present Administration's stewardship of the Treasury. She will correct me if I am wrong, but I do not believe that her record on that matter compares favourably with our own.
    Mrs. Shephard: The Chief Secretary is misremembering our time in the Treasury. When he was my opposite number during a particularly memorable period in our lives, I do not recall him pressing that case. Furthermore, his own Government's stated objectives of meeting the requirements of the EU biofuels directive now oblige them to take action. I hope that he can reassure the House on that score.
    Mr. Boateng: The right hon. Lady has had an uncharacteristic lapse of memory, but I can certainly assure her that we take our commitments in that respect very seriously indeed and that I look forward to hearing the outcome of her discussion with the Economic Secretary.
    We now have new duty differentials for sulphur-free fuels and bioethanol; a new low-carbon band of vehicle excise duty for the lowest CO2 emission cars, which will allow motorists to save up to £110 per year by choosing
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    those vehicles in preference to others; and an increase of £1 per tonne in the landfill tax rate for this year and the next to provide business certainty. Inevitably—
    Mr. Redwood: Customers pay.
    Mr. Boateng: I hear the right hon. Gentleman muttering, "Customers pay" from a sedentary position, but it is right to recognise the "polluter pays" principle, which has not divided the parties in the past—and it would be rather sad if it were to divide us now. We have taken a range of important initiatives, which I hope will find favour on both sides of the House.
    The Finance Bill is also about meeting our responsibilities to those in need. The 10 per cent. Government supplement on gifts to charity through payroll giving is extended for a further year to April 2004. That will be welcomed in the sector and throughout the House. Importantly, clause 175 recognises the role of foster carers with an income tax exemption to support their recruitment and retention by ensuring that they are not unfairly taxed on the expenses that they incur in making their invaluable contribution to society. Also importantly, in clause 174 we act to ensure that payments made to adoptive families under the Adoption and Children Act 2002 will continue to be free of tax.
    The Finance Bill continues our drive towards maintaining economic stability; our commitment to enterprise and fairness, which has enabled us to meet our responsibilities; and our drive to move forward with investment in public services, tackling poverty and social exclusion, despite the global turndown. I commend it to the House.
    9.30 pm
    Mr. Flight: I thank the Chief Secretary for his kind comments. Although there has manifestly been insufficient time, the Opposition have done our best to provide effective scrutiny of the Bill. The right hon. Gentleman put a good-natured gloss on what we feel is a bad Bill, which we shall vote against it for three essential reasons.
    First, there simply has not been the time for proper scrutiny. Large chunks of the Bill will hang in mid air, unresolved and waiting for Inland Revenue guidelines or further consultation. That is no way to run a country's tax affairs. Secondly, in spite of the spin, virtually nothing in the Bill is positive for the economy or addresses the economy's pressing needs. Indeed, some of it could do substantial damage. Thirdly, behind all the language of tax avoidance, it is clear that the Bill has been about a lot of detailed work, scratching around to leech the tax system and to sweat the maximum possible revenue from all sorts of hidden, little, new stealth taxes.
    This very day has given an example of the insufficient time allowed to address important territories. We did not have time to get round to several new clauses and important amendments. The time allotted in Committee was clearly inadequate for a long, complex and, dare I say it, not very well drafted Bill. The Government have been unacceptably arrogant in not giving way on allowing sufficient time. I have had the privilege of serving on three Finance Bills, and there is no record of

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    our filibustering or wasting time. There has been constructive collaboration, and there was no need not to allow enough time and to put in knives that resulted in some things not being covered that should have been covered while leaving potentially too much time for some other matters. Much of the Bill had to be rushed to allow us to cover as much territory as possible. Although the Government have given full responses in many areas—even if we may not have been satisfied with them—there are many others in which responses are required.
    As we all know, the Bill contains 180 pages rewriting the law on and changing the nature of stamp duty. Indeed, there is a new tax, and it is widely accepted that that was not properly consulted on. About 40 Government new clauses and amendments have been required to change that provision at this stage, for which only two and a half hours of debate was allowed. I should have hoped that the Government would take note of the measured House of Lords advice to delay until they could get those provisions right.
    Schedules 21 and 22 are the other big area of tax law rewrite, and they relate to employee securities and options. They are not well drafted; much of schedule 22 is still quite impenetrable, and we believe that there may be unintended consequences for which the only break will be Revenue guidance. To have the Revenue acting in that executive capacity is somewhat less than proper. Allowing the Revenue discretion is not a proper alternative to getting the law correct in the first place.
    With reference to the impenetrable drafting, the Institute of Chartered of Accountants said in its summary:
    "This poor redrafting of a large section of newly rewritten provisions is disappointing. We are concerned that our members will start to question our commitment of time and resources to the project"—
    the tax rewrite project—
    "if all that happens is that, within a few weeks of legislation being enacted, the Government makes wholesale amendments to it with no proper consultation. The result is that the case for us continuing our involvement in the Rewrite of the UK tax rules is undermined. We would welcome clarification as to the Government's policy concerning the Tax Law Rewrite project given the above comments."
    Even Government spin recognises that our tax system is already far too complex; it does not need the added problems and unintended consequences of complicated new tax legislation that has been poorly drafted and received inadequate scrutiny. Frequently, it is unclear how it will work.
    As is traditional, the legal and accounting professions assist in the scrutiny of Finance Bills by making representations for improvements and pointing out shortcomings that are available at the Committee stage and on Report. As the Chief Secretary recognises, the Opposition have done their utmost to give voice to those representations, but much in the Bill is still not properly resolved; to quote the Foreign Secretary, there is a lot of Horlicks. Much has been left hanging in the air, waiting on Revenue guidelines and future consultation. I cannot believe that the Chief Secretary really thinks this is the best way to run a successful country's economy, let alone its tax laws.
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    It is clear that the normal two days were necessary for Report and Third Reading. Many of the Government's new clauses and amendments were tabled extremely late; I did not receive some of them until yesterday afternoon and I confess that I have not had time to digest them. The country knows that if it elects a Government with a large majority, it is bringing in an elected tyranny. By God, we certainly have an elected tyranny; it is not right for the Government to ride roughshod over the traditional co-operation in dealing with a measure such as the Finance Bill.
    The Government might take notice of the fact that they are no longer so popular. They are behind in the polls and business and professionals are deeply displeased at being shortchanged by the Finance Bill.
    Our second major objection is the negative nature of the Bill. Given the problems facing our economy, little in the Bill will have a positive material impact and boost productivity and the business sector. What is there for our pension funds and pension fund assets, which are in trouble and which will be so important to the stability of the economy in the near future and in the long term? What is there that will materially restore business profitability or encourage investment, which is at its nadir for many years?
    Even ECOFIN—not a body of which I am deeply fond—pointed out that the UK economy's two weaknesses were our poor productivity record and, especially, the out-of-line growth in the number of claimants for disability and incapacity benefits. Although those are not Finance Bill matters, neither has been effectively addressed.
    The Government say that the Bill is about enterprise and meeting their obligations to business. I suggest that, from its representations, the CBI views that as an entirely tongue-in-cheek comment.
    There have been major contradictions. The Chancellor's speech included commitments to advance deregulation and to remove unnecessary legislation, but we are dealing with 447 pages of highly complex legislation that will be expensive for businesses to get on top of and implement. That is on top of the costs of assimilating the income tax, earnings and pension legislation rewrite.
    The Budget's only positive proposal for middle England—it is not in the Bill—was the child trust fund, but where are the proposals? They were promised in the summer, but we are only 16 days away from the recess. I hope that the Government will be able to tell us when the proposals will be forthcoming. The general understanding is that, even after they have been forthcoming, nothing will be implemented until 2005, by which time it looks certain that the Government will be out of power.
    My third point is that the reality that has emerged from scrutinising and debating the Bill is that it is largely about sweating the tax system. Significant new stealth taxes lie within virtually all the anti-avoidance measures. We have had a long debate about stamp duty, and the Red Book gives extra revenue figures of £350 million this year and £450 million next year. During the debates, the Government admitted that £190 million of that will come from the new lease duty this year and some £290 million next year, but the estimates emerging from the industry are truly concerning. The total stamp

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    duty tax take could well rise from £6 billion to £8 billion. As has been pointed out, the cost to the retail sector alone will be £228 million. Indeed, it is extremely worrying that the only two sectors of the economy that are still reasonably robust are retailing and property, yet the Bill threatens major damage to both.
    The change to stamp duty land tax was spun as a modernisation and reform of the system, but, as my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) pointed out, it fails to address the major problem of the slab that millions of citizens experience when buying and selling houses and it could leave first-time buyers with double charges when new housing estate lands are parcelled up among different builders. In that sense, the proposal has not addressed the full subsale issues.
    As my colleagues have pointed out, for small to medium-sized businesses, including virtually every business in London, the cost of the lease tax could not just double or quadruple, but rise by 10 or 15 times, with 35-year leases. The dangers of that are clearly a freezing of commercial property mobility, a move to short leases, inadequate investment in infrastructure and a major undermining of something that we have been good at: retailing.
    Schedule 21 prompted sharp exchanges today. I will not repeat them in depth, but there was an act of bad faith. There was never any legal position, nor any suggestion, that employers would be liable for national insurance contributions if their employees exercised certain rights within three years and that the latter would be liable for income tax. Those changes could have been made for the future, but the proposals have been implemented by changing the tax law. Again, we have a new tax.
    Unfortunately, we did not reach schedule 22 today, which leaves a great deal outstanding. In essence, the risk is that the definition of securities relating to employment is so wide that it could include employees who own shares in their companies. Even where shares are not part of a remuneration structure, employees could become liable to income tax and national insurance on the gains. The situation could be especially difficult for the venture capital industry and management buy-outs.
    Contrary to what the Chief Secretary said, business and commerce have been given the impression that the Government are biased against employee option motivation. The Government have already wrecked unapproved options and are now tightening up other areas. They do not understand that it is crucially important for companies with a market capitalisation between £100 million and £500 million to get the right people with talent—the entrepreneurial drivers—and lock them in. Those companies have to compete with bigger ones, but they are too large to qualify for the enterprise management incentive scheme and they have new problems with the limited approved scheme. At least the Government are no longer claiming that the UK share option regime is comparable in any way with the positive aspects of the US regime.
    Today, we debated the Government's reaction to the Eversden judgment. Although I appreciate the need to tighten things, their proposal amounts to a new stealth tax on people in middle England who want to transfer
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    their houses to their children and let the old mother live there in her latter years. The Government did not even honour the commitments on bingo tax that the Chancellor made in his Budget speech.
    The Chancellor is well aware of his over-optimistic forecasts on tax revenue. Goodness knows why a person who argues that he is so intelligent based his tax forecasts on the top of a nine-year boom period, because any practitioner could have told him that tax revenues were artificially inflated at that time. The situation has resulted in a depressing Bill that has the main objective of sweating out whatever additional tax it can. I remind hon. Members that taxation is increasing by 7.5 per cent. this year—more than £26 billion—in a climate that is less than healthy. Real household disposable incomes are expected to fall this year.
    Mr. Redwood: Does my hon. Friend agree that, by a mile, this is the dearest tax bill ever presented, and does that make it the worst?
    Mr. Flight: As my right hon. Friend knows, the subtle thing is that the taxes are not all in the Bill. A mass of advanced taxes was slipped in last year, or introduced via council tax or by another sleight of hand. The Bill is bad and the overall fiscal measures are extremely undesirable and the worst that I can think of. They are bad on bad.
    Economists are increasingly worried that the massive increase in taxation is hitting consumer demand and that that could push the economy into recession. The threat to the property market is added to that. The Government span the Bill and the Budget by citing measures that would build a strong and more flexible economy, but this year's Ernst and Young survey shows that entrepreneurs' view of Government and Whitehall is at rock bottom. Taxation has increased by nearly 50 per cent. since 1996–97 and spending has increased by more than 50 per cent., but there has been a less than 20 per cent. increase in delivery. About 80 per cent. of the tax increase has evaporated through inflated public sector costs and higher bureaucratic and administrative costs.
    It is a sad day for me—I say, jokingly, that that is not only because David Beckham has gone to Madrid—because my only son has left to make his career in America, as have so many talented young people to whom Britain does not offer the opportunity they want. The job situation for maturing graduates in this country is as dire as it has been for many years. Too many jobs in the public sector are non-jobs, and there is a dearth of new jobs in the private sector. As Digby Jones, head of the CBI, commented:
    "We are bearing witness to a continual erosion of our competitive position. If the government wants a low-tax, flexible economy, we are not heading in the right direction."
    We are back to the socialist tax-and-spend failures of the 1970s when I went to work abroad—more taxes, more spending, more borrowing, more excuses and inadequate delivery. Voters are beginning to realise what is happening. The sooner this depressing, divided and incompetent Government are out of office, the better.
    9.50 pm
    Denzil Davies: I want to raise a technical issue that relates to two clauses. It was mentioned briefly in Committee and concerns the possible interaction between clause 197 and schedule 42, and clause 148, with the developing jurisprudence of the European Court of Justice in respect of the "four freedoms", as they are described. In particular, I am concerned about the freedom of establishment, which impinges on the ability of member states to legislate in a traditional way on corporation tax and income tax.
    I did not serve on the Committee, but I read the reports. Members of it will know that clause 197 and schedule 42 deal with controlled foreign companies, which have been mentioned. Controlled foreign companies are not new, and the clause and the schedule extend the ambit of controlled foreign companies to other areas. There is no objection to that. I am sure that every hon. Member knows that a controlled foreign company is usually a foreign subsidiary of a UK parent company and is located in a country where corporation tax is much lower than it is in the UK.
    The Treasury Bench knows that the object is to charge the amount of corporation tax that would have been payable, had the foreign company been resident in the UK, on the UK parent company. There are exemptions and suspensions. The legislation does not apply to all countries or to most European Union countries, although it is uncertain whether it will apply to the 12.5 per cent. corporation tax rate in Ireland.
    Although it was denied in Committee, the problem is that the clause could fall foul of the jurisprudence of the European Court if a resident company in the UK is taxed according to UK rules and a non-resident company in the UK is taxed differently. If that nonresident company is resident in an EU member state, there will be a conflict between the traditional way of raising taxation in all member states, which is based on residency and non-residency. As a result, there will be a contradiction and conflict between that and the so-called four freedoms, especially the freedom of establishment of companies within the EU. The problems created by the Court go well beyond controlled foreign companies. I am not saying that the legislation will be challenged, but challenges are occurring all the time, as many hon. Members know. I merely ask my right hon. Friends whether that problem has been considered, although I am sure that it has.
    Clause 148 seems fairly innocuous. It changes the terminology from a tax on branches to a tax on permanent establishments, which is how double taxation treaties refer to what are, in effect, branches. Again, there is a problem. Recent cases, such as the Lankhorst case, relate to that well-known concept of the thin capitalisation rule. I will not go into that, but branches do not usually have capital; they rely on the capital of the company to which the branch belongs. It is possible to borrow money, pay interest, get a tax deduction and use the money as if it were capital in the company.
    The hon. Member for Arundel and South Downs (Mr. Flight) raised the matter in Committee and my right hon. Friend the Paymaster General was confident in her reply. I do not criticise her reply when she said that she was happy that the challenges could not occur. She
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    then said, "Of course, all this uncertainty will be taken into account in the ongoing discussions." I am not sure who the discussions are with, but that is how my right hon. Friend was reported. Probably the discussions are with either the Commission or with other countries. It is not a Eurosceptic point but a real problem. How do we dovetail or relate national corporation tax rules into the wider provisions of the European Union?
    I do not know for how long the discussions will continue, but there is a real problem because we are losing money. If challenges are made, and certainly if there is a challenge made to the controlled foreign companies legislation, what is to stop a British company setting up a holding company in Luxembourg? There are rules that prevent companies from leaving the United Kingdom, but exit taxes are also under threat. In a French case the exit tax has been held—this is certainly the position in French courts—to be contrary to the rules of the European Union.
    It is a real problem that extends beyond teachers paying income tax in France when they work across the border in Germany. I suspect that it will be examined. I suspect that the Treasury is much more worried than it makes out to be. I do not know the answer but an answer must be found to protect the revenues of this country, and to protect the money that comes into the Treasury as a result of taxing people in the normal and traditional way.
    9.56 pm
    Mr. Laws: There is no doubt that in terms of weight of paper and length, this is one of the heaviest and longest Finance Bills in history. There is little doubt, however, that in terms of substance it is probably one of the thinnest Finance Bills of the past 20 years. To me, at least, it suggests that the Government are running out of ideas and creative inspiration.
    Our proceedings have been lightened from time to time by the turns of the Chief Secretary, but in terms of the substance of the Bill, all too much is missing. I shall make some general comments about the proceedings of the Bill and then consider the substance of some of the major elements of the measure, before relating it to the Government's wider economic policy.
    Given the general way in which the Finance Bill has been handled this year, I shall make three requests. I suspect that they would be shared and to some extent mirrored given the comments made by the occupants of the Opposition Front Bench. First, can we in future have some foreknowledge of Budget day from a Government who tell us that they believe in fiscal transparency, clarity and predictability in fiscal policy? Do we have to continue with a situation where Budget dates are fixed by the Chancellor of the Exchequer one or two weeks in advance to suit the needs of the Labour party's media management? If we believe in fiscal transparency, let us and those outside the House who want to know when the Finance Bill will be introduced each year be informed well in advance. Let the date be fixed every year.
    Secondly, whether this is a thin Bill in terms of substance, no doubt the measures in it are important to many people—not only tax accountants but business

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    people throughout the country. It is vital that we have the necessary time to scrutinise all the measures in the Bill.
    Opposition Front Bench Members who are responsible for scrutiny of the Bill have done a good job in covering a large portion of the Bill this year, but a number of amendments, new clauses and portions of the Bill have not been scrutinised, including some of the amendments and new clauses that were tabled for consideration today in the earlier part of our proceedings. I ask the Chief Secretary to consider next year reinstating consideration on Report and Third Reading over two days rather than one elongated day. I ask him to ensure that consideration in Committee is sufficiently lengthy to enable us to consider all parts of the Bill. In addition, the length of the Bill—447 pages to cover a relatively sparse amount of policy and substance—is of concern. The Government are determined to try to make the Finance Bill more accessible and shorten the existing legislation, but they appear to be doing so without any eye for the new measures that they introducing, their length and the way in which they are increasing the complexity of our tax system.
    I am afraid I have only two generally positive comments about the Finance Bill. One relates to the report, which has already been mentioned, produced by the Economic Affairs Committee in another place. It is immensely useful, even if we do not want the other place to involve itself too much in financial matters, for us to be able to draw upon the Lords' undoubted expertise. If the Government do the House and people outside the courtesy of allowing us to know in advance when the Budget will take place, it may even be possible for the Economic Affairs Committee to anticipate those developments so that we can have its report before Committee proceedings conclude, as happened this year.
    Before I go on to the substance of the Bill, I should like to make a slightly more generous comment, and thank the Chief Secretary, the Paymaster General and the Economic Secretary both for the generally good natured and sometimes humorous way in which they have conducted proceedings and for their willingness to amend provisions on different issues, including the stamp duty issue affecting social housing tenants that we discussed today, in the light of representations from the Opposition.
    The Bill is relatively insubstantial and includes some extremely worrying measures. There is a series of tax changes of great complexity, but there is little or no evidence that the Treasury has given any thought whatsoever to the question of whether those changes justify the amount of money spent on them. There are concerns about whether the change to stamp duty in deprived areas will be abused. Will it benefit small, deprived communities in the parts of the country that it sets out to benefit, or will it merely help the big commercial enterprises that are often based in the inner cities? The Government have not provided any assessment of the economic benefit of those measures.
    Today, we debated tax reliefs on savings, and the Economic Secretary made an admission, which he did not regard as surprising, that the Government are spending billions of pounds of tax relief on savings without the slightest idea of whether they are doing
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    anything more than shifting savings from one class of savings instrument to another. We have had no assessment at all of whether the change has any economic value in increasing the total stock of savings. The Government are spending a great deal of money on research and development tax credits, but we do not know whether they are of any benefit because the Treasury do not seem to be carrying out any scrutiny of whether the expenditure of Government money to pay for tax revenues forgone makes any sense. It is extraordinary that the Treasury should insist that other Departments should achieve good value for money in their expenditure while it is making no analysis whatsoever of immensely expensive tax changes.
    Mr. Redwood: Does that mean that the Liberal Democrats would take away those tax reliefs?
    Mr. Laws: The right hon. Gentleman will know that we would remove certain tax reliefs, not least the film tax relief, which was originally introduced by the Government in the expectation that it would cost £20 million to £40 million. However, within a couple of years, behind the backs of Ministers, "Coronation Street" and other programmes were categorised as films, and the cost of the relief had increased from £30 million or £40 million to £200 million, then £300 million and £350 million. We ought to subject such measures to much greater scrutiny in the House, and I am very surprised indeed that the Chancellor and Treasury officials should allow Treasury Ministers to get away with all those ill-thought-out reliefs—there seems to be no ongoing assessment of their economic value.
    There is an extremely worrying lack of coherence in the Treasury—one would expect to find it there of all places—about the way in which the tax system treats similar types of activity. Earlier, we had a debate in which I appeared to irritate the Economic Secretary by asking him whether the intention was to create a level playing field for different forms of tax on gambling. He is laughing now. He thinks that that is amusing. Apparently, it is not the Government's policy that there should be a level playing field. It is the policy of the Government to send out through the tax system a signal that certain types of gambling are better than others. I do not understand that at all. I do not understand how the economists and officials in the Treasury and the chief economic adviser, for whom I have the highest regard, can allow Ministers to get away with such ill-thoughtout measures.
    On the overall thrust of tax policy, we must wonder whether the Government are committed to fairness in tax, as they have long boasted. Shortly after the Government came to power in 1997, we tabled questions asking about the tax burden by income deciles—figures for which the Labour party in opposition had been asking and on which it had been getting parliamentary written answers since 1979, and using them to taunt other parties about the effect of their tax policies. It was interesting that within about a year of the Government coming to power, that series was abolished. Apparently, it was far too complicated to assess the effect of tax policies on each income decile.
    It seems that a lot of work would have to be carried out to produce a new series, and we have not seen it yet. With the increase in council tax being forced through by

    329
    the measures being taken by the Chancellor—one of the most regressive taxes that the Government have yet thought up—we are not surprised that they do not intend to produce that series, as it would show how regressive certain elements of their tax policy are.
    When we link all that to the Government's economic performance, we see a Government who came in initially in 1997 with a clear and, in certain respects, ambitious agenda. They gave the central Bank of the United Kingdom operational independence, even though that was not in their manifesto, and we welcomed that. They had a clear agenda, whether or not one agreed with it, on public expenditure, and they wanted to restore the public finances to a strong state. They wanted to end the dithering on the euro, and they wanted to prepare and decide, rather than wait and see.
    What do we see in all those areas now? A failure of the Government—failure on the economy, where productivity growth is as low as it has been for 10 or 20 years, and lower than in the period before they took over. If we do not have productivity growth, how will we get extra money into public services without an ever-rising tax burden? We see the budget balance returning to significant deficit, and perhaps even to structural deficit, after a short period of surplus. We see the tax burden going back up and the Government having to use taxes such as national insurance. Because of the political pledges that were given not to change income tax, they have found a mirror-image tax. It is not surprising, therefore, that people feel such distrust of the Government.
    On public services, we see an increasingly centralised system of delivery that cannot possibly work and which is letting down the British people. On the euro, it is difficult to see what the difference is between the wait-and-see policy that was derided, and the prepare-and-decide policy that we were to get.
    Mr. Stephen O'Brien: Hope and pray.
    Mr. Laws: The hon. Gentleman is probably right.
    The Finance Bill is a complacent Bill from a Government who have run out of steam and from a Chancellor who has little to be complacent about.
    10.8 pm
    Mr. Redwood: The Chief Secretary tonight made a bad fist of a very bad case. He dared to tell the House that the Budget is about stability, enterprise and fairness. It is about none of those things.
    Let us take the case of enterprise. Can the Budget be said to be a Budget for enterprise, when all the moves on corporation tax are to increase the tax and make it more difficult for business to shield its hard-earned and dwindling profits? Can it be said to be a Budget for enterprise when the cornerstone of the Government's policy this year is a big hike in employer and employees national insurance? Labour introduced a tax on jobs, and dares to tell the House that the Budget is a Budget for enterprise and jobs. Can it be said to be a Budget for enterprise when we see a fundamental restructuring of stamp duty and land taxes, in a way that is likely to be damaging to retail and property, two of the sectors that
    330
    have so far survived rather better than others from the depredations of the Chancellor, who is always taking more and more money away? Can this year's Budget be said to be a Budget for stability? Of course not.
    The Finance Bill contains the seeds of the Government's own undoing. They have foolishly decided to use their huge majority to grant themselves the powers to start to tax the property sector, particularly people's homes, more highly as a means of regulating the economy. I give them this warning tonight: if they do that—if they increase stamp duties on homes under the powers that they are taking, or if they decide at some future date to introduce capital gains on the principal residence, as they have threatened to do in recent documentation—they could well overshoot and destroy the one remaining thing that is keeping the economy going.
    It is higher house prices that are keeping up confidence to some extent. It is higher house prices that are enabling people to borrow to supplement their squeezed incomes and keep up their spending patterns. It is higher house prices that are sustaining a modest level of confidence in a corporate sector that has otherwise been sandbagged and knocked badly by the Chancellor's tax depredations in recent Budgets. If the Government use their enhanced powers and new taxation base to take more money out of the housing sector, they will rue the day. They will do themselves considerable political damage as well as undermine the one remaining part of the British economy that still survives and works in their favour.
    I do not think that the Government have yet learned the brutal lesson that they should have learned from their previous higher taxes. This year's Budget and Finance Bill are about higher tax. They are based on the proposition to which the Government have worked for the past four years, which is if they see a stream of income or money going into the private sector, they can take as much of it they like and do no damage—the private sector deserves such treatment. In the moral universe of the Chancellor and the Chief Secretary, it is necessary to take a big chunk of that money away from the private sector and use it for their own spending purposes.
    Mr. Boateng: That is absurd.
    Mr. Redwood: The Chief Secretary says that, but he should look at the evidence. At the end of the 1990s, the Government saw a successful telecommunications industry, so they imposed a £22.5 billion windfall tax on that industry and more or less destroyed it. They destroyed jobs, investment and prosperity—they destroyed the very engine of growth at the peak of that market's growth. Then, the Government saw pension funds and thought, "What an easy target. Let's take £5 billion a year off pensioners—they won't notice, they're too old to complain." That, of course, did grave damage to pension funds and helped to produce a bigger collapse in the stock market in Britain than was seen overseas.
    This year's Budget and Finance Bill threaten to do the same thing to employment and to housing, so I renew my warning to the Government that they should back off from the housing market. They should understand

    331
    that it is the last remaining thing that makes part of their growth forecasts credible. No private sector forecaster thinks that the Chancellor has a hope in hell of achieving the growth in the economy that he forecasts for the next two years. We all know that his revenues will fall short and his expenditures will exceed his Budget. We all know that this Finance Bill, the biggest tax bill ever presented to the British people, will not be enough. I promise the Government that if they go ahead and use the extra powers that they are taking over the housing market, not only will the taxes not be enough, but they will fall short by a massive amount and trigger a substantial disaster.
    The Chief Secretary says that this year's Budget is a Budget to produce fairness. What is fair about a Government who tax the poor to pay the fat cats in the quangos and the government sector? What is fair about a Government who expand the bureaucracy and the government sector—
    It being nine and a half hours after the commencement of proceedings on the first Ways and Means motion relating to the Bill, MR. DEPUTY SPEAKER, pursuant to Order [this day], proceeded to put forthwith the Question already proposed from the Chair.
    Question put, That the Bill be read the Third time:—
    The House divided: Ayes 285, Noes 175.

    Division No. 268]

    [10.14 pm

    AYES

    Abbott, Ms Diane

    Campbell, Mrs Anne (C'bridge)

    Adams, Irene (Paisley N)

    Casale, Roger

    Ainsworth, Bob (Cov'try NE)

    Caton, Martin

    Alexander, Douglas

    Cawsey, Ian (Brigg)

    Allen, Graham

    Challen, Colin

    Anderson, rh Donald (Swansea E)

    Clapham, Michael

    Anderson, Janet (Rossendale &

    Clark, Mrs Helen (Peterborough)

    Darwen)

    Clark, Dr. Lynda (Edinburgh

    Armstrong, rh Ms Hilary

    Pentlands)

    Atherton, Ms Candy

    Clark, Paul (Gillingham)

    Atkins, Charlotte

    Clarke, rh Tom (Coatbridge &

    Austin, John

    Chryston)

    Bailey, Adrian

    Clarke, Tony (Northampton S)

    Banks, Tony

    Clelland, David

    Barnes, Harry

    Clwyd, Ann (Cynon V)

    Battle, John

    Coffey, Ms Ann

    Bayley, Hugh

    Cohen, Harry

    Beckett, rh Margaret

    Colman, Tony

    Begg, Miss Anne

    Cook, rh Robin (Livingston)

    Bell, Stuart

    Corbyn, Jeremy

    Benn, Hilary

    Corston, Jean

    Bennett, Andrew

    Cousins, Jim

    Benton, Joe (Bootle)

    Cox, Tom (Tooting)

    Berry, Roger

    Cranston, Ross

    Betts, Clive

    Crausby, David

    Boateng, rh Paul

    Cruddas, Jon

    Borrow, David

    Cryer, Ann (Keighley)

    Bradley, rh Keith (Withington)

    Cryer, John (Hornchurch)

    Bradley, Peter (The Wrekin)

    Cummings, John

    Bradshaw, Ben

    Cunningham, rh Dr. Jack

    Brown, rh Nicholas (Newcastle E

    (Copeland)

    Wallsend)

    Cunningham, Jim (Coventry S)

    Brown, Russell (Dumfries)

    Cunningham, Tony (Workington)

    Browne, Desmond

    Dalyell, Tam

    Buck, Ms Karen

    Davey, Valerie (Bristol W)

    Burden, Richard

    David, Wayne

    Burgon, Colin

    Davidson, Ian

    Burnham, Andy

    Davies, rh Denzil (Llanelli)

    Byers, rh Stephen

    Davis, rh Terry (B'ham Hodge H)

    Caborn, rh Richard

    Dawson, Hilton

    Campbell, Alan (Tynemouth)

    Dean, Mrs Janet

    332

    Denham, rh John

    Kidney, David

    Dhanda, Parmjit

    Kilfoyle, Peter

    Dismore, Andrew

    King, Andy (Rugby)

    Dobbin, Jim (Heywood)

    King, Ms Oona (Bethnal Green &

    Donohoe, Brian H.

    Bow)

    Dowd, Jim (Lewisham W)

    Ladyman, Dr. Stephen

    Drew, David (Stroud)

    Lammy, David

    Eagle, Angela (Wallasey)

    Lawrence, Mrs Jackie

    Efford, Clive

    Laxton, Bob (Derby N)

    Ellman, Mrs Louise

    Lepper, David

    Etherington, Bill

    Leslie, Christopher

    Field, rh Frank (Birkenhead)

    Levitt, Tom (High Peak)

    Fisher, Mark

    Lewis, Terry (Worsley)

    Fitzpatrick, Jim

    Linton, Martin

    Fitzsimons, Mrs Lorna

    Lloyd, Tony (Manchester C)

    Foster, rh Derek

    Love, Andrew

    Foster, Michael Jabez (Hastings

    Luke, Iain (Dundee E)

    & Rye)

    Lyons, John (Strathkelvin)

    Foulkes, rh George

    McAvoy, Thomas

    Francis, Dr. Hywel

    McCabe, Stephen

    George, rh Bruce (Walsall S)

    McCafferty, Chris

    Gerrard, Neil

    McCartney, rh Ian

    Gilroy, Linda

    McDonagh, Siobhain

    Godsiff, Roger

    MacDonald, Calum

    Goggins, Paul

    McDonnell, John

    Griffiths, Jane (Reading E)

    MacDougall, John

    Griffiths, Nigel (Edinburgh S)

    McKechin, Ann

    Griffiths, Win (Bridgend)

    McKenna, Rosemary

    Grogan, John

    Mackinlay, Andrew

    Hain, rh Peter

    McNulty, Tony

    Hall, Mike (Weaver Vale)

    MacShane, Denis

    Hall, Patrick (Bedford)

    McWalter, Tony

    Hamilton, David (Midlothian)

    Mahmood, Khalid

    Hamilton, Fabian (Leeds NE)

    Mahon, Mrs Alice

    Hanson, David

    Mallaber, Judy

    Harris, Tom (Glasgow Cathcart)

    Marris, Rob (Wolverh'ton SW)

    Havard, Dai (Merthyr Tydfil &

    Marsden, Gordon (Blackpool S)

    Rhymney)

    Marshall, David (Glasgow

    Healey, John

    Shettleston)

    Henderson, Ivan (Harwich)

    Martlew, Eric

    Hendrick, Mark

    Meale, Alan (Mansfield)

    Hepburn, Stephen

    Michael, rh Alun

    Heppell, John

    Miliband, David

    Hesford, Stephen

    Miller, Andrew

    Heyes, David

    Mitchell, Austin (Gt Grimsby)

    Hill, Keith (Streatham)

    Moffatt, Laura

    Hoey, Kate (Vauxhall)

    Mole, Chris

    Hood, Jimmy (Clydesdale)

    Moran, Margaret

    Hoon, rh Geoffrey

    Morgan, Julie

    Hope, Phil (Corby)

    Morley, Elliot

    Hopkins, Kelvin

    Mountford, Kali

    Howarth, George (Knowsley N &

    Mudie, George

    Sefton E)

    Mullin, Chris

    Howells, Dr. Kim

    Murphy, Denis (Wansbeck)

    Hughes, Beverley (Stretford &

    Murphy, Jim (Eastwood)

    Urmston)

    Naysmith, Dr. Doug

    Hughes, Kevin (Doncaster N)

    Norris, Dan (Wansdyke)

    Humble, Mrs Joan

    O'Brien, Bill (Normanton)

    Hurst, Alan (Braintree)

    Olner, Bill

    Iddon, Dr. Brian

    O'Neill, Martin

    Illsley, Eric

    Organ, Diana

    Ingram, rh Adam

    Osborne, Sandra (Ayr)

    Irranca-Davies, Huw

    Owen, Albert

    Jackson, Helen (Hillsborough)

    Palmer, Dr. Nick

    Jenkins, Brian

    Picking, Anne

    Johnson, Miss Melanie (Welwyn

    Pickthall, Colin

    Hatfield)

    Pike, Peter (Burnley)

    Jones, Helen (Warrington N)

    Pollard, Kerry

    Jones, Jon Owen (Cardiff C)

    Pope, Greg (Hyndburn)

    Jones, Lynne (Selly Oak)

    Prentice, Ms Bridget (Lewisham

    Jones, Martyn (Clwyd S)

    E)

    Kaufman, rh Gerald

    Prentice, Gordon (Pendle)

    Keen, Alan (Feltham)

    Prescott, rh John

    Keen, Ann (Brentford)

    Primarolo, rh Dawn

    Kemp, Fraser

    Prosser, Gwyn

    Khabra, Piara S.

    Purchase, Ken

    333

    Quinn, Lawrie

    Stringer, Graham

    Rammell, Bill

    Stuart, Ms Gisela

    Rapson, Syd (Portsmouth N)

    Tami, Mark (Alyn)

    Reed, Andy (Loughborough)

    Thomas, Gareth (Clwyd W)

    Robertson, John (Glasgow

    Timms, Stephen

    Anniesland)

    Tipping, Paddy

    Roche, Mrs Barbara

    Trickett, Jon

    Ross, Ernie (Dundee W)

    Truswell, Paul

    Roy, Frank (Motherwell)

    Turner, Dennis (Wolverh'ton SE)

    Ruane, Chris

    Turner, Dr. Desmond (Brighton

    Russell, Ms Christine (City of

    Kemptown)

    Chester)

    Turner, Neil (Wigan)

    Ryan, Joan (Enfield N)

    Twigg, Derek (Halton)

    Salter, Martin

    Twigg, Stephen (Enfield)

    Sarwar, Mohammad

    Tynan, Bill (Hamilton S)

    Savidge, Malcolm

    Vaz, Keith (Leicester E)

    Sawford, Phil

    Vis, Dr. Rudi

    Sedgemore, Brian

    Walley, Ms Joan

    Sheridan, Jim

    Wareing. Robert N.

    Simpson, Alan (Nottingham S)

    Watson, Tom (W Bromwich E)

    Singh, Marsha

    Watts, David

    Skinner, Dennis

    White, Brian

    Smith, rh Chris (Islington S &

    Williams, Betty (Conwy)

    Finsbury)

    Wills, Michael

    Smith, Geraldine (Morecambe &

    Winnick, David

    Lunesdale)

    Wood, Mike (Batley)

    Smith, Jacqui (Redditch)

    Woolas, Phil

    Smith, John (Glamorgan)

    Worthington, Tony

    Soley, Clive

    Wray, James (Glasgow

    Southworth, Helen

    Baillieston)

    Starkey, Dr. Phyllis

    Wright, Anthony D. (Gt

    Steinberg, Gerry

    Yarmouth)

    Stevenson, George

    Wright, David (Telford)

    Stewart, David (Inverness E &

    Wright, Tony (Cannock)

    Lochaber)

    Stewart, Ian (Eccles)

    Tellers for the Ayes:

    Stinchcombe, Paul

    Gillian Merron and

    Stoate, Dr. Howard

    Mr. Nick Ainger

    NOES

    Ainsworth, Peter (E Surrey)

    Chope, Christopher

    Allan, Richard

    Clappison, James

    Amess, David

    Clarke, rh Kenneth (Rushcliffe)

    Atkinson, David (Bour'mth E)

    Clifton-Brown, Geoffrey

    Atkinson, Peter (Hexham)

    Collins, Tim

    Bacon, Richard

    Conway, Derek

    Baldry, Tony

    Cotter, Brian

    Barker, Gregory

    Curry, rh David

    Baron, John (Billericay)

    Davey, Edward (Kingston)

    Barrett, John

    Davies, Quentin (Grantham &

    Beggs, Roy (E Antrim)

    Stamford)

    Beith, rh A. J.

    Davis, rh David (Haltemprice &

    Bellingham, Henry

    Howden)

    Bercow, John

    Djanogly, Jonathan

    Beresford, Sir Paul

    Dodds, Nigel

    Blunt, Crispin

    Duncan, Peter (Galloway)

    Boswell, Tim

    Evans, Nigel

    Bottomley, rh Virginia (SW

    Ewing, Annabelle

    Surrey)

    Fabricant, Michael

    Brake, Tom (Carshalton)

    Fallen, Michael

    Brazier, Julian

    Field, Mark (Cities of London &

    Breed, Colin

    Westminster)

    Brooke, Mrs Annette L.

    Flight, Howard

    Browning, Mrs Angela

    Flook, Adrian

    Bruce, Malcolm

    Forth, rh Eric

    Burnett, John

    Foster, Don (Bath)

    Burns, Simon

    Fox, Dr. Liam

    Burt, Alistair

    Francois, Mark

    Butterfill, John

    Garnier, Edward

    Calton, Mrs Patsy

    George, Andrew (St. Ives)

    Cameron, David

    Gibb, Nick (Bognor Regis)

    Campbell, Gregory (E Lond'y)

    Gidley, Sandra

    Campbell, rh Menzies (NE Fife)

    Gillan, Mrs Cheryl

    Cash, William

    Goodman, Paul

    Chapman, Sir Sydney (Chipping

    Gray, James (N Wilts)

    Barnet)

    Grayling, Chris

    334

    Green, Damian (Ashford)

    Price, Adam (E Carmarthen &

    Green, Matthew (Ludlow)

    Dinefwr)

    Greenway, John

    Prisk, Mark (Hertford)

    Grieve, Dominic

    Pugh, Dr. John

    Hague, rh William

    Randall, John

    Harris, Dr. Evan (Oxford W &

    Redwood, rh John

    Abingdon)

    Reid. Alan (Argyll & Bute)

    Harvey, Nick

    Rendel, David

    Hawkins Nick

    Robertson, Angus (Moray)

    Hayes, John (S Holland)

    Robertson, Laurence (Tewk'b'ry)

    Heath, David

    Robinson, Peter (Belfast E)

    Heathcoat-Amory, rh David

    Roe, Mrs Marion

    Hendry, Charles

    Rosindell, Andrew

    Ruffley, David

    Hermon, Lady

    Russell, Bob (Colchester)

    Hoban, Mark (Fareham)

    Salmond, Alex

    Holmes, Paul

    Sanders, Adrian

    Horam, John (Orpington)

    Sayeed, Jonathan

    Howard, rh Michael

    Shephard, rh Mrs Gillian

    Howarth, Gerald (Aldershot)

    Simmonds, Mark

    Jack, rh Michael

    Simpson, Keith (M-Norfolk)

    Johnson, Boris (Henley)

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

    Keetch, Paul

    Kincardine)

    Key, Robert (Salisbury)

    Soames, Nicholas

    Kirkbride, Miss Julie

    Spicer, Sir Michael

    Kirkwood, Sir Archy

    Spink, Bob (Castle Point)

    Knight, rh Greg (E Yorkshire)

    Stanley, rh Sir John

    Laing, Mrs Eleanor

    Steen, Anthony

    Lait, Mrs Jacqui

    Streeter, Gary

    Lamb, Norman

    Stunell, Andrew

    Lansley, Andrew

    Swire, Hugo (E Devon)

    Laws, David (Yeovil)

    Taylor, Ian (Esher)

    Leigh, Edward

    Taylor, John (Solihull)

    Liddell-Grainger, Ian

    Taylor, Matthew (Truro)

    Lidington, David

    Taylor, Dr. Richard (Wyre F)

    Thomas, Simon (Ceredigion)

    Lilley, rh Peter

    Tredinnick, David

    Loughton, Tim

    Trimble, rh David

    Luff, Peter (M- Worcs)

    Turner, Andrew (Isle of Wight)

    McIntosh, Miss Anne

    Tyler, Paul (N Cornwall)

    Mackay, rh Andrew

    Tyrie, Andrew

    McLoughlin, Patrick

    Viggers, Peter

    Malins, Humfrey

    Waterson, Nigel

    Marsden, Paul (Shrewsbury &

    Watkinson, Angela

    Atcham)

    Webb, Steve (Northavon)

    Mawhinney, rh Sir Brian

    Weir, Michael

    May, Mrs Theresa

    Widdecombe, rh Miss Ann

    Mercer, Patrick

    Willetts, David

    Mitchell, Andrew (Sutton

    Williams, Hywel (Caernarfon)

    Coldfield)

    Williams, Roger (Brecon)

    Moss, Malcolm

    Wilshire, David

    Murrison, Dr. Andrew

    Winterton, Ann (Congleton)

    Norman, Archie

    Wishart, Pate

    O'Brien, Stephen (Eddisbury)

    Yeo, Tim (S Suffolk)

    Öpik, Lembit

    Young, rh Sir George

    Osborne, George (Tatton)

    Younger-Ross, Richard

    Ottaway, Richard

    Tellers for the Noes:

    Page, Richard

    Mr. Robert Syms and

    Paice, James

    Hugh Robertson

    Question accordingly agreed to.
    Bill read the Third time, and passed.

    Hunting Bill (Programme) (No. 4)
    10.27 pm
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): I beg to move,
    That the programme order of 16th December 2002 in relation to the Hunting Bill be varied as follows—

    1. Proceedings in the Standing Committee on recommittal shall (so far as not previously concluded) be brought to a conclusion on Monday 7th July.

    2. The Standing Committee shall have leave to sit twice on the first day on which it meets.

    3. Proceedings on consideration following recommittal shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement.

    4. Sessional Order B (programming committees) made on 28th June 2001 shall not apply to proceedings on consideration following recommital.

    The purpose of the programme motion is to ensure that the consequences of last night's vote are tackled quickly and efficiently. [Interruption.] I am grateful for Opposition Members' support for dealing with something quickly and efficiently; they do not normally offer such backing.
    As I made clear in last night's recommittal motion, the Bill stands recommitted to the same Standing Committee that considered it previously. There should therefore be no steep learning curve, and the Committee will be able to deal with the business that we put to it.
    The Government amendments have been tabled today. They will do three things, which are consequential on last night's votes. First, they will remove all the provisions that relate to the registration and tribunal system. Secondly, they will provide for the amended Bill to come into force three months after Royal Assent. Thirdly, they will amend the exemption schedule to allow strictly limited use of a dog below ground to protect birds for shooting.
    Although there are 22 Government amendments, most are straightforward deletions and there is no reason for the Committee not to deal with them in two sittings.
    Mr. John Redwood: When a Minister has had his policy catastrophically defeated in the House and the opposite policy inflicted upon him, should he not resign?
    Alun Michael: I will not take that from the right hon. Gentleman, who during his period in office could not even sing the Welsh national anthem. That should have been a resigning matter on the spot.
    Mr. Nicholas Soames: Will the Minister give way?
    Alun Michael: I will happily give way to the hon. Gentleman.
    Mr. Soames: I am very grateful to the Minister. Regardless of whether my right hon. Friend the Member for Wokingham (Mr. Redwood) knew the words of the Welsh national anthem, will the Minister accept that
    336
    what is now effectively a private Member's Bill will require a great deal more in the way of detailed consideration than that which he has just suggested?
    Alun Michael: I wonder whether the hon. Gentleman can put together two words in the correct order: "vote" and "free". The point is that the House of Commons had a free vote. My understanding is that it was a free vote on the Opposition side of the House as well, but they seem not to understand the nature of the word. This remains a Government Bill. It was the Government who introduced it and who created the opportunity for Members of this House to vote on it. It leaves here as a Government Bill, with the amendment that was decided on by right hon. and hon. Friends on a free vote last night.
    Several hon. Members rose—
    Alun Michael: I give way to my hon. Friend the Member for Sherwood (Paddy Tipping).
    Paddy Tipping: The House voted last night with a majority of more than 200, and the established will of the Commons is for a total ban on hunting. Does my right hon. Friend agree that we now need to ensure that this matter is finally resolved, and that the voice of the Commons prevails?
    Alun Michael: I am certain that Opposition Members will have taken that lesson from my hon. Friend about the implications of last night's vote. We are treating with respect the decision that this House took by introducing amendments, as I promised that we would, to tidy up the Bill in a variety of ways.
    Several hon. Members rose—
    Alun Michael: I am spoilt for choice. I give way to the hon. Member for Bexhill and Battle (Gregory Barker).
    Gregory Barker: I thank the Minister for giving way. Can he think of a single precedent on this scale, whereby a Bill has been shredded in the House of Commons, returned to Committee with such indecent haste and bounced out? Can he name a single such precedent?
    Alun Michael: There are many precedents in this House for all sorts of things. What we had yesterday was a free vote. This is a Government who are confident enough to allow their Members a free vote on what has been a burning issue in this House for year upon year. It is entirely appropriate for the Government to respect the decision of this House.
    Several hon. Members rose—
    Alun Michael: I shall give way to my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), and then, of course, to the hon. Member for Aldershot (Mr. Howarth).
    Mr. Gerald Kaufman: Does my right hon. Friend not agree that the hon. Member for

    337
    Mid-Sussex (Mr. Soames) should learn from the lessons not only of history but of family relationships? The original Parliament Act was passed not on manifesto commitments of any kind whatsoever—here, we are in fact talking about a manifesto commitment—but in order to assert in all legislative circumstances the supremacy of the House of Commons. What is more, all that the hon. Gentleman has to do is to read his grandfather's memoirs—assuming, because one cannot remember, that he was a member of the Liberal party at the time.
    Alun Michael: I cannot improve on the history lesson that my right hon. Friend has contributed to the House. I now give way to the hon. Member for Aldershot.
    Mr. Gerald Howarth: I thank the Minister for giving way. Given that this is a Government Bill, the Prime Minister will presumably be supporting it. Or are tonight's television reports correct in saying that in fact, he wants to disown this nasty, illiberal and prejudiced Bill, which will be resisted by the people of England?
    Alun Michael: What a confused statement! The hon. Gentleman obviously does not listen to many of the people of England; otherwise, he would not have made such as biased and ridiculous claim.
    Several hon. Members rose—
    Alun Michael: I give way to the hon. Member for Ceredigion (Mr. Thomas).
    Mr. Simon Thomas: I thank the right hon. Gentleman for giving way. He spoke just a few minutes ago about respect for this House. We all recognise that the vote was a free vote and that the House came to a conclusion. However, will he also show some respect to those who took him at face value? When he talked of utility and cruelty, he spoke of two important animal welfare principles that many of us felt could work to the benefit of communities, and particularly to those in upland Wales. Having thrown away that lifeline to those communities, what proposals does the Minister now have to ensure that they are not undermined by last night's decision?
    Alun Michael: It is a bit late for a contribution that is really about last night's debate and decision. The hon. Gentleman should recognise that I brought forward proposals to this House in good faith. They were constructed in good faith after a great deal of discussion. I listened to people, including people in his constituency. The House of Commons decided what to do. The House voted as it did, and that should be respected by hon. Members of all parties.
    Kate Hoey: Will my right hon. Friend give way?
    Alun Michael: I give way with great pleasure to my hon. Friend
    Kate Hoey: I know that a day is a long time in politics, but my right hon. Friend said last night that he could
    338
    not, in all conscience, vote for the full ban on hunting. How can he now, as a Minister, so wholeheartedly ask people to go into Committee and support the Bill?
    Alun Michael: I do not think that my hon. Friend has quite understood what happened yesterday. Perhaps a little more history than one day is required. The House of Commons had a choice, and voted. A majority of 209 indicated the nature of the Bill that hon. Members wished to go forward. [Interruption.] As a result—
    Several hon. Members rose—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I suggest that the debate be conducted in a more orderly manner. The Minister will indicate as much if he is prepared to give way, but we do not want half a dozen hon. Members on their feet at the same time. We also want to hear every word that is being said.
    Alun Michael: I am grateful, Mr. Deputy Speaker. I shall respond to as many hon. Members as I can. I give way first to my hon. Friend the Member for Amber Valley (Judy Mallaber),
    Judy Mallaber: Does my right hon. Friend agree that the settled will of the House of Commons is that the best way to get rid of the cruelty inherent in the so-called sport of hunting with dogs is through a total ban? When he introduced the Bill, was it not also his intention to get rid of cruelty?
    Alun Michael: My hon. Friend is right. I made it clear that my target was the cruelty associated with hunting with dogs. I succeeded in designing a Bill that was good and strong, as my hon. Friend the Member for West Ham (Mr. Banks), who moved the amendment last night, acknowledged—[Interruption.] I assure Opposition Members that I shall be generous about giving way to them, but I should be very grateful to be allowed to reach the odd full stop here and there.
    The House of Commons last night had a choice between the Bill that I brought forward and the amendment moved by my hon. Friend the Member for West Ham. The House voted accordingly. What I am moving now is a motion to enable the House to deal with the Bill, to clean it up, amend it and tidy it up so that it can then go forward, in the light of the decision taken by the House last night.
    Mr. James Paice: The House will have noted the enthusiasm with which the Minister is promoting the motion. It stands in stark contrast to his lacklustre performance last night. Is not the reason for that enthusiasm the fact that the right hon. Gentleman has always supported a total ban on hunting? Was not all the claptrap about utility and cruelty designed merely to con the hunting fraternity into thinking that he was interested in its views?
    Alun Michael: I expect that the hon. Gentleman can put that in his press release for the hunting supporters in his constituency. I believe in two things, and one is the eradication of cruelty. That is what I targeted in the Bill. There has been a difference between me and some of my hon. Friends about how to do that. The second thing

    339
    that I believe is that the House has the right to take its decisions, and that the voices of hon. Members must be listened to. That is what I am seeking to do in moving this procedural motion.
    Mr. Peter Luff: In his famous leaked letter to his Cabinet colleagues, the Minister described what turned out to be new clause 11 as a wrecking amendment. Does he really suppose that less than a week is an adequate period of time in which to put right the consequences of a wrecking amendment?
    Alun Michael: The hon. Gentleman should understand that, although of course the architecture of the Bill that I designed was wrecked by that amendment, the will of the House of Commons was made clear. We will be dealing on Thursday with amendments that respect the decision taken by the House of Commons, so that we can take forward a Bill whose architecture does the job in accordance with the House's wishes, as expressed last night.
    David Winnick: Is it not a fact that, by a large majority on a free vote, the House of Commons expressed the views of the large majority of the people of Britain, who want a total ban on fox hunting? Is it not a fact that the majority of MPs now want this to become law as soon as possible?
    Alun Michael: It is a fact that I am seeking to amend the Bill in ways that will respect the decision of the House and take the Bill forward so that the House of Lords can consider it on its way to becoming legislation.
    Mr. Edward Garnier: On the basis of the Minister's argument that the House has expressed its will through the exercise of a free vote, may I assume that he will be advising his colleagues not to hinder the Retirement Income Reform Bill, which, on a free vote, received its Second Reading by a majority of 129?
    Mr. Deputy Speaker: Order. That does not arise under the motion.
    Alun Michael: I shall not be advising outside my brief, Mr. Deputy Speaker.
    Lembit Öpik: On the programme motion—I assume that we are discussing that, and that this is not Question Time—the Minister will know that members of the middle way group were acting in good faith, with him, in attempting to reach a solution that took account of circumstances where hunting with dogs was regarded even by Burns as the most effective means of fox control. It does not look like a huge amount if time has been allocated in the motion to finding a solution that is consistent with the will of the House last night and with the Burns report, which all sides accepted was authoritative. Will the Minister consider how we can resolve that serious issue—which Burns highlighted—especially for the upland areas of Wales?
    Alun Michael: First, I congratulate the hon. Gentleman on spotting the fact that we are dealing with the programme motion, something that seems to have escaped many of those who have intervened. Secondly,
    340
    during the many months that we spent in Committee dealing with the issue, the hon. Gentleman and his colleagues in the middle way group spent an enormous amount of time—as did members of the Countryside Alliance and the animal welfare organisations—discussing things around the table; no small thing with something as divisive as this. One of the things that occurred time and time again was the selective quoting of the Burns report. It is ironic that I was invited by both the Countryside Alliance and the animal welfare organisations—and, indeed, by the middle way group—to take the Burns report as the starting point. I did so.
    Mr. James Gray: He ignored it.
    Alun Michael: The hon. Gentleman, who sometimes speaks for the Conservative party and sometimes for the hunts, says that I ignored it. He knows that that is a lie—[Hon. Members: "Oh!"]
    Mr. Deputy Speaker: Order. The right hon. Gentleman would be in accordance with the traditions of the House if he withdrew that remark.
    Alun Michael: Indeed, Mr. Deputy Speaker. I am sorry that I used that terminological inexactitude, or whatever it is. The hon. Member for North Wiltshire (Mr. Gray) is entirely wrong.
    Mr. Soames rose—
    Alun Michael: I give way to the hon. Gentleman.
    Mr. Crispin Blunt: On a point of order, Mr. Deputy Speaker. The Minister said that he withdrew the term, which is not quite the same as saying that he withdrew the meaning of the remark. I should be grateful for your ruling on that.
    Mr. Deputy Speaker: I was seeking not to exacerbate the situation. The Minister reacted as I would have wished him to do in the circumstances.
    Alun Michael: If there is any doubt, Mr. Deputy Speaker, I certainly did apologise for using that term, and I apologise particularly to you.
    Rob Marris: For my part, I would say that my right hon. Friend the Minister continues to act honourably, as he has done throughout, and continues to do so in recognising the will of the House. In terms of the amendments that the Government are proposing to table, I recognise the amendments to abolish part 2 of the Bill—I tabled amendments to that end myself—and on the three-month commencement; again, I tabled similar amendments this morning. Will he explain why the amendment on dogs below ground that he proposes is consequent upon new clause 11, which is what the recommittal motion—
    Mr. Deputy Speaker: Order. I must ask the right hon. Gentleman not to go down that line. We must not

    341
    discuss at this stage what will be before the Standing Committee. We are discussing, hopefully, just the programme motion.
    Alun Michael: I give way to the hon. Member for Mid-Sussex.
    Mr. Soames: Pursuant to the right hon. Gentleman's point, does he agree that the gamekeepers gave the most extensive evidence in the Department for Environment and Rural Affairs consultation? Will he now reconsider that evidence in the light of the new clauses that he proposes under the timetable motion?
    Alun Michael: I considered that evidence in assessing the requirements of those clauses, which we will also be able to debate in Committee.
    Although there are 22 Government amendments, most are straightforward deletions and I see no reason why the Committee could not deal with them in two sittings. The programme motion allows the Committee to sit twice on the first day that it meets. I understand that the first sitting will be this Thursday and that the motion requires the Committee to complete its business by Monday 7 July, but it should be able to finish its work on Thursday. I also understand that, following recommittal, Report stage will take place on Wednesday 9 July, and the motion provides for that debate to last up to two hours. The original programme motion, which this motion amends, allows a further hour that evening for Third Reading. To sum up the programme motion, it will ensure that the Bill is tidied up as necessary and sent to the House of Lords on 9 July. It is for that limited purpose that recommital was agreed last night and that is why I have proposed the motion in that way.
    Mr. George Osborne: Cannot the Minister see that his golden thread of cruelty and utility has completely unravelled, and that his hard work in trying to produce a compromise Bill has failed? Last night, his Bill was lost and if he honoured his job, the Minister would simply resign.
    Alun Michael: The hon. Gentleman merely repeats a few lines that he has tried already. I urge him to keep on practising, and he might get somewhere with them. I have made clear the purpose of a procedural resolution to deal with promises given to the House last night about how we would respect the motion decided by the House.
    Mr. Geoffrey Clifton-Brown: The right hon. Gentleman will recall that as long ago as last July I took a very high-powered delegation [HON. MEMBERS: "Ooh"] to see him about the Bill. He gave an absolute assurance then that he would produce a Bill based on the principles of scientific evidence, cruelty and utility. He went through the process of hearings at Portcullis
    342
    House, Second Reading, then six weeks in Committee in an attempt to produce a Bill on that basis. He now proposes under the programme motion tonight—
    Mr. Deputy Speaker: Order. I do not see much connection between what the hon. Member is saying and the motion before us. If he is about to come on to it, it has been a very long preface.
    Mr. Clifton-Brown: Having gone through all that procedure, the Minister now expects a totally different Bill to pass through Committee in just one day, or is he expecting members of the Committee to sit throughout the weekend? Is that reasonable under the circumstances?
    Alun Michael: Yes, it is reasonable. Indeed, I compliment the hon. Gentleman for tracing through the integrity of the process that led to the Bill being put before this House and then considered in Committee. Last night, the House voted overwhelmingly in favour of an amendment, and I respect the decision that was taken, so I am proposing procedure that will allow the Committee and the House to amend the Bill to make it consistent with last night's decision.
    Mr. Soames: On a point of order, Mr. Deputy Speaker. Last night the right hon. Gentleman told the House that the Bill was now defective and required to be submitted to Committee to consolidate the Bill and reinstate it. Is it not therefore in order for the Committee to have the equivalent or same amount of time to examine what is effectively a new Bill, rather than have it railroaded through in an unjust and corrupt parliamentary manner?
    Mr. Deputy Speaker: Order. There is no real point of order in what the hon. Gentleman says. The House took a decision on recommital and we now have a motion before us. There may be different opinions about it, but it is a matter for debate, not a point of order for the Chair.
    Mr. Luff: On a point of order, Mr. Deputy Speaker. Is it in order for a Minister of the Crown to prejudge the work of the Programming Sub-Committee tomorrow by effectively instructing that Committee to complete its work in one day?
    Mr. Deputy Speaker: Order. I have heard many things ascribed to Ministers of the Crown in my time in this House. I do not believe that any attempt can be made to presume, in effect, what the Committee itself will decide to do.
    Alun Michael: Thank you, Mr. Deputy Speaker. In response to the hon. Member for Mid-Sussex, I should say that I did say that there were defects in the Bill as a result of the passing of new clause 11 last night. That is why we undertook recommittal. That is why I propose a process that will enable us to deal expeditiously with all those defects and bring back to the House, in short order, as promised yesterday, a Bill that is coherent and which deals with all the outstanding issues.
    Mr. Soames: The right hon. Gentleman made play during the Committee stage of his promise that this

    343
    would be a fair and open process. He was defeated last night and he now intends to railroad through in a day what we took 100 hours to do. Will he reconsider and allow the Committee a minimum of two days?
    Alun Michael: I thank the hon. Gentleman for his contribution as a fine thespian. I can be certain that he asks for another 100 hours in Committee in the sure knowledge that he will not be granted them.There are clear reasons for tidying up the Bill. We respect the will of the House. The process before us will allow that to be done, and that is the beginning and end of the matter.
    Bob Spink: Will the Minister remove all invective from the debate and instead consider coldly and clearly that we are talking about a Bill that will criminalise a group of people? How can we do that in one day in Committee, given the complete Horlicks that he has presented to us?
    Alun Michael: I have always thought it unwise to say "criminalise" in that way. Someone becomes a criminal only when he breaks the law. We keep being told that these are law-abiding people; they will have the opportunity to show it.
    Dr. Nick Palmer: A constituent has been pressing me for some time with extreme scepticism about the Government's intentions, and I have always told him that he can rely on the Government to follow the will of the House. He apologised to me today when he heard that the Minister intended tonight to present a new programme motion, and he asked me to tell my right hon. Friend that his faith in democracy had been restored.
    Alun Michael: I am delighted to hear that.
    Several hon. Members rose—
    Alun Michael: I give way to the hon. Member for St. Ives (Andrew George).
    Mr. Deputy Speaker: Order. May I point out to the Minister that this is not Question Time, and we hope that there may be some other contributions to the debate? I call Mr. George.
    Andrew George: Does the Minister agree that many people have repeated many points in our debates and doubtless will want to rehearse them once again? Does he agree that it will be important in the Committee to take a raft of amendments and not to reopen individual issues? I have to say that I did not agree with what we did last night, but we must face the prospect of making sure that we have a watertight Bill that has internal integrity, and that is what we are trying to achieve.
    Alun Michael: The hon. Gentleman has played a significant part in debating the issues properly in Committee, which Conservative Members have singularly failed to do. He is right: there will be limited amendments along the lines proposed by the House, and they will respect the will of the House.
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    I have responded as generously as I thought appropriate to many Members of the House because I wanted to respect and deal with any points that they wished to raise. However, in view of what you have said, Mr. Deputy Speaker, I think it would be sensible of me to urge the House to support the programme motion and leave my remarks at that.
    10.54 pm
    Mr. David Lidington: The Minister described the events of last night in terms of the House of Commons having made a choice between the Government's proposal, which had been through all parliamentary stages, and the option presented by the hon. Member for West Ham (Mr. Banks). In presenting his case in that way, the Minister elided reality; he seemed almost to be trying to tell the House that, all along, we had been presented with two options between which we could come to a cool and rational decision. That was something like the process that the Government adopted in the last Parliament over the so-called options Bill, when the House made its choice, after a debate, from the three options offered by the Government, and proceeded to detailed scrutiny in Committee and on Report of the single option that it preferred.
    By contrast, after last night's shambles, we are left with a situation in which the House has given some detailed scrutiny to the Government's proposals, embodied in their original Bill, but has been given no opportunity to apply comparable scrutiny to the proposal made by the hon. Member for West Ham, which now forms the kernel of the Bill, as amended by the Commons last night. We have before us a programme motion that is draconian, even by the standards of this Administration. We are told that Committee proceedings must finish by next Monday, 7 July. The wording of paragraph 1 of the motion implies that the Committee will commence its sittings on an earlier date.
    That gives rise immediately to an issue on the selection of amendments which I ask you, Mr. Deputy Speaker, to bring to the attention of Mr. Speaker. If the Standing Committee were to sit for the first time on Thursday, any amendments would need to be tabled tonight in order to be unstarred for selection by the day after tomorrow. I hope that, in view of paragraph 1, Mr. Speaker and the Committee Chairman will use their discretion to protect the rights not only of Opposition parties but also of Back-Bench members of the Committee on both sides of the House.
    Mr. Garnier: There is a further problem. As the Committee is being reformed at short notice, a number of us—[Interruption.] Quite apart from the intellectual deficiencies of Labour Members, a number of us will be attending other Standing Committees, which may preclude our attending the Committee—[Interruption.]
    Mr. Deputy Speaker: Order. One or two hon. Members are making an exhibition of themselves; I shall make a bigger exhibition of them if they cannot keep quiet.
    Mr. Garnier: My point may be of no concern to Labour Members, but it seems a denial of democracy for the Government to railroad the Bill, at very short notice, into another Committee that is subject to timetable problems, when hon. Members may already be serving on other parliamentary Committees.
    Mr. Lidington: Not only my hon. and learned Friend's point but the raucous laughter with which his serious remarks were greeted by certain Labour Members indicate that the programme is a pretence at providing an opportunity for scrutiny; it is nothing like the real thing.
    The truth is that even if the Chair was minded to exercise its discretion, that would leave precious little time either for Members or outside organisations to reflect on the implications of last night's vote and to draft and table amendments to allow debate about their concerns. The situation will be even worse on Report and Third Reading when the proposition before us, that Members will be restricted to a total of three hours, is outrageous and a complete denial of our constituents' right to have their voice heard through their representatives in this place.
    Lembit Öpik: Does the hon. Gentleman agree that the programme motion compresses two years of painstaking work, not least by the Minister, into one day's consideration? In effect, those of us who genuinely accepted at face value the merits of the suffering and utility test will have little opportunity to try to put back the good provisions on the exemption of hunting with dogs that the Minister and even the hon. Member for Worcester (Mr. Foster) have acknowledged would be acceptable.
    Mr. Lidington: The hon. Gentleman has pursued a consistent course in all the debates on this subject. Not only he but many people both inside and outside the House will feel grievously betrayed by the way in which the Government are now handling the matter.
    Mr. Hugo Swire: My hon. Friend talks of consistency and indeed the middle way group have at least been consistent, but does he agree that a body that has been spectacularly, if predictably, inconsistent is the Liberal Democrat party? The hon. Member for St. Ives (Andrew George), who said that he disapproved of what happened last night, abstained on both new clauses 11 and 14. Is he aware of any morning-after pill that the Liberal Democrats—
    Mr. Deputy Speaker: Order. That is far too long for an intervention.
    Mr. Lidington: My hon. Friend makes his point in characteristically forceful style.
    The truth is that we now have a Bill whose intentions and consequences are radically dissimilar from those of the Bill that the Minister introduced last year. Until last night, the Minister had followed an approach that I certainly regarded as seriously flawed but at least had about it a measure of logic and coherence. There was the exhaustive evidence of the Burns report. There were three days of hearings in Portcullis House, where the
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    Minister listened to the evidence presented by outside organisations, and the Government's proposals have been examined for 77 hours in Standing Committee.
    On 14 May this year, the Minister wrote in his letter to the Deputy Prime Minister that
    "there is a golden thread from the principles through to the evidence to the conclusion."
    Last night, that golden thread was severed. Last night, the Minister ditched his principles and turned his back on the evidence, and he has finished up in the ungainly position of defending a conclusion this evening that he had denounced just 24 hours previously.
    If the motion is agreed to tonight, we will, in effect, send to the Lords a Bill that the House of Commons has been denied the opportunity to scrutinise and challenge. The House needs more time to carry out that task. For example, we need time to debate the implication for enforcement of what is now clause 6.
    Paddy Tipping: Does the hon. Gentleman recall the comments, which he has made on many occasions, that the House has had far too much time to give to the Bill? He is now arguing that there is too little time. Does he not agree that the time has come to resolve this matter once and for all?
    Mr. Lidington: I believe that the Government's decision to give higher priority to a Bill on hunting than to a Bill on health speaks volumes about the way in which Ministers are now drifting out of touch with the priorities of the British people. I argue that, when the Government choose to set a priority and to introduce legislation, the House should have the time to subject it to proper scrutiny and challenge on behalf of our constituents. Let me give the hon. Gentleman some examples of why that time is needed.
    Mr. Clifton-Brown: Does my hon. Friend not agree that one way to ameliorate this draconian timetable would be for the Committee to sit all day Thursday, all day Friday, all day Saturday and all day Monday—four days in Committee? If my hon. Friend cannot get enough hon. Members to serve on the Committee, I volunteer my services.
    Mr. Lidington: I am sure that my hon. Friend's enthusiasm will have been noted by the usual channels.
    The Minister himself said in his letter to the Deputy Prime Minister that the new clause approved last night would
    "undermine the strong, simple framework of enforcement that is set out in the Bill."
    So proper time will be needed in Committee and on Report to consider the implications for enforcement of that new clause. We will also need time to debate the implications for cruelty, since the Minister stated in the same letter:
    "The so-called 'complete ban' amendment would disregard those tests"—
    utility and cruelty—
    "and make it possible that wild mammals would suffer more".
    We need time to debate the implications of that new clause for the livelihood of many of our constituents. There are men and women in this country who stand to

    347
    lose both their jobs and their homes because of last night's vote. It is frankly a disgrace that the Government's motion is an attempt to deny the elected representatives of those men and women the chance to put their case in the House.
    Why are the Government in such a rush? Perhaps they have changed their mind, although I doubt it. Are they embarrassed, or do Ministers perhaps just want to sweep the Bill out of the way as quickly as possible? After last night's shenanigans, I am tempted to believe that the Government's actions are explained more by cock-up than conspiracy. However, I fear that there is another motive at work. I suspect that the Government are working to an overall timetable that includes plans to apply the Parliament Act and that if it were not for that timetable, the programme motion would be unnecessary.
    I detect a glimmer of hope from No. 10's reluctance today to commit the Government to using the Parliament Act and, indeed, from the omission of any such pledge from the Minister's opening speech. I respond to the right hon. Member for Manchester, Gorton (Mr. Kaufman) by saying that Asquith and Lloyd George designed the Parliament Act to deal with a situation in which the House of Lords had rejected not relatively minor legislation—in the overall scheme of things—but a Budget. The proposal to limit the power of the Lords in such a way was endorsed not once but twice by the people after a general election campaign.
    Mr. Kaufman:As the hon. Gentleman refers to me, perhaps he recalls that the last time that the Parliament Act was used was not in the circumstances that he outlined? The Conservative Government used it to put through a war crimes Bill, which was not proposed in any party's manifesto.
    Mr. dington: In fact, the Parliament Act was last used by the present Government—I think that they have used it twice since coming to office in 1997. My point is that its purpose was to enable the Commons to assert its will over the Lords if grave issues of policy were at stake and the policy supported by the Commons had been clearly endorsed by the people. However, the Government seem to want to use the Parliament Act to force through a measure that Ministers opposed until last night and that they even now believe to be unworkable and unenforceable, even if they are scared to say so. Using the Parliament Act in such circumstances would be nothing short of a grotesque abuse of parliamentary procedure. On those grounds alone, the House should resist the motion. The fact that the Government insist on trying to ram the measure through is the clearest demonstration yet that they have completely lost touch with the priorities of the British people.
    11.8 pm
    Andrew George: I said earlier that I strongly objected to the fact that we did not have the opportunity to vote last night on new clause 13. I wanted the opportunity to do that, and it was a procedural failure that all the options were not available. I suspect that the new clause would have fallen in any case, judging by the nature of last night's debate, but of course we will never know.[Interruption.] Despite the unwarranted sledging
    348
    from Conservative Members, important matters must be sorted out prior to the debate in Committee.[Interruption.] Conservative Members appear to be incapable of engaging in intelligent debate.
    Everyone has already said the same things many times in the debate. Many people seem to be determined to rehearse all the arguments all over again, and that will probably happen in Committee on Thursday and up to Monday. I am worried that that will be an abuse of the Standing Committee.
    I want the Government to manage business in the Standing Committee so that we have an efficient use of the available time. It is clear from the vote last night that, despite the Minister's best efforts to persuade his hon. Friends that we should go for a registration scheme, the will of the House has been expressed and it wants what will amount to an outright ban. To achieve the necessary changes in the Standing Committee, over what I hope will be no more than two sittings, it is important that we discuss a raft of amendments rather than reopen debates that we have had many times before.
    Alun Michael: I give the hon. Gentleman an undertaking that I will try to ensure that the amendments are tabled to facilitate the process that he proposes.
    Andrew George: I am grateful to the Minister. The issue is important.
    Kate Hoey: Will the hon. Gentleman give way?
    Andrew George: No, I have a further point to make.
    Despite the protests and the synthetic objections of Tory Members, we have a responsibility in the Committee not to waste time. We must use the time efficiently so that we end up with—
    Mr. Garnier: On a point of order, Mr. Deputy Speaker. The hon. Gentleman seems to be talking about what he would like to say in the truncated Committee. I thought that we were talking about the timetable motion.
    Mr. Deputy Speaker (Sir Michael Lord): I think such matters can be left for the Chair to decide. That is not a point of order.
    Andrew George: I am grateful to you, Mr. Deputy Speaker.
    Although I have misgivings about the programme motion, I will support the Government. In Committee, we want to achieve—
    It being forty-five minutes after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Orders [28 June 2001 and 29 October 2002].
    The House divided: Ayes 279, Noes 140.

    Division No. 269]

    [11:12 pm

    AYES

    Abbott, Ms Diane

    Cryer, John (Hornchurch)

    Adams, Irene (Paisley N)

    Cummings, John

    Ainsworth, Bob (Cov'try NE)

    Cunningnam, Jim (Coventry S)

    Alexander, Douglas

    Cunningham, Tony (Workington)

    Allan, Richard

    Dalyell, Tam

    Allen, Graham

    Davey, Valerie (Bristol W)

    Anderson, Janet (Rossendale &

    David, Wayne

    Darwen)

    Davidson, Ian

    Armstrong, rh Ms Hilary

    Davis, rh Terry (B'ham Hodge H)

    Atherton, Ms Candy

    Dawson, Hilton

    Atkins, Charlotte

    Dean, Mrs Janet

    Austin, John

    Denham, rh John

    Bailey, Adrian

    Dhanda, Parmjit

    Banks, Tony

    Dismore, Andrew

    Barnes, Harry

    Dobbin, Jim (Heywood)

    Battle, John

    Donohoe, Brian H.

    Bayley, Hugh

    Doran, Frank

    Beckett, rh Margaret

    Dowd, Jim (Lewisham W)

    Begg, Miss Anne

    Drew, David (Stroud)

    Bell, Stuart

    Eagle, Angela (Wallasey)

    Benn, Hilary

    Efford, Clive

    Bennett, Andrew

    Ellman, Mrs Louise

    Benton, Joe (Bootle)

    Etherington, Bill

    Berry, Roger

    Fitzpatrick, Jim

    Betts, Clive

    Fitzsimons, Mrs Lorna

    Blizzard, Bob

    Foster, rh Derek

    Boateng, rh Paul

    Foster, Don (Bath)

    Bradley, rh Keith (Withington)

    Foster, Michael Jabez (Hastings

    Bradley, Peter (The Wrekin)

    & Rye)

    Bradshaw, Ben

    Foulkes, rh George

    Brennan, Kevin

    Francis, Dr. Hywel

    Brooke, Mrs Annette L.

    Gapes, Mike (Ilford S)

    Brown, rh Nicholas (Newcastle E

    George, Andrew (St. Ives)

    Wallsend)

    Gerrard, Neil

    Brown, Russell (Dumfries)

    Gidley, Sandra

    Browne, Desmond

    Gilroy, Linda

    Buck, Ms Karen

    Goggins, Paul

    Burden, Richard

    Griffiths, Jane (Reading E)

    Burgon, Colin

    Griffiths, Nigel (Edinburgh S)

    Burnham, Andy

    Griffiths, Win (Bridgend)

    Byers, rh Stephen

    Grogan, John

    Caborn, rh Richard

    Hain, rh Peter

    Calton, Mrs Patsy

    Hall, Miks (Weaver Vale)

    Campbell, Alan (Tynemouth)

    Hall, Patrick (Bedford)

    Campbell, Mrs Anne (C'bridge)

    Hamilton, David (Midlothian)

    Casale, Roger

    Hamilton, Fabian (Leeds NE)

    Caton, Martin

    Hanson, David

    Cawsey, Ian (Brigg)

    Harris, Dr. Evan (Oxford W &

    Challen, Colin

    Abingdon)

    Clapham, Michael

    Harris, Tom (Glasgow Cathcart)

    Clark, Mrs Helen (Peterborough)

    Havard, Dai (Merthyr Tydfil &

    Clark, Dr. Lynda (Edinburgh

    Rhymney)

    Pentlands)

    Healey, John

    Clark, Paul (Gillingham)

    Henderson, Ivan (Harwich)

    Clarke, rh Charles (Norwich S)

    Hendrick Mark

    Clarke, Tony (Northampton S)

    Heppell, John

    Clelland, David

    Hesford, Stephen

    Clwyd, Ann (Cynon V)

    Heyes, David

    Coffey, Ms Ann

    Hill, Keith (Streatham)

    Cohen, Harry

    Holmes, Paul

    Colman, Tony

    Hope, Phil (Corby)

    Connarty, Michael

    Hopkins, Kelvin

    Cook, rh Robin (Livingston)

    Howarth, George (Knowsley N &

    Corbyn, Jeremy

    Sefton E)

    Corston, Jean

    Howells, Dr. Kim

    Cousins, Jim

    Hughes, Beverley (Stretford &

    Cox, Tom (Tooting)

    Urmston)

    Cranston, Ross

    Hughes, Kevin (Doncaster N)

    Crausby, David

    Humble, Mrs Joan

    Cruddas, Jon

    Hurst Alan (Braintree)

    Cryer, Ann (Keighley)

    Iddon, Dr. Brian

    350

    Illsley, Eric

    Prentice, Ms Bridget (Lewisham

    Jackson, Helen (Hillsborough)

    E)

    Jenkins, Brian

    Prentice, Gordon (Pendle)

    Johnson, Miss Melanie (Welwyn

    Prosser, Gwyn

    Hatfield)

    Pugh, Dr. John

    Jones, Helen (Warrington N)

    Purchase, Ken

    Jones, Jon Owen (Cardiff C)

    Quinn, Lawrie

    Jones, Lynne (Selly Oak)

    Rammell, Bill

    Jones, Martyn (Clwyd S)

    Rapson, Syd (Portsmouth N)

    Kaufman, rh Gerald

    Reed, Andy (Loughborough)

    Keen, Alan (Feltham)

    Reid, rh Dr. John (Hamilton N &

    Keen, Ann (Brentford)

    Bellshill)

    Kemp, Fraser

    Rendel, David

    Khabra, Piara S.

    Robertson, John (Glasgow

    Kidney, David

    Anniesland)

    Kilfoyle, Peter

    Roche, Mrs Barbara

    King, Andy (Rugby)

    Ross Ernie (Dundee W)

    King, Ms Oona (Bethnal Green &

    Roy Frank (Motherwell)

    Bow)

    Ruane, Chris

    Kumar, Dr. Ashok

    Ruddock, Joan

    Ladyman, Dr. Stephen

    Ryan Joan (Enfield N)

    Lammy, David

    Sarwar, Mohammad

    Lawrence, Mrs Jackie

    Savidge, Malcolm

    Laxton, Bob (Derby N)

    Sawford, Phil

    Lepper, David

    Sedgemore, Brian

    Leslie, Christopher

    Shaw, Jonathan

    Levitt, Tom (High Peak)

    Sheridan, Jim

    Lewis, Terry (Worsley)

    Simpson, Alan (Nottingham S)

    Linton, Martin

    Skinner, Dennis

    Love, Andrew

    Smith, rh Chris (Islington S &

    Luke, Iain (Dundee E)

    Finsbury)

    Lyons, John (Strathkelvin)

    Smith, Geraldine (Morecambe &

    McAvoy, Thomas

    Lunesdale)

    McCabe, Stephen

    Smith, Jacqui (Redditch)

    McCafferty, Chris

    Smith, John (Glamorgan)

    McDonagh, Siobhain

    Solev, Clive

    MacDonald, Calum

    Starkey, Dr. Phyllis

    McDonnell, John

    Steinberg, Gerry

    MacDougall, John

    Stewart, David (Inverness E &

    McKechin, Ann

    Lochaber)

    Mackinlay, Andrew

    Stewart, Ian (Eccles)

    McNully, Tony

    Stinchcombe, Paul

    MacShane, Denis

    Stoate Dr. Howard

    McWalter, Tony

    Stringer, Graham

    Mahmood, Khalid

    Stuart, Ms Gisela

    Mahon, Mrs Alice

    Stunell, Andrew

    Mallaber, Judy

    Tami, Mark (Alyn)

    Mann, John (Bassetlaw)

    Taylor, Dari (Stockton S)

    Marris, Rob (Wolverh'ton SW)

    Taylor, Matthew (Truro)

    Marshall, David (Glasgow

    Thomas, Gareth (Clwyd W)

    Shettleston)

    Timms, Stephen

    Martlew, Eric

    Tipping, Paddy

    Meacher, rh Michael

    Trickett, Jon

    Meale, Alan (Mansfield)

    Truswell, Paul

    Michael, rh Alun

    Turner, Dennis (Wolverh'ton SE)

    Miller, Andrew

    Turner, Dr. Desmond (Brighton

    Moffatt, Laura

    Mole, Chris

    Kemptown)

    Moran, Margaret

    Turner, Neil (Wigan)

    Morgan, Julie

    Twigg, Derek (Halton)

    Morley, Elliot

    Twigg, Stephen (Enfield)

    Mountford, Kali

    Tynan, Bill (Hamilton S)

    Mudie, George

    Vaz, Keith (Leicester E)

    Mullin, Chris

    Vis, Dr. Rudi

    Murphy, Denis (Wansbeck)

    Walley, Ms Joan

    Murphy, Jim (Eastwood)

    Wareing, Robert N.

    Naysmith, Dr. Doug

    Watson, Tom (W Bromwich E)

    Norris, Dan (Wansdyke)

    Watts, David

    Olner, Bill

    Webb, Steve (Northavon)

    Organ, Diana

    White, Brian

    Owen, Albert

    Williams, Betty (Conwy)

    Palmer, Dr. Nick

    Wills, Michael

    Picking, Anne

    Winnick, David

    Pickthall, Colin

    Wood, Mike (Batley)

    Pike, Peter (Burnley)

    Woolas, Phil

    Pope, Greg (Hyndburn)

    Worthington, Tony

    351

    Wray, James (Glasgow

    Wright, Tony (Cannock)

    Baillieston)

    Wright Anthony D. (Gt

    Tellers for the Ayes:

    Yarmouth)

    Gillian Merron and

    Wright, David (Telford)

    Mr. Nick Ainger

    NOES

    Ainsworth, Peter (E Surrey)

    Howarth, Gerald (Aldershot)

    Atkinson, Peter (Hexham)

    Jack, rh Michael

    Bacon, Richard

    Keetch, Paul

    Baldry, Tony

    Key, Robert (Salisbury)

    Barker, Gregory

    Kirkbride, Miss Julie

    Baron, John (Billericay)

    Kirkwood, Sir Archy

    Beggs, Roy (E Antrim)

    Knight, rh Greg (E Yorkshire)

    Beith, rh A. J.

    Laing, Mrs Eleanor

    Bercow, John

    Lait, Mrs Jacqui

    Beresford, Sir Paul

    Lamb, Norman

    Blunt, Crispin

    Lansley, Andrew

    Boswell, Tim

    Leigh, Edward

    Bottomley, rh Virginia (SW

    Lewis, Dr. Julian (New Forest E)

    Surrey)

    Liddell-Grainger, Ian

    Brazier, Julian

    Lidington, David

    Browning, Mrs Angela

    Lilley, rh Peter

    Bruce, Malcolm

    Loughton, Tim

    Burnett, John

    Luff, Peter (M-Worcs)

    Burns, Simon

    McIntosh, Miss Anne

    Burt, Alistair

    McLoughlin, Patrick

    Butterfill, John

    Malins, Humfrey

    Cameron, David

    Marsden, Paul (Shrewsbury &

    Campbell, Gregory (E Lond'y)

    Atcham)

    Campbell, rh Menzies (NE Fife)

    Mawhinney, rh Sir Brian

    Cash, William

    May, Mrs Theresa

    Chapman, Sir Sydney (Chipping

    Mercer, Patrick

    Barnet)

    Mitchell, Andrew (Sutton

    Chope, Christopher

    Coldfield)

    Clappison, James

    Moss, Malcolm

    Clarke, rh Kenneth (Rushcliffe)

    Murrison, Dr. Andrew

    Clifton-Brown, Geoffrey

    Norman, Archie

    Collins, Tim

    O'Brien, Stephen (Eddisbury)

    Conway, Derek

    Öpik, Lembit

    Curry, rh David

    Osborne, George (Tatton)

    Davies, Quentin (Grantham &

    Ottaway, Richard

    Stamford)

    Page, Richard

    Davis, rh David (Haltemprice &

    Paice, James

    Howden)

    Portillo, rh Michael

    Djanogly, Jonathan

    Price, Adam (E Carmarthen &

    Dodds, Nigel

    Dinefwr)

    Evans, Nigel

    Prisk, Mark (Hertford)

    Fabricant, Michael

    Randall, John

    Field, Mark (Cities of London &

    Redwood, rh John

    Westminster)

    Reid, Alan (Argyll & Bute)

    Flight, Howard

    Robertson, Laurence (Tewk'b'ry)

    Flook, Adrian

    Robinson, Peter (Belfast E)

    Forth, rh Eric

    Rosindell, Andrew

    Fox, Dr. Liam

    Ruffley, David

    Francois, Mark

    Russell, Bob (Colchester)

    Garnier, Edward

    Sanders, Adrian

    Gillan, Mrs Cheryl

    Sayeed, Jonathan

    Goodman, Paul

    Shephard, rh Mrs Gillian

    Gray, James (N Wilts)

    Simmonds, Mark

    Grayling, Chris

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

    Green, Damian (Ashford)

    Kincardine)

    Green, Matthew (Ludlow)

    Soames, Nicholas

    Greenway, John

    Spicer, Sir Michael

    Grieve, Dominic

    Spink, Bob (Castle Point)

    Hague, rh William

    Stanley, rh Sir John

    Hammond, Philip

    Steen, Anthony

    Hawkins, Nick

    Streeter, Gary

    Hayes, John (S Holland)

    Swire, Hugo (E Devon)

    Heath, David

    Taylor, Ian (Esher)

    Hendry, Charles

    Taylor, John (Solihull)

    Hermon, Lady

    Taylor, Dr. Richard (Wyre F)

    Hoban, Mark (Fareham)

    Thomas, Simon (Ceredigion)

    Hoey, Kate (Vauxhall)

    Tredinnick, David

    Horam, John (Orpington)

    Turner, Andrew (Isle of Wight)

    Howard, rh Michael

    Tyrie, Andrew

    352

    Viggers, Peter

    Winterton, Sir Nicholas

    Waterson, Nigel

    (Macclesfield)

    Watkinson, Angela

    Young, rh Sir George

    Willetts, David

    Younger-Ross, Richard

    Williams, Hywel (Caernarfon)

    Williams, Roger (Brecon)

    Tellers for the Noes:

    Wilshire, David

    Hugh Robertson and

    Winterton, Ann (Congleton)

    Mr. Robert Syms

    Question accordingly agreed to.
    Mr. Simon Thomas: On a point of order, Mr. Deputy Speaker. As you know, we have committed the Hunting Bill to a Standing Committee for one day. Last night we substantially altered the structure of the Bill, in such a way that what was permissible in the Bill first introduced by the Government, including a certain type of hunting with dogs, flushing out and so on, in the upland areas of Wales and England, will now not survive the regime. The will of the House having been clearly expressed on these matters tonight, we are now in the uncomfortable situation where Back Benchers cannot table amendments and be sure that those amendments will be unstarred by the Speaker so that they can be discussed in Committee. What advice or guidance can you give to Back-Bench Members, recognising both the will of the House and the need for Back-Bench scrutiny of any Bill going through the House? Will it be possible for us to table amendments first thing tomorrow morning, and for those to have an opportunity of being debated in the one-day Standing Committee?
    Mr. Deputy Speaker: The selection of amendments in Committee will be entirely a matter for the Chairman of that Committee, not for me. I am sure he will take into consideration all the relevant factors.
    Mr. Luff: Or she.
    Mr. Deputy Speaker: Or she.
    Lembit Öpik: On a point of order, Mr. Deputy Speaker. Now that the programme motion has been passed, is there any latitude for the Government to extend the time available to consider the Bill if it turns out that, with the best will in the world, we have not made reasonable progress in the Committee stage?
    Mr. Deputy Speaker: That is an entirely hypothetical question, which I am not prepared to deal with this evening.

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

    DEFENCE
    That the draft Armed Forces (Review of Search and Seizure) Order 2003, which was laid before this House on 28th April, be approved.—[Margaret Moran.]
    Mr. Deputy Speaker: I think the Ayes have it.
    Hon. Members: No.
    Division deferred till Wednesday 2 July pursuant to Orders [28 June 2001 and 29 October 2002]
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),
    That the draft Army, Air Force and Naval Discipline Acts (Continuation) Order 2003, which was laid before this House on 28th April, be approved.—[Margaret Moran.]
    Question agreed to.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

    LOCAL GOVERNMENT FINANCE
    That the Local Government Finance (England) Special Grant Report (No. 122) on Local Authorities with Autonomy on Formulaic Capital Allowances, a copy of which was laid before this House on 7th May, be approved.—[Margaret Moran.]
    Question agreed to.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

    IMMIGRATION
    That the draft Nationality, Immigration and Asylum Act 2002 (Juxtaposed Controls) Order 2003, which was laid before this House on 5th June, be approved.—[Margaret Moran.]
    Mr. Deputy Speaker: I think the Ayes have it.
    Hon. Members: No.
    Division deferred till Wednesday 2 July pursuant to Orders [28 June 2002 and 29 October 2002]
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

    DISABLED PERSONS
    That the draft Disability Discrimination Act 1995 (Amendment) Regulations 2003, which were laid before this House on 8th May, be approved.—[Margaret Moran.]
    Question agreed to.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

    CUSTOMS AND EXCISE
    That the Tobacco Products (Description of Products) Order 2003, which was laid before this House on 5th June, be approved.—[Margaret Moran.]
    Question agreed to.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

    FINANCIAL SERVICES AND MARKETS
    That the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 1) Order 2003 (S.I., 2003, No. 1475), dated 5th June 2003, a copy of which was laid before this House on 5th June, be approved.
    That the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2003 (S.I., 2003, No. 1476), dated 5th June 2003, a copy of which was laid before this House on 5th June, be approved.
    That the draft Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2003, which was laid before this House on 5th June, be approved.
    That the draft Financial Services and Markets Act 2000 (Exemption) (Amendment) (No. 2) Order 2003, which was laid before this House on 5th June, be approved.—[Margaret Moran.]
    Question agreed to.

  PETITIONS

    Driving Offences (Sentencing)
    11.29 pm
    Mr. Nigel Dodds: I have been asked to present a petition signed by more than 3,600 of my North Belfast constituents and others, concerning the tragic death of Thomas McDonald, who was deliberately run down and killed on the Whitewell road in my constituency in September 2001. The petition states:
    The Petition of Residents of North Belfast and elsewhere declares that 16 year old Thomas McDonald was run down and killed in September 2001; that the driver of the car, despite the circumstances, only received a prison sentence of two years; and that this is a travesty of justice.
    The Petitioners therefore request that the House of Commons urge the Secretary of State for Northern Ireland and the Attorney General to review the case and to seek the imposition of a heavier sentence in this and other such cases.
    To lie upon the Table.

    Post Offices
    11.30 pm
    Bob Spink: The Labour Government's policy on payment of pensions and benefits and on preventing development of an effective Post Office basic bank account is causing the demise of many post offices around the country. The people of Canvey island are outraged by the impending closure of their shopping centre post office. In only three and a half days last week, almost 5,000 on Canvey island signed a petition that states:
    To the Honourable Commons of the UK, Great Britain and Northern Ireland in Parliament assembled.
    The Humble Petition of Cllr Lionel Hart, Cllr Pat Haunts, Janet Penn, residents of Canvey Island and others of like disposition sheweth.
    That there is massive public outrage at the Government's policies on Post Offices, payment of pensions and benefits and the basic Post Office bank account and that these will lead to the closure of 3000 Post Offices and have added to the factors causing the closure of Canvey Island's shopping centre Post Office in Furtherwick Road.
    Wherefore your petitioners pray that your Honourable House shall urge the Government to implore Royal Mail to keep a Post Office facility in Canvey Island town Shopping Centre, to help the economic viability of the shopping centre and to provide a service for all Canvey island residents and particularly the more vulnerable people in our community.
    And your Petitioners, as in duty bound, will ever pray, etc.
    To lie upon the Table.

    Local Police Stations
    11.31 pm
    Bob Spink: I have a second petition—[Interruption.] Those sitting on the Treasury Bench seem to be laughing at my having a second petition, but it deals with a rather serious matter.
    Last year, Canvey island police station was closed by the police without notice or consultation. I fought to get it reopened and, working as a team with local councillors and the Yellow Advertiser, we succeeded. Now, however, the station is more often closed than open, again without the consultation that I had formally requested being carried out. Such action brings the chief constable and the police into disrepute and destroys public confidence in the police.
    The petition, which has been signed by almost 5,000 people but is supported by the entire Canvey population, states:
    To the Honourable Commons of the United Kingdom, Great Britain and Northern Ireland in Parliament assembled.
    The Humble Petition of Mrs Maureen Campbell, Mrs Margarette Robbins, Cllr Ray Howard and Cllr Tony Belford and others of like disposition sheweth.
    That there is deep concern across Castle Point regarding the opening of local police stations which have been increasingly closed to the public over recent years, and that this has reduced public access to and confidence in community policing and that residents on Canvey Island like those on the mainland want a transparent police for their local police station opening.
    Wherefore your Petitioners pray that your Honourable House shall urge the Government to implore the Chief Constable to issue such a policy and will ensure that funding is available to maintain at previous levels, open police stations and in particular to re-open Canvey Island Police Station in order to help stop the crime and vandalism on Canvey Island.
    And your Petitions, as in duty bound, will ever pray, etc.
    To lie upon the Table.

    Regional Government (North-West)
    Motion made, and Question proposed, That this House do now adjourn.—[Margaret Moran.]
    11.33 pm
    Ann Winterton: I well remember the Secretary of State for the Environment, Transport and the Regions making his statement on 3 December 1997, when the Government published their White Paper in which it was made clear that the Government were
    "committed to moving … to directly elected regional government in England."
    The right hon. Gentleman asserted that he had
    "been associated with the cause of regional development … for more than 20 years."—[Official Report, 3 December 1997; Vol. 302, c. 359.]
    and that it was a cause close to his heart. Of course, he had been leader of the Labour party delegation to the European Parliament between 1976 and 1979, and a delegate before that. On that occasion, he did not tell the House that it was a manifesto commitment of the Labour party way back in 1929 to
    "support the creation of separate legislative assemblies in Scotland, Wales and England with autonomised powers of local concern."
    Between the wars, from 1934 to 1937, regional policy emerged in response to the unemployment of the slump years. South Wales and parts of Durham, Tyneside and west Cumberland, plus Scotland, were designated as assisted areas under special area Acts and administered by appointed commissioners with limited powers to grant subsidies. During world war two, Labour Ministers founded nine civil defence regions that the post-war Labour Government turned into regional boards for industry. So there is nothing new in regionalisation for the Labour party, and the Conservative party has also played a part stretching from the 1970s, under the then Prime Minister, the right hon. Edward Heath, to the more recent Maastricht treaty.
    While the concept of regionalisation came from a totally different source and background from the concept of European Union integration, the European Commission was quick to hijack regionalisation to make the single currency work. As a result, the issue involves immense considerations for the United Kingdom as a whole and the north-west in particular.
    Pierre Werner, Prime Minister of Luxembourg, wrote in his report of 1970:
    "The realisation of global economic equilibrium may be dangerously threatened by differences of structure. Co-operation between the partners in the Community in the matter of structural and regional policies will help to surmount these difficulties, just as it will make it possible to eliminate the distortion of competition. The solution of the big problem in this field will be facilitated by financial measures of compensation. In an economic and monetary union, structural and regional policies will not be exclusively a matter for national budgets."
    The following is from the 1975 report of the Prime Minister of Belgium, Leo Tindemans:
    "For an integrated economic and monetary unit to operate harmoniously there must be a substantial regional policy to offset the tendency of the market to concentrate capital and activity in the more competitive areas of the Union. Such a policy will satisfy the clear desire in all our countries to revive the regions.

    357
    This policy must necessarily involve a net transfer of resources from the most prosperous areas of the community to the less favoured areas. In part these transfers will be made, as now, through national regional development policies. However, a large proportion of the transfer will have to be made through the Community budget, either directly by means of regional aids, or indirectly by the effect on economic structures of the agriculture and industrial policies. Regional policy will therefore have to expand gradually in step with aligning the economic and monetary policies of the member countries.
    Moreover, the regional policy must be concentrated on the most economically backward areas of the Community."
    It therefore stands to reason that regionalisation is an integral part of economic and monetary union, and those who support the eurozone will also support the regions of the European Union. For as Tindemans indicated, because the United Kingdom has a successful economy and we have above-average member state GDP, we will be the losers in this new Europe of the regions. So the answer to the question that is often posed—whether there will be more money as a result of regional government for the north-west—is a resounding no. Indeed, there will be less overall.
    We have to bear it in mind—a fact that has not been recognised—that we are talking not about regions of the United Kingdom but about regions of the European Union. If the former were the case, it could well be that a United Kingdom Government would be prepared to spend more on the regions, as they do now, particularly in the most needy areas. However, the present Government have made it clear that no more funds will be available than at present for regional assemblies, so the added cost of setting up and running them will top-slice the resources that are available, leaving less overall to spend.
    The figures involved are not inconsiderable. My hon. Friend the Member for Tatton (Mr. Osborne), in his excellent debate on regional government in Westminster Hall last Tuesday, stated that the Minister's predecessor had estimated that it would cost up to £30 million to set up the assembly, of which £20 million would be new money. Central Government—in other words, the taxpayer—will pay for that, but most of the running costs of £25 million a year would be met from the assembly's general Government grant. Moreover, the Minister of State for Regeneration and the Regions has said that there will be no new powers and no new money for regional assemblies.
    Those areas in the north-west that are at present receiving economic aid of one kind or another should look very carefully at the pig in a poke that they are being sold, and perhaps reflect on whether a regional assembly will be in a position to deliver and to meet their expectations. Certainly, the hon. Member for Manchester, Blackley (Mr. Stringer) was in no doubt when he spoke in last week's debate, for he posed the question whether an elected regional assembly would put right the wrongs caused by the country's huge and growing regional disparities. He asked whether there will be money in it, and went on to make a comparison with the Scottish Parliament, which was guaranteed in its White Paper that the Barnett formula would continue, thereby retaining the levels of money that go to Scotland. No such good fortune for the north-west, I
    358
    hasten to add; and I will refrain from going over the old ground of the huge and increasing cost of the Scottish Parliament building.
    Business is extremely sceptical about regional assemblies. In an excellent document produced recently by the British Chambers of Commerce, it expressed the view that regional assemblies will not be a success unless the concerns of business are addressed and taken into account. It also believes that if regulation and costs are all that regional assemblies are to bring to the regions, as will be the case under the proposals in the White Paper, the assemblies will damage regional competitiveness.
    What we are about to experience, if regional government in the north-west gets the go-ahead from the electorate, is the handing over of regional policy in the north-west to the European Union. Further powers will be ceded to Europe and will therefore be lost to the United Kingdom, and the British public will once again not have been told the whole truth. Rather than being of economic benefit to the region, it will be the very opposite, because the UK's GDP of just over £1,000 billion is above the 85 per cent. benchmark of the average GDP of EU member states. Adding to that equation the 10 new countries joining the EU, whose GDP is lower still, will mean that the UK will fall even further behind and will not qualify for assistance. We should remember that EU regional policy must be concentrated on the most backward areas of the Community. That means that deprived areas in the north-west that currently receive assistance—for every pound that is paid to the EU, we receive 50p, which the United Kingdom must match with a further 50p, plus the administration cost—will not do so in future because they will be treated as one region. The overall needs of the whole region, not parts of it, will be the determining factor. Yet those parts may be worthy of extra assistance. If we wanted to deal with the hot spots or the most deprived areas, we would need to revert to what we have had for a long time—a United Kingdom regional policy.
    I expect some people who listen to the debate or perhaps read it later in Hansard will express some scepticism. However, rather than taking my word for it, perhaps they should consider what is buried deep in the Chancellor's recent and tedious 246-page document, "Assessment of the Five Economic Tests", not forgetting the 18 supporting studies. Box 2.13 on page 125 in the long chapter on flexibility gives undoubted confirmation that Government plans for an elected regional assembly in the north-west are all to do with the EU. It states:
    "It is also vital to modernise the European dimension of regional policy based on the principles underpinning domestic policy, so that it is locally led and substantially devolved. In this context, the consultation paper A modern regional policy for the United Kingdom",
    which was printed in March,
    "outlines the Government's commitment to regional flexibility in the UK and the euro area and puts forward a proposed new approach for EU regional policy, an EU Framework for Devolved Regional Policy.
    Under this Framework, EU Member States would agree common principles but delivery of regional policy would be substantially devolved and decentralised, and offer greater

    359
    flexibility to Member States and their nations and regions. EU support, both financial and institutional, would be refocused on those poorest Member States that will benefit most from direct EU involvement."
    There we have it, in black and white.
    In other words, the plan has nothing to do with the electorate's desire for regional assemblies. Indeed, to date, the electorate have shown an absence of desire for them. It has everything to do with breaking up nation states to form a Europe of the regions, and with moving money to make the euro work.
    I introduced the debate to ensure that such vital matters to the future economic success of the north-west and the United Kingdom at least receive an airing. For far too long, successive Governments have told the people of this country only part of the truth about the implications of the UK's relationship with the European Union. If the people of the north-west are to decide in a referendum whether to have a north-west regional assembly, they must be armed with the true facts. I advise them to read the small print with great care and look before they leap.
    11.49 pm
    The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Phil Hope): We have had another interesting debate on regional governance in the north-west, following that which the hon. Member for Tatton (Mr. Osborne) secured last week. I shall not recycle all the points that I made in that debate, but I remind hon. Members of one specific point. I make no apologies for repeating it. It is the Government's policy to instigate a far-reaching and radical programme of constitutional change and devolution. It was helpful of the hon. Member for Congleton (Ann Winterton) to say that my right hon. Friend the Deputy Prime Minister has been and continues to be a committed supporter of regional government in England. Indeed, the Labour party has been committed to that in successive manifestos for many years. That is a helpful reminder of this party's commitment to successful regional development.
    I regret to inform the hon. Member for Congleton that this history of support for regionalisation rather undermines her phobia, whereby this is some kind of European plot to take over the north-west. That is clearly not the case and it is not a credible argument.
    Ann Winterton: Will the hon. Gentleman give way?
    Phil Hope: In a moment. That argument illustrates not only the Conservatives' knee-jerk reaction to all matters affecting Europe and to relationships between this country and the European Union; it undermines the north-west's deserving case for far better representation at regional level for its economic future.
    Ann Winterton: I was filled with hope—no pun intended—that the hon. Gentleman would not use the argument that he has just expressed to the House. This is no phobia for my party; rather, the Government are seeking not to be truthful with the facts. They are not prepared to tell the British people what the true facts are, so that they can make up their own minds. In fact, the Government are being patronising; they should for
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    once decide that they will be fair and give the full picture, so that the British people can make an informed decision.
    Phil Hope: Of course, the whole point of a referendum is that it gives people the chance of a choice in these matters—a choice that the hon. Lady and her party would deny people by denying them the opportunity of a referendum. The debate that we have had, are having and will continue to have is a very important one about the future economic development of this country's regions—in this case, the north-west.
    We said that we would provide for directly elected regional government in the English regions in which such a demand exists, and where people decided in a referendum to support it. It is fundamentally clear that no region will have an elected assembly imposed on it; it will be a matter of choice. It is that choice that the hon. Lady and her party are denying to the people of the north-west. We are giving the people of the regions the opportunity to make that choice. Perhaps those such as the hon. Lady who oppose that policy could make it clear why they would deny the people of the north-east, the north-west and Yorkshire and the Humber the right to choose through a referendum.
    Two fundamental principles underline our proposal for elected regional assemblies. First, it will give the regions the opportunity to establish democratic accountability for activities that are already carried out on a regional basis by central Government, their agencies and quangos. I need not remind the hon. Lady that it was under a previous Conservative Administration that the Government offices for the regions were established. Through this means, we shall provide greater democratic accountability for those offices. Secondly, elected assemblies can use their resources and influence to improve regional economic performance. The Government remain committed to improving regional economies, and elected regional assemblies are a vital part of this framework.
    Sir Nicholas Winterton: Rubbish!
    Phil Hope: Elected assemblies will have responsibilities for key regional issues such as jobs, skills, planning, housing and economic development, all of which have a fundamental impact on overall economic development.
    The way to drive forward the UK economy as a whole is to boost regional economies, getting all of our regions firing on all cylinders. A Treasury report of last year suggested that if all of our regions raised their economic performance to the national average, the average person in the UK would be £1,000 a year better off.
    The Government have already done much to boost regional economies. We have strengthened the regional tier in the UK to ensure that there is the capacity to deliver higher productivity and economic growth. Regional development agencies have been set up to promote economic development and regeneration, and regional chambers have been established to contribute to the RDAs' regional economic strategies, and to scrutinise delivery. Perhaps the Conservatives can tell us what their policy is on RDAs. They went into the last general election promising to abolish RDAs; now, we

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    see hints here and there that they would keep them. What is their policy on RDAs, given the huge success that those agencies are having, supported by business up and down the country, in developing our regional economies?
    We have given more responsibilities to the Government offices, and the role of local authorities has been strengthened, for example through the introduction of business planning zones, and generally through the Government's localism agenda.
    We have published the communities plan, a regionally focused action programme for tackling imbalances between housing supply and demand. It addresses the lack of housing demand in parts of the north and the lack of supply in parts of the south. The plan seeks to develop policies that are appropriate to each region.
    I shall now talk specifically about the north-west. Four of the nine new pathfinder programmes announced in the communities plan are in the northwest. The region will receive some £35 million this year to deal with early interventions.
    We are investing more than £1 billion this financial year, along with European programmes and the Northwest Development Agency, on a range of regeneration initiatives. The agency currently invests more than £220 million per year to facilitate the economic, social, physical and environmental regeneration of key areas in the region.
    Sir Nicholas Winterton: That is not new money.
    Phil Hope: Those are facts that the Opposition seem to want to deny. They clearly illustrate the Government's commitment to effective economic regeneration in both rural and urban parts of the regions of this country. It was this Government who set up the country's first urban regeneration companies—Liverpool Vision and New East Manchester. They are sparkling examples of what partnerships between the private, public and voluntary sectors can achieve, when they have the right delivery vehicles. We are also developing programmes for Cumbria and Furness, East Lancashire and selected coastal and market towns.
    The RDAs also manage 140 local regeneration partnerships, and are developing 600 land and property development schemes and rural regeneration programmes. In addition, the north-west region has been allocated £108 million for 21 neighbourhood renewal fund areas to tackle deprivation. We are also making £325 million available to six new deal for communities partnerships in the region over the next 10 years.
    I want to show that there has been a range of important initiatives at a local level, addressing issues such as housing, skills, enterprise and crime. The Government's existing policies are beginning to give regions the economic levers that they need to develop their full economic potential. The Government will continue to work to identify where these can be enhanced, or where there are factors affecting economic performance that are not currently addressed in the most effective way.
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    The Government have set themselves the challenging task of increasing economic growth in all regions. In the long term, that means reducing the disparities in rates of growth between the historically more successful regions and the rest of the country. That will not happen overnight; trends are long established, and may take time to change. However, I do not subscribe to the view often held in other parts of the Chamber that central Government have all the answers. There is only so much that the centre can do. We need strategic decision-making and accountability at regional and local levels, as well as at national level. Scotland, Wales and London have been given new powers to take decisions that are relevant to them and promote their own regional strategies. The Opposition opposed those institutions tooth and nail, but now that they are established, they support them. I dare say that we will see a similar reversal of policy when the new regional assemblies are established and have proved their success.
    Sir Nicholas Winterton: Rubbish.
    Phil Hope: The Government want there to be elected English regional assemblies, where there is a demand for them. The assemblies will take decisions that bring to hear their knowledge of regional needs and circumstances. There is scope for a much greater role for strategic action at a regional level that can address regional priorities.
    To pick up on a specific point made by the hon. Member for Congleton, the majority of business in the north-west consulted in the sounding exercise support a referendum for an elected regional assembly.
    Sir Nicholas Winterton: Not an assembly.
    Phil Hope: Elected regional assemblies, with their ears closer to the ground, can be on the spot to deal with specific issues that affect regional economies. An elected assembly in the north-west would have direct spending power, or influence, over funding amounting to some £2.1 billion. That is not loose change. It can make a considerable difference to the regional economy.
    Sir Nicholas Winterton: There is no extra money.
    Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman must not keep up a running commentary from a sedentary position when the Minister is replying to the debate.
    Sir Nicholas Winterton: I believe in the truth.
    Mr. Deputy Speaker: Order. The hon. Gentleman must do as the Chair tells him.
    Sir Nicholas Winterton: I shall tell the truth.
    Phil Hope: The hon. Member for Congleton was right to say that we had a full debate last week in Westminster Hall, where a number of important points were made that she has repeated here. We have been very frank on costs, which were set out clearly in our regional governance White Paper. Setting-up costs will vary from region to region, obviously because of the different sizes

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    of their electorates, but we can expect the cost to be around £30 million in each region. The estimate includes all costs necessary to establish an assembly, including the cost of local government reviews, referendums and the first elections.
    It is important to provide support for the referendums and the campaigns that will take place, which will be governed by the Electoral Commission, so that they can take place properly, transparently and fairly, allowing the electors to understand all the issues before them.
    To conclude, we trust the people to make their own choice.
    Ann Winterton: The Under-Secretary is certainly reading out his speech magnificently and repeating many of the points that were made in the debate last week, which I did not raise tonight. It is a shame that he does not respond to some of the more important points that I made, which he has not addressed at all. Is he not capable of doing that?
    Phil Hope: I directly addressed many of the points raised by the hon. Lady, specifically in relation to Europe. I understand that the hon. Lady and many members of the Conservative party have an attitude to Europe; not only are they opposed to the euro, but they are fundamentally opposed, in reality, to being part of the European Union at all. They take every opportunity they find to exhibit their anti-Europeanism. We see this
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    regularly in this Chamber, and it is matter of regret that rather than taking a mature attitude to Britain's relationship with the European Union, we see a phobia and an endeavour—
    Ann Winterton: This is laughable.
    Phil Hope: The hon. Lady makes remarks from a sedentary position. She said that I had failed to address the points that she made in her speech. I am now addressing those points about Europe and it is with great regret that I say that she clearly does not like the answers.
    As we draw towards the end of this debate, I want to make it clear that the debate about the future of elected regional assemblies is a matter of choice, involving a referendum. We have had a sounding exercise that proved that there is interest in the north-west, the northeast and in Yorkshire and Humberside. Now we are offering a chance for the people to make a choice through a referendum. Labour trusts the people to make their own choice about whether they want an elected regional assembly in the north-west. That is the fundamental difference between Labour and our opponents. We are prepared to trust the people.
    Question put and agreed to.
    Adjourned accordingly at four minutes past Twelve midnight.

Preamble
[SIR NICHOLAS WINTERTON in the Chair]

Prisons
Motion made, and Question proposed, That the sitting be now adjourned.—[Vernon Coaker.]
9.30 am
Mr. Andrew Turner: Mr. Deputy Speaker, it is a pleasure to see you at any time, but it is a particular pleasure to see you so early in the morning. I also welcome the Minister, who is the sixth Minister with responsibility for prisons since 1997. I hope that he will remain in his post for two or possibly three years, because the Government's approach to prisons must be consistent, and that involves having consistent personnel as well as consistent policy.
The prison population has risen from 36,000 in 1991 to 77,379 in the current year, which is the largest number of people ever to be imprisoned in this country. Prison Reform Trust figures suggest that that is largely due to longer sentences rather than to more crime. I will not get into that argument, but it is not inappropriate that those who perpetrate burglary, rape and crimes of violence against their fellow citizens should be incarcerated.
The solutions include greater resources, greater efficiency in obtaining better returns for the money invested, shorter sentences, more effective community sentences, and tackling at root the propensity to offending behaviour. Although it is not the Minister's responsibility—so far, very little is his responsibility—to take those steps with regard to the population as a whole, it is his responsibility to tackle the propensity to offending behaviour through the Prison Service. He is severely handicapped by problems, caused by both the Prison Service and the Home Office, relating to the way in which the Prison Service is run, and the Home Office has failed to acknowledge some widely understood problems.
I shall refer in detail to the difficulties at Parkhurst prison in my constituency. The Minister will know that there are more criminals in my constituency than in any other, but I am pleased to say that most of them are not on the electoral roll. There are 1,800 prisoners in my constituency, and the Prison Officers Association at Parkhurst pointed out in April 2002 that:
"We have been two health care Senior Officers short since October 2000 … We have 10 Officer vacancies, four Officers acting up and two further Senior Officer vacancies. Two staff have recently resigned to join the Police … Nine staff applied for transfer to HMP Albany. We currently have 22 unified grades off sick … Every day the Residential Units are below their MSL, until staff are redeployed … workshops are closed and Officer instructors are deployed to the wings. In conclusion Parkhurst is experiencing serious problems with no solutions in sight."
That was the verdict of the branch chairman, Mr. Holmes, in April 2002.
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At the same time, the chairman of the board of visitors, Janice Palin, wrote to me about her annual report for 2000–01:
"I have to repeat from the third paragraph of my letter last year that severe cutbacks continue to be made in the way of 'efficiency savings'. We appreciate that resources are tight in all areas and that prisons are not 'vote winners', but as we understand it 'rehabilitation' is the aim. How can this be obtained when more and more resources are being withdrawn? This is a very short-sighted approach to a long-term problem."
The board of visitors was not limited to that generalisation; it gave some examples:
"Serious impoverishment has led to the levels of disruption experienced during the year, and the Prison Service policy on appropriate resettlement programmes is either not delivering or is very ineffective."
It also made the point that services for mentally ill prisoners were inadequate. The board of visitors was particularly concerned about health care:
"Dentistry has always been a problem within the prison, which has been exacerbated by having to use unsatisfactory mobile facilities".
Dentistry is a problem in the whole of my constituency, where there is a desperate shortage of dentists. The board of visitors pointed out:
"Due to lack of staff, prisoners' out-patients appointments are being cancelled at short notice which means that they are not receiving the necessary treatment and the knock-on effect is that an appointment is lost to a member of the local community."
Dr. Andrew Murrison: My hon. Friend has touched on health care in prisons. Does he agree that it is a crying scandal? Furthermore, does he agree that Ministers have been indifferent to the plight of those who need health care most? The Minister was unable to tell me the proportion of prisoners who receive thrombolysis within 30 minutes of having a heart attack, which is something that the rest of us would take for granted. Also, the last survey of mental health in prisons was carried out in 1997, according to a recent response that I have had from the Minister. Does my hon. Friend not agree that Ministers appear to want to ignore the health care of our prison population? Whatever they have done wrong—
Mr. Deputy Speaker: Order. This almost sounds to me like a speech. It should be a brief intervention. There have been enough questions already.
Mr. Turner: I thank my hon. Friend for his intervention. I certainly agree that if Ministers are not ignoring the problems of health care, as he suggests, they are not dealing with them adequately. It is not good enough to give generalisations about objectives for health care—as Ministers frequently do, and as the Minister's predecessor did in a letter dated 23 April 2002—without delivering the resources. In the case of Parkhurst prison, those resources mean more qualified mental health care staff.
Those were some of the issues raised by the board of visitors in March 2002. Many were repeats of points that had been raised earlier. The Minister's predecessor, now the Minister for Citizenship and Immigration, the hon. Member for Stretford and Urmston (Beverley Hughes),

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wrote on 23 April 2002 a letter of the most outstanding generalised guff—making the broad, sweeping statements that we now expect in ministerial replies—about the importance of resettlement work, which she said was
"making a significant impact on the lives of prisoners."
The letter pointed out how many literacy and numeracy qualifications had been achieved at level 2 in 2000–01.
None of those generalised statements responded, in my view, to the particular needs of Parkhurst prison. The Minister's predecessor claimed that Parkhurst had received sufficient funding to allow it to deliver an appropriate regime for prisoners, saying:
"Previous and longstanding failures to make required efficiency savings have resulted in a cumulative overspend that is now being addressed by the Governor."
Most of us now understand that a "cumulative overspend … now being addressed" means that money is not being spent where it needs to be in the current year, because it is busy repaying the debts of previous years.
The Minister's predecessor went on to recognise that
"more work is required to ensure that resettlement policy is translated into practice … All people with severe mental illness will be in receipt of treatment and no prisoner with serious mental illness will leave prison without a care plan and a care co-ordinator."
I have to tell the Minister that prisoners at Parkhurst are not receiving adequate treatment. In some cases, they have to be sectioned during their final weeks at Parkhurst to enable them to be moved to Broadmoor. They cannot be sectioned before they are out of prison, so they have to be sectioned in preparation for their departure, otherwise they would be free to roam the streets. However, because there is not an adequate number of places in Broadmoor, prisoners are left in inadequate health care facilities in prisons such as Parkhurst.
The Minister's predecessor went on to make some points about dentistry, to which I have referred, and stated:
"Regrettably, during the reporting year, there have been a couple of occasions when, because of operational pressures, the Health Care Centre has had to be locked resulting in prisoners spending longer in their cells than would have otherwise been the case. These operational pressures have also resulted in the cancellation of some outside hospital appointments."
The words "operational pressures" are a smokescreen for a lack of staff.
On remand prisoners, the Minister's predecessor stated:
"It is important that the Prison Service provides remand accommodation on the Isle of Wight to serve the island courts, ensuring that prisoners are produced on time, and to allow prisoners access to their solicitors."
That may be so, but it is not appropriate that prisoners on remand should be kept in the segregation unit of a category B prison, as was reported in paragraphs 1.05 and 1.06 of the report on Parkhurst by Her Majesty's chief inspector of prisons, which followed visits in November and December last year.
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I do not accept that the quality of the response from the Home Office is adequate. Ministers do not recognise the problems that are widely appreciated by my constituents, and certainly by the board of visitors and by those who work so well and effectively for the Prison Service, whether in a uniformed capacity or otherwise.
On 17 June, the board of visitors responded to the letter from the Minister's predecessor. I will refer to several points. The letter from the Minister's predecessor stated:
"Prisoners are not received late at Parkhurst."
One of the great problems is getting prisoners into the prison and dealing with their arrival sufficiently quickly. That cannot be done late into the night and certainly not after the prison reception closes. The Minister's predecessor thought that the prison reception closed at 7.30 in the evening. The prison thinks that the prison reception closes at 5.30 in the evening.
Prisoners are being brought to the Isle of Wight when they have been convicted at Winchester Crown court. They should be transferred to Winchester prison, but the contract for the transport of prisoners does not appear to require them to be transported to the right prison, with the result that they return, late, to the Isle of Wight. Other prisoners arrive at the Isle of Wight from other prisons. The consequence is that such prisoners are not dealt with properly. Far too many prisoners arrive without adequate paperwork and without sufficient information being given about their background, needs and, in particular, training needs. The education and rehabilitation of prisoners cannot take place if they are shifted, apparently at random, across the prison estate and arrive without adequate information on their needs.
In the response on 17 June, the board of visitors stated:
"We dispute the comment that prisoners are not received late at Parkhurst. The time quoted is 1930 hours. Why is it that 1730 has always been quoted in the past?"
Indeed, 17.30 is quoted in the report by Her Majesty's chief inspector of prisons. The response continues:
"Reception is closed by 1730; there would be very few staff in the Health Care Centre after 1730."
That response was sent in June of last year. In November and December, there was an inspection of Parkhurst prison. There are a huge number of quotations from which to choose. There is criticism of the segregation unit because it includes prisoners who require protection, prisoners who are there for reasons relating to good order and discipline, lodgers—people who have just arrived at Parkhurst, but have not been found a cell because they have arrived so late at night—and local lads, some of them on remand, who almost certainly would not end up in a category B prison. I understand why it is necessary for there to be remand facilities on the island for people accused of crimes, but there are two other prisons on the island, and I would not describe Parkhurst as the ideal one for remanding prisoners.
An example of someone arriving in segregation is given as
"a black prisoner with mental health problems, transferred from Swaleside without any prior notice to reception staff of the seriousness of his condition. He had been on an open F2052SH ('Self-harm at risk' form) at Swaleside"—

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they must have an awful lot of forms in the Prison Service—
"but this had been closed before his transfer in apparent disregard for his safety."
The example continues:
"To their credit staff at Parkhurst were now considering the appropriateness of securing his detention under Mental Health Act powers."
Another example concerns late arrivals:
"Often these involve young prisoners held on remand who were attending court on the mainland … some were coming to prison for the first time; a number were withdrawing from drugs. Spending their first night in prison on the segregation unit of Parkhurst could do nothing but exacerbate their anxieties."
Prisoners arrive with no sentence plan:
"The majority of prisoners entering Parkhurst came from other establishments. Some arrived with expectations of what they could achieve in a new stage of their sentence."
That was demotivating because it is so much harder to receive visits at Parkhurst. Paragraph 1.31 states:
"The establishment continued to house a significant number (37 per cent.) of black and minority ethnic prisoners who spoke of feeling powerless in addressing their concerns."
I thought that 37 per cent. was an extraordinary proportion, but I was advised that that is broadly par for the course in the prison estate, and the Minister needs to address and explain that.
The establishment has a lack of sufficient purposeful activity. All the criticisms show that there is a serious failure to address even the limited area of offending behaviour in prisons, to judge from Parkhurst. More than one area was praised, but I must repeat the praise for the physical education department, which the report said
"continued to deliver a good service in difficult circumstances. It was well-led by a very positive manager, and was one of the few areas where prisoners could gain qualifications."
The report contains some important messages for the director-general of the Prison Service and the area manager. I shall cite a few of those. The report for 2000 stated that
"The allocation criteria for Parkhurst should be consistent with its throughcare strategy, and the prison should aim to attract prisoners with the offending profile which the programmes at Parkhurst are designed to address."
The report said that that had not been achieved:
"Population pressures and the reduction in the number of offending behaviour programme places has not caused this to be a priority."
That is a direct criticism of the director-general of the Prison Service. It was also reported in 2000 that:
"Other Prison Service establishments and Population Management Unit at headquarters should be reminded about Parkhurst's change in role and therefore which prisoners should be allocated."
At Parkhurst 20 per cent. of the prisoners are foreign nationals, and of that number, 24 are from Jamaica. A minor recommendation was made that:
"Foreign national prisoners should be assisted to make affordable telephone calls to friends and families abroad."
That was not achieved. It was also recommended that:
"The number of foreign national prisoners should be analysed across the Prison Service and a strategy developed to manage them."
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That was not achieved either. The report stated:
"We were aware of no change in national policy. We repeat the recommendation."
The report is a catalogue of failure, not on the part of Parkhurst prison—I commend the governor, Steve Metcalf, his predecessor, David Kennedy, and the staff for their excellent work—but of the Prison Service nationally. It does not follow the recommendations of Her Majesty's chief inspector of prisons. The governor and uniformed and non-uniformed staff at Parkhurst work extremely hard at jobs for which most of us would not even consider applying.
The prison has 520 prisoners, 150 of whom are guilty of murder or crimes of violence. It is not adequate to respond, as the Minister did on the day the report was published, that there are many people in prison who should not be there. I invite him to walk around Parkhurst with me and indicate which prisoners should not be there but should, perhaps, be out in the community, living next door to his or my constituents.
When I told Steve Metcalf that this debate was coming up, he wrote:
"The good news is the amount of progress made, since the inspection, on addressing the issues.
We have re-organised in several areas, been successful in reducing our overcrowding, with the help of our Area Manager and PS HQ are optimistic that we will be successful with bids for additional trade training courses by next April."
Next April, it will be 15 months since the report was published. That is one third or one quarter of some people's sentences. Their offending behaviour will not effectively be addressed if they have to wait that long for training.
I wish to raise several other issues that do not relate to Parkhurst alone. One is the power of governors effectively to discipline prisoners. A European Court ruling prevents governors from reducing remission for disciplinary reasons. That causes cost and delay in the prison discipline system, and lack of discipline affects inmates and staff alike. The ruling diverts money from services to lawyers and perpetuates the absurd myth that people are entitled to serve only half the period for which they are sentenced.
The Prison Officers Association at Camp Hill has raised with me its concern that
"the Prison Rule that made it an offence against prison discipline for a prisoner to make a false or malicious allegation against prison staff"
has not been reintroduced. It says that in recent years there have been many cases of false and malicious accusations by prisoners against staff. Such accusations are deeply stressful to the staff, cost a huge amount to investigate and do nothing to maintain discipline in the prison.
In case hon. Members are convinced that I am extrapolating from the particular to the general, let me refer to the information that has recently been provided by the Prison Reform Trust. It shows that 85 per cent. of prisoners have had major illnesses and that there is a shortage of mental health professionals working in prisons. It shows the dire background of prisoners in terms of qualifications and numeracy and literacy, which are far below the national average, and of drug

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use and hazardous drinking. Unless resources are provided to address such problems, those prisoners will offend again.
In many respects, Albany, which deals with a large number of sex offenders, is a very successful prison. However, it suffers from a particular problem, in that sex offenders tend to be older men, many of whom are in prison for a long time, and it costs more to look after older prisoners. For example, in many cases, if they have to be transferred to hospital—St. Mary's hospital is just across the road from Albany prison—they have to be attended all the time. That is an added burden, just as it is an added burden to take those requiring dental treatment from Parkhurst. That needs to be addressed in the resources that are made available to Albany.
The Prison Reform Trust reports that many prisoners have never received help with their drug problems and that the Prison Service does not keep records of the percentage of prisoners with drug problems who do receive treatment. It also reports that transfers between prisons because of overcrowding often disrupt drug treatment and other training.
I have gone on long enough to paint a picture not only of Parkhurst, but of too many of our prisons. I am gravely concerned that we are spending about £36 million a year in Parkhurst alone on imprisoning foreign nationals. I wonder whether we could find a more effective way. We have bilateral agreements with some countries. Will the Minister consider extending those agreements, if necessary by purchasing places in prisons in Jamaica for Jamaicans? They would be nearer to their homes and families, and I doubt that that would be more expensive than providing prison places in the United Kingdom. That would get 24 people out of Parkhurst, and doubtless there are many Jamaicans in other prisons up and down the country.
I urge the Minister to review the background to the report on Parkhurst, which I suggest goes back some years. I urge him to check statements made by his predecessors, doubtless on the advice of their officials, to see whether they are true, because I fear that many in those letters appear to be untrue. I urge Her Majesty's chief inspector of prisons to examine all such correspondence in future inspections of any prison.
I should also like the Minister to explore why so many black and ethnic minority citizens and foreigners end up in prison, and to do that not by demonising judges, the police or whoever for finding those who are committing crimes, but by identifying why there is apparently such a high propensity to serious crime among those citizens and foreigners. I should like the Minister to stay in his job, and governors to stay in their jobs, for longer. It is not satisfactory for a new governor to come in every time that there is an adverse report and then disappear after the next adverse report. I doubt that any Minister could do his job effectively in those circumstances, and I hope that the Labour Government terminate their term of office with no more than six Prison Ministers
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under their belt. I wish this Minister well in his two or three years in the job and I look forward to hearing his responses.
Several hon. Members rose—
Mr. Deputy Speaker: Order. May I help the House? It is the custom in Westminster Hall that the winding-up speeches begin at 10.30 am. At least four colleagues are seeking to catch my eye, so I appeal for an element of self-discipline. A number of hon. Members have prisons in their constituencies, so this is an important debate for them.
9.58 am
Mr. Tom Cox: Thank you, Mr. Deputy Speaker. I congratulate the hon. Member for Isle of Wight (Mr. Turner) on obtaining the debate, and I welcome my hon. Friend the Minister, who will reply to it.
Wandsworth prison in my constituency is one of the largest prisons in England and Wales and one of the oldest—it was built 150 years ago. Wandsworth, like many other prisons, faces overcrowding and all the resulting problems. The certified accommodation for the prison is 1,163 people, but the prison population is hardly ever at that figure. Today, like most days, there are about 1,400 inmates. As a result of that overcrowding, several hundred men are two to a cell, which creates problems and tensions. One has only to speak to a prison governor, the board of visitors and members of the Prison Officers Association to learn of the problems and dangers that overcrowding causes.
I am deeply concerned that there has been overcrowding in prisons for a number of years. Home Office Ministers and officials say that the prison population will continue to increase, and that is completely unacceptable to me, and to many hon. Members, irrespective of their party. As the current prison population is well over 70,000, it is time for the Home Office to look at its policy of overcrowding in prisons.
I have been in the House for many years. I have taken part in many debates and asked many questions on prison issues, but I can see no improvement in the prison population in the foreseeable future. I am deeply concerned that the House rarely debates the prison system. Had the hon. Member for Isle of Wight not been successful in the ballot, there would not have been a debate before the summer recess on this ever important issue.
I have no idea of the total cost of running the prison system, but I know that it is enormous, and it is growing year by year. Those of us who represent constituencies where there are prisons know what the issues are; we see them when we visit prisons and read about them in the letters we receive from members of the boards of prison visitors and the Prison Officers Association, who tell us the facts about prisons. The hon. Gentleman referred to the board of visitors' annual reports, which will soon be dropping on to the Minister's desk. Does he read them? What notice does he take of the issues and what action does he take? What does he do about the problems that are raised in those reports?

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I pay the warmest tribute to Wandsworth prison's board of visitors; its annual reports outline the good things that happen in prison—I am the first to say that good things do happen—but they are overshadowed by the ongoing problems in the prison system. There was recently a thorough condemnation of the prison system by the new chief inspector of prisons, Anne Owers. She has been in the job for only a short time and already she is highly critical of what is happening.
For many people who are sent to prison, it is the start of their problems. They have anxieties such as how they will adjust to prison and how they will keep in contact with their family. How a prison is run is the key to day-to-day life for a prison inmate, who will want to know such things as what association there is, what is offered and when it takes place. A prisoner will have questions such as whether there are enough officers on duty to hold associations, whether he can telephone his family when he needs to and what is the visiting system for family and friends. As any prison governor or officer will say, such conditions affect a prisoner's behaviour.
Those of us who represent London prisons know that the number of prison officers in a prison is crucial. In Wandsworth, the recruitment of officers and, more importantly, their retention, is a very real problem—it may apply to other parts of the country, too. Does the Minister have any idea of the cost of housing in my constituency? The weekly rent for a very small flat in the area is about £250. There are few, if any, officers' quarters in prisons; they were sold off long ago.
In previous prison debates I have called for an increased allowance to be paid to officers who work in London prisons. Officers at Wandsworth ask me why their London allowance is so much lower than that paid to a London police officer.
The hon. Member for Isle of Wight touched on much of what one can say in debates about prisons. I am deeply concerned about continuing assaults on prison officers, but we rarely hear anything about them. Officers' morale is crucial in the day-to-day running of a prison.
I say to my hon. Friend the Minister that some of us really do want to work with him. I take to heart the comment made by the hon. Member for Isle of Wight about the number of prison Ministers that we have had. He made a point about consistency in relation to governors; the same is true of prison Ministers. Wandsworth prison had a superb governor, Stephen Rimmer, who turned it around. He was then moved off. In a long chat that I had with him about that, he said, "Tom, my problem is that if I don't take this promotion, I don't know when another offer will come my way." There is an urgent need for consistency.
I hope that my hon. Friend the Minister will listen to Members who have prisons in their constituencies and that he will meet members of the board of visitors and the Prison Officers Association, because they can tell him what life is really like in a prison. I understand that he must have officials, but prison officers in prisons throughout the country and those loyal people who serve on boards of visitors run the day-to-day system in our prisons, not officials.
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I wish the Minister well. Some of us will raise the issue of prisons with him time and again. We are willing to work with him, and I hope that we will do so and that he will work with us.
10.6 am
Dr. Andrew Murrison: I am inspired by your call to order, Mr. Deputy Speaker, and have converted what was to be a brief intervention into a speech.
I was a prison visitor before entering this place. It was a salutary experience. I want to talk a little about the work of prison visitors, who need to be differentiated from boards of visitors, which fulfil a completely different role. During the past two years, I have asked the Minister questions about prison visitors, because they have a great impact on the welfare and rehabilitation of those in our total institutions.
I am afraid that the Minister has a lamentable grip on how many prison visitors there are. When I asked the question last July, I was distressed that he appeared not to have met the National Association of Prison Visitors. The Government have no idea how many prison visitors there are and have not gone to the trouble of meeting the body that represents them. There is an obvious need to improve the welfare and rehabilitation of our prison population and the important part that prison visitors play in normalising and moderating life in prisons, so the Government's shortcoming is very serious. I hope that, a year later, the Minister will tell us that he has now met the National Association of Prison Visitors and can indeed tell us how many prison visitors there are.
I want to talk briefly about the prison health service—another subject about which I have bearded Ministers during the past two years. It is in a parlous state. There are moves towards bringing it more into the national health service, which are long overdue and are to be welcomed. We need to recognise that prisoners' health falls well short of the health that most of us in this country can expect. If we are serious about improving the overall health of the population of this country, we must focus on those areas where our efforts can have the most impact. One of those areas is the prison population, where health indicators, such as they are, suggest that the inmates suffer from extremely poor health in comparison with the general public.
The health care purveyed to our prison population is often of dubious quality, and the informatics that support moves that we might make towards improving that health are abysmal. I have asked a number of basic questions, the answers to which most primary care trusts in this country would have at their finger tips, but it seems that that information is not collected about the prison population. For example, the Minister cannot tell me the average time taken to institute thrombolysis following heart attacks, but I have no doubt that his counterpart in the Department of Health would have that information on the tip of his tongue. We do not know what proportion of our prison population are prescribed atypical anti-psychotics, which is recognised as the treatment of choice for psychosis, although we know that that population is a repository of a large amount of mental ill health.

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The problem is not just the lack of health informatics about inmates. I recently asked the Minister about sickness absence among prison officers, but he was unable to tell me, although he was able to trot off statistics for the police service.
That all suggests that, probably for a long time, Ministers have failed to get to grips with what is going on in the health care of our prison population. Given the obvious need to improve the health of and the health service in that population, that is a serious omission.
10.11 am
Dr. Phyllis Starkey: Woodhill prison is a modern prison in my constituency. It is constantly being expanded, and is about to have yet another facility added for young prisoners. It had some unwelcome publicity recently about an incident involving a particular remand prisoner, which occasioned a ministerial statement on 19 June.
Many prisoners should not be in prison and would be better served if they were given community sentences. The public would also be better served if those prisoners were given community sentences, because they are more likely to lead to their rehabilitation. The public want people to be punished when they have committed crimes, but they also want them not to reoffend. I urge the Minister and his colleagues in the Home Office to make a real effort to inform the public about the reality of community sentencing.
I attended my local magistrates court, and it was clear that community sentences are a real and viable alternative to prison. They are not a soft option, and allow much greater control in ensuring that offenders undertake proper drug treatment courses or anger management courses. They enable positive measures to be taken to help them to stop their offending behaviour.
As regards the Minister's statement on 19 June about the incident at Woodhill prison, I want to refer to the report by the inspector of prisons following an inspection of Woodhill in February 2002. The report was published a year later. The distressing fact is that many of the issues highlighted in that report by the inspector of prisons in early 2003 mirrored the failures that the Minister outlined in his statement on the recent incident concerning the remand prisoner in Woodhill. Most of the issues come down to two factors. One concerns recruitment and retention problems. Not only are there problems of understaffing, but the staff tend to be relatively inexperienced and poorly trained. The ministerial statement on the incident concerning the remand prisoner pointed out that staff were being asked to do a complex task with inadequate supervision and training. That was also highlighted in the report of the inspector of prisons in February 2003.
The second factor is the quality of health services in the Prison Service. Woodhill is a modern prison, with modern health facilities. The report criticised those health facilities, so I dread to think what criticisms would be made of the health facilities in other prisons. The report is particularly critical of the methods used in the prison for the supply of medicines, and makes a number of recommendations. It noted that the
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"written prescribing formulary … had last been revised in February 2000."—
that is two years before the inspection took place—and recommended that
"the prescribing formulary should regularly be reviewed."
The Minister's statement on the recent incident pointed to failures in prescribing practice in relation to the drug that was given to the prisoner concerned, which was perhaps not the most appropriate, and to the lack of supervision by staff of the handing out of medicines, which allowed the prisoner to accumulate sufficient to attempt suicide. I am concerned that the issues highlighted in that hard-hitting report by the inspector of prisons seem not to have been acted on, and that they will not be acted on now, even though a very high-profile incident has occurred which necessitated a statement by the Minister.
I am also concerned about the health system. The report by the inspector of prisons recommended that
"all staff whether doctors, nurses or non-nurse trained health care officers should have a training plan aimed at enhancing their skills to meet the needs of patients. These plans should be reviewed yearly. The Health Care manager should complete a training needs assessment.">
It also recommended that the health care manager should keep records on individual staff to ensure that they were all up to date
"in all aspects of current health care needs in prison."
Clearly, that has not occurred, and is again highlighted by the incident concerning that particular prisoner. However, I assume that the lack of training and record keeping occurs across the piece.
I do not criticise the prison staff at Woodhill or my local primary care trust, which has been very forward thinking in working with the local prison, and has made strenuous efforts to try to integrate the prison health care system into the local NHS and to bring it up to standard. However, I am concerned about the level of funding available through the Home Office and the Prison Service for bringing the prison health service up to scratch, in accordance with the action plan drawn up jointly by the primary care trust and the local prison. I know that responsibility for the prison health service will eventually be handed over to the NHS, and that the primary care trust will have to fund it. I ask the Home Office to ensure that the health service in the prison is up to standard before it is handed over, so that it does not have to be brought up to scratch by NHS funding, which is already tightly stretched in my constituency.
I have drawn concerns about staff recruitment and retention to the Minister's attention on several occasions, because it has been drawn to my attention by the local Prison Officers Association and by the prison governor. I am pleased that, partly as a result of pressure from me and from the prison governor, the extra housing allowance of four prison officers in Woodhill was increased from low to medium. However, in the light of continuing recruitment and retention problems, I asked the Minister to consider whether that allowance should be further upgraded.
I also ask the Minister to look into the issue of key worker housing for prison officers. There are significant key worker housing schemes being built in my constituency but, as elsewhere in the country, the definition of key worker applies only to police officers,

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teachers and certain NHS staff. It does not include prison officers although, to some extent, prison officers and police officers are in the same market, and prison officers often leave the Prison Service to go into the police service, because the pay and conditions in the police service are more attractive.
The responsibility for key worker housing is to be transferred to the Housing Corporation in the near future, and the Office of the Deputy Prime Minister is currently undertaking a review of the categories of workers that should be included in the definition of key worker. Sponsoring Departments have the opportunity to present the case for other categories of public sector workers to be included. I ask the Minister to consider urgently the evidence available, especially from places such as Milton Keynes but also from London and across the south-east, that will enable the Home Secretary to argue for prison officers to be included in the definition and therefore benefit from affordable housing.
Mr. Dominic Grieve: The hon. Lady is making a good point. I do not know what the position is at Woodhill, but on my visits to prisons in south-east England and from talking to prison officers, I have always been struck by the fact that many of them are routinely travelling 60 to 70 miles to work. They are living far away from the prisons in which they work.
Dr. Starkey: That is often the case. There are reasons why prison officers prefer not to live immediately adjacent to a prison, particularly when, as with Woodhill, 60 per cent. of prisoners are on remand. There are parts of Milton Keynes in which prison officers do not live because they contain a high representation of the pre-prison and post-prison population—if I can describe them in that way—and the officers prefer not to bump into them when they are off duty.
I am pleased that the hon. Gentleman supports my case, as it should not be a party political point. We should all agree that prisons need to be effective in containing prisoners within a safe environment, particularly for remand prisoners. The Prison Service has an added responsibility for them, as they have not yet been proved guilty of any crime. Indeed, some of them will never be convicted.
It is also important that prisons provide an environment in which offending behaviour can be addressed and prisoners can be provided with a real opportunity to reform and rehabilitate, so that they do not return to prison. That is not possible in prisons at the moment, because of staffing difficulties, among other factors. I urge the Minister to ensure that that is addressed.
Mr. Mark Francois: Will the hon. Lady give way?
Dr. Starkey: No, because I know that others want to speak.
I have already apologised to the Minister for the fact that I must leave at quarter to 11 because I have an appointment with another Minister that I could not shift. I apologise to the Chamber as well.
Mr. Deputy Speaker:The hon. Lady's courtesy is noted.
10.22 am
Mr. Paul Stinchcombe: I should declare an interest at the outset. In introducing the debate, the hon. Member for Isle of Wight (Mr. Turner) made several references to the Prison Reform Trust. I am a trustee of the Prison Reform Trust.
This is the second time that I have made a speech in Westminster Hall about prison overcrowding. The last occasion was two and a half years ago when I marked the 10th anniversary of the publication of Lord Justice Woolf's report on the Strangeways riot. On that occasion, my lament was that 10 years after that report, and 11 years after the riot, the lessons of Strangeways had not been learned. Prisons that were grotesquely overcrowded in 1990 remained grotesquely overcrowded in 2001. Sadly, I return today to tell the Minister that things have not got better; indeed, they have got worse.
When the Labour Government came to power in May 1997, the prison population was just over 60,000. When I spoke in February 2001, it was 64,000. When my right hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) became Home Secretary on 8 June 2001, the prison population was just over 66,000. Eleven days ago, on 20 June, the figure stood at 73,478—the highest ever recorded.
The United Kingdom has the highest imprisonment rate in the European Union. Inevitably, the result is that 12 years after the Strangeways report pointed out the problems caused by overcrowding, the prisons of this nation remain overcrowded. Today, prison overcrowding is at its highest recorded level. At the end of May this year, 90 of the 138 prisons in England and Wales were overcrowded. Preston was overcrowded by 86 per cent., holding 661 prisoners in a prison intended to accommodate just 356. Shrewsbury was overcrowded by 75 per cent., and Leicester by 73 per cent. Those figures are worse than for Strangeways in 1990.
More than 17,000 prisoners are held in overcrowded accommodation, so it is little wonder that doubling up still occurs, with prisoners held two to a cell meant for one and three to a cell meant for two. In the past 10 years, 13 new prisons have been opened, but nine are already overcrowded. The current overcrowding means that, all these years after Lord Woolf published his blueprint towards a more just and humane, fairer and securer prison system, we have still not progressed.
Lord Woolf called for an end to slopping out, which has indeed ended. Cells have integrated sanitation, but with prisoners doubling up, they have to defecate in front of each other. There is little wonder that three quarters of the independent monitoring boards are concerned that overcrowding is leading to prisoners being held in inhuman, degrading and unsafe conditions. Lord Woolf also recommended that prisoners should be held in community prisons, as near as possible to their homes. However, after all these years

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27,000 prisoners are still held more than 50 miles from their committal court town, and 12,500 prisoners more than 100 miles away.
Lord Woolf also recommended that there should be a separate statement of purpose, separate conditions and a lower security categorisation for remand prisoners. However, on 13 June this year, almost 13,000 prisoners were those being held on remand. As my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) said, those prisoners have not been convicted. More than half will not subsequently receive a prison sentence, and one fifth will be acquitted or have the proceedings against them terminated early. Despite that, they are being kept in conditions that Mr. Narey, the former director general of the Prison Service, described as primitive.
We have to ask ourselves why. Why do we have these legion problems? Why are prisons so overcrowded? Why are prisoners still held hundreds of miles from home? Why are remand prisoners held in primitive conditions when they have not been convicted of a crime and may never be so? It is not because crime is soaring. As the hon. Member for Isle of Wight said, the adult prison population in England and Wales has grown by 71 per cent. in the past 12 years, but all the evidence shows that both overall crime rates and the number of offenders appearing before the courts have fallen in those 12 years.
If crime is not soaring, why is imprisonment? It is because of changes in sentencing policy. The evidence shows that courts are now more likely to imprison offenders who 10 years ago would have received a community sentence or a fine. People convicted of petty offences such as theft and the handling of stolen goods are now three times more likely to go to prison than they were in 1991. The courts are imposing longer sentences. The number of offenders being sent to jail for more than four years has increased by 62 per cent. since 1991, and the number of lifers has increased by 45 per cent. since 1992. England and Wales have a higher proportion of life sentence prisoners than the rest of western Europe.
In short, we are locking up more and more people, and we are locking them up for longer. It does not work. Indeed, it is doing harm to both the prisoners and the rest of us. We are locking prisoners up in conditions that put them unnecessarily at risk. Overcrowding has been one of the reasons underlying the dramatic increase in suicides and suicide attempts in custody—a record 94 last year. Worse even than that, we are locking people up in conditions that make them more likely to reoffend in the future.
I mentioned earlier the figures for prisoners held miles from home. The reason why Lord Woolf advised against that was simple. Maintaining good family ties can reduce a prisoner's risk of reoffending by a factor of six. It is the greatest single factor determining whether a prisoner is likely to reoffend on release, so if we want to be tough on crime and the causes of crime, restoring and sustaining those family relationships is a good place to start. Keeping people in prisons close to their families is the best way of doing that. However, today, with so many still held miles away from their home town, 59 per
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cent. of all prisoners, and nearly three quarters of young male prisoners, are reconvicted within two years of discharge from prison.
Prison is not working, so what should the Home Office's response be? It should be twofold. First, the Home Office must acknowledge that overcrowding is the core problem facing prisons. It is a scourge, cancer and obscenity. Those are not my words, but those of Mr. Narey, Lord Woolf and Christopher Scott, the former president of the Prison Governors Association, respectively.
The Home Office must address the problem of overcrowding not by building more and more prisons, but by sending fewer people to prison. I say that despite sharing everyone's abhorrence of crime. I have asked to serve on every Standing Committee on every major criminal justice Bill since I became a Member of Parliament. Crime blights my constituency just as it blights others. It ruins lives. It shreds the most fundamental human right of all—the right not just to live, but to live free from fear. I bow my head to no one in my desire to fight crime, but sometimes a more liberal touch works more effectively.
Rather than locking people up in overcrowded prisons, we should first focus on the need to cut crime. That is not a trite thing to say: it should be an imperative in criminal justice policy. Preventive crime reduction policies should be part and parcel of every properly integrated criminal justice and penal system. It can be done. In my constituency, the council evicted a drug dealer from a sink estate and offered the council house to the police to use as a temporary police office while it was being recycled into housing accommodation. Burglaries in that area fell by 81 per cent. in the following month.
Secondly, we should develop, and then sell, more effective and more flexible sentences, some of which do not involve prison. We should examine the alternatives to prison. Top of the list must be drug testing and treatment orders. In particular, we should expand the use of naltrexone implants, which block the effect of opiates so that there is no point in mugging an old lady for a 10-quid fix because the fix will do nothing. We should massively expand the use of naltrexone.
Thirdly, we must ensure that those who should not be in prison are not sent there. No one would argue against long-term imprisonment for serious or serial offenders, but we are imprisoning addicts and the mentally ill. Nine out of 10 young people in custody have mental health or substance abuse problems, or a combination of the two. We imprisoned David Blagden, a former constituent of mine, for 24 years for setting fire to some curtains on the week that his parents died. What fools we are. Prison should be for serious offenders and violent offenders, but we are sending people to prison who should not be there.
Juliet Lyon, the director of the Prison Reform Trust, said:
"It will take a sustained and decisive change of political will to halt this relentless increase in our prison population, and the shocking levels of re-offending and strain on the public purse which accompany it."
If we are serious about avoiding the next victim, now is the time to find that will and bring a sense of proportion and fairness hack into sentencing.
10.32 am
Mrs. Annette L. Brooke: I congratulate the hon. Member for Isle of Wight (Mr. Turner) on securing this timely and important debate, although I hesitate to congratulate him on the large number of prisoners in his constituency.
We have heard many examples from particular prisons, and a great deal about the deficiencies in health care for prisoners. I should like to underline the particular deficiencies in mental health care, which can lead to so many other problems. Members' comments have complemented the comprehensive study that the Prison Reform Trust has recently published, and I should like to associate myself with all the comments made by the hon. Member for Wellingborough (Mr. Stinchcombe), who has drawn on many of the study's findings.
We all want our communities to be safer, and we all want there to be fewer victims of crime. To those ends, some excellent work is being carried out, and I do not want to undermine the contributions being made by professionals and volunteers. However, we must recognise that an outcome of the Government's trying to achieve those objectives is the massive escalation in the size of the prison population that other Members have described. The size of the prison population is certainly rising at an exponential rate.
Since November last year, I have served on three Standing Committees with the hon. Member for Beaconsfield (Mr. Grieve), all of which have dealt with the early release of offenders with electronic tagging. We have questioned whether those measures are part of the Government's overall strategic policy, or quick fixes to attempt to address the problem of rising prison numbers. We cannot be proud of the fact that we now have the highest imprisonment rate in the European Union, and we can be even less proud of—and should be greatly concerned about—the projections for the end of this decade, by which time the Home Office is suggesting that there could be a prison population of 91,000, and perhaps as much as 110,000. What are we going to do? Are we going to build more prisons, or are we going to examine carefully what is happening to give us more and more prisoners?
I want to comment on women prisoners, as there has been a particularly rapid rise in their numbers. Although those numbers are relatively small, an increase of 191 per cent. in 10 years must be highlighted. I shall also touch later on the number of prisoners under 18. I am relieved to see that that is now below 3,000, but there is still an awfully long way to go. I think that it is true to say that the spiralling prison population is unplanned. It is difficult to see how it fits into an overall strategy to reduce crime, and the unintended consequences have been graphically described by many other hon. Members this morning. We have built 13 new prisons in the past 10 years, but overcrowding is now at its highest recorded level in 90 out of 138 prisons. That overcrowding, as we have heard, threatens prison safety and has led to unacceptable conditions for prisoners. Linked to that is the massive rise in suicides, particularly in the past year, tragically including nine women. Those suicides must be linked to overcrowding.
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Another result of the vast numbers coming into custody is that people have to be moved up and down the country—I understand that that is known as the churn factor. Prisoners are being moved around the system to accommodate demands from local courts and to avoid overcrowding in certain prisons. That has caused disruption to important education and drugs programmes, fewer opportunities for teachers to become fully involved, offending behaviour programmes to be suspended and family ties and resettlement work to be affected. We have just heard how important it is for prisoners to have good, strong links with the family and home community. The number of cases of prisoners absconding increases as more move around the country, and the work of prison officers is made much more difficult, as they find it hard to build up relationships and trust with inmates.
Further problems, as we have heard, involve the numbers of prison officers, staff shortages, the high level of staff vacancies in one third of all prisons, and record sickness levels among prison officers. In the reply to a parliamentary question that I submitted recently, I learned that 17 prisons are understaffed by more than 10 per cent. There are some staggering figures involved, and the problem is clearly causing a morale vacuum. The more members of staff who leave, or who are absent because of stress and illness, the greater the stress and work load for those who remain. It is a vicious cycle.
Mr. Francois: Does the hon. Lady agree that the whole picture painted by this morning's debate is of a system under incredible pressure, and that we therefore cannot rehabilitate offenders because the resources are barely there to keep them confined at all?
Mrs. Brooke: Absolutely. We really have a crisis. Our prisoners are locked up for longer, and not engaging in activities, which makes it impossible to make progress.
Among women prisoners, there is a high reconviction rate, and the majority are serving short sentences. There must be alternatives to custodial sentences for some of them. Mothers are separated from their children, and the knock-on effects for our social system are enormous. We have only 68 places in mother and baby units. A further 22 more places are planned, but how many are needed? There has been no recent survey, but a survey from 1994 suggests, if we project its figures, that we need about 178 such places.
Some women have to make a terrible choice to keep their baby with them for perhaps 18 months at a particular prison, when that takes them further away from their other children. That is scandalous if we are to move forward and describe ourselves as living in a civilised society. There is also the issue of children in prison, and it is questionable whether we are meeting children's rights in this country. How long will it take to provide all the placements for children? Will the Home Secretary meet his commitment to having no young girls in prison by the end of this year? There have been promises since 1999, but when will action be taken?
We have said a great deal, but perhaps the issue is in the sentencing. The Criminal Justice Bill refers to a new custodial scale including custody plus and custody minus, but is there not a case for a royal commission to look at the whole issue of punishment? The media say

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that sentences must be tough and there seems to have been a reaction to that, but, more recently, the media have been concerned about conditions in prison. We have had a series of articles about incidents in prison, including an article headed:
"Inside Holloway—one woman inmate's harrowing story of life on the dark side".
We must marry the two issues, and we must give leadership.
We must move forward and think about what prison is trying to achieve. I believe that it is achieving punishment, but not rehabilitation and health care. We want a prison system that works and which the community supports with a full review of sentencing. As the Magistrates Association has suggested, we could even have an interim community penalty between a fine and the current community sentences. We must be imaginative and try to make fines work more effectively. We must use prison when serious, violent crimes have been committed, but for some of the shorter sentences we should use our money more effectively by treating people, preventing re-offending and making our society better.
10.41 am
Mr. Dominic Grieve: My hon. Friend the Member for Isle of Wight (Mr. Turner) has done the House a good service by raising the issues concerning Parkhurst and Albany prisons. He has done something that is quite unusual. During my time as prison spokesman for my party, I have been horrified at the number of Members of Parliament who have never visited their local prison. It would be useful if we were all better informed about what was going on in the prison system.
The hon. Gentleman has been supported by the expertise of the hon. Members for Tooting (Mr. Cox) and for Milton Keynes, South-West (Dr. Starkey), and of my hon. Friend the Member for Westbury (Dr. Murrison), who brought his medical experience to bear, which was extremely useful. There is no doubt that the situation is bad, but I shall not repeat the litany of how bad it is or make a party political point on the issue, because I have a funny feeling that, irrespective of when a Conservative Government next come to office, it will be equally bad then and equally intractable to deal with. There is no doubt that the situation is extremely serious.
I hope that the Minister will be able to give us the exact figures on certified normal accommodation—the last figure that I saw was 65,850—and on the operational capacity, whose absolute ceiling limit is around 76,000. I hope that he will also tell us how close we are to that operational capacity. Are we a few hundred away, as I think we might be? At the end of my contribution I shall ask the Minister to tell us what he will do when that capacity is reached. This is an immediate crisis that needs to be addressed.
There is no doubt about the consequences of overcrowding; they have already been listed. In some prisons—including Liverpool, Pentonville and, I believe, Wandsworth—inmates are locked up for 23 hours a day. Assaults in prison have risen 9.9 per cent. during the past 12 months to more than 6,500, and there
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have been riots and disturbances, most notably at Lincoln, but also at Guys Marsh, Ranby and other prisons.
Many prisons are not meeting the Government's and Prison Service's target of 24 hours a week of purposeful activity. Belmarsh, which is a state-of-the-art remand and local prison, and regarded in some ways as a model—I have visited it—is providing between 11 and 15 hours a week only. We have heard about the suicide rate going up, and it is astonishing that in a prison such as Woodhill, with a dedicated unit for remand prisoners known to have mental health problems, the situation was so bad that a suicide attempt could be made by a prisoner under 24-hour supervision by staff through an open cell grille. That is an astonishing state of affairs, and a reflection of the collapse of staff morale and lack of training highlighted by the hon. Member for Milton Keynes, South-West. We have heard also about the churn effect, which is a disaster.
The one thing that I have become convinced of during my time as prisons spokesman is that it is possible, in the right conditions, for prisons to deliver purposeful regimes that help rehabilitation. Prison can work, not just in detaining those who are psychopathic or a serious danger, but—if part of a structured programme, both pre-release and post-release—as a very important tool in rehabilitation.
Prisons are not hell holes; they can be constructive, pleasant places, and a secure environment can be a real help to rehabilitation in the right conditions. I know that the Minister will agree that that cannot happen if there is overcrowding. The churn is the classic example of that. Prisoners are taken off programmes and sent to another prison 150 miles away when they are about to take their GCSEs or national vocational qualifications the next day. That is a crazy state of affairs.
During an earlier debate, I agreed with the previous prisons Minister, who said that it was possible to visit a prison that had had a terrible report 12 months previously, and to be impressed that it had completely picked itself up, only to find that, six months later, under pressure from overcrowding, the situation had collapsed again. It is impossible to ensure sustained improvement.
We have heard about travel distances, and the problem of prisoners not being local. It is worth highlighting that there are 700 children in the prison system who are more than 100 miles away from their homes. We have heard a great deal about measures that are being taken, and we have been given local statistics, but I think that I am right in saying that during 2001–02, 363 officers were recruited, while 1,342 officers left the service. That is a measure of the extent of the crisis. The numbers of prison officers are static or going down, and prisoner numbers are going up.
The Government have tried a number of devices to establish community-based punishments. We have been broadly supportive of those, including what we thought were emergency measures on tagging to get some people out of the prison system. However, those provisions will not solve the problem. My impression is that prison numbers are going to continue to rise because people are coming before the courts having committed offences when Ministers have made various public pronouncements about the antisocial nature of those activities. That leads to those people being imprisoned

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because the courts do not consider that there is any adequate alternative that commands public confidence. What are we going to do about that?
I would like to hear from the Minister about the wider issues, and about the immediate crisis. At what point are we going to have to put prisoners into police cells? Are we a week or two away from that, or a few months, or are we going to be able to avoid it completely? What other contingencies have been made for the operational capacity ceiling being reached?
It has been suggested that introducing weekend and evening jails might solve the problem. I do not quite see that. If we built a jail for weekends only, the fact that it was filled at weekends would not mean that it could be filled by alternative prisoners during the week, so I am not sure how that would help to reduce prison numbers. It would be helpful if the Minister could tell us a little about that proposal, as that particular kite has been flown. It would surely require more prison places.
How is the prison building programme progressing? I fully respect the views of the hon. Member for Wellingborough (Mr. Stinchcombe), and I sympathise with many of the points that he made. We should be trying to reduce the prison population, but the reality is that under the Criminal Justice Bill and according to the Halliday report, prison numbers will increase by 8,000 or 9,000. That is according to Halliday; the Government think that that number will be a little lower. We have been stacking more and more people into the system, which might have been all right if we had had a system that could take them.
I have grave concerns, especially as custody plus and custody minus are not going to come into operation for some time—it would be interesting if the Minister could say when they will do so. When the Criminal Justice Bill becomes law, there will be a restriction on passing sentences of less than 12 months imprisonment, with the consequence that during the initial term agreed by the Government, more people will be sentenced for longer terms.
I apologise for the brevity of my remarks; I would have liked to expand them further, but I want to give the Minister a chance to reply. He has my sympathy; I wish him well in his job, and he will always have our constructive support. This issue should not be party political, and I do not intend to make it so, but the Minister has a serious problem on his hands. I am grateful to my hon. Friend the Member for Isle of Wight for highlighting that.
10.50 am
The Parliamentary Under-Secretary of State for the Home Department(Paul Goggins): I join other hon. Members in congratulating the hon. Member for Isle of Wight (Mr. Turner) on obtaining this important debate. I agree with my hon. Friend the Member for Tooting (Mr. Cox): these issues are debated far too infrequently, and it is important that we should discuss the conditions in prison and the pressures that we face. I was grateful to the hon. Member for Isle of Wight for what he said about his hopes for my future. I should point out to him that I have survived at least one reshuffle, even though I have been in the job for only a few weeks.
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It was clear from the hon. Gentleman's speech that he takes a strong interest in the prisons in his constituency and elsewhere. He spoke powerfully about his concerns for the welfare of prisoners, as did all Members who contributed to the debate. I will try to respond to some of the issues that he raised and to the points made by other hon. Members, although inevitably it will be impossible for me to answer all the questions in the time available. I emphasise that I am keen to engage constructively in debates on these issues, and I will attempt, at least in writing after the debate, to cover every point that has been made and to try to answer every question.
The Government are committed to ensuring that the public are protected from crime and the criminals who commit crimes. Various references have been made to the Criminal Justice Bill. The Government are making it clear that those who commit the most heinous crimes such as murder will face longer prison sentences. It is a popular view that those who commit the most horrendous crimes should face longer prison terms. The hon. Member for Isle of Wight rightly stressed that part of my responsibility relates to rehabilitation and reducing offending, as well as to overseeing those in our prisons.
I want to emphasise the tremendous work that is being done in prisons, albeit in the face of various pressures. That work includes offending behaviour programmes, drug treatment, and education and training. I can tell hon. Members that people in prison obtained 32,398 level 1 and 2 basic skills qualifications last year. That represents one in 10 of all qualifications obtained in the country, which is a great tribute to the work done by people in the Prison Service. Increasingly, we need to prepare prisoners for their release by making them ready for work. Jobcentre Plus is doing a great deal in that regard.
The hon. Member for Beaconsfield (Mr. Grieve) mentioned some of our recent debates on the home detention curfew, which is proving to be a great success in reintegrating and rehabilitating prisoners. The maximum period is now four and a half months, which will reduce the number of people in prison. At the moment, about 3,000 people are on home detention curfews at any one time who would otherwise be in prison. That number will increase. The home detention curfew will ensure that their re-entry into society is more successful.
The hon. Gentleman also asked me about the current prison population. We heard various estimates of that figure, but I regret to tell the House that each of them was an undercount, rather than an overcount. As of this morning, the prison population stands at 73,807. The hon. Gentleman asked what the total uncrowded capacity was. That currently stands at 66,144. The total useable operational capacity in the Prison Service is 74,436. Not all those places can be used, of course, because they might be in the wrong part of the estate or in the wrong part of the country.
There is no hiding from the fact that we are under great pressure in regard to numbers. Last year, police cells had to be used to accommodate additional prisoners, and we may not be very far away from having to do that again. Operation Safeguard may soon be necessary, but I cannot give the hon. Gentleman a

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definite date. Obviously, none of us wants prisoners to be held in police cells. They are not the appropriate place, and precious police resources are diverted away from safeguarding our communities and into safeguarding prisoners, which none of us wants.
The hon. Member for Isle of Wight referred to the three prisons on the island. Although he highlighted some of the difficulties at Parkhurst, I think that he would agree that, on the whole, the performance and quality of those prisons is good. Albany is a four-star prison, Camp Hill will soon be a four-star prison and Parkhurst, although it has been criticised, is also making progress. He also raised a number of issues about staffing, and mentioned a time, some months ago, when there was a need to recruit additional staff. I am happy to tell him that there has been a big local recruitment campaign—I am sure that he is aware of that—and that all officer vacancies were filled as of last week. Some senior positions remain unfilled, but most of the officer positions are filled.
The hon. Gentleman and other hon. Members also raised the issue of health care. It might interest hon. Members to know that, when I leave this debate, I am going to a Prison Health Development Network conference. The network facilitates the transfer of health provision in our prisons from the Prison Service to the national health service. The process began in April and will be completed in 2006. Responsibility and funding will be transferred to primary care trusts. The transfer will mean a third more money going into health. Already, additional staff are being recruited to help to deal with the considerable mental health problems that exist in our prisons.
I am pleased to say that there is a good relationship between the prisons and the primary care trusts on the Isle of Wight. Recently, they jointly commissioned research into the mental health needs of prisoners, and the results are imminent. I am also pleased to confirm that £5 million of capital investment has been set aside to provide a new health care centre at Parkhurst. I am sure that that will be of interest the hon. Gentleman.
The hon. Gentleman mentioned escort contracts. Obviously, the difficulties that he outlined about prisoners arriving late are symptomatic of the overcrowding that he mentioned. I can confirm that, when prisoners are received in the evening, they will routinely be seen by health care staff. He also made a number of points about the recent inspection report. I will write more fully to him about that. Clearly, there was a need to make improvements in the segregation unit and there were important indications of the need for improvement in the reception facilities.
The hon. Gentleman mentioned race relations and the over-representation of black and ethnic minority people in prisons. That is a profound issue, not just for the
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prisons in his constituency but throughout the prison system, and it should concern us all. I am pleased to confirm that a new race relations liaison officer has been appointed and is in the post. All complaints are investigated. I am pleased to say, as well, that there are liaison officers on each wing of the prison. I would be happy to send the hon. Gentleman a copy of the improvement plan. I should warn him that it keeps changing with the additional improvements, but I am sure that he will find things of interest in it.
My hon. Friend the Member for Tooting talked about the importance of the independent monitoring board. When I visited Wandsworth recently, I was able to meet the chair of the board. I strongly agree with what was said about the role that volunteers play. That is a real example of civil society engaging with the criminal justice system. I promise that I will read the reports and that the independent monitoring boards will get a more timely response from Ministers than perhaps has been the case in the past. The boards' role is extremely important.
I am pleased to hear that my hon. Friend the Member for Wellingborough (Mr. Stinchcombe) is a trustee of the Prison Reform Trust. Its report makes an important contribution to the debate, and I hope that it will aid growing consensus on the issues. Clearly, prisons are under pressure, and there must be growing consensus between politicians and the public on sentences and on how we should move forward.
Mr. Grieve: Will the Minister give way?
Paul Goggins: I have only seconds left.
The hon. Member for Westbury (Dr. Murrison) raised a number of issues. I still cannot answer the questions about the response time to heart attacks and the number of prison visitors. I shall write to him when I have that information. I can tell him, however, that the number of days lost per person because of sickness has fallen from 16.4 to 13.7. That is one question that I can answer, and I hope that he will be encouraged by that.
Clearly, our prison system faces major pressures. Several hon. Members mentioned the need to develop alternatives to prison, and I am concerned about the large number of people who are in prison for six months or less—
Mr. Deputy Speaker: Order. Time is up and we must now move to the next debate, which offers a very rare experience. I am not sure how often the leader of a major political party applies for, and succeeds in getting, an Adjournment debate, but that has been achieved. The next debate, which has been initiated by the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), perhaps highlights the importance of constituency duties for all Members of Parliament.

Special Needs (Waltham Forest)
11 am
Mr. Iain Duncan Smith: This is indeed a unique experience. It is unique for me, because I believe that I have made only one small intervention in this Chamber since its initiation. Essentially, I am a new boy, so I seek your tolerance, Mr. Deputy Speaker, during my prolonged intervention this morning.
I thank the Minister for Children for being here today. The subject of the debate, while not directly a party political issue, brings into question the Government's attitude to special needs. I hope that she will be able to respond to some very serious questions that the consultation process in Waltham Forest has raised.
I begin by declaring an interest. I am a trustee of a superb special needs school in my constituency called Whitefield, which, while originally part of the consultation process, is not directly involved. It is through that that I have come to take a very special interest in such schools.
The schools that are directly affected by Waltham Forest council's drive on special needs schools are Belmont Park, Brookfield House, Hawkswood, Joseph Clarke, William Morris and Whitefield, which I mentioned earlier. The timelines are very simple. I shall not go into details, as I am sure that the Minister has them already to hand. The first report from the council was, I believe, on 17 December 2002, at which time the consultation process was, essentially, mooted. A consultation process was set out, and I understand that it is finally due to conclude some time in the middle of September this year.
I have questions about whether the consultation process is really as open and fair as it should be or whether the council and the education action forum have already reached a conclusion and are simply going through the motions. Three reasons were given for considering whether special needs education should be reordered, with the strong possibility of closure of one or more schools that deliver such education in the borough. The first reason was the Government's position on the national standards established in the Special Educational Needs and Disability Act 2001. The second had to do with meeting the inclusion standards of the Department for Education and Skills, Ofsted and the Audit Commission, and the third was the borough's own policy on social inclusion.
Let me discuss my concerns about the consultation process by dealing with the Government's position on the matter and what the borough is essentially saying about its needs. The consultation has not been as fair and as open as the council would have us believe. It received only a small number of returns on the original consultation that was sent out. I believe that more than 15,000 were sent out but not more than 1,000 were returned.
In the meantime, there was a phenomenal reaction not only from people who have children in the schools, but most remarkably, from people who live in the borough but do not have children attending the schools and from people who live way beyond Waltham Forest
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but have a direct interest in the issue. A number of MPs fit into that category. Indeed, I think that the Minister's own constituency is affected. I believe that a petition of just under 30,000 signatures was presented to the council and that more are arriving every day. I do not recall such an overwhelming passion being declared quite so clearly and openly to the council in such a short time. Sadly, the council does not necessarily seem to have paid much attention. I shall return to that matter in a moment.
One problem with the consultation process is the fact that the costs of the integration have not been fully explained. We always hear about the savings to be made from closing a special needs school, but we do not see in detail how much it will cost to integrate children with serious physical or learning disabilities into mainstream schools. That is critical. Nowhere in the document have I seen a statement of such clarity that it would allow us to make a judgment.
I should like to refer to a letter from Marcia Gibbs, a special educational needs adviser at the Department for Education and Skills, in response to Joseph Clarke school. She makes interesting points. First, she states:
"Waltham Forest local authority would have to provide details of plans to support children currently attending Joseph Clarke School, including those pupils from other authorities, should it decide to make proposals for change."
However, none of those is included in the consultation, so how are we to make a decision about how effective the process will be? That is missing. Marcia Gibbs goes on to say:
"The right of parents to make a positive choice and express a preference for a special school place will be fully maintained."
At the same time, however, she restates the Government's determined advocacy of inclusion.
My concern is that there seem to be conflicting interests even within that letter. It suggests that although the Government are determined about inclusion, there is not a clear statement to local authorities and education authorities on exactly what they need to do if they are to go down the route of the consultation process. There is only a general statement of what is required. I want to return to that issue, because I believe that it will cause the greatest problem.
I understand that in the early part of June, the council announced, almost out of nowhere, that it was taking Brookfield school out of the process and that it was no longer under threat of closure. It said that that was because the costs of integrating those children with serious physical disabilities would be too great, but at no stage have we seen those costs. What are the costs and what calculations has the council made for schools such as Joseph Clarke or Hawkswood? Hawkswood has children with severe hearing disabilities and Joseph Clarke has children with visual impairment. My point is that at no stage has the local authority indicated anywhere what those costs are and how it has calculated them, but suddenly, out of the blue, it declares that one school is no longer relevant to the process. There is no regard to the costs. That makes us concerned about how the authority managed to arrive at those figures. Why not publish all the figures? Surely there should be guidelines stating that.

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There are questions concerning other aspects relating to the local authority. At no stage in the document or in the discussions has it entertained the idea that perhaps Waltham Forest simply does not transfer the real cost of education to other boroughs and does not reflect the true cost. It does not state what the real cost is and at no stage has it set about trying to calculate it or to say to other boroughs, "Let's meet and discuss whether we can do a little more burden sharing." The authority has talked generally about that, but has not said, "This is the real cost of educating a child at a special needs school in Waltham Forest. You're paying only this much. Is there any chance that we could come to an agreement to share the burden?" At no stage has the authority attempted to do that.
With regard to the consultation process, the document made some stark statements that I do not believe are true. I shall highlight one, although there are others. The consultation document states:
"Although the borough has statemented a similar proportion of young people to other London LEAs, a rather greater proportion is educated in special schools than elsewhere."
The document did not give figures to back up that statement and it is not true. It is not borne out by any evidence that we can find. The percentage of statemented pupils in special schools in Waltham Forest is 42 per cent., the inner London average is 44 per cent. and the outer London average is 42 per cent. Comparing like with like in councils and boroughs that have similar problems, the figure for Hounslow is 41 per cent., Brent 43 per cent., Enfield 47 per cent., Ealing 55 per cent. and Lewisham 56 per cent.
The document is full of statements, without any supporting evidence. No one can understand its rationale. It is almost as though the verdict is given first, followed by the evidence. It seems that minds were made up before entering the consultation process, and I shall come to the reasons why in a moment.
I quote from a letter sent by the head of pupil and student support services in Waltham Forest to a neighbouring borough, the London borough of Newham, which explains what the education authority—with EduAction—is trying to do. It states:
"The transitional arrangements which would form part of the statutory notices have not yet been set out and cannot 'emerge' until after June",
although it indicates that they have already been settled. It becomes clear what is going on from the penultimate paragraph of the letter, which states:
"I would however want to take this opportunity of asking you not to put forward new admissions for the School from this point."
That is before decisions are supposed to have been taken. The borough is leaning on a neighbouring borough by indicating that there will not be a school or schools that can take further children, therefore it would be pointless to send them.
The letter says of the Ofsted report,
"we are driven by a poor LEA OFSTED inspection",
which is not true. In general it is the case, yes, but most of the specific schools have reasonable, if not good,
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Ofsted inspections; only one is subject to special measures. It continues, stating,
"re-organisation would be treated as a test of corporate governance."
The authority's concern is that failure to meet the test by the Department for Education and Skills or by the Ofsted inspectors would lead to further pressure on the borough. It blames the Government and Ofsted for driving it into this position, thus indicating to Newham that the conclusion will be that it intends to shut certain schools.
That explains my concerns about the consultation process. It is clear that the council has already arrived at its conclusions and the consultation process is, in essence, a way of covering that decision. Money is at the heart of it. The council declares itself in difficulties. It has had problems running its education policy. Ofsted was deeply critical of the education authority, and as a result the company called EduAction now runs education in the borough. Throughout, the council is concerned about the money it believes it needs to run education generally, and I want to explain why I have misgivings about it.
The process should be very carefully undertaken if changes are to be made, as those involved are such special children and we cannot risk getting it wrong. There will be a dual effect on education in this and other boroughs, which will affect those pupils who are already being educated in mainstream schools. There has to be a serious rethink about how the process takes place, as once children with real special needs—learning disabilities, visual impairment and hearing impairment—are put into those schools things change dramatically. For example, about 47 per cent. to 50 per cent. of children at Joseph Clarke, a school for the visually impaired, go there because they are scarred by the difficulties they had in mainstream schooling. They are now in that school because they failed to make progress in mainstream schooling and have been hurt and damaged by that; no reference is made to that in the consultation process.
The strength of parental support for such schools is awe-inspiring. The Joseph Clarke school asked parents for their views on the school, whether positive or negative, and 100 per cent. gave a positive response. I know of no other situation in which 100 per cent. of parents would respond to a notice from a school. Everyone knows how difficult it is to get parents to respond to requests from schools, but that is not the case at Joseph Clarke, or at the other special needs schools.
It is important to note that special needs schools provide peripatetic services for the other schools. It is ironic that the lower number of statements in the borough is partly due to the fact that the outreach from those schools allows children to settle in mainstream schools without statements. If that service is removed, they will have to be statemented, and that will place much greater pressure on the mainstream schools. Mainstream schooling would need to be reorganised to meet those children's needs—for example, there would need to be considerable debate on how mainstream schools could meet the Braille requirements of the visually impaired.

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I was talking recently to someone from Hawkswood school, who pointed out that teachers will often walk to the whiteboard—or blackboard, whatever they are using—and talk to the class while writing on the board. If a hearing impaired child is a lip reader, which is not always the case, once they break sight from the teacher, they have no idea what is going on in the class. How many times does a teacher go to the back of a class and explain over the heads of the children what they are looking at on the board at the front? Those are two very simple realities that most mainstream teachers would take for granted, but which they would not be able to do if their classes included hearing impaired children, because teachers must never break sight from a hearing impaired child. Such simple issues have been forgotten in this process. A huge amount of retraining of teachers would be required.
Such examples show that there is a need to rethink this process, both nationally and locally. Dyslexia is arguably the most well known learning disability in schools. However, I have visited many mainstream schools—I am sure the Minister has also done so—that still struggle with the teaching of dyslexic children. Some of those schools are hopeless and others are good—the coverage is patchy. That problem has been known about for years, but we still struggle with it. How will we take children with much greater disabilities into those schools without a serious change in the way that mainstream schools are funded and supported?
I believe that Waltham Forest council should stop and rethink the process. It should reconsider the options and hold an open consultation process, putting all the facts and figures on display, so that a reasoned and rational decision can be made. The way in which the council has behaved—in some cases quite rudely to parents who are concerned about what will happen to their children—has led parents and others living in the borough to lose faith in its ability to deal with the matter sensibly and rationally.
I hope that the Minister will be able to explain some aspects of the matter to me. I do not want to make the issue a party political one, nor do I want special needs to be seen as party political. However, I believe that we need to have a proper, serious national debate about how we deal with children with special needs, and what we do about mainstream schooling. The Government, when they came to power, said that they wanted to move towards inclusion of children with special needs in mainstream schools. Superficially, that is a great idea—we would all want as many of those children as possible to be included in mainstream education. However, the devil lies in the detail of how that is done. How do we do that for children with real difficulties, and how do mainstream schools get funded? Who runs and controls that? The problem if we just have a general push for inclusion, is that cash-strapped local authorities see that as a way of putting up a shield behind which they find money that would otherwise not be there.
Loose statements by the Secretary of State worry me. A few weeks ago he talked about the general funding of local education authorities and his concern that some of the money was not being passed down, although I gather that there has been disagreement with that. One matter on which he discussed a re-think is the way in which local authorities may be retaining that money to spend on capital, special needs or educating pupils in
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outside schools. He went on to say that those decisions had a major impact on the budget of individual schools. I am sure that he was not driving down and trying to say that special needs schools should therefore be closed, but my concern is that cash-strapped local authorities may see that as an opportunity to make savings and to transfer money into mainstream education, without serious consideration of the huge extra costs involved.
How we treat children with special needs speaks volumes about us as a society and as Members of Parliament, and about the Government. It is important to think very carefully before making a major mistake. To see how disabilities are overcome and how those schools operate is not only moving but awe-inspiring and humbling. We owe it to those children, and to their parents and teachers, to think again. Waltham Forest should think again. I hope that the Government will initiate a real debate, and try to prevent councils, as an excuse for saving money, from closing special needs schools because inclusion is the order of the day. [Interruption.]
Mr. Deputy Speaker (Sir Nicholas Winterton): Order. We do not have applause. I call the hon. Member for Epping Forest (Mrs. Laing), who has my permission, and that of the Minister and the initiator of the debate, to intervene very briefly.
11.22 am
Mrs. Eleanor Laing: I support my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) in everything that he has said, first because children from my constituency also attend some of the schools about which he has spoken this morning, and I know how concerned their parents are. Secondly, I have visited many special schools throughout the country in the past year and spoken to hundreds of teachers and parents who share the concerns about the schools in Waltham Forest described by my right hon. Friend. I hope that the Minister will note that the situation that my right hon. Friend so eloquently described there is not an isolated case, but pertains throughout the country. Many special schools are under threat of closure and the parents of pupils and their teachers are most concerned about the Government's policy.
11.23 am
The Minister for Children (Margaret Hodge): I shall have to curtail my response' and I hope that the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) will accept my apologies for that. This is the first time that I can remember a Leader of the Opposition securing a debate on a matter of local interest, and I think that that is really great. We all get our strength and our understanding from our constituencies and the work that we do there. We all have to reflect the interests of our constituents in the House, and that adds value. I genuinely congratulate him on securing the debate and on the role that he plays in education in his constituency, especially as a trustee for Whitefield.
On special needs generally, I totally agree with the right hon. Gentleman that the way we cater for children with special educational needs is the hallmark of

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whether our education system is appropriate and really provides an inclusive education in which every child can develop their full potential. It is a key part of the educational process. I was engaged in discussions running up to the Special Educational Needs and Disability Act 2001, which put a greater emphasis on inclusion in mainstream education. I talked extensively with many groups about the interests of children. We have tried to provide the balance, which is difficult, and ensure individual choice for parents and children to find the environment that will enable the children to develop their full potential while providing a real choice of mainstream inclusion for those parents who want it.
As this is a non-party political point, I am sure that the right hon. Gentleman would agree that such a choice has often been denied to young children. That choice informs our policy, with an emphasis that where a family and child want mainstream education, it should be available.
I should tell the hon. Member for Epping Forest (Mrs. Laing) that although it may feel as if we are in the business of closing more and more special schools, the statistics tell another story. From 1992 to 1997, the last period in office of the previous Government, 103 special schools were closed. In 1997 to 2002, 73 were closed. There has been no change in policy direction, although I accept that the 2001 Act included an emphasis on the right of children to have mainstream education if they want.
Such decisions are important and emotive to the parents and children involved, and I always commend complete openness of information, so that people can participate effectively. Within my powers, which are limited as the right hon. Gentleman knows, I will urge the council to consult. However, I have just pulled out figures from a briefing document, and they give detailed financial information on the schools that he mentioned and that are being considered.
I want also to make another point about Waltham Forest, on which both the right hon. Gentleman and we should reflect. When children can be properly educated in a mainstream setting to the satisfaction of the parents and the child, that is probably good for their ability to be included properly in society as adults. It is striking that the statistics show that there is a greater propensity for children to be in special schools in Waltham Forest than elsewhere. My statistics show that 1.8 per cent. of the pupil roll in Waltham Forest attends special schools
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compared with 1 per cent. elsewhere, and the right hon. Gentleman needs to reflect on that as, nationally, it stands out as a difference.
The right hon. Gentleman will know that the most recent Ofsted report on special educational needs in the borough said that the authority should secure a radical improvement in communication with schools and parents as soon as possible. It sounds to me as if more work has to be done on that point. Ofsted also said that there should he an improvement in the quality of management of SEN in the borough, and I gather that some steps have been taken. A new unit has been set up and is open today, and I hope that the right hon. Gentleman will agree that that is good news. Ofsted also said that there should be an improvement in the quality of strategic management of special educational needs in the borough and that better value for money should be achieved.
My understanding is that no decision has been taken and that a range of options is being considered by the various bodies that have the authority in the borough. A letter that was sent to the chair of governors of Joseph Clarke school set out seven different options and all are being taken seriously in the borough. I urge all the parents who have an interest to get engaged in the discussion of those options, which will help us to meet the needs of the children and parents and the broader needs of the borough. We have to provide more opportunities for children with special needs to be educated and secure better value for the money that is invested in the borough so that a disproportionate amount is not invested in educating, for example, children who come from out-of-borough placements. One answer may be simply to increase the money charged for out-of-borough placements and I believe that that is one of the options.
As the right hon. Gentleman will know, the Department has no authority in this matter. If it cannot be settled locally to the satisfaction of all bodies, it goes to the independent adjudicator. I hope that he applauds that system. We must continue to engage in the debate on how to respond to the individual needs of every child in every family through the special educational needs system. We are producing a further action programme in the autumn, and I hope that it will give us the basis for continuing engagement. I am delighted that we can have such debates outside the party political arena, because we all share the common interest of the best start for all children, particularly those with special needs.
11.30 am
Sitting suspended until Two o'clock.

Airport Services (Midlands)
2 pm
Mr. Deputy Speaker (Sir Nicholas Winterton): I make a plea from the Chair, as it appears that a large number of Members want to participate in the debate. If each and every Member is disciplined in their comments and as succinct as possible, I hope to get all of them in to speak in this debate, which is clearly very important to the constituencies in the area.
Andy King: Thank you, Mr. Deputy Speaker. I am pleased to have the opportunity to raise this afternoon the important issue of airport development in the midlands. First, I welcome my hon. Friend the Member for Harrow, East (Mr. McNulty) to his new position as Under-Secretary of State for Transport. One has to crawl to the boss. I am sure that, given the importance that Members of Parliament attach to transport, he will be a familiar sight in this Chamber during the coming weeks and months. I note that my debate is one of four during the next few days to which he and his ministerial colleagues will respond. I wish him all the very best.
I pay tribute to Warwickshire county council, other organisations and my constituents for working with me to promote the interests of Rugby, Warwickshire and the midlands as a whole. I thank my parliamentary colleagues across the whole of the midlands for their welcome support. Unfortunately, my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) has had to attend an important meeting in his constituency today. He wishes us all the best and gives us his full support this afternoon. I see that representatives of Warwickshire county council are present, too. The fact that the council has sent a cross-party delegation to London this afternoon on the day of its full council meeting is a clear indication of the importance that it attaches to airport development, which is felt across the whole of Warwickshire.
As many hon. Members know, yesterday was the closing date for comments on the Government's consultation exercise on the future of air transport, so this debate is timely and relevant. The Government first launched the consultation in July last year and published a series of detailed consultation documents containing a wealth of information, the accuracy of which has generated considerable debate in the communities affected. I am sure that those concerns have been brought to the Minister's attention throughout the exercise.
I shall not dwell on the fact that the consultation arrangements have been the subject of more than a little controversy. Furthermore, the extension of the closing date for comments has served to prolong the distressing effect of the proposals on the midlands. Suffice it to say that the consultation has prompted a huge amount of interest, and I speak from the experience of having a postbag that has been overflowing throughout the past 11 months. I understand that the Minister, even in the very short time for which he has been in his current post, has felt the effect of the volume of correspondence that the consultation has generated against the option of the airport in the midlands. I have also followed with interest the inquiry carried out by the Select Committee
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on Transport under the excellent chairmanship of my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). However, I hope that we can today concentrate on issues that affect the midlands.
I read the Government's consultation document relating to the midlands with great care and interest. It rightly acknowledges the contributions made by the aviation sector to the economy and general prosperity of the United Kingdom.
"Birmingham International Airport is the very cornerstone of development of air services for the West Midlands".
Those are not my words, but those of the Birmingham chamber of commerce and industry in its response to the consultation exercise. I am convinced that with sensible and sensitive expansion, Birmingham airport would be fully able to cope with the projected demand—and, importantly, in a way that is consistent with other economic and planning objectives.
East Midlands airport's existing and continuing role as a freight airport is important.
Mr. John Taylor: I am grateful to the hon. Gentleman for the sensitive way in which he has handled the potential impact of Birmingham airport on my constituents. May I say to him in a spirit of reciprocal good will that the people whom I am representing do not want an airport in his constituency in Warwickshire either? We support him and his constituents; in the vernacular, we are not dumping on them.
Andy King: I fully appreciate that support, which has been apparent throughout this painful time.
These two important airports form the basis of a sensible and sustainable strategy for aviation in the midlands and for the United Kingdom economy as a whole.
Mr. Andy Reed: East Midlands airport is in the constituency next door to mine, and the planes continually fly over my house. Is my hon. Friend aware of the specific problem with night flights? There are currently no restrictions on the number of night flights, and although we accept that there has been growth at East Midlands airport, that point must be borne in mind when the Minister develops the plans.
Andy King: I thank my hon. Friend for that point. The issue is, of course, also of great concern to my constituents, who are close to a freight airport in Coventry. There is the potential threat of ever-increasing night flights. The threat is real and we fully understand it. I hope that the Minister bears it in mind and will work with the industry and Parliament to resolve these concerns for all the communities across the United Kingdom affected by freight.
Mr. Bill Olner: You are no stranger to matters Warwickshire, Mr. Deputy Speaker, because you served on Warwickshire county council for a number of years. I congratulate my hon. Friend on not only securing today's debate but on speaking to many people in the Rugby area about the proposed airport, which would affect my constituency. I say to the Minister that the proposed airport would affect every midlands MP because it would drastically affect East

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Midlands and Birmingham international airports. Not only those airports—I hope that my hon. Friend touches on this later in his speech—but the surrounding infrastructure would be affected.
Andy King: I fully appreciate the comments made by my hon. Friend, with whom I have relentlessly discussed these matters. I will touch on the issues that he raised later in my speech.
It makes much more sense from a sustainable development point of view to meet the demand for air travel in the regions, where it arises, instead of exporting it elsewhere. Currently, around 50 per cent. of passengers who live in the midlands travel outside the region to catch a flight. The midlands must have sufficient capacity in its own right. It was therefore with some astonishment that I realised the full impact of what the Government are saying in the consultation document, which is that if a new airport was built at Rugby, Birmingham international airport would close.
I appreciate that the consultation has just ended and that the many thousands of representations must be analysed and assessed, but I should be interested to know how many representations the Minister and his Department have received about Rugby, and how many of those supported building an international airport there.
It would not have taken him very long to count those letters and consultation forms.
I am conscious that the consultation has only just closed, but I wonder whether the Minister could clarify some important issues in his closing remarks. Would he tell us how the closure of an existing, successful international airport could be a solution to aviation requirements for the future of the midlands? It strikes me as somewhat bizarre to go to all the trouble of a lengthy planning exercise, followed by the disruption and cost of building a new airport just a few miles down the road from an established, successful international airport.
Once the new airport is built, there will be further uncertainty. There will be disruption and blight as the existing airport is demolished, terminals and hangars dismantled and runways dug up. That will leave a vast tract of land that will take many years to redevelop, leading to further uncertainty and blight during the lengthy planning process. Does that make any sense for the economy of the midlands, or for the local people?
Another aspect that puzzles me is that the Government seem to suggest seriously the closure of one airport in favour of a brand new one. The only other new airport proposed in the consultation is at Cliffe, but there is no suggestion that the development there would mean the closure of London City airport, for example.
Perhaps of more immediate concern is the effect that the consultation and the uncertainty have had on the area close to the proposed development sites. That is an all-too-common theme in a large proportion of the very well-informed representations of my constituents, and those in the surrounding area. Representations have been made to the Secretary of State from the Strategic Airport Co-ordinating Group, the Church Lawford and King's Newnham Action Group and, of course,
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Warwickshire county council, which have all played a major role in engaging the community in this important debate.
It goes without saying that no one wants any development in his or her back yard. We can all recognise the anguish felt when changes are proposed that might adversely affect our quality of life. The people of Rugby and Warwickshire have the greatest sympathy for those living near Heathrow, Stansted and Gatwick who are very concerned indeed that any additional runways or further development could have a detrimental effect on their local environment. I know that the Minister—and indeed the Secretary of State—is acutely aware of the need to ensure that such impacts are treated with care and sensitivity, and that decisions are taken to minimise the disruption in people's daily lives.
It is important to stress that none of my constituents chose to live near an international airport, and until last summer no one was aware that there was any prospect of there ever being one. The threat of other infrastructure developments—those that come to mind immediately are the M25, the channel tunnel and some trunk road developments in London was on the cards for decades before they came to fruition, and the effects of the uncertainty on the local areas were manifested in low property prices, run-down neighbourhoods, poor residential facilities and a lack of investment in the area. I would contend that there is not a single town in this country that has not been the subject of decades of blight, in one form or another, and where there is a proposed development, the effect of that blight is all too apparent.
We must not overlook the effect of the economic blight that would be caused by the closure of Birmingham international airport. I am sure that that point is not lost on the Minister, bearing in mind his planning responsibilities during his time at the Office of the Deputy Prime Minister. To develop an airport at Rugby would fundamentally shift the centre of economic gravity in the west midlands. The continuing uncertainty around the future of Birmingham international airport could put businesses off locating or investing in the area, thereby hindering much-needed regeneration for deprived areas.
Despite some of its social difficulties, Birmingham has come a long way forward in recent years, but that hard work would be in vain if business goes elsewhere. There is also the question of the regional planning guidance, which would need to be ripped up and started again if the development at Rugby were to go ahead.
I would also gently suggest to the Minister that the international reputation and image of Birmingham—Britain's second city—stands to be irrevocably damaged by the prospect of its international airport being closed down. I believe that it would be the cause of great embarrassment were this Government to embark on such a bizarre enterprise. I do not know of any other second city in the developed world that does not have its own international airport, or has had that airport closed. I understand that today, as we speak, Mr. Michael Cashman, a West Midlands Member of the European Parliament, is raising that very issue there.
One vital aspect of the equation, which I have not yet mentioned, is cost. The Government have said that any future airport development would have to be

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undertaken by the private sector. According to the consultation document for the midlands, the cost of building a new airport at Rugby would be around £7 billion. I repeat: £7 billion. The expansion of Birmingham international, on the other hand, would cost approximately £1.8 billion. Given the difficulty that the Government have in delivering major transport infrastructure projects on time and to budget, is the private sector really likely to want to stump up £7 billion—and no doubt several billion more on top of that—for a brand new airport that no one wants?
The whole of the midlands, from the regional development agency and the regional assembly all the way down to the smallest parish council, has made clear its view.
Mr. Dennis Turner: To that long list of objectors to the proposal for Rugby airport, I think that my hon. Friend could add the west midlands group of Labour MPs, 42 in number, which took an unprecedented step in voting unanimously to recommend to the Minister that the idea of a new airport at Rugby be dropped from any consideration and from further Government thinking.
Andy King: I thank my hon. Friend for reminding me of that important debate that the group had.
The midlands has made clear its view that the long-term economic and environmental well-being of the midlands and the United Kingdom as a whole is best served by the retention of Birmingham and East Midlands airports. Wiser and better use of existing airports, together with the development of regional airports, is the only sensible way forward. The proposal for a new Rugby airport and the associated closure of Birmingham international airport is an option that shows signs of having been designed to provide an escape route for a projected growth in demand in the south-east. I hope that I am wrong, and that the Government will not use the midlands as a solution to the problems of the south-east. Decisions in the south-east will be hard, there is no getting away from that, but for the sake of the UK's standing in the global economy, it is imperative that those decisions are taken, and quickly.
I look forward to the forthcoming White Paper, which I hope the Minister can confirm is to be published before the end of this year. Before then, I hope that the Government will be able to bring some closure to the concerns of the midlands, rule out an airport at Rugby and retain Birmingham international airport. Making an early decision to rule out Rugby at this stage would not be unprecedented.
The Minister might not admit it, but I think that it is clear that the Government have all but ruled out an airport at Cliffe on safety grounds, because of the potential seriousness of bird strike. We in the midlands, too, have a significant problem with bird strike. At the end of the site of the proposed runways for Rugby airport is a large reservoir where, each winter, 40,000 black-headed gulls roost. The situation is equally dangerous as that at Cliffe, so why has bird strike at Rugby not had an equally full, detailed examination? I do not expect the Minister to be in a position to give me this assurance this afternoon, but the development of a
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major new international airport, which the Government's consultation shows has no support whatever, must be a dead duck.
Having got that off my chest, I will give other hon. Members a chance to speak. I very much appreciate the tremendous attendance in this debate. The Minister and his officials have a considerable amount of work to do before the White Paper is produced, and I do not envy them the task of wading through the responses to the consultation. However, I hope that the Minister will be able to clarify some of the points that have been raised this afternoon.
Several hon. Members rose—
Mr. Deputy Speaker:Order. I hope that this is the last time that I will need to get to my feet this afternoon. I usually encourage, or welcome, interventions in a debate, but I hope that those who wish to intervene are doing so because they do not wish to catch my eye and make a speech. If hon. Members keep their remarks to five minutes, everyone will be able to speak, and it will give Front-Bench spokesmen adequate time to reply.
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Mr. John Taylor: In view of your request that hon. Members speak for five minutes, Mr. Deputy Speaker, I do not propose to take interventions. I hope that hon. Members will not take that badly.
When the Government issued their initial airport strategy consultation document in July last year, it was based on a presumption that they could suppress or contain civil aviation demand in the south-east of England—broadly, that meant at Heathrow, Gatwick and Stansted. Whether it is grown-up economics in a free market to try to suppress demand in one place and predict its consequences elsewhere is open to doubt, but that is what they did.
In the midlands regional consultation document, two consequential considerations were offered that were clearly barmy: a new international airport amid Warwickshire villages near Rugby, and the suggestion that Birmingham airport should close. An immense amount of money has recently been spent by the Highways Agency on the cloverleaf roadway connections between the A45 Birmingham-Coventry roadway and the Birmingham airport campus, and even greater sums have been spent on the overhead railway interconnector between Birmingham International railway station and Birmingham airport. Any consideration that that airport should close ought to result in someone going to prison or to a madhouse. I recall from my legal training that it was said that if a material witness, in this case the Government, can be so wrong or perverse about one thing, how can they be trusted with the rest?
I am unashamedly here to speak for the people of my constituency, especially those in the eastern part of it, in villages such as Catherine de Barnes. Visitors from outside the UK want to go to the south-east, to London, and that is the truth of the matter. My American friends who visit Britain want to arrive in London, although I realise that that is disobliging of them.

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Since the Gatwick decision, the presumption of suppressed demand in the south-east is out of the window, and the Government's latest consultation on the south-east even admits the possibility of one more runway at Heathrow and two more at Gatwick.
The original premise on which the midlands consultation was based-namely, that demand in the south-east would have been suppressed—has gone. It will not have been suppressed. A second runway at Birmingham is wholly unnecessary; it will be ruinous to people in the east of my constituency, damaging to the environment and economically unnecessary.
Birmingham airport is a success story; it does not need to take overflow from the south-east, as it can make the most of its substantial facilities. It has been argued that the runway could be extended, and I would not stand in the way of that proposal, but I am an opponent of a second runway.
Last autumn, I flew from Birmingham to Chicago and back. Chicago is not on the eastern seaboard of America, but in the midwest. I flew there in a fully-laden plane, which used about half the length of the runway at Birmingham airport. Birmingham can make the most of what it has, within its existing perimeter, particularly now that there is no longer the presumption of suppressed demand in the south-east.
Meanwhile, there is a serious blight on people who are waiting to find out what will happen. The people in the east of Solihull have now waited a year, not knowing whether they can sell their properties. I urge the Minister to give us an answer as soon as he reasonably can, once the matter has been properly thought out. The property blight is something that people did not expect or want, and it is profoundly uncomfortable for them.
I am mistrustful of statistical linear extrapolation—taking a set of figures, such as that on the graph, and continuing the dotted line. In one of my public meetings, one of my constituents walked the length of the graph, extended the line up to the ceiling, and said, "If it goes on like this, there will be nobody left on the ground." That is the sort of bogus thinking behind the airport consultation.
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Mr. Jim Cunningham: I thank my hon. Friend the Member for Rugby and Kenilworth (Andy King) for securing the debate. I am sure that my hon. Friend the Member for Coventry, North-West (Mr. Robinson) will support me in some of what I am about to say.
Although we fully support, through the west midlands group, the opposition to the new airport at Rugby, one of the great fears of people in Coventry is that if the Rugby proposal fails, the fall-back position could be Coventry airport. If that were to happen, it would have the same effect on the area as that outlined by my hon. Friend the Member for Rugby and Kenilworth: environmental impact, blight, traffic problems and noise pollution.
About eight or nine years ago, there was a serious air crash in the Willenhall area of my constituency. I remember the well-attended public meetings, and was
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struck by the impact that that event had on the community at the time and ever since. The flight path into Coventry airport is not very high above the houses, when observed from the main road. The noise is tremendous, and consequently there is noise pollution. Some years ago, I tabled a Bill in the House of Commons that would have dealt with the noise pollution and safety aspects in the area, but it was defeated.
There is a proposal for Coventry airport to process 1 million passengers a year. The owners say that they do not need to extend the runway, but they require a new terminal. I find it difficult to believe that the passenger numbers can be increased to 1 million a year without a runway extension, because that would be needed for the additional aircraft. To be fair to the owners, they conducted a number of public meetings in my constituency to present their proposals, which my hon. Friend the Member for Coventry, North-West and I attended.
There have been massive objections in Coventry to any further extension of Coventry airport, and great support for my hon. Friend the Member for Rugby and Kenilworth in his objection to the proposal for Rugby airport. However, the owners of Coventry airport now say that if they do not get their way about the extension, they want to extend night flights. I hope that the Minister will take account of the threats that have been bandied about when the public in Coventry expressed their view on the development of Coventry airport.
I know that we are short of time, but I would like to reiterate my support for my hon. Friend the Member for Rugby and Kenilworth. I hope that the Minister will take account of hon. Members' comments, because the issue is serious. In addition to the tremendous costs and social disruption that would occur if the Rugby proposals went ahead or Coventry were further developed, one of the nicest parts of Britain would be destroyed. If the proposals were to go ahead, it would be an act of vandalism. Frankly, it would be a disgrace to allow that. I hope that the Minister will take seriously what we have to say, and will reject any proposal affecting the midlands.
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Sir Patrick Cormack: I congratulate the hon. Member for Rugby and Kenilworth (Andy King) on initiating the debate, and associate myself entirely with what he said. He has my total support, as does my hon. Friend the Member for Solihull (Mr. Taylor), who spoke movingly on behalf of his constituents.
I want to talk about another proposal, and I am grateful to the hon. Member for Rugby and Kenilworth for making this a debate not just on Rugby, but on the west midlands and airport needs. I have been in the House for just over 33 years, and I have never had so much mail as I have had about the proposal to develop a major airport from the old Halfpenny Green second world war airfield. I have received more than 11,000 letters in the past nine weeks, and many more letters before we started counting. I have addressed meetings attended by hundreds of people. Indeed, the hon. Members for Ludlow (Matthew Green) and for Stourbridge (Ms Shipley)—for these purposes, I may

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call them my hon. Friends—and I addressed a meeting attended by some 800 people in one village in my constituency a few weeks ago.
There is an enormous upsurge of opposition to the proposal that the Halfpenny Green airfield, known and loved from the second world war, should be developed into a major international airport so that people can take cheap flights to the sun. It would destroy a glorious part of England. I will not enter into any competition with the hon. Member for Coventry, South (Mr. Cunningham) about the glories of his part of the country, but if he comes to South Staffordshire and the Shropshire border, he will find another part of England at least as lovely. He will find a part of England served by country lanes, where there is nothing of the infrastructure that a great international airport needs. The acres of tarmac for car parks, the roads that would have to be widened and all the other facilities that would have to be created would do one thing: devastate and destroy for ever the lovely part of England that we have the honour to represent and that many people from throughout the west midlands come to enjoy at weekends.
That is why I already have the support not only of the two hon. Members whom I mentioned, but of my hon. Friends the Members for Bromsgrove (Miss Kirkbride) and for Mid-Worcestershire (Mr. Lull), and the hon. Members for Wyre Forest (Dr. Taylor), for Wolverhampton, South-West (Rob Marris), for Halesowen and Rowley Regis (Sylvia Heal), for Cannock Chase (Tony Wright) and for Dudley, South (Mr. Pearson). That is to name only some who asked to be put on the list of supporters.
Ours is a great country, and it is right that any great country should have proper airport facilities. Those facilities should exist so that people can discharge their business duties and, yes, go on holiday, but not at the expense of the finite land that makes up our beautiful countryside. Although I understand what has been said about what my hon. Friend the Member for Solihull rightly called this barmy idea, I urge the Minister not necessarily to read each of the 11,000 letters that I have been sent and the other 11,000 letters sent to my hon. Friends and others, but at least to recognise the overwhelming strength of local feeling and opinion. I have received only six letters in favour of the proposal, compared with the 11,000-plus against.
I ask the Minister to come to see what the area is like—I would be delighted to provide him with a meal and, if necessary, a bed for the night. He should be able to understand what is making local people so agitated and annoyed, and whatever he does, he should not make a judgment without coming to visit. I suggest that if he looks at Halfpenny Green airfield, he will recognise immediately that no site in the United Kingdom is less suited to providing extra airport facilities for the new and remarkable city of Wolverhampton. I am delighted that two Wolverhampton Members are present, and that their town now has city status, but the airfield in question is not particularly near Wolverhampton and would not provide what is required.
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Whatever else is needed in the west midlands, an airport on Halfpenny Green is not it.
Mr. Dennis Turner: I concur with what the hon. Gentleman said about letters of protest, because I have received many letters telling me that people in my constituency do not want that development.
If there is a case for any expansion or development on the west side of Wolverhampton, and accepting that Halfpenny Green is not the choice, is Cosford a possibility that we could jointly put to the Department for Transport and the Ministry of Defence to see whether that could be developed?
Sir Patrick Cormack: I am sorry to respond churlishly to such a seductive proposal, but my answer is no, I do not think so. Although Cosford might be preferable, neither site is suitable for a major international airport. When it achieved 1 million passengers, the process would continue inexorably. There was once a lovely little village called Elmdon, but there is now a great international airport there. Let it stay there and serve people as it does—
Miss Julie Kirkbride: For the record, I would like my hon. Friend to include the residents of Hagley and Belbroughton, who share his strong opinions about the development of Halfpenny Green airport.
Sir Patrick Cormack: I am delighted to do so. On that note, conscious of your admonition, Mr. Deputy Speaker, and being within the five minutes allowed, I conclude my comments.
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Mr. Geoffrey Robinson: I congratulate my hon. Friend the Member for Rugby and Kenilworth (Andy King) on initiating this debate, and the Minister on his new appointment. I am pleased to see the councillors from Warwickshire and take this opportunity of assuring them that the desecration of that lovely central area of England with Church Lawford and other beautiful villages is as utterly unacceptable to us as to them. I say the same to my hon. Friend the Member for Cannock Chase (Tony Wright). There is no case for it.
I can say categorically that in all my years in the House I have never come across a barmier proposal than that which would turn the whole area around Rugby into an airport. At the same time as doing that, as my hon. Friend the Member for Rugby and Kenilworth said, at a cost of £7.8 billion, Birmingham airport would be pulled down. Have those people lost their minds? Are they so careless of money that they do not know what they are doing? We have had report after report from enormously expensive consultants, but we are prepared to consider something to which no one in their right mind would give a moment's thought.
My hon. Friend the Minister may not have the figures to hand, but I would like to know—the information should be a matter of public record, but if it is I have missed it—exactly how many millions of pounds were spent on those stupid reports. They are serious and professionally compiled reports and show the enormous

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scale of the work that would be involved. The £7.8 billion plus another billion or so for the losses associated with pulling down Birmingham airport takes us to £10 billion. Wherever anyone thinks those resources will come from, I can assure them that they will not come from my good friend in No. 11 Downing street.
It was a good idea to have a planning exercise—I believe that it was called the regional air services coordination study, or RASCO—but it has now finished and I hope that we are about to look at the sensible alternatives. Two—Rugby and South Staffordshire—are likely to disappear. I would have thought that as a country we should consider providing for the medium-term growth strategy that the consultation outlined. It referred to no growth, medium growth and high growth. We do not want to turn this country into a permanent airfield where there is never a moment's rest because of aircraft and fuel spill-outs, but there will be growth, and we must plan sensibly to meet that growth. We can do that, and I hope that the policy that evolves from the consultation will be for growth in the medium range and will provide for that on a balanced incremental basis, regionally and at existing airports.
We could do that without the desecration of countryside and the destruction of villages. The programme is entirely feasible—the more so now that the constraints in relation to Gatwick have been removed.
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Richard Burden: I, too, congratulate my hon. Friend the Member for Rugby and Kenilworth (Andy King) on securing the debate and on the campaign that he has been so active in. Like everybody present, I support him in that. He has reflected great local feeling in the area. I know that from personal experience. My mother-in-law and father-in-law live in his constituency, so they keep an eye on him. He has been accurately reflecting local feeling.
My hon. Friend is also right to object to what has been described as the barmy idea to develop a new airport at Rugby. I go along with that objection entirely. The scheme would cause great environmental damage and, as he rightly pointed out, severe economic damage.
More than 6,000 jobs are directly dependent on Birmingham airport. About another 900 people are directly employed off site. There have been some estimates that approximately 41,000 jobs in the west midlands are supported by the airport. The airport brings approximately £192 million of income into the region. At least, that was the position according to the figures for 2001. If Rugby airport went ahead and Birmingham airport closed, there would be real and severe economic damage to the region, which is not acceptable.
If Rugby airport is not to go ahead, we must answer the question, what then? Are we saying that we should do nothing? We must take seriously the real concerns outlined by the hon. Member for Solihull (Mr. Taylor). People who live anywhere near an airport suffer environmental damage and reductions in their quality of life. There is no doubt about that. Those concerns lead me to the conclusion that a second full-length runway at Birmingham would not be the right option.
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Should we, however, conclude that no expansion at Birmingham is the right way to go? I have some difficulty with that as well, because there would be an environmental cost. It has been estimated that there may be 5 million unnecessary journeys to airports in other parts of the country as a result of people not going to Birmingham. Even though I think that the hon. Member for Solihull is right in his concerns for his constituents, I have to say that I have not come across a great wish in the midlands to make a scenic journey down to Gatwick or Heathrow.
There is an extra demand at Birmingham and it can be met. We need, at least, to give serious consideration to the proposal for a shorter, but wider-spaced runway at Birmingham. That should not be without conditions. There should be no blank cheques for Birmingham airport. The West Midlands Local Government Association had it about right when it said that a second runway should be supported only
"when fully justified and designed sustainably to minimise the environmental impacts on people, property and the natural environment."
If a second runway satisfies those tests, we should not rule it out.
I think that everyone is unanimous in their opposition to Rugby, but we may have different views on how far Birmingham should be expanded. One thing that we will all be united on is the need to minimise uncertainly, because that is the worst thing of all for causing blight. I was worried by the comments made by the chairman of the Civil Aviation Authority, Sir Roy McNulty, who, as far as I know, is no relation to my hon. Friend the Minister—the mind boggles as to where that could take us. Sir Roy McNulty has indicated that the White Paper should identify where additional runways should be built only when they are in the south-east, and not necessarily do the same for the regions. That seems a recipe for disaster. We need to be clear about where we are going.
That point has been put to Sir Roy by Brian Summers, who is the retiring managing director of Birmingham airport. It is right that Parliament should mark the retirement of Brian Summers. Not only has he been an excellent managing director of Birmingham airport and really put it on the map, but during what are always difficult discussions about the development of airports, he has always been courteous. He has seen his role as involving a partnership with the local community and the region. He has made a great contribution to putting the west midlands on the map, and is a great participant in the regional assembly and elsewhere. We are losing him from the airport. I wish his successor, Richard Heard, well, but it is important that we pay tribute to Brian for the work that he has done at Birmingham. I look forward to his continued participation in the regional assembly and the west midlands as a whole.
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Matthew Green: I congratulate the hon. Member for Rugby and Kenilworth (Andy King) on securing the debate, and the Minister on his new post. He probably thought that he had got away from me in Westminster Hall debates. I am sorry to turn up in a Back-Bench role.

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The hon. Member for South Staffordshire (Sir Patrick Cormack) and I are here to talk about Halfpenny Green, about which I have received just over 4,500 letters, as of today. It is just on the edge of my constituency. We should consider where the proposals came from. In the 202 pages of the Government's west midlands consultation document, Halfpenny Green is given two paragraphs and a photograph, and that is it. It was not included in the Government's ideas. The consortium that owns it seized on the consultation as an opportunity to submit a proposal for an airport that is twice the size of the current Birmingham airport and that ultimately will deal with up to 8 million passengers a year.
The word "barmy" was mentioned earlier. It is equally apt in this instance. We need studies to show whether an airport is needed west of the conurbation. So far, insufficient work has been done on that. The only study that has been carried out—a brief one by Advantage West Midlands—recently concluded that neither Halfpenny Green nor Cosford were viable airport sites.
If a study were to show that we need a regional airport west of the conurbation, we might then start to talk about sites. We should consider sites on the basis of their suitability. In order of suitability, Halfpenny Green would almost certainly come bottom of the list. It has very poor transport links: it can be reached only by country lane. It is smack in the middle of the green belt, and is completely surrounded by rural areas. Indeed, it is not particularly accessible from any of the major business centres, be it Telford, Wolverhampton, Dudley or Birmingham. It is not an easy place to get to at the moment. One would probably have to spend billions on a transport infrastructure to make it accessible.
I do not want to detain the Chamber any longer. The Government were not considering Halfpenny Green in the first place, and I hope that the Minister will rapidly conclude that the 22,000 letters of objection are a very good reason why the Government should not take seriously the developers' application.
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Mr. Stephen McCabe: I, too, congratulate my hon. Friend the Member for Rugby and Kenilworth (Andy King) on securing the debate, and on the leadership that he has shown in the campaign against the proposals for an airport development in Warwickshire.
I am glad that the Government have embarked on the consultation. Too often, we have avoided discussions on crucial issues such as this. Over the years, forward planning in transport has not been a notable British success, so at the least the Government are trying to recognise that there is a problem and tackle it. Expanding passenger numbers mean that, ultimately, we will need increased airport capacity.
Some people will say that all expansion is bad. I suppose that they are the people who never fly, never take low-cost flights, and never travel by car to other regional airports hundreds of miles away. I am happy to take lessons from them. Weak-willed individuals such as myself behave differently, and if we want to travel, we will have to realise that some facilities will have to be expanded. That will mean making some hard choices and taking some hard decisions.
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Like my hon. Friend the Member for Birmingham, Northfield (Richard Burden), I recognise that that could involve the loss of some green space. There could be some increased noise for those living in the immediate vicinity of an expanded airport. However, we must think of those things as trade-offs. For example, what reductions would there be in CO2 emissions if we cut the number of inter-regional journeys made by people who travel in excess of 100 miles simply to get to an airport?
We also have to think about the consequences for those who already live near an airport. We have some sense of the difficulties that airports cause. In my experience, such people are relatively adept in negotiating with the local airport about how to make the best of the situation, and as far as I can tell, Birmingham airport is always anxious to work with its neighbours and to live up to its environmental and social responsibilities. It is worth observing that the likely growth in travel will mostly be taken up by the new generation of chapter 3 aircraft, which are significantly quieter than their predecessors.
It is very important to recognise that airports create jobs and contribute to the wealth of a region. Birmingham airport is expanding some 10 per cent. a year more than any other regional airport in the country. As my hon. Friend the Member for Birmingham, Northfield said, it directly employs some 6,500 people on site, and probably supports another 8,700 jobs in the immediate area and more than 40,000 in the region. It derives 10 per cent. of its business from foreign business travel and has been voted the best business airport in the country five times in the past nine years. In fact, it serves 11 of the top 12 European business destinations.
I say with all due respect to my neighbour, the hon. Member for Solihull (Mr. Taylor), who is trying to defend the immediate interests of his constituents, that if we have to have expansion, having it at Birmingham airport would be good for the airport and for jobs in the region. The airport itself is well placed to work with Advantage West Midlands to help to regenerate not only east Birmingham but the north of Solihull. He knows as well as I do that the airport has been so successful in such work in recent years that last year a jobcentre was opened there to attract more staff for the expanding number of jobs.
My point is simply that we have a successful airport in Birmingham. It has the capacity to expand, within limits, if necessary, and it would be tantamount to madness to demolish it and build a new airport in Warwickshire.
2.52 pm
Mr. Kelvin Hopkins: I am delighted to have this opportunity to speak in this debate, although strictly speaking I am not from the midlands. I entirely support my hon. Friend the Member for Rugby and Kenilworth (Andy King) and congratulate him on securing the debate. He spoke extremely well, and I agree with every word that he said.
We appreciate that there are demands for additional airport capacity, but we ought to question how much. In the past, there have been overblown forecasts of passenger demand, particularly for the channel tunnel. Those forecasts were way over the top and proved not

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to be true in the fulness of time. It is possible that the forecasts of growth of airport usage may be overblown. Indeed, if one takes into account the possibility of changes in economic growth, changes in the costs of oil and fuel, a different tax regime, environmental resistance and so on, one can see that there may well not be the kind of growth in airport passenger traffic that we have seen in the past.
I wish to bring to the debate an offer of assistance, to which I hope my hon. Friend the Member for Rugby and Kenilworth will listen carefully. There is an airport in Luton—I hope that I speak as well for my hon. Friend the Member for Luton, South (Margaret Moran), in whose constituency it is situated. Luton is not technically part of the midlands, but some might describe it as part of the southeast midlands. It is certainly very close to the midlands, and it can offer a solution to the problems of additional airport capacity, at least for the south-eastern part of the region.
Luton airport is less than an hour from the midlands by train. Indeed, it has a dedicated railway station. A motorway passes very close to the airport, and direct bus services run from Milton Keynes. It can provide extra capacity for the midlands, particularly the south-east midlands not far from Rugby. It can make a contribution, and unlike most other areas, people in Luton are keen to see our airport expanded. It has tremendous possibilities that are not fully recognised by the Government. They are being lobbied by very powerful groups in the aviation industry, and we have a small voice, but I want to ensure that the Government fully recognise that Luton can make a tremendous contribution.
Luton caters for about 7 million passengers with very little investment. I am glad to see that the Liberal Democrat council has now done a U-turn and come out in favour of a re-angled runway, which if slightly lengthened would enable the airport to expand its capacity to between 28 million and 30 million passengers a year. There is scope to go beyond that and have a much larger capacity. Luton can make a major contribution to passenger traffic, not very far from the midlands, and close to the south-east midlands.
Luton has a great deal to offer, and unlike in other regions in the country, there is no resistance to such development. There will be voices raised—someone is bound to be affected by increased air travel and flights—but the numbers would be small, and the environmental impact would be much less than elsewhere. I urge the Minister to think seriously about giving Luton the go-ahead to expand in order to provide greater passenger scope for the future.
Mr. Deputy Speaker:Before I call the Liberal Democrat spokesman, I congratulate all those who have participated on their self-discipline, and thank them. It has been an excellent debate, and everyone who wanted to say something had that opportunity. That is what Westminster Hall is all about.
2.56 pm
Tom Brake: I congratulate the hon. Member for Rugby and Kenilworth (Andy King) on securing the debate. He did
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a good job of putting across the concerns of his constituents about the impact that a new airport in Rugby would have. I also congratulate the Minister on his new role, and I hope that he will suffer no more than light bruising from the friendly but collective mugging that he has received from his hon. Friends today. I am certain that they have made the point that Rugby airport is not desired in the midlands.
We have had an interesting debate. I have attended many debates in Westminster Hall, and this was probably the best attended. It certainly had the largest number of speakers. That conveys the importance of the issue. One thing noticeable in this debate, and the wider aviation debate, is the fact that groups are sticking together. Individual campaign groups are not being picked off and coming out in favour of someone else getting the development. That is a significant point, because it might suggest that we are reaching the sort of critical mass in the expansion of aviation that exists in relation to road-building programmes. There is now a recognition that the expansion has to be handled very carefully.
One issue that most hon. Members did not touch on—I appreciate that they were short of time and wanted to put across their constituents' concerns—was the framework in which a decision will be made about whether there will be a new airport in Rugby, or expansion at Birmingham, Coventry or elsewhere. We need to look at that framework, and I am sure that the Minister will touch on that in his response. We cannot look at aviation separately from other forms of transport in the UK, such as rail. Equally, we cannot look at Rugby in isolation from Luton, because there are clear links between them. We need an integrated approach to the issue.
The Government must confirm that their policy will not be one of predict and provide. I have heard several Ministers say that they were not going to predict and provide. They were not going simply to provide as many runways and airports as the figures suggest will be needed. I hope that that is true, but the Government have not given so far any demonstration of the measures that they will use to ensure that those figures are adjusted downwards. There are many tools and levers that they can use to adjust the figures so that the midrange prediction of 500 million passengers by 2030 is not reached.
Mr. John Taylor: The hon. Gentleman may have been in Westminster Hall when I suggested that linear extrapolation had never been proved, and could never be proved, to be correct. Would he care to comment on that?
Tom Brake: That is a good point. Interesting studies have considered whether, if we adjust slightly the figures relating to, say, the predictions about what will happen to ticket prices, there will be a huge difference in the number of passengers flying by 2030. We need a steer from the Minister as to what measures the Government will introduce so that their policy is not simply predicting and providing.
Notwithstanding that point, we must concede that in all probability, whatever measures are introduced by the Government, at EU level or at international level—that

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is less likely—there will be a growth in demand, so measures will have to be taken sooner or later. I ask the Government to do everything that they can to try to secure international agreements on emissions from aircraft, so that that can play a role in reducing the demand for aviation. It is illogical that aviation fuel is the one fuel that is not taxed. I am not necessarily suggesting that it should be taxed at the same level as the fuel used in a private motor car, but even if it were taxed only at the same level as the fuel used for other forms of public transport, that would make a difference. I appreciate that such a measure requires international agreement and that that will be very difficult for the Government to achieve, but I hope that, in international forums, they will press for it.
Mr. Taylor: I am extremely grateful to the hon. Gentleman, not least because he has given way twice. He has largely answered the point that I wanted to make, which is that the Government can raise fuel duties only within our jurisdiction. A great deal of international co-operation will be needed, will it not?
Tom Brake: I have already answered that point, but I am happy to repeat that securing an international agreement, whether on aviation fuel tax or on emissions trading for the industry, will be extremely difficult. Nevertheless, I hope that the Government will give that some priority.
To try to redress the balance with regard to the concentration in the south-east, the Government must consider the dual till arrangement. That allows BAA, for instance, to subsidise its landing charges and drop them to unrealistic levels because it makes lots of money in its shops, thereby making those airports, which are already heavily congested, even more attractive to other operators.
The Government must also consider landing slots, which are probably the most problematic issue internationally and nationally. If we can identify who owns the slots, there is the possibility, particularly for any new slots that become available, of allowing an auction process in order to maximise the revenue. That could be invested in public transport or rail schemes surrounding airports. Again, I accept that the issue is hugely complex. I am a member of the Transport Committee, and so far no one has been willing to go on the record as to who owns those slots, but one hopes that a legal agreement on ownership will be reached. Significant revenue could then be generated from the sale of slots and usefully deployed in other ways. I enter one small caveat: certain reserved slots would need to be available for lifeline flights. It would be important to maintain that.
I have outlined a framework, or at least given an idea of the levers that the Government have or could have at their disposal to influence the final outcome. I shall make a couple of comments on Rugby. We have heard the strength of opposition to the proposals from all those who have spoken today. Although it is true that most requests for consultation documents came from the south-east, the most e-mails and letters were received from the midlands. Given the concentration of airports in the south-east, it is significant that as at 31 May the greatest number of responses had been received from the midlands.
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I understand that not one democratically elected local body has been willing to speak in favour of the Rugby proposal in public. In a recent BBC Midlands poll, 96 per cent. of respondents voted against the new airport option. I have visited the site, and it is clear that there are concerns, which are acknowledged in the site appraisal, about flooding in the area and how it might affect a new airport. Hon. Members have also referred to the risk of bird strike.
The issue of cost, whether for Rugby or Cliffe, will determine, we hope, that those proposals will never be implemented, because no private airport operator will invest the money to build a new airport when there is no guarantee that airlines will want to fly from it. That will put the kibosh on the proposals.
A sustainable approach must give extra credits to any proposal that builds on existing infrastructure, whether it be airport or associated transport infrastructure. It should not give credits to proposals for major developments on new greenfield sites where there are poor transport links, sites of special scientific interest or no infrastructure on which to build. The sustainable approach suggests that tough measures will be needed to control noise and emissions at any airport that undergoes expansion. Compensation will also be needed for those affected. We cannot bury our heads in the sand, because expansion will certainly go ahead in certain parts of the country. We must ensure that effective mitigation is implemented, and that, for instance, the airlines are required to use the most modern and up-to-date aircraft to minimise the impact on local residents.
3.7 pm
Miss Anne McIntosh: It is a great pleasure to contribute to such a fruitful debate. I congratulate the hon. Member for Rugby and Kenilworth (Andy King) on his work and the excellent representation that he has given to his concerned constituents. I also congratulate those Members who have participated in this excellent debate. I wish the Minister a warm welcome on what I am sure will be the first of many exchanges. I am delighted to see that he has got broad shoulders because a great weight is about to bear down upon him given the volume of replies to the consultation.
I shall declare my interests in air transport: my husband has worked for 34 years in the airline business. I also have personal interests in BA, BAA and BAE. I should also like to know whether the Minister is related to Sir Roy McNulty of the Civil Aviation Authority, whom we know and love.
As a number of hon. Members have said, the consultation exercise has been flawed. What is the Government's timetable? As the hon. Member for Rugby and Kenilworth, who eloquently opened the debate, said, the debate is both timely and relevant because the consultation exercise finished yesterday. Is the White Paper still expected at the end of the year? What will happen after that? Can we expect a Bill or a draft Bill by the spring? Will there be the usual pre-legislative scrutiny to which one is becoming accustomed in the House?
This was not widely referred to in the debate, but we must accept that the major challenge that we face is balancing the social and economic benefits with the

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significant environmental impact. It is that impact that has been particularly discussed this afternoon, especially for those living at or near airports. We talked about Luton airport, but not much mention has been made of the rapid rise in low-cost carriers. We must accept—I hope that the Minister will recognise this—that they make little contribution to the local economy, but one reason why they have expanded so rapidly is the inadequacy of the railways. I shall return to that.
Mr. Hopkins: I dispute the hon. Lady's point about job creation. In Luton, we estimate that for every 1 million extra passengers there are 1,000 extra jobs. Of course, a lot of engineering work is also going on at Luton, supporting the airlines that operate from there.
Miss McIntosh: In my humble experience of representing Stansted airport in the European Parliament for 10 years, every time that I went to knock on the airport's door to ask whether the people who worked at the airport would vote for me, none could afford the housing nearby. Perhaps Luton is different, but that was my humble experience. I then retired, and could not call on those people to vote for me on a regional list.
The environmentalists have highlighted the main points in the debate. Are the Government trying to fly a kite? [Laughter.] I am pleased that hon. Members are following me so closely this afternoon. Are the Government proposing a new airport at Rugby purely to secure the acceptance of a second runway at Birmingham international airport?
Mr. John Taylor: Will my hon. Friend give way on that point?
Miss McIntosh: I am short of time, so I hope that my hon. Friend will forgive me. The hon. Member for Carshalton and Wallington (Tom Brake), who spoke at some length, said that the airlines, airports and air passengers are not paying the environmental costs. Although I carry no brief for the airlines and airports, I know that it is a source of some concern to them that they pay a hefty whack of airport passenger tax that, so far, the Government have refused to hypothecate. Perhaps the Minister would like to respond to those points this afternoon and confirm that the Government will hypothecate that tax in the future.
What is missing from this debate is the development of direct links, region to region, particularly regional airport access to Europe—something for which we have argued for a considerable time. This Government pride themselves on having joined-up thinking for an integrated transport policy. One major flaw in the whole airport consultation process was the lack of regard to developing the railway network as an alternative transport infrastructure to the airport network. What has emerged from most Members who have contributed today is the improvements that need to be made to surface access.
I am sure that hon. Members will have read with interest the note prepared by the Library in preparation for this afternoon's debate. Page 37 includes an
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executive summary of a report produced by Arup Transport Planning for the Department of Transport, entitled "Midlands New Site: Option Appraisal Report." Paragraph 5 talks at some length about the lack of surface access that would connect to any new proposed site at Rugby, Coventry, or anywhere in the east midlands. The Government have lost sight of that in today's debate.
The 10-year transport plan sets targets for road and rail, yet we have a 30-year period of consultation in the airports policy. That smacks of rather less than joined-up thinking.
Many of the issues raised in today's debate have a lot to do with the environment and surface access by road and rail to airports. Surely it is better for rail targets to be considered as part of an holistic, integrated transport policy, rather than piecemeal as an investment in access to new airports, especially when many of us want proper rail access to airports, particularly northern ones such as Newcastle, Leeds-Bradford and Teesside. All that is set against a background of investment in existing rail improvements being jeopardised by the profligate spending by Network Rail.
Rail and air transport should be considered together and rail should be seen as an alternative to air transport in cost, comfort, safety and convenience in terms of punctuality and reliability. The challenge that we leave the Minister with this afternoon is what will happen after the White Paper. When can we expect a Bill, and when will there be a degree of certainty for the constituents who have been so well represented this afternoon?
3.15 pm
The Parliamentary Under-Secretary of State for Transport (Mr. Tony McNulty): Save for the last two more partisan contributions, to which I will return later, this has been a good and timely debate, not least given that the consultation finished yesterday, as my hon. Friend the Member for Rugby and Kenilworth (Andy King) said.
I join other hon. Members in congratulating my hon. Friend, not only on the timeliness of the debate, but on the manner in which he opened it. He put it firmly in a regional context, starting from the premise that it is right to acknowledge the contribution made by the aviation sector to the economy both locally and regionally and to the general prosperity of the United Kingdom. Unless I heard him incorrectly, he offered a regional solution, as he feels clearly that some greater development—we can return to the question of its magnitude—for Birmingham is preferable to doing anything at Rugby. That is a proper approach, for which I commend him.
All the other contributions, save the later partisan ones that marred the debate somewhat, were sincere. All hon. Members represented the thrust of opinion in their constituencies, and they are to be congratulated. As some have suggested, I fear that this will not be the last time that I am on my feet to discuss the consultation document. When I walked through Westminster Hall itself and saw the many chairs lined up, I thought that you knew more about who was turning up for the debate

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than I did, Mr. Deputy Speaker, and that there would be a video screen link for the overflow, or we would have the debate outside.
That is right and proper, because as some hon. Members have said, this has been one of the most substantial and far-reaching debates on the future of a mode of transport that we have ever had. I thank my hon. Friend the Member for Rugby and Kenilworth for his kind words and congratulations, and I will take his points seriously.
I make no apologies for the length, breadth or depth of the consultation because, as hon. Members have said, these are serious matters. Even in his rather vacuous and partisan contribution, the hon. Member for Carshalton and Wallington (Tom Brake) managed to say that these were serious matters that need addressing. He did not offer a solution, but he at least suggested that matters needed addressing, before going on about a bunch of things that, as he well knows, we are already doing on the international dimension.
Before I forget, I should tell the hon. Member for Vale of York (Miss McIntosh) that Sir Roy McNulty is a lovely fellow, but he is no relation of mine. It is pure coincidence that we share the same name.
I can confirm to my hon. Friend the Member for Rugby and Kenilworth that we intend to publish the White Paper by the end of the year. This has been a huge consultation process, and we have received about 140,000 to 150,000 contributions, and counting, from various groups and members of the public. The closing date was only yesterday, and given that I sign most of the letters that are sent out, I would love to think that because there was nothing on my desk this morning, there are no more contributions to come, but I fear that there are. Plenty of hon. Members, not least those present, will be getting more letters from me in the near future.
As things unfold, we may go into greater detail, but I cannot tell the hon. Lady what will happen immediately post-White Paper as that would prejudge and pre-empt what it will contain. The point of a consultation process is partly to determine, or to colour, our view of what should go in the White Paper. It may say, "Lovely exercise, but we're doing nothing", although I doubt it, given what hon. Members have said. I cannot imagine any legislation that would follow from such an analysis, but I ask hon. Members to bear with us. Having conducted such an extensive consultation, it would be churlish, if not downright inefficient, if we did not take the submissions seriously and carry out a proper analysis of them, and we intend to do so.
I hope that the hon. Member for Solihull (Mr. Taylor) was not implying that I should go to prison or to a madhouse or both, but he is entitled to his view—rhetorical or otherwise—of the suggestions in the consultation paper. I should be disappointed if at least some options in the range of consultation papers were greeted not in that fashion but at least with a shudder or jolt.
The consultation process is supposed to be extensive and expansive. If it contained only one solution to the country's aviation expansion difficulties it would not be
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very useful. I will not comment on the hon. Gentleman's suggestion, as that is not my job the day after the consultation process, but I accept that he has the right to be concerned about the matter and to express his views. It is right and proper to move to a sustained, sustainable and comprehensive decision on the White Paper after the consultation process.
People are concerned; they take the matter seriously. We can debate the extent and manner of things such as blight and uncertainty, which my hon. Friend mentioned, but we need an expansive, analytical and comprehensive appraisal of the consultation exercise.
I understand the point about statistical linear extrapolation, albeit it was expressed in unnecessarily simplistic terms and was a little unkind. The last time I spoke in this Chamber, in another capacity, I accused a colleague of the hon. Member for Solihull of the casual empiricism of aggregates, a charge that can also be made about statistical terms. Taken to extremes, statistical linear extrapolation is not terribly helpful, but I hope that he will understand that it is done in the context of making informed judgments about the future, not just for the sake of it.
I assure my hon. Friend the Member for Coventry, South (Mr. Cunningham) that I am here to take note and to listen to what hon. Members say, not least the west midlands group of Labour MPs. I fully understand, knowing most of the comrades in that group, that unanimity is a rarity; when it is achieved, it should be cherished, and certainly fully noted by the Department.
Miss Kirkbride: The Minister is being too nice.
Mr. McNulty: I said that only because my hon. Friend the Member for Coventry, South alluded to the west midlands group of Labour MPs. If there were an equivalent group in the Conservative party, I would say nice things about it, too—although it would meet in a smaller room.
As the hon. Member for South Staffordshire (Sir Patrick Cormack) said, it is right and proper for constituency Members to express in stark terms the strong feelings of their constituents. In parliamentary terms, the unfolding of this and similar debates in Westminster Hall and on the Floor of the House are part and parcel of the ongoing process of wider consultation.
I also accept the point made by my hon. Friend the Member for Birmingham, Northfield (Richard Burden), that the nature of the expansion, if that is appropriate for Birmingham, is important. The question is whether to extend the use of existing runways, including extensions, new taxiways and additional aprons and terminal capacity, or to build another runway. I certainly take those points on board, as well as the points made by my other hon. Friends.
Mr. Geoffrey Robinson: Will the Minister give way?
Mr. McNulty: Yes, because I have forgotten what I was going to say about my hon. Friend's comments.
Mr. Robinson: I am very willing to await the Minister's remarks, but if I anticipate or provoke them, there will be no harm.

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Everyone agrees that this consultation process is absolutely vital and proper—and that it is costly. Democracy of this kind does not come cheap. My specific point is that I have never seen such a technically detailed case. A feasibility study is one thing, but this study has been worked out in such detail that my immediate reaction was, "Gosh, this is the one that they will go for, because it has been examined in such detail." If the Minister does not know the costs of the exercise—consultants do not come cheap, either—will he undertake to ascertain them for us?
Mr. McNulty: I will certainly look into that matter for my hon. Friend. I have no difficulty at all in doing that.
The consultation has been comprehensive. I am very pleased that my hon. Friend the Member for Birmingham, Hall Green (Mr. McCabe) welcomed it and highlighted the difficulties. To be perfectly honest, the exercise was long overdue. It probably should have happened on a cyclical basis since the expansion of aviation not long after the war. That was a failure of past Governments of both parties. I would characterise the past as being not even predict and provide but a sort of splodge: there is an airport there and another one there—we will see what happens as they expand.
We need to grasp the nettle and deal with the matter properly. It is about balance, as has been suggested by all hon. Members, and jobs, as my hon. Friend the Member for Birmingham, Hall Green said, but it is also about the environment. I am grateful that someone mentioned the fact that newer generations of aircraft are far more environmentally friendly. They are not as noisy and have been improved in various ways.
I shall keep in mind the comments of the lone voice from Luton, which were greeted with equanimity by everyone. My hon. Friend the Member for Luton, North (Mr. Hopkins) said that Luton would have the
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expansion if no one else wanted it. That suggestion certainly should go into the pot, along with the others. It is important that we have had the exercise.
Sir Patrick Cormack: Does the Minister recollect the saying that a willing hand is worth 20 pressed men?
Mr. McNulty: With the best will in the world, I shall pass on that, because my comments may be seen as an exhortation for or against a particular expansion plan. I note the point but shall pass over it gently, if I may.
Many of the comments that the hon. Member for Carshalton and Wallington made in his little partisan bit at the end concerned matters that the Government are already dealing with through various international forums.
Mr. Reed: The Minister said something about environmental impacts. Would he discuss night flights, particularly to and from East Midlands airport, and their impact on my constituency? Will that issue be included in the consultation?
Mr. McNulty: I certainly accept that night flights are an important dimension in the balance between economics and the environment in the east midlands, and indeed elsewhere.
As I said, we seek to produce a White Paper by the end of the year. It will not be about predict and provide. I have been in the role for only two weeks and the Liberal Democrats are already throwing clichés at me. If the exercise were about predict and provide, we would not have undertaken the consultation process. We would not have changed the planning agenda in this country so that it is underpinned entirely by a sustainability framework. I remind hon. Members that every application subsequent to the White Paper will have to go through that process. Happily, the planning Bill will be in place by then, if not sooner.
Yes, the concerns and points have been well made. Yes, elements have been mentioned that we shall include in the consultation exercise. Yes—I say this very strongly—I shall be here again or in other forums having the same debate with the same or other colleagues. It is a serious debate, which is why we have had a serious consultation process.

DVLA Tow-away Teams
3.30 pm
Siobhain McDonagh: I am pleased to have secured the debate as it gives me the opportunity to tackle an issue that causes annoyance to my constituents and, I am sure, to others throughout the United Kingdom. Given that London accounts for more than one in 10 untaxed cars in the UK, the quality of life of Londoners is disproportionately affected by them. I will therefore speak today about the troubling problem of untaxed cars, which is a major aggravation for my constituents in Mitcham and Morden.
I begin by applauding the action that the Government took, initially under the direction of my right hon. Friend the Member for Tyneside, North (Mr. Byers), in tackling the vexed issue of abandoned cars. The alteration in the law overseen by my right hon. Friend dramatically reduced the amount of time it takes to remove cars from where they have been dumped and to dispose of them. It has done much to reduce the problem of end-of-life vehicles being dumped on the roads of my constituency.
However, the problem has not yet gone away. I think I am right in saying that in one year recently, the London borough of Merton had to deal with more dumped cars than the entire city of Manchester. Local people were outraged at the fact that people from other boroughs were bringing their clapped-out cars to dump on Merton's streets. For Merton, that legislation came not a minute too soon.
We may not be preventing the problem—its solution lies in the hands of the antisocial people who cannot be bothered to ring the council for help with the disposal of their redundant vehicles—but at least we are reducing its unacceptable effects, which are the cause of significant irritation and are an eyesore for many council-taxpaying constituents. They want and deserve to live in a clean, tidy community of which they are proud, rather than somewhere that sometimes appears like a war zone.
Untaxed and abandoned cars can be magnets for other low-level antisocial behaviour, such as graffiti, vandalism, fly tipping and noise nuisance. All such activities drag down communities and magnify the fear of crime. We in the House have a responsibility to do more to stem the tide of antisocial behaviour. Having lobbied for so long for action, I am pleased and proud that the Government have introduced the first ever Anti-social Behaviour Bill, through which they hope to tackle some of those activities. However, we can always do more.
A large number of my constituents have written to me, or come to see me, about untaxed cars, asking me what the Government are doing or will do about the issue. I can tell them only about the arrangements that already exist—we should be glad that they do—but given the scale of the problem, those arrangements often seem inadequate to my constituents. They feel that it is rather like using a nut to crack a sledgehammer, to reverse the usual saying.
According to the DVLA annual accounts of 2001–02, enforcement and wheel clamping cost £39.9 million, but it was estimated that £110 million was recovered through enforcement activities in fines, penalties and re-
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licensing revenue from bringing 800,000 offenders to book. That was the basis for the estimate that the Minister gave me in his written answer in December 2002 of a return of 3:1 on clamping activity. Clearly, given the return on the outlay, funding is not the issue, so perhaps it is a matter of capacity.
The DVLA has 18 clamping teams operating from 14 pounds around the UK, and I have no doubt that they do a good job with the limited resources available to them. I understand that four of the clamping teams operate in the London area, covering the north, south, east and west. In addition, there are two national mobile clamping units, which rove around the UK when particular hot spots are identified.
I also understand that DVLA clamping teams spend the equivalent of a fortnight twice a year in each of London's 33 boroughs. Given that the Minister has estimated that there were 171,000 unlicensed vehicles in the London area in 2001–02, the number of teams and the amount of time the teams spend on the ground in each borough, perhaps he would tell me if he considers that to be sufficient coverage. It would appear that in London, capacity and coverage are the problems.
Another issue is that of car pounds. I understand that the DVLA operates only one permanent car pound for the whole of London and only 13 in the rest of the UK. I would be interested to know what plans, if any, the Government have to encourage, or perhaps incentivise, local authorities to earmark land for their own car pounds, either on their own or in partnership with neighbouring authorities, to allow for an increase in their clamping and crushing efforts.
As I hope the Minister will agree, local authorities represent a real hope for getting on top of the untaxed car problem. Local authorities could act as contractors or agents of the DVLA, since they have the local presence, the local contact and the local interest to be able to deal quickly and efficiently with reported cases. They can be more responsive than the DVLA teams.
Why should local authorities not become fully fledged agents of the DVLA? If all local authorities had their own pounds, they might have a greater incentive to remove abandoned cars before they become dangerous or are set alight. Similarly, if there were more pounds willing to take dilapidated cars at no cost, some offenders might actually be willing to take their cars there instead of leaving them on the streets to be towed away at the expense, of council tax payers.
My understanding is that the provisions of the Vehicle Excise and Registration Act 1994, applying to the removal of unlicensed vehicles, give the Secretary of State powers to appoint contractors to undertake this removal work. Initially, this function has been exercised through a contractor acting for DVLA. However, pilot schemes in both Lewisham and Newham have been carried out in which the local authority acts as the DVLA's contractors, removing and impounding unlicensed vehicles. That can be a major tool in dealing with the blight of abandoned vehicles.
In Newham, the DVLA pilot scheme has worked well and has encouraged residents to register their vehicles. During the 12 months of the pilot scheme, I gather that 2,000 vehicles were wheel-clamped. Half of those vehicles were released upon payment and, as the Department for Transport notes, surveys undertaken by

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Newham council before and at the end of the pilot scheme showed that the level of evasion had reduced by 15 per cent. as a result of additional and visible enforcement in the borough.
I understand that five other local authorities—Croydon, Lewisham, Wandsworth, Hastings and Southend—have taken on devolved powers to clamp and impound unlicensed vehicles in partnership with the DVLA. Each authority has its own car pound for the purpose. I was intrigued to learn that the DVLA is in discussion with 11 other local authorities to agree similar devolved powers. That all seems very promising, but as always there is a problem, money.
Newham officers estimate that the pilot has made £2.1 million for the Treasury in new registrations but the scheme has operated at a net loss to the borough of approximately £300. Therefore, for any scheme to be a success in other boroughs, such as my own, Merton, there would need to be some element of ring-fencing of revenue raised for covering costs. Will the Minister say whether the Government would be willing to entertain the notion that local authorities would be not only the agents of the DVLA, but would be allowed to keep the revenue they generate from clamping operations, or just the part that would cover their costs?
I would like to talk briefly about the success of the Operation Cubit scheme in the Medway towns, which I believe contains many useful lessons for local authorities dealing with untaxed and dumped cars. The first pilot Cubit operation took place in Medway, from 22 January 2001 to 16 March 2001 and the second in Swanley, from 11 June 2001 to 6 July 2001. Operation Cubit brought together the key agencies that have powers in relation to abandoned and untaxed vehicles: namely, the police, the local authorities, and the DVLA. The main aim of Operation Cubit was to use these agencies' powers in combination to remove vehicles quickly and efficiently from the streets and other areas. The results of Operation Cubit were that a total of 642 vehicles were removed during the eight-week Medway operation, and the operational team inspected an additional 102 vehicles. In the four weeks of the Swanley pilot, 184 vehicles were removed, 26 were clamped and subsequently de-clamped prior to removal, and the DVLA took action against a further 60 untaxed vehicles.
I understand that officers involved in both operations believed that the operations had a beneficial effect, at least in the short term, on community safety and the local environment—a perception shared by many of the local residents surveyed. According to DVLA estimates, the operations encouraged 3,919 motorists in Kent to re-license their vehicles between February and July 2001. Induced re-licensing improves official tracking of vehicles, encouraging motorists to take greater responsibility for their vehicles. In turn that leads to a greater number of insured and MOT -ed vehicles on the road. Operation Cubit improved the accuracy of vehicle registration, which assists the police in enforcing criminal and road traffic law. It also created more than £600,000 in additional revenue for the Treasury. Operational costs were approximately £136,000, showing its clear cost-effectiveness.
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Operation Cubit was originally seen as having the potential to reduce the problem of vehicle arson by removing the vehicles most likely to be magnets for such vandalism. Local police intelligence suggests that a number of vehicles associated with local crime or offenders were removed by the Medway and Swanley operations, indicating that some crime prevention impacts may be associated with that type of operation. Operation Cubit and similar schemes may provide police with another method of targeting persistent offenders.
I understand that there is now a counterpart to Operation Cubit in London, which is called Operation Scrapit, that uses powers shared by various agencies, including the DVLA, the police, the fire service and seven London boroughs, to pick up and remove untaxed and abandoned vehicles in short, sharp, shock-style operations. Those operations have proved to be successful in removing and destroying vehicles quickly and have been very popular with local residents. In some circumstances, they have cleared up one third of all street crime, but they require funding and access to a vehicle-storage pound.
There are proven, cost-effective ways in which the problem of untaxed cars can be dealt with while providing local authorities with income—if the Treasury allows local authorities to use them. I realise that the Minister is not in a position to dictate Treasury policy, but I would be grateful for his comments on that and on the other matters that I have raised. I can only conclude by reiterating that this is an issue of great frustration to a significant number of my constituents in Mitcham and Morden, and their frustration should not be underestimated. I am sure that they hope not for comforting words, but for a firm assurance that the Government intend to enable local authorities such as Merton to crack down on untaxed cars.
3.43 pm
The Minister of State, Department for Transport (Dr. Kim Howells): I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on giving us the opportunity to debate this important issue. There cannot be many Members who have not encountered the problems that arise from untaxed cars, which are often abandoned, in their constituencies.
Vehicle excise duty evasion is a serious problem in this country. The national roadside survey undertaken in 2002 showed that the VED evasion rate is 4.5 per cent. The compliance rate is high, but the number of untaxed vehicles involved and the sums of money lost to the Exchequer are huge. We estimate that as many as 1.75 million vehicles are untaxed, which costs more than £190 million every year in lost revenue.
The police and other enforcement agencies report untaxed vehicles as part of their day-to-day work, but the task of enforcing VED falls to the Driver and Vehicle Licensing Agency. It has about 780 staff, who are dedicated to enforcing vehicle excise and registration offences. Their efforts last year resulted in record success, bringing nearly 820,000 offenders to book and collecting more than £110 million in fines, penalties and induced revenue. The agency is on course to do even better this year but despite that success, as my hon.

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Friend pointed out, there is still a hard core of evaders who seem determined to do all that they can to avoid paying their road tax. It is not just the tax that those people are evading. We know that many will also be uninsured, unregistered and driving unroadworthy vehicles.
Northamptonshire police have pioneered the use of automatic number plate recognition to target criminals using the roads. Their study showed that many of the vehicles that they stopped for having no tax were also involved in some other form of criminality, including drugs offences, burglary, theft, disqualified driving, outstanding warrants and various vehicle-related offences. All right-minded people worry that this is a very big problem. The Home Office recently extended the pilot on the use of ANPR systems to another 23 police force areas, which I am sure that my hon. Friend will welcome. That means that we will be targeting criminals using the roads in many more parts of the country.
The DVLA also operates ANPR camera vans to catch road tax dodgers—the Stingray systems that have been deployed across the UK. They are type approved to the highest standards by the Home Office and work by linking digital cameras to an on-board computer that stores the images of untaxed cars. They catch tax dodgers on the move and can operate night and day at speeds in excess of 100 mph. I assume that it is the tax dodgers that are doing 100 mph, not the vans containing the systems.
ANPR systems operated by the police and the DVLA, together with safety cameras, red light cameras, parking and bus lane enforcement, and the enforcement of VED, all rely on an accurate record of vehicle keepers to be fully effective. The accuracy of the vehicle records held by the DVLA is therefore vital.
3.47 pm
Sitting suspended for a Division in the House.
3.58 pm
On resuming—
Dr. Howells: My right hon. Friend the Secretary of State for Transport announced proposals on 22 May this year to modernise the vehicle registration and licensing system in Great Britain to ensure that records are as accurate as possible. Continuous registration will be introduced from 1 January 2004. My hon. Friend the Member for Mitcham and Morden is most concerned that that should happen, and it will. That is designed to close the loophole of vehicle keepers failing to re-license their vehicles or declare statutory off-road notification—SORN. We will be able to enforce this measure directly from the DVLA's computer system. We will not have to rely on the police or others making a formal sighting of the vehicle being used or kept on a public road to prove a continuous registration offence. That is a very important step forward.
The move to continuous registration will not do away with the need for on-road enforcement. Experience shows that some motorists will continue to defy the rules. The vast majority pay their tax on time and rightly become very annoyed with those who continue to dodge
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their responsibilities. The postbags of many right hon. and hon. Members are full of complaints about untaxed and abandoned cars in their constituencies. We need a robust enforcement regime to catch those offenders.
The proliferation of abandoned cars is a plague that affects whole communities. It certainly affects mine. They lower the tone of neighbourhoods, and act as a magnet for the criminal element. They also attract the worst kind of antisocial behaviour. They are regularly trashed and torched, which is a danger to children. They cost the police, the fire service and local authorities time and money to investigate and to clear up the mess. It can cost the fire service up to £5,000 to deal with a vehicle fire. More importantly, however, it diverts the service from dealing with other, potentially life-threatening, situations. It is not always recognised that today's untaxed car is tomorrow's abandoned car. The vigorous pursuit of tax dodgers will therefore reduce the abandoned vehicle problem.
My hon. Friend made an important point about the cost element and why some local authorities have been put off taking part in the scheme or contacting the DVLA to become a partner in such schemes. There are costs to councils in taking on DVLA powers. The scheme is unlikely to be self-financing, but there are considerable benefits in dealing with vehicles before they are abandoned. As I said, costs could be saved in the long run. The earlier that the vehicle is dealt with, the lower the cost.
During its pilot, Newham found that VED evasion was reduced from 20 per cent. to 5 per cent. locally, and that the number of abandoned cars in the borough was reduced by 10 per cent. at a time when the trend was firmly upwards elsewhere. Many councils that are already involved consider the costs to be a price worth paying to deal with nuisance vehicles. Unlicensed vehicles are often involved in crime and antisocial behaviour, and local residents are usually only too pleased to see unlicensed vehicles removed from the streets.
Direct hypothecation of tax revenue is not on the cards, but we are keen to examine ways in which the considerable benefits to the public sector as a whole are more accurately reflected in funding mechanisms. Such benefits include reducing arson and other forms of antisocial behaviour, regeneration and improving the quality of our public space.
Siobhain McDonagh: The DVLA incurs costs by employing its current contractor to run the tow-away teams. Surely, therefore, it is reasonable to suggest that the money that the DVLA already pays to its tow-away contractors might also be given to local authorities if they take on these powers? I am sure that my hon. Friend will agree that the cost involved of £300,000, especially to a borough such as Newham—one of the most deprived boroughs in the whole country—is an awfully large decision to take.
Dr. Howells: I am glad that my hon. Friend mentioned the £300,000, because initially she said £300. I just wanted to make sure that that was on the record, as I am sure that Newham would not thank her for saying that the scheme had cost it only £300. I very much accept what she says. As I said, we will try hard to gauge

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the effectiveness of the funding mechanisms to ensure that the benefits that I mentioned are fully reflected in the way in which we ensure that the job is carried out.
The police and the DVLA ANPR systems will be invaluable in that. The DVLA's wheel-clamping powers are another key weapon in tackling these outlaws. Those powers make it possible to remove the vehicles from the street. In most cases, they are removed permanently as they end up being crushed.
The wheel-clamping scheme starred in August 1997. Since then, we have clamped 135,000 vehicles throughout the United Kingdom, 67,000 of which have been crushed. Those are 67,000 vehicles that will never be abandoned. Perhaps the biggest success has been the publicity that accompanies the scheme. It has persuaded no fewer than 651,000 would-be evaders to re-license their vehicles rather than risk being clamped, which has brought in another £85 million in induced revenue. Wheel clamping and the surrounding publicity have proved to be a powerful deterrent to VED evasion. Those who are caught cannot ignore the clamp, and the costs of having it removed are high.
The fees were increased in April 2001. You might be interested in this, Mr. Deputy Speaker. The cost of having a clamp removed is £80 plus a surety of £120 in lieu of a current tax disc. The surety is refunded only if a valid disc is produced within 14 days. If the vehicle is not reclaimed within 24 hours, it is removed to a secure compound, and the fee for its release is increased to £160 plus the £120 surety. I will certainly consider the number of car pounds, to which my hon. Friend referred, because that issue is important, too. There is a storage charge of £15 for every day that the vehicle is in the compound. If it is not reclaimed within seven days, it can be crushed. As well as those charges, the offender will be brought to book for the VED offence, which carries a maximum fine of £1,000 for a car. It is much more for a lorry.
We have 14 permanent wheel-clamping sites throughout the UK. They are located in Belfast, Barnsley, Blackpool, Birmingham, Bridgend, Bristol, Edinburgh, Glasgow, Liverpool. Loughborough, Manchester, Milton Keynes, Newcastle and London. The London site has four dedicated clamping teams, which operate across the capital. As my hon. Friend made clear, however, that is not enough; we could do with more. We are interested in partnership arrangements with local authorities, because they have local knowledge and the incentive to use clamping as a
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means of ridding the streets of these vehicles. The four London teams account for more than 20 per cent. of the total number of vehicles clamped and 16 per cent. of those crushed. In addition to the permanent compounds, the DVLA operates two mobile clamping teams, which operate in other parts of the country where there are no permanent compounds.
Following a successful trial in the London borough of Newham, we have made the DVLA's powers to clamp and impound untaxed vehicles available to any local authority that wants to tackle the problem of untaxed cars in their area. That complements the DVLA's clamping operations and brings wheel clamping to parts of the country that are not served by a permanent compound. So far, the wheel-clamping powers have been devolved to 11 councils: Southend-on-Sea, Hastings, Doncaster, Middlesbrough, Redcar and Cleveland, Stockton-on-Tees and the London boroughs of Newham, Lewisham, Enfield, Croydon and Wandsworth. Four more councils have been trained in readiness for the start of operations, and the DVLA is in discussions with a further 17 councils that have expressed an interest in taking devolved powers. As my hon. Friend well knows, unfortunately, the London borough of Merton is not one of them at the moment, but I am sure that she is urging it to take a serious look at the matter. We will certainly be ready to work in partnership with that borough if it decides so to do.
The police have recognised the importance of wheel clamping and increasingly arrange joint operations with their ANPR vehicles. The cameras identify a vehicle for action. The police use their powers to stop the vehicle and, if it is untaxed, it is clamped at the roadside. Such high-profile enforcement shows the law-abiding majority and any would-be evaders what can happen to those who continue to dodge their responsibilities. The additional use of the wheel-clamping scheme has put it under pressure, as my hon. Friend made clear. We recognise that we need additional clamping capacity and I am glad that she brought it to our attention. An extension of the wheel-clamping scheme is being addressed as part of our proposals to modernise the vehicle registration and licensing system because the Government treat the problem of vehicle excise duty evasion very seriously. The DVLA's wheel-clamping scheme is arguably the most high profile of all the weapons that we deploy to tackle tax dodgers and enforce vehicle excise duty.
Finally, I assure my hon. Friend that if she feels it would be useful to discuss the matter with officials, we will be only too pleased to make the necessary arrangements.

Education (South Gloucestershire)
4.10 pm
Mr. Steve Webb: Since South Gloucestershire became a new unitary council in 1995, it has been one of the worst funded authorities in the country. Since it was created, local children have received less money per head for education and local elderly people have received less money per head for social services than virtually anywhere else in the country. That is a matter of public record. Since then, I and many others have joined forces to campaign for a change in the way in which local authorities are funded. Change finally came this year and was welcome in some respects. Recognition of the high cost of employing people in low unemployment areas such as ours was a welcome change that benefited South Gloucestershire.
Some of the other changes were less advantageous, but local people thought that, at long last, we would move from being the worst funded authority to not one of the best funded, but perhaps bottom but one or two—a small step in the right direction. We thought that at long last there would be a bit of an improvement. Then came the killer blow. Although it was agreed under the new system that we needed substantially more money, the Government capped that increase and spent some of the money that they thought we needed on ensuring that other authorities did not receive very small rises.
The irony is that if we had not had such a bad deal under the old system, we would not have had such a big rise, so we would not have been capped. We have been capped by £4.7 million only because we had such an appalling deal for the entire life of South Gloucestershire unitary council. It is a special South Gloucestershire tax. Of that money, more than £2 million would have gone to our schools.
The purpose of my debate is to bring the matter to the Minister's attention. With respect to the Minister who is here, it is regrettable that a schools Minister is not present to hear what I have to say. I have contacted the heads of primary schools in my constituency and asked them to tell me how the budget settlement has affected them. I shall say a few words about the fact and figures, but most of what I say will be the words of local head teachers, governors and parents who want to tell a schools Minister or the Secretary of State what it means for them on the ground. They may never come to a lobby at Westminster or sit in the office of a Secretary of State, but they want the Government to know how it is. I hope that the Minister will take back what he hears today to those with responsibility for these matters. Our schools could have had £2 million, but it was taken away from us because of the operation of the ceiling. As a result, our schools have suffered this year.
When the fiasco blew up earlier this year, the Department for Education and Skills was wont to blame councils and said that they were holding on to the money. Let us look at the role of South Gloucestershire unitary council. It has played the game by the rules. Let us look at the council tax. The Government built in to the funding settlement an assumption that local authority council tax revenue would rise by 6.1 per cent. So what did the council do? It increased council tax by 6.1 per cent. It could have been more. It could have increased it by 9 or 12 per cent., or four times the rate of
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inflation, and made pensioners just above benefit levels pay for trying to maintain schools—to some extent that is a local decision. I hope that the Minister will not say that the only way to have decent schools in South Gloucestershire is to force pensioners to pay council tax rises of four times the rate of inflation. If that were Government policy, I would be concerned.
South Gloucestershire bit the bullet and went for 6.1 per cent.—the Government guideline figure and double the rate of inflation. What about the money for education? The Department for Education and Skills has published a list of what councils did with their money. Allowing for the cap that was applied to South Gloucestershire, which we have to do because that is a measure of the money that it actually got, South Gloucestershire passported—to use the jargon—102 per cent. That is the Department's figure. The authority passed on more than all of the increased education funding—so it is rot that the sticky hands of South
Gloucestershire prevented the money from getting through to schools.
Allowing for the cap, South Gloucestershire is still spending more than the education funding formula spending share that has been allocated to it. In other words, the council is spending more on education than the Government say it needs to do—so it is not that the council is short-changing schools.
If I had been given the Minister's brief to read out, I am sure that I would have found that it said, "This is a good settlement. This is a lot of money. This is a record amount. South Gloucestershire got a big amount of cash, so why is it complaining?" However, the 9.9 per cent. rise in the total FSS soon disappears when one considers what it has to go on. Pupil numbers across South Gloucestershire as a whole are rising, so some of the money is needed just to stand still. As with everywhere else, teachers' pay, pensions and national insurance costs eat up another huge slice.
Part of the increase in formula spending that the Minister will no doubt want to highlight is to offset cuts in the standards fund—another part of the money that goes to local authorities. The cruel irony for South Gloucestershire is that, whereas standards fund money is allocated on one basis—for example to reduce infant class sizes, an area in which South Gloucestershire was quite near the top of the league—money is allocated on a different basis through the formula, in relation to which the authority is still bottom but one, or bottom but two, so even if the same total amount is spent, South Gloucestershire gets less. A switch from the standards fund to formula application just takes hundreds of thousands of pounds away from South Gloucestershire. That has been a big factor in the pain that South Gloucestershire has faced.
There are many other one-off factors. The Minister may mention that direct payments to schools have gone up, but that money is a tiny fraction of the total amount that schools get. The overall pattern is that the rise in money was not enough to stand still.
What has been the impact on schools? Overall, redundancy or premature retirement procedures have accounted for 6.1 members of staff in primary schools and four in secondary schools. That is the overall picture in the authority as a whole. Some schools have taken on teachers because they are growing.

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There have been many other effects as well. I want to concentrate on the human side. The Minister and I could trade figures all afternoon. I have had a letter from a chairman of governors who said that he has read the correspondence between the Department and the local authority and is no wiser as to what on earth has gone on. I hope that, if the Minister says what a good settlement we have had, he will also explain why what I am about to describe has happened in our local schools. I will not name any of the schools, because in general that was the basis on which I was given answers by the heads—although some were willing to be named.
The first school to which I wish to draw the Minister's attention is one that I visited last year, when it lost one general non-teaching post and had no training for any staff and governors, and when there was an overall reduction in spending on heating and books. To make ends meet, the school turned the heating down. When I visited, there were boxes of crisps in the doorway and the hallway. When I asked why they were there, I was told that a local store let the school have the boxes of crisps when they were near to the sell-by date because it could not sell them any more. The school sold them to raise a few pennies. When schools get to the stage of having to sell nearly stale crisps to try to avoid having to sack teachers, something is wrong. That was last year, before the settlement.
When an authority has been underfunded year after year, a tight year cannot simply be absorbed. The effect is compounded. Much of the feedback that I got from teachers and head teachers was to the effect that they had just about cobbled something together for this year, but dreaded next year. I hope that the Minister's notes will give us some feel for whether the ceiling will be lifted for next year, because that is critical.
I asked the school what happened in this year's settlement and was told:
"long and hard-saved-for money for projects such as the roof has had to go by the board".
When the Secretary of State announced that schools could prop up their revenue budget by raiding their capital budget, the head of that school was furious, as it needed to repair the roof. It was fine that she could use the money intended for the roof to try to keep teaching assistants, but what could she do about the roof? The situation is just not good enough.
The chairman of governors from a second school wrote:
"The most worrying impact is that we have had to reduce teaching assistant hours and teacher non contact time. If not corrected"—
this is the key phrase—
"such a reduction will seriously impact the level of education we are able to offer the children".
It may be obvious to say, but children are at the heart of the matter. The subject of the debate is teacher redundancies and the many, many other cutbacks, but it is the impact on the children that is the issue.
I spoke to the head teacher of another school. He stressed the problems of cuts in the standards fund, saying that the school liked to employ newly qualified teachers but that it now had to provide and pay for half
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a day's training a week. That cost the school £3,000 a year, so it will employ fewer newly qualified teachers. Another head teacher said:
"There is no money this year under the 'School Improvement' category so there is no money for courses and supply cover so professional development has to be cut drastically".
That was a recurring theme—teachers will not be trained in large parts of South Gloucestershire this year. She went on:
"We have cut everything to the bone … I just hope there will be improvement next year, otherwise we will have to cut support staff. Therefore we will be unable to help raise standards and implement reduction in teacher workload. The children suffer in the end."
The Government have great plans for changes to teacher work load and for teaching assistants to do more, but teaching assistants throughout South Gloucestershire are having their hours cut or being laid off because the schools cannot afford to keep them. How can the new agreement that has been reached with most of the teaching unions be delivered if teaching assistants are being cut back?
Another school said:
"We lost valued staff with a wealth of experience whose prime task was to support children's learning. We have just been awarded a school achievement award for 2001–02: evidence … that the investment in our teaching team was worthwhile."
I am absolutely convinced that each of those head teachers would gladly swap any number of awards, recognitions and pats on the head from the Government for a decent funding settlement. It is almost insulting to offer them an award and then not give them the money to hold on to the teachers that delivered that education.
Another head teacher said:
"We are a Beacon school with rising numbers but have had to cut all staff inset training and are not replacing a part time teacher who is leaving in September."
That school is interested in Government initiatives, does not have falling numbers and is regularly in the top two or three in the league tables of primary schools in the area, but it is having to cut teaching numbers. What is going on?
Another head teacher said:
"We have just had an Ofsted inspection and the result was excellent! We are very proud."
However, she continues:
"Even by reducing our teachers by 0.5 in September we still will have no money in our supply budget and not enough Teaching Assistants to run the Government strategies, e.g. Early Literacy Support, Additional Literacy Support, Further Literacy Support."
The Government want schools to do all those things but are not ensuring that they have the teachers to deliver them. She continues:
"If a teacher goes off sick it will be disastrous. It feels like our school is paring down and, as Head, I cannot run the school as I know I should."
This is such a painful sentence:
"Our school should be thriving after a brilliant Ofsted but we feel disillusioned and depressed. I have two members of staff waiting to hear if they have jobs in September or not."
I believe that the school has asked the authority whether it can spend capital to keep the teachers, and the authority is currently deciding. The school does not know yet and may have to sack them.

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Another school said:
"Setting our budget this year has been a nightmare, unsure of whether we would be able to afford teachers or not. At one stage decided one teacher would have to go—a stressful time for teachers, a stressful time for Head and Governors. We are keeping all our teachers—but we have had to cut back on so much there is only enough money left to buy bare essentials to keep the school running."
The Government have said that "excellence and enjoyment" is their plan for education; where will the enjoyment be if schools have to turn down the heating and cannot afford new books?
Another school said:
"We are deeply distressed by the current funding issue, we feel we will find it next to impossible to run our school on the money allocated … We have worked hard over the years to provide a high quality education for all our pupils and we now feel that we cannot maintain standards".
We should be talking about improving standards, not struggling to maintain them.
Another example gives a feel of where we are. There is a whole list of cuts, one of which was:
"Reduction of subject leaders budgets and relying more on the Parents' Association to raise funds."
Parents' associations certainly do a fantastic job, but I bet they do not think that they are raising bread-and-butter money to keep teachers at the school.
I have one last one, and I do not apologise for citing all these examples, because they show that it is not a case of one school in special circumstances, or falling rolls. I am quoting from the experience of a dozen schools across the authority. One school said:
"We have made a cut of .2 of a teacher but have funded retaining other staff by using a carry forward of £45,000. This includes £20,000 generated income from consultancy fees for head"—
—that is quite a thing in South Gloucestershire. The head goes to work for someone else for a day a week, to earn more than it costs the school to employ them, so that they can put the balance back into the school funds to prop up the school. That is obviously what we want our heads to do, I do not think. That school also mentions:
"taking students, donations from Friends of School etc."
Staff retention is funded by donations from friends of schools. It should not be like that. Voluntary effort by parents and friends should be for the extras, not employing teachers. The school adds:
"We had been saving this money to use for essential alterations to very small teaching spaces as identified by OFSTED. We cannot now do this work. If the situation does not improve next year we will certainly have to make teachers and teaching assistants redundant."
Where does that leave us? We are not going to change this year's funding. My authority is not a high-profile one, or one about which the Government got upset and threw in a few extra million. We are not going to get any more money this year. A lot of those schools have made do and mended, and used sticking-plaster solutions to get through this year; they cannot do it again.
My plea to the Minister is to tell us that he will scrap the ceiling on our grant. Our modest request is that the Government give us the money that their formula says that we need. Is that greedy or outrageous? No, it is asking for the money that the Government's new and
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fairer way of assessing local need should give us. I have asked for more outrageous things in my time, but the money that we need will do.
I am going to pass the Hansard report of our debate to all the heads who have responded and the parents who have written in. I am sure that the Minister will understand that they will want to see what the Government say. I hope that he will not insult those head teachers by telling us what record sums have gone in, how good the settlement was, and that it ain't like that, because that is exactly how it is in our schools.
Mr. Deputy Speaker (Sir Nicholas Winterton): Before I call the Minister, I inform him that the debate will finish at 4.42 pm.
4.27 pm
The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis): I congratulate the hon. Member for Northavon (Mr. Webb) on securing the debate. He clearly is passionate about education in his constituency. I do not dismiss the concerns that he has articulated from some of the schools in his area. He says that he does not ask too much by requesting that I announce today that we will scrap the ceiling. I think that expecting a junior Minister to make an announcement on behalf of the Deputy Prime Minister might be a little too much for such a debate. I empathise with the history of his local authority's situation because it is the same situation that my local authority found itself in for a number of years. It is one of the worst funded local authorities in the country, but, as in South Gloucestershire, it provides a high standard of education.
We always fought for a fairer, better system, and I think that the hon. Gentleman would share that view. That system had to be one that could be justified objectively and was more transparent, under which there was no disparity between one group of authorities and another. However, in that context we were also realistic. If there were to be radical changes that made the system fairer—the system is much fairer than it was—there would have to be a transitional phase. That is the only difference that I have with him.
The hon. Gentleman was playing to the gallery in relation to his constituents in pretending that one can move from one system to another without needing to put in place a floor-and-ceiling approach. I suggest, although I do not have the information in front of me, that if the hon. Gentleman's authority was historically one of the great losers, it may have benefited from the fact that there was a floor under the previous system. I know that my authority benefited from that. It is therefore slightly disingenuous to pretend that such radical change can be created in the system without having a ceiling-and-floor approach as a consequence, however frustrating that is—and I recognise, from my local authority area, that there is frustration. People wanted a new system, and we should remember that it is this Government who have delivered a fairer deal for authorities such as South Gloucestershire and mine in Bury. There is an understandable desire for rapid change, but there must also be honesty and reality about the need to phase in the changes.
Mr. Webb: I absolutely accept the Minister's point about phasing in the changes where authorities have to

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cope with less money, or very small rises, but the question is, who pays for that? The Government's answer is that authorities such as South Gloucestershire, which have had a raw deal since they were created, should pay for the transitional arrangements for the authorities that do not do very well. My argument is that yes, we need a floor, but we do not need a ceiling because a ceiling is a measure of how badly off such authorities were before. The floor could be funded by general taxation rather than by the authorities that, by definition, have had a bad deal in the past.
Mr. Lewis: Again, that is one of the differences between us. In debate after debate in this House, if we tallied up the spending commitments that the Liberal Democrats make across a whole range of policy areas, the income generation part of their economic policy would, frankly, be voodoo in terms of the tax consequences for the people of this country. There has to be a measured, balanced approach. I believe that the phasing in of a new system was necessary and justified.
The hon. Gentleman said that he did not want me to quote figures at him, but in debates such as this, the facts surrounding the way in which the financial situation in our schools has changed should be in the public domain. This year, there has been a record £2.7 billion increase in funding for schools. That will go up by another £1.4 billion in 2004–05 and there will be a further increase of £2.1 billion in 2005–06. The total cash increase over those three years will be more than £6 billion.
Looking at South Gloucestershire, the people that the hon. Gentleman eloquently and rightly quoted, such as the heads, parents, governors and others who work in schools, know the truth. They know that between 1997–98 and 2002–03, South Gloucestershire's education spending assessment increased by more than £31 million. Over five years, that is an increase of 39 per cent. The people working in, running and benefiting from those schools know the tangible difference that there has been in their funding as a consequence of having a Labour Government since 1997.
In debates such as this it has become fashionable not to mention capital, or to dismiss it as an irrelevance. The focus is on revenue, so the amount of money to repair buildings and build extra classrooms is dismissed. However, if we look at what has happened there, we can see that in 1998–99 capital funding in South Gloucestershire was £8.1 million. This year, it is up to nearly £15 million. There have been significant, year-on-year improvements in the level of resources made available to South Gloucestershire. The local authority has a record of passporting such money and I would not criticise it in such circumstances, so I assume that the individual schools have benefited directly in a significant way. Of course, the schools are impatient for the improvements to be even better, but the hon. Gentleman will agree that the fact that we have a new funding regime is the light at the end of the tunnel. I, perhaps unconventionally, in my capacity as a constituency MP and the hon. Gentleman in his capacity as a local representative have been engaging in a dialogue about the light at the end of that tunnel for many years—probably since the days when we were parliamentary
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candidates. The Government have delivered those changes and a new system. That will begin to lead daily to significant and tangible benefits to the investment available for the front-line services that matter to people in our communities.
The aims of the new system are clear: similar pupils in different parts of the country should receive a similar amount of money from central Government. We also believe that it is important that the distinct responsibilities of schools and local education authorities are recognised in funding. That is why there is a separation of the two in the new system. There are also three basic funding entitlements for all pupils: first, £2,005 for pupils in primary schools and £2,657 for secondary schools; secondly, a top-up for deprivation and additional educational needs; and thirdly, for pupils in areas with high costs for salaries, recruitment and retention. So there is logic and fairness in the new system, which were not evident in the previous system.
We also acknowledge that there must be a shared responsibility between central and local government when dealing with these issues. We also honestly recognise that the challenge for us all this year has been to manage a complex interaction of changes in the transfer of funding to reflect the teachers' pensions increase and the working through of the teachers' pay settlement. We recognised that by making additional resources available to areas where those changes have had a seriously unreasonable effect.
The hon. Gentleman implied that arbitrary decisions had been taken about how local authorities received additional money. We believed that no area should receive less than 3.2 per cent. per pupil, which is how we allocated that additional resource. Despite his comments, South Gloucestershire's increase was 4.3 per cent. per pupil. The local authority did not meet the threshold required not to qualify for that additional resource.
The full cost of the teachers' threshold will continue to be paid by additional grant from my Department. As the hon. Gentleman said, the Secretary of State made it clear that, for one year only, we were prepared to relax the regulations so that devolved capital could be used for revenue purposes. He also made it clear that we would allow schools to borrow from consolidated balances and that LEAs could license schools to set reasonable deficit budgets.
In our debates, there are certain legitimate questions that we never ask. One such question is about the level of reserves that schools have, although by asking that question I am not implying that all the schools to which the hon. Gentleman referred have large reserves. I do not know, but I do know that many schools with problems have significant reserves, and there are issues about that. It is also true that governing bodies and head teachers make individual choices about the use of existing and available resources and prioritise in a way that varies widely.
The hon. Gentleman referred to the implementation of the Government's strategies, as if the Government are somehow separate from the challenge to raise educational standards. Improving literacy and numeracy, the key stage 3 strategy, and the emphasis on attendance, behaviour and discipline should not be seen

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simply as Government strategy. They are about every school in every part of the country wanting to focus on raising educational standards.
We have teacher redundancies every year, and we always will because of falling rolls in some institutions. Again, I do not pretend that all the potential redundancies in the hon. Gentleman's constituency are due to falling off. I do not know. The hon. Gentleman was honest enough to say that other schools are taking on more teachers, therefore the net effect in the local education authority area might be that more teachers and more classroom assistants will be employed. Hon. Members should remember that there are 25,000 more teachers than there were six years ago, and 80,000 more support staff. We are determined to sustain that improvement.
The new system is a substantial improvement. It reflects the separate responsibilities of LEAs and schools; it uses up-to-date data that is relevant to children's needs—
Mr. Webb: The Minister has a couple of minutes left. Will he reflect on what he has said and how it will be read by the head teachers I quoted earlier? How will they feel when he tells them that there is light at the end of the tunnel, but he cannot tell them how long the tunnel is in terms of years, or when he says that it is okay that they have had to sack teachers because some schools have taken teachers on?
Mr. Lewis: Most head teachers and educationists would recognise that a significant extra investment has
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gone into education since 1997 because I believe them to be honourable. They would also recognise that they have been waiting for a long time for the local government finance system to change, welcome the fact that it has now done so and want that change to be accelerated. Most of them would say, "What are we going to do next year and the year after in terms of our financial situation?"
We want to maintain the momentum of record levels of investment in education and we are committed to a number of things: sufficient education funding increases for every local education authority; getting the balance right between support through general grant and ring-fenced and targeted grant; schools and pupils having the confidence that they will receive the money intended for them; the right balance between in-school and out-of-school provision; fair and appropriate variations in the budget increases received by different schools within each local education authority; and that work force reform in line with the national agreement can be sustained.
We are working through that agenda with our national and local Partners to ensure that the changes are in place and are understood in good time to enable schools and LEAs to plan effectively for 2004–05 and 2005–06.
It being eighteen minutes to Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.

WORK AND PENSIONS

  Employment Action Teams
  Mr. Cousins
  To ask the Secretary of State for Work and Pensions what eligibility criteria were used to define boundaries in each Employment Action Team area; and how each ward in the local authority of each EAT area scored against those criteria. [113057]

  Mr. Browne
  During Phase I of the Action Teams for Jobs initiative, Action teams were allowed to focus on pockets of deprivation, often at housing estate level, rather than ward level. This meant that some Local Authority wards with high overall employment rates were still able to receive Action Team help for areas within the ward with lower employment rates.

  In Phase II, a new selection method was developed to decide where Action Teams were located which focused on identifying and tackling low employment rates at ward level. The method used to identify ward employment rates used information from a number of sources such as Office of National Statistics 1998 database information on working age population; benefit administrative data; and data from the Scottish Executive and Welsh Assembly. Ward jobless estimates were thus indicative rather than authoritative, but the primary aim was to provide Action Team help to wards with employment rates of 58.5 per cent or below.

  However, a number of wards with higher employment rates were included in Action Teams. In some cases this was to prevent the need to withdraw Action Team services from areas with pockets of extreme deprivation but with a high level of employment at ward level. Some wards with employment rates above the threshold were also included to ensure greater viability for those Action Teams with the attendant benefit for the clients they were serving.

  The available information on the indicative employment rates of all wards in each Action Team area, and identification of wards covered by Action Team activity has been placed in the Library.

  Health and Safety
  Ross Cranston
  To ask the Secretary of State for Work and Pensions pursuant to the answer of 13 February 2003,Official Report, columns 962–63W, on health and safety, whether he has received the report from the Health and Safety Commission; and if he will make a statement. [121171]

  Mr. Browne
  I have not yet received the report from the Health and Safety Commission on the effectiveness of the current strategy to promote directors' responsibility for health and safety, the success of the voluntary approach and the need for further legislation.

  Lone Parents
  Bob Spink
  To ask the Secretary of State for Work and Pensions if he will make a statement on the Government's plans to help lone parents back to work. [119482]

  Mr. Browne
  We have introduced a wide range of initiatives to help lone parents gain independence by moving into work.

  The New Deal for Lone Parents is delivering services tailored to meet the needs of individual lone parents and giving them the skills, support and confidence they need to move into work. By the end of March 2003, it had helped over 193,000 lone parents to find jobs.

  The combination of the child care component of our new Tax Credits and the extra places created through our National Childcare Strategy are making child care affordable and accessible for parents moving into work. Since April, Childcare Partnership Managers have been introduced into every Jobcentre Plus District to work with personal advisers and Local Authorities to ensure that jobseekers with children have access to information on child care provision in their area. Lone Parents can also benefit from payments of Housing Benefit and Council Tax Benefit at pre-work levels for four weeks after starting work to help them through what can be a difficult transitional period.

  We announced a number of measures in Budget 2003 to help lone parents overcome barriers to work. Discovery Week pilots will increase the familiarity of lone parents with the help and support available to them. From 2004 we will also introduce a new mentoring service across the country that is tailored specifically for lone parents. This will be delivered alongside child care taster pilots which allow lone parents to test whether formal child care suits their needs.

  From April 2004, in 12 areas we will pilot a payment of £4 per week for 12 months on top of tax and benefits when the lone parent starts a job of more than 16 hours a week. This will be complemented, in eight pilot areas, by a weekly work search premium payment of £20 on top of benefits for lone parents who have been on income support for more than 12 months and are actively seeking work.

  We have introduced compulsory Work Focused Interviews for lone parents claiming Income Support to ensure that they are aware of the wide range of help they can access to move into work. Through our programmes we are giving lone parents more choices and more help than ever before to move off welfare and into work and this has helped reduce the number of lone parents dependent on Income Support by over 175,000 since May 1997.

  Mr. G. E. Morris
  Mr. Edwards
  To ask the Secretary of State for Work and Pensions pursuant to the answer of 16 June 2003,Official Report, column 92W, to the hon. Member for Croydon North, if he will request that the Inland Revenue collaborates with the Child Support Agency to investigate the income tax and child maintenance liabilities of Mr. Graham Edward Morris. [120617]
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  Maria Eagle
  The administration of the Child Support Agency is a matter for the Chief Executive, Mr. Doug Smith. He will write to the hon. Member.

  Letter from Doug Smith to Mr. Haw Edwards, dated June 2003:
  The Secretary of State for Work and Pensions in replying to your recent Parliamentary question about the Child Support Agency promised a substantive reply from the Chief Executive.
  You ask pursuant to his answer of 16 June, ref. 118072, if he will investigate the income tax and child maintenance liabilities of Mr. Graham Edward Morris.
  As individual cases are confidential I have written to you privately concerning Mr. Morris.

  Pensioners
  Mr. Willetts
  To ask the Secretary of State for Work and Pensions whether the additional £100 paid to pensioner households that include someone aged over 80 years will be paid separately from the existing winter fuel payment. [121215]

  Malcolm Wicks
  No. It will be paid in accordance with the rules, which apply to entitlement to the existing winter fuel payment arrangements, subject to satisfying the additional age condition.

CABINET OFFICE

  Construction Industry
  Brian Cotter
  To ask the Minister for the Cabinet Office if he will make a statement on the work being carried out by his Department to assist regulatory compliance in the construction industry; and if he will make a statement. [122821]

  Mr. Alexander
  The Regulatory Impact Unit's Business Regulation Team engages directly with the business community to identify unnecessary or excessive regulatory burdens and works closely with other Government Departments and Agencies to broker reform. The team is built on a core of high quality secondees from industry.

  April's Budget Report set out plans for the Business Regulation Team to investigate regulatory burdens in three sectors, including the construction industry, as part of its 2004 work programme. Preliminary research will begin this autumn.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  CAP Reform
  Mr. Hayes
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the effect of CAP reform negotiations upon the(a) timetables for the productions of forms for 2003–04 by the Rural Payments Agency and (b) payments by the Agency. [122519]

  Alun Michael
  Timetables for the production of forms for 2003–04 by the Rural Payments Agency will not be affected by the CAP reform negotiations, as any new schemes do not take effect until 2005. Payments by the Agency will not be affected.

  European Councils
  Mr. Hood
  To ask the Secretary of State for Environment, Food and Rural Affairs what the outcome was of the Environment council on 13 June 2003; what the Government's stance was on the issues discussed, including its voting records; and if she will make a statement. [119887]

  Margaret Beckett
  I represented the UK at Environment council on 13 June 2003. The council reached a provisional political agreement on one important legislative measure and agreed a general approach on another. The council also considered a number of other issues.

  The council reached agreement on a framework for a common position on the Environmental Liability directive. This measure will require polluters to bear the cost of remedying environmental damage, in line with the 'polluter pays' principle. Following intensive negotiation, the agreement reflects key UK concerns. First, there will be no obligation for compulsory financial security (to be reviewed within five years of implementation). Second, Member States will retain discretion to decide whether or not to remedy damage in the absence of the polluter. Third, Member States may choose to allow exception from liability on the basis that operations comply with a permit or were not judged harmful by the best scientific knowledge at the time. Some of the technical detail of the proposal remains subject to further discussions before an agreement is finalised. The text did however include a review of the coverage of damage falling within the scope of international conventions and of GMO damage. It should be noted that the Directive is intended to cover damage caused by the deliberate release or contained use of GMOs.

  Austria and Ireland opposed the agreement because it did not cover nuclear damage, and Germany was also opposed because of disagreement with major features, notably the permit and state of the art exceptions.

  The council also agreed a general approach on gaseous and particulate emissions from non-road mobile machinery. This included an exemption for lifeboat launchers from the scope of the Directive, an issue pressed by the UK in negotiations. I indicated that my intention at this stage was to abstain, pending European Parliamentary consideration, and that I had concerns about the second phase of the proposals. Germany was unable to support the general approach.

  Council debated a decision for establishing a monitoring mechanism for greenhouse gas emissions. I, together with Ministers from a number of other Member States, emphasised the need to clarify Member State and Community responsibilities in implementing certain obligations under the Kyoto Protocol, particularly with respect to establishing the assigned amount, and in exercising certain rights, including participation in the flexible mechanisms. There was general agreement to aim for political agreement in October.

  We also discussed a presentation from the Commission about progress towards its new system for registering and approving Chemicals. Draft proposals are currently subject to an internet consultation by the Commission.
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  Several Ministers emphasised the need to have the right balance in the proposals between environmental protection and industrial competitiveness. The Commission hoped to bring forward its full proposal by October, to enable progress to be made before the European parliamentary elections.

  Together with Denmark, the UK tabled a paper drawing attention to the Commission's Communication on Forest Law Enforcement, Governance and Trade and calling for rapid progress on measures to address illegal logging and its associated trade. The council also noted written contributions on the recent Environment for Europe Conference in Kiev, Environmental Technologies, Sustainable Development in an enlarged Union, Natura 2000, vehicle emissions, sensitive sea areas, flood prevention and the herbicide Paraquat.

  The Presidency reported that it had written to key members of the Convention on the Future of Europe, setting out the concerns with the inadequate treatment of the environment in the draft Constitutional Treaty. I circulated a letter to colleagues at council, highlighting my continuing concerns on these points, and about the negative impact of the proposal for a Single Legislative council. The Presidency considered that the latest draft Treaty text on environment and sustainable development was a significant improvement.

  Fishing
  John Thurso
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her answer to the hon. Member for Lewes of 1 May 2003,Official Report, column 461W, on the Darwin Mounds, when the consultation on the legislation to apply the Habitats Directive to offshore areas will begin. [121648]

  Mr. Bradshaw
  Preparations are under way for a full public consultation to begin in July, with a view to regulations being laid before Parliament during the autumn.

  Rural Payments Agency
  Mr. Hayes
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the capacity of the Rural Payments Agency to meet the deadline for payments of 30 June; and what steps she is taking to ensure that the deadline is met. [122571]

  Alun Michael
  Balance payments on all the bovine subsidy schemes have been delayed due to the need to implement changes in EU legislation introduced for the 2002 scheme year. These changes introduced new penalty procedures that apply when either the scheme rules or cattle identification requirements have been breached. Before making balance payments the Rural Payments Agency has had to build a new computer database and significantly enhance existing computer systems to cope with the changes. These are complex changes and have taken considerable time to implement. As a result, not all producers will be paid before the 30 June deadline.

  Staff at the RPA continue to work overtime at offices around the country to process as many payments as possible.
  188W
  Although the regulations require payments to be made by 30 June, in order to complete the process, the UK and several other member states have made representations to the European Commission for an extension to the EC deadline, due to the introduction of Aggregated penalties.

  Senior Departmental Posts
  Annabelle Ewing
  To ask the Secretary of State for Environment, Food and Rural Affairs how many senior departmental posts were advertised in each year since June 1999; and how many of these were advertised in the Scottish press. [120663]

  Alun Michael
  The information is as follows:

  (a) Since the formation of Defra the following senior departmental posts were advertised in each year as follows:

  Number

  From April 2003

  1

  April 2002 to April 2003

  8

  April 2001 to April 2002

  7

  It would incur disproportionate cost to obtain this information prior to the formation of Defra.

  (b) No senior departmental posts were advertised separately in the Scottish press.

  Veterinary Surgeons
  Miss Widdecombe
  To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the number of veterinary surgeons who will be required over each of the next five years. [119228]

  Mr. Bradshaw
  [holding answer 16 June 2003]No such estimate has been made, but in 2001 the Institute for Employment Studies carried out a modelling exercise for the Royal College of Veterinary Surgeons (RCVS). This indicated that the requirement for veterinary surgeons in the UK over the next ten years was very sensitive to a number of variables. On several possible scenarios fewer new graduates would be needed each year than now.

  The RCVS has recently asked IES to update the model and the results of this review are expected within the next few months.

  Discussions between Defra and stakeholders in developing the Animal Health and Welfare Strategy for Great Britain have stressed the important role private veterinarians will have in delivering the Strategy.

LEADER OF THE COUNCIL

  Official Engagements
  Llew Smith
  To ask the Leader of the Council if he will make a statement on how he plans to balance his official engagements in the House of Commons with his requirements to be in Wales as Secretary of State for Wales. [120809]
  189W
  Peter Hain
  I intend to spend as much time as is necessary to fulfil both my responsibilities as Leader of the House of Commons and as Secretary of State for Wales.

TRANSPORT

  Air Traffic Control
  Mr. Ben Chapman
  To ask the Secretary of State for Transport (1) if he will make a statement on air traffic control delays at(a) London Heathrow airport, (b) Gatwick airport, (c) Manchester airport, (d) London Stansted airport, (e) Luton airport and (f) Leeds-Bradford airport;

  (2)if he will make a statement on air traffic control delays at Heathrow airport;

  (3)how many air traffic control delays to individual aircraft of over (a) 10 minutes, (b) 20 minutes and (c) 30 minutes there have been at Heathrow airport in the last two years. [122620]

  Mr. McNulty
  Airport air traffic control services are provided either by the airport operator or by private sector companies under contract to the airport operator. I would expect questions on performance to be directed to the management of the airport or service provider concerned, or their regulator, the Civil Aviation Authority.

  Aviation
  Mr. Prisk
  To ask the Secretary of State for Transport what average fare per return journey at 2000 prices is used for each of the examples shown in Table 14.5 of "The Future of Air Transport in the United Kingdom: South East", for(a) 2000 and (b) 2003. [122497]

  Mr. McNulty
  The average fare per return journey at 2000 prices implicit in each of the examples shown in Table 14.5 of "The Future of Air Transport in the United Kingdom: South East" is the sum of the fare premia for 2030 given in that table, plus an underlying fare in the absence of airport capacity constraints of£258 in 2030. The underlying fare in the year 2030 is calculated by taking a 1 per cent. per annum reduction in real terms over 20 years from a fare in the year 2000 of £312. The latter figure is derived from the International Passenger Survey, taking account of long haul and short haul flights.

  Mr. Peter Ainsworth
  To ask the Secretary of State for Transport whether he will include for approval in the forthcoming White Paper on aviation any proposal which was not presented by his Department for public consultation under SERAS. [122896]

  Mr. McNulty
  As my right hon. Friend, the Secretary of State for Transport, has made clear or many occasions, we will consider carefully all serious worked-up proposals submitted as responses to the consultation.

  If Government were minded to favour in the proposed air transport White Paper any option or options which had not been presented in the "The Future Development of Air
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  Transport in the United Kingdom" consultation, there would need to be a further period of consultation on that option or options.

  Chancery Lane Derailment
  Harry Cohen
  To ask the Secretary of State for Transport what conclusion he has reached as to the cause of the Chancery Lane derailment; and if he will make a statement. [121885]

  Mr. McNulty
  It is hoped that London Underground's final report into the incident will be completed in July and they are committed to making the findings of the report public.

  Freight Grants
  John Thurso
  To ask the Secretary of State for Transport pursuant to his answer of 20 June 2003,Official Report, column 446W, on freight grants, what grants to which he refers are made by the Scottish Executive; and what proportion relates to movement within Scotland in each year since 1996 (a) at current prices and (b) at outturn prices. [122751]

  Mr. McNulty
  None of the grants referred to was made by the Scottish Executive.

  The following number of cross border Track Access Grants (TAG) was made by my Department or the Strategic Rail Authority in each year.

  Number of TAG awards with Scottish element

  1994

  0

  1995

  0

  1996

  2

  1997

  1

  1998

  3

  1999

  3

  2000

  0

  2001

  2

  2002

  2

  Kirkstall Bridge Station
  Mr. Battle
  To ask the Secretary of State for Transport what requests for funding he has received for the construction of Kirkstall Bridge railway station. [122672]

  Mr. McNulty
  No such requests have been received.

  Mail Transportation
  Mrs. Ellman
  To ask the Secretary of State for Transport if he will make an environmental impact assessment of Royal Mail's decision to stop transporting its freight by rail. [122788]

  Mr. McNulty
  No. The decision is a matter for Royal Mail.

  Mersey Tunnels Bill
  Mr. Ben Chapman
  To ask the Secretary of State for Transport if he will make a statement on(a) the duration of individual meetings and (b) the total duration of meetings he has held with the Merseyside Passenger Transport Authority and Executive to discuss the Mersey Tunnels Bill in the last five years. [122700]

  Dr. Howells
  The requested information is not available, as it is not normal departmental practice to record the duration of such meetings.

  Mr. Ben Chapman
  To ask the Secretary of State for Transport what meetings his Department has had with hon. Members to discuss the Mersey Tunnels Bill. [123156]

  Mr. McNulty
  There have been two meetings with hon. Members to discuss the Mersey Tunnels Bill. These were on:

  (a) 17 December 2001 with the hon. Member and the hon. Members for Wirral West (Stephen Hesford) and Ellesmere Port and Neston (Mr. Miller); and

  (b) 16 July 2002 with the hon. Members for Crosby (Mrs. Curtis-Thomas), Knowsley North and Sefton East (Mr. George Howarth) and Liverpool, Walton (Mr. Kilfoyle).

  Pilots
  Mr. Nigel Jones
  To ask the Secretary of State for Transport if he will make it his policy to follow the advice of the European Aviation Safety Agency on pilot flying hour limits; and if he will make a statement. [122508]

  Mr. McNulty
  The Regulation establishing the European Aviation Safety Agency came into force in September 2002 and the Agency is not yet fully operational. The Regulation requires the Agency to assist the Commission in the preparation of proposals for basic principals, applicability and essential requirements in the field of air operations. This will include the framework for flight time limitations. The Commission proposals will take the form of a draft Regulation which will be subject to the co-decision procedure. Once adopted, the Regulation will be binding on all member states.

  Railways
  Mr. Paul Marsden
  To ask the Secretary of State for Transport how many passengers travelled to and from Shrewsbury by rail in each year since 1997; how many regular train services were available from Shrewsbury in each year since 1997; and how much was raised in ticket sales at Shrewsbury rail station in each year since 1997. [122460]

  Mr. McNulty
  The Strategic Rail Authority (SRA) publishes annual passenger journey figures for each Train Operating Company in its Annual Report, a copy of which is placed in the Library of the House. National figures for timetabled train kilometres and passenger revenue are published in the SRA's quarterly 192W
  publication, "National Rail Trends", a copy of which is also placed in the Library of the House. These data are not broken down to route level.

  Redhill Aerodrome
  Mr. Peter Ainsworth
  To ask the Secretary of State for Transport what assistance his Department is providing to Redhill Aerodrome Ventures in relation to the development of their proposal to establish an international airport at Redhill Aerodrome; at what cost to public funds; and if he will make a statement. [122894]

  Mr. McNulty
  The Department has held discussions with several promoters of proposals for new airport capacity that are alternatives to, or variants of, options set out in the Government's consultation document. The aim has been to provide guidance on the methodology used to appraise options in the SERAS study and the information that will be needed by the Department in order to appraise alternative ideas submitted as part of the consultation.

  Where new work on such alternatives has required the involvement of the Department and its consultants—such as traffic forecasting and modelling of economic benefits—the direct costs will be met by the promoter. The cost of appraising alternative schemes will be met by the Department.

  Mr. Peter Ainsworth
  To ask the Secretary of State for Transport what contracts have been signed between Halcrow and his Department in relation to the proposal to develop an international airport at Redhill. [122895]

  Mr. McNulty
  No contracts have been signed between the Department and Halcrow concerning the proposal by Redhill Aerodrome Ltd. to develop a stand-alone passenger airport.

  Mr. Peter Ainsworth
  To ask the Secretary of State for Transport if he will list the meetings which have taken place between his Department and representatives of Redhill Aerodrome Ventures since September 2002; on what dates the meetings took place; and what the purpose of each meeting was. [122897]

  Mr. McNulty
  Officials from the Department met representatives of Redhill Aerodrome Ltd. on 12 February and 26 March 2003. The purpose of these technical meetings was to(a) provide guidance on the methodology used to appraise options in the SERAS study and (b) to advise on the type and level of information needed by the Department in order to appraise the alternative option presented by Redhill in their original response to the airports consultation.

  Mr. Peter Ainsworth
  To ask the Secretary of State for Transport whether he has received assurances from Redhill Aerodrome Ventures that their proposal to develop Redhill Aerodrome into an international airport could be carried forward with no call on public funds. [122898]
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  Mr. McNulty
  The Redhill Aerodrome Ltd. response to "The Future Development of Air Transport in the United Kingdom (South East)", submitted in December 2002, included a statement about the availability of funding. We will make publicly available in due course all responses to the consultation, except those marked confidential. In the mean time publication is a matter for the authors.

  The Government's approach to the funding of future airport development schemes is described in paragraph 15.3 of "The Future Development of Air Transport in the United Kingdom: South East" consultation document. This states that the Government expect the current pattern of private sector financing to continue and that it does not expect to commit public funds to future airport development.

  Road Charging
  Mr. Wiggin
  To ask the Secretary of State for Transport what recent assessment he has made of the effects of road charging. [122002]

  Dr. Howells
  As both the London and Durham schemes have shown, charging can play a role in the management of local congestion. The effects of congestion charging depend upon the design of a scheme, which is a matter for individual local authorities. I have made no assessment of the cumulative effects of such schemes on congestion across the country.

  Senior Departmental Posts
  Annabelle Ewing
  To ask the Secretary of State for Transport how many senior departmental posts were advertised in each year since June 1999; and how many of those were advertised in the Scottish press. [120669]

  Mr. McNulty
  The Department for Transport (DfT) was not established until May 2002. In 2002–03, DfT recruited seven senior civil servants by open competition. These posts were advertised in newspapers or magazines with a readership throughout the UK.

  Speed Limits
  Mr. Austin Mitchell
  To ask the Secretary of State for Transport under what circumstances reduced speed limits can be imposed on dual carriageways. [121717]

  Dr. Howells
  Local highways authorities can introduce lower speed limits on dual carriageways in accordance with guidance contained in Circular Roads 1/93, such as to improve road safety or for environmental reasons.

  Judy Mallaber
  To ask the Secretary of State for Transport if he will review the Road Traffic Regulations 1984 relating to the exemptions of emergency ambulances from speed limits. [122290]

  Dr. Howells
  Ambulances on emergency duty are exempt from speed limit regulations as set out in the Road Traffic Regulation Act 1984. My Department recognises the requirement to keep all its regulations under review and this includes regulations to exempt vehicles from speed limits.

  Traffic Commissioners
  Mr. Peter Duncan
  To ask the Secretary of State for Transport how many public inquiries have taken place in each year since 1997 under regulations administered by traffic commissioners in(a) Scotland and (b) England and Wales. [122311]

  Dr. Howells
  [holding answer 30 June 2003]: The number of public inquiries held in Scotland and England and Wales in each year since 1998 for which figures are available are shown in the table. Figures are not available for 1997–98.

  Scotland

  England/Wales

  1998–99

  202

  1,418

  1999–2000

  222

  1,422

  2000–01

  163

  1,632

  2001–02

  184

  1,514

  Transplant Vehicles
  Judy Mallaber
  To ask the Secretary of State for Transport if he will extend the speeding limit exemption for ambulances to cover transplant vehicles. [121941]

  Dr. Howells
  Vehicles used for ambulance purposes are exempt from speed limits when used in an emergency. However the legislation does not contain a definition of what constitutes an ambulance. Whilst other vehicles used to carry human tissue are allowed to use blue lights in an emergency, it would be for a court to decide whether they are permitted to exceed speed limits.

  The Government are therefore considering whether an amendment to legislation is necessary.

  Vehicle Excise Duty
  Tom Brake
  To ask the Secretary of State for Transport if he will estimate the cost of vehicle excise duty evasion in London, broken down by local authority, in each year since 1997. [122749]

  Dr. Howells
  A breakdown of evasion by local authority area could be obtained only at disproportionate cost. Figures of evasion in London were given in my previous answer of 25 June. Estimates of the cost of this evasion in London would be £19.4 million in 1999–2000 and £20.6 million in 2002–03. Increase in lost revenue is not as sharp as the increase in evasion because of the reduction in the average value of licenses.

DEFENCE

  Arctic
  Norman Baker
  To ask the Secretary of State for Defence if he will make a statement on the agreement reached with the US and Russia in respect of military environmental co-operation in the Arctic. [122667]

  Mr. Caplin
  [holding answer 30 June 2003]: The United Kingdom formally joined the Arctic Military Environmental Cooperation (AMEC) Programme at a

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  ceremony last week (26 June) together with the other AMEC partner countries, Norway, the Russian Federation and the United States.

  The UK, in cooperation with these partners, will implement practical nuclear clean-up projects focused on naval bases in the north-west region of Russia. Initial UK project plans include submarine dismantling and the design and procurement of submarine float pontoons. AMEC will provide the UK with valuable defence diplomacy and environmental clean-up opportunities within Russia and working with the Russian navy.

  I am able to confirm that the management of these projects will be undertaken by the Department for Trade and Industry as this forms part of the cross-Government approach to issues such as nuclear safety.

  Canadian Airspace
  Mr. Gordon Prentice
  To ask the Secretary of State for Defence on how many occasions in 2002 the RAF has used Canadian airspace for fast jet training; and what the cost was. [122115]

  Mr. Caplin
  Four exercises involving fast-jet aircraft were undertaken in Canadian airspace during 2002. The United Kingdom has a reciprocal agreement in force with Canada under which we do not pay any fees for using Canadian airspace.

  Civil Contingency Unit
  Mr. Gray
  To ask the Secretary of State for Defence what proportion of the Civil Contingency Unit for the North East of England have been deployed to Iraq. [122127]

  Mr. Ingram
  It is assumed that the hon. Member is referring to the Civil Contingency Reaction Forces (CCRF), introduced as part of the New Chapter to the Strategic Defence Review, of which there are currently two based in the North East of England. CCRF (North), based with the Tyne Tees Regiment at Durham, and CCRF (South), based with the East and West Riding Regiment at Pontefract. The normal establishment of each of these units is 500 personnel.

  The numbers of personnel from each that have been called up for service on Operation TELIC, are as follows: 160 personnel from CCRF (North), which represents less than one third of the total; and 144 personnel from CCRF (South), which represents about one quarter of the force. Although working under current call out notices, not all of these personnel may yet have actually deployed to theatre.

  The SDR New Chapter introduced the requirement to establish one CCRF per regional brigade area, across the Mainland UK. As a result, and despite the fact that some CCRF personnel have been deployed to the Gulf, the required cover is still available to the North East regional brigade.

  Defence Medical Services
  Mr. Keetch
  To ask the Secretary of State for Defence how many new recruits to the Defence Medical Services 196W
  have been signed up under the Golden Hello scheme; what the comparable inflow rates were for the previous six months; and if he will make a statement. [119009]

  Mr. Caplin
  [holding answer 18 June 2003]: As at 11 June 2003, three vocationally trained General Medical Practitioners (GMPs) and two consultants had joined the Defence Medical Services (DMS) under the Golden Hello scheme. In addition, six vocationally trained GMPs and one consultant have been accepted into the DMS, but have not yet joined their Service, and 18 GMPs and five consultants are awaiting selection interviews.

  In the six months prior to the introduction of the Golden Hello scheme, two consultants in the eligible specialties were recruited into the DMS.

  Defence Procurement
  Mr. Hancock
  To ask the Secretary of State for Defence pursuant to his answer of 20 June 2003,Official Report, column 510W, on defence procurement, what factors underlay (a) the gap between the in service date (ISD) at the time the contract was let and the current estimated ISD and (b) the cost difference for the same period in respect of the (i) Swiftsure and Trafalgar submarines, (ii) Astute submarines, (iii) Typhoon and (iv) ASRAAM and (v) MRA4; and if he will make a statement. [122324]

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

  Executive Agencies (Key Targets)
  Gregory Barker
  To ask the Secretary of State for Defence (1) what key targets have been set for(a) the Meteorological Office, (b) the Chief Executive of the Warship Support Agency, (c) the Defence Analytical Services Agency and (d) the Defence Communication Services Agency for Financial Year 2003–04; [120812]

  (2) what performance targets have been set for (a) the Defence Vetting Agency, (b) the Defence Dental Agency, (c) the Defence Estates Agency and (d) the Pay and Personnel Agency for the Financial Year 2003–04; [120811]

  (3) what key targets have been set for (a) the Chief Executive of the Training Group Defence Agency, (b) the Defence Housing Executive, (c) the Chief Executive of the Defence Procurement Agency, (d) the Chief Executive of Service Children's Education and (e) the Ministry of Defence Police Agency for the Financial Year 2003–04. [120810]

  Mr. Caplin
  Key targets for Financial Year 2003–04 for the following agencies have previously been announced via a Written Ministerial Statement. I refer the hon. Member to the relevant Official Report:
  Defence Dental Agency, 31 March 2003, Official Report, column 487WS
  Defence Analytical Services Agency, 4 April 2003, Official Report, column 74WS

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  Defence Vetting Agency, 28 April 2003, Official Report, column 1WS
  Pay and Personnel Agency, 29 April 2003, Official Report, column I2WS
  Meteorological Office, 11 June 2003, Official Report, column 50WS
  Ministry of Defence Police, 26 June 2003, Official Report, column 49 WS.

  Key targets for the Defence Communication and Services Agency, Defence Estates, Defence Housing Executive, Defence Procurement Agency, RAF Training Group Defence Agency, Warship Support Agency and Service Children's Education are currently being finalised, with the intention of announcing them to the House prior to the summer recess.

  Guardsmen Fisher and Wright
  Mr. McNamara
  To ask the Secretary of State for Defence what measures he will take following the declaration of the Northern Ireland Court of Appeal on the application of Mrs. Jean McBride relating to the reasons for retention in service of Guardsmen Fisher and Wright. [122230]

  Mr. Ingram
  The Ministry of Defence has sought Counsel's advice following the recent Court of Appeal Northern Ireland ruling on the Fisher and Wright case. This advice has been received and is currently being considered.

  Iraq
  Llew Smith
  To ask the Secretary of State for Defence what inspections have been carried out since the end of the invasion of Iraq of dual-use chemical plants built and operated since UNSCOM reported in January 1999 on the destruction of the older chemical plants. [122504]

  Mr. Ingram
  A number of chemical plants in Iraq which could be dual use have been visited by Coalition forces since March 2003. Sites are being identified and investigated as information becomes available. Investigations may require more than one visit to certain sites and the process will not be quick. The Government have made clear its determination to assemble evidence of Iraq's weapons of mass destruction and we aim to make public our findings where appropriate.

  Mr. Kidney
  To ask the Secretary of State for Defence what his most recent estimate is of the number of civilians killed in Iraq since 1 January. [114209]

  Mr. Ingram
  We have no means of ascertaining the numbers of military or civilian lives lost during decisive military operations in Iraq, although we made every effort to minimise civilian casualties.

  Medical Personnel
  Glenda Jackson
  To ask the Secretary of State for Defence how many British personnel have been seconded to the Iraq survey groups; and what their expertise is. [114514]

  Mr. Ingram
  [holding answer 19 May 2003]: I refer my hon. Friend to the answer my right hon. Friend the Secretary of State for Defence gave on 23 June 2003, Official Report, column 536W, to the hon. Member for Pendle (Mr. Prentice).
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  The Iraq Survey Group will have a changing membership based on the task at hand and will be able to draw upon expertise and personnel as required. Its members will include Service personnel and subject-matter technical experts.

  Service Personnel (Deaths)
  Lembit Öpik
  To ask the Secretary of State for Defence (1)how many members of Her Majesty's armed forces have died through(a) deaths ruled as self-inflicted, (b) firearms discharge, (c) medical conditions induced by training activities and (d) alcohol-related incidents since 1990; [122529]

  (2)how many firearms deaths among members of the armed forces since 1990 were perceived to be (a) self-inflicted deaths, (b) accidental deaths and (c) other deaths caused by other (i) persons or (ii) persons unknown; [122528]

  (3)how many members of Her Majesty's armed forces have died through non-combat related causes in (a) Great Britain, (b) Northern Ireland, (c) Germany and (d) other overseas postings since 1990; [122527]

  (4)how many members of Her Majesty's armed forces have died through non-natural causes (a) in and (b) in the vicinity of military property since 1990; and what the name of the site was in each case. [122526]

  Mr. Caplin
  The information required is still being collated. When this is complete I will write to the hon. Member and a copy of my letter will be placed in the Library of the House.

  Transport Aircraft
  Mr. Keetch
  To ask the Secretary of State for Defence how much his Department has spent on chartering transport aircraft in each month since October 2001; and if he will make a statement. [116143]

  Mr. Ingram
  The amounts in cash terms actually paid against submitted invoices for the period October 2001 to March 2003, are as follows:

  £ million

  October 2001

  4.505

  November 2001

  5.534

  December 2001

  2.506

  January 2002

  1.287

  February 2002

  3.578

  March 2002

  9.190

  April 2002

  5.025

  May 2002

  6.755

  June 2002

  3.212

  July 2002

  4.427

  August 2002

  3.913

  September 2002

  4.360

  October 2002

  3.281

  November 2002

  1.801

  December 2002

  4.217

  January 2003

  0.831

  February 2003

  4.675

  March 2003

  15.688

  Note:

  These figures are provisional and subject to final audit.
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  The Ministry of Defence does not necessarily pay the charter fees in the same month as the activity takes place and a direct correlation cannot therefore be drawn month by month between aircraft chartered and costs paid. Neither is there necessarily a particular significance between the fluctuating amounts committed or paid each month.

  Commercial aircraft are chartered by the MOD when required to supplement the strategic aircraft resources of the RAF, particularly when the timescale and size of arising operations overseas necessitate the rapid deployment of equipment in support of United Kingdom expeditionary Forces.

EDUCATION AND SKILLS

  Illiteracy
  Mr. Keith Bradley
  To ask the Secretary of State for Education and Skills how many people are illiterate in the United Kingdom. [122524]

  Mr. Ivan Lewis
  [holding answer 30 June 2003]: The International Adult Literacy Survey in 1996 suggested that in Great Britain there are 7.9 million adults aged 16-65 who are functionally illiterate. This is equivalent to 22 per cent. of the population aged 16-65.

  The Department has commissioned a new representative sample survey of working age adults in England to provide an up-to-date assessment of the scale of literacy and numeracy need. These estimates will be mapped to the new national basic skills standards and will be published in September 2003.

  Leading Edge Schools
  Mr. Cameron
  To ask the Secretary of State for Education and Skills what representations he has received about the criteria for funding Leading Edge Schools; and if he will make a statement. [119231]

  Mr. Miliband
  My Department has received a small number of letters and phone calls related to the funding criteria for the Leading Edge Programme, most of them general funding inquiries. Each school will receive £60,000 per year to support the development and sharing of innovative teaching practice in partnership with a group of named secondary schools.

  Regulatory Bodies
  Mr. Yeo
  To ask the Secretary of State for Education and Skills if he will list the(a) number of staff employed by and (b) budget of each regulatory body for which his Department is responsible in each year since 1997. [117780]

  Mr. Charles Clarke
  The information requested for Regulatory Bodies is listed as follows.

  Qualifications and Curriculum Authority (QCA)

  Financial year

  Staff employed at start of the financial year

  Grant in aid (£ million)

  1997/98

  539

  53.0

  1998/99

  459

  52.2

  1999/2000

  502

  57.7

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  Qualifications and Curriculum Authority (QCA)

  Financial year

  Staff employed at start of the financial year

  Grant in aid (£ million)

  2000/01

  434

  58.5

  2001/02

  454

  68.6

  2002/03

  524

  76.1

  2003/04

  548

  60.2

  The QCA was established on 1 October 1997 from the merger of the School Curriculum and Assessment Authority (SCAA) and the National Council for Vocational Qualifications (NCVQ). The staff figure shown for 1997/98 is that of SCAA and NCVQ combined. The grant in aid figure for 1997/98 is that for SCAA, NCVQ and QCA combined. The grant in aid figure for 2003/04 does not include funding for specific items of work that the QCA may be asked to undertake in the coming year.

  General Teaching Council (GTC)

  Year

  Staff employed at start of the financial year

  Grant in aid (£ million)

  2000/01

  n/a

  4.0

  2001/02

  68

  9.0

  2002/03

  94

  3.7

  2003/04

  121

  1.4

  Grant in aid payments to the GTC began in September 2000. Funding in 2000/01, therefore, covers the period September 2000 to March 2001.

  Sector Skills Councils
  Stephen Hesford
  To ask the Secretary of State for Education and Skills what progress the Government are making in establishing sector skills councils. [121744]

  Mr. Ivan Lewis
  Good progress is being made in establishing Sector Skills Councils (SSCs). To date there are two fully licensed SSCs and a further 18 in development including the five trailblazer SSCs. I anticipate that the full network of around 25 SSCs will be in place by May 2004.

  Truancy
  Mr. Wray
  To ask the Secretary of State for Education and Skills(1) what action may be taken against parents who knowingly allow and encourage their children to truant from school; and how many parents have had action taken against them since 1997; [121515]

  (2) what measures are in place to ensure that parents who are unable to control whether their children attend school do not have action taken against them. [121516]

  Mr. Ivan Lewis
  If a child of compulsory school age who is registered at a school fails to attend regularly at the school then the parent is guilty of an offence under section 444(1) of the Education Act 1996. Sanctions that might be imposed following a conviction under section 444(1) include a parenting order or a fine.

  Since March 2001 there has been a more serious offence where a parent who, knowing that his child is failing to attend regularly at school, fails without

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  reasonable justification to cause him to attend (Education Act 1996 section 444(1A) as amended by the Criminal Justice and Court Service Act 2000). Prosecution under section 444(1A) can lead to a custodial sentence.

  Information about the number of prosecutions under sections 444(1) and 444(1A) is not collected centrally.

  Local education authorities have discretion whether or not to prosecute in individual cases. On conviction, magistrates must consider the aggravating and mitigating factors of the offence before deciding on a sentence.

  Further measures to reinforce parental responsibility for school attendance are being introduced in the Antisocial Behaviour Bill. New parenting contracts will enable formal agreements between parent and school or parent and LEA in which each side sets out the steps they will take to secure an improvement in the child's attendance. Penalty notices will provide an alternative to prosecution and a much quicker and cheaper way of sanctioning parents who are capable of improving their child's school attendance and simply need a reminder of their responsibilities.

  Mr. Wiggin
  To ask the Secretary of State for Education and Skills what recent research he has conducted into the percentage of primary school children who play truant without their parents' knowledge. [122015]

  Mr. Ivan Lewis
  The Department recently commissioned research into the causes and effects of truancy. The report, "Absence from School", Scottish Council for Research in Education, 2003, was published on 29 May.

  The research found that 27 per cent. of the primary pupils interviewed said that they had truanted from school without their parents' knowledge. It is important to note that these findings come from a relatively small sample of local education authorities and are therefore not necessarily representative of the whole country. The national primary school unauthorised absence rate for last year was 0.5 per cent. of half days missed.

  Mr. Wiggin
  To ask the Secretary of State for Education and Skills if he will make a statement on truancy levels for children of(a) primary and (b)secondary school age in March (i) 2002 and (ii) 2003. [122016]

  Mr. Ivan Lewis
  Truancy data is collected annually and not broken down into monthly figures. Data for the 2002/03 academic year will be available in the Autumn. The percentage of half days missed due to unauthorised absence in 2001/02 was 0.5 per cent. in primary schools and 1.1 per cent. in secondary schools. These figures have remained consistent since national data was first collected in 1994/95.

FOREIGN AND COMMONWEALTH AFFAIRS

  Afghanistan
  Bob Russell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action he is taking to have UK nationals held in custody in Afghanistan 202W
  returned to the UK for treatment in cases where their medical condition is causing concern; and if he will make a statement. [121896]

  Mr. Mike O'Brien
  [holding answer of 26 June 2003]: As far as we are aware the Afghan authorities are holding one British national in custody. He is currently receiving medical treatment in hospital. However, the necessary facilities to diagnose his condition do not appear to be available in Afghanistan and, in these exceptional circumstances, my right hon. Friend the Foreign Secretary wrote to the Afghan Foreign Minister on 16 June to request the individual's release so that he could be returned to the UK for the specialist medical attention he appears to require.

  British Council
  Mr. McNamara
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many British born ethnic minority members there are in senior posts of the British Council abroad, indicating the grade and the percentage this represents of all posts. [119230]

  Mr. Mullin
  [holding answer 30 June 2003]: There are three ethnic minority members of staff in senior British Council posts overseas who are British passport holders. All three are at Band 9, and this represents 3.4 per cent. of all British Council senior posts abroad.

  Cyprus
  Mr. Lyons
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in Cyprus. [117393]

  Mr. MacShane
  I refer my hon. Friend to the written ministerial statement made by my right hon. Friend the Foreign Secretary on 4 June 2003,Official Report, column 22WS.

  EU Constitution
  Mr. Heathcoat-Amory
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the areas of decision-making by unanimity under the present European Community and Union Treaties which transfer to qualified majority voting in the Convention on the draft EU constitution, broken down by article of the draft constitution; what his policy is on the acceptability of each; and if he will make a statement. [121470]

  Mr. MacShane
  Annex VIII of document number CONV 727/03 of the Convention on the Future of Europe provides a complete list of the legal bases for which the draft EU constitutional treaty proposes changing the adoption procedure. That document is available on the Convention's website (www.europeanconvention.eu.int) in the "Documents" section. This Government believe that more QMV is essential to push through our solutions to Europe-wide problems in key areas, such as immigration and asylum. But there are areas in which we would not be prepared to move away from unanimity. Our amendments to the draft Treaty, which indicate our policy, are displayed under the "Future of Europe" section of the FCO website (www.fco.gov.uk).
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  Denzil Davies
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list EU policy items which can now be vetoed by member states and which under the draft EU constitution are made subject to qualified majority voting. [122047]

  Mr. MacShane
  Annex VIII of document number CONV 727/03 of the Convention on the Future of Europe provides a complete list of the legal bases for which the draft EU constitutional treaty proposes changing the adoption procedure. That document is available on the Convention's website (www.europeanconvention.eu.int) in the "Documents" section.

  G8 Declaration (Nuclear Non-proliferation)
  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on North Korea's breach of its nuclear safeguards agreement, as mentioned in paragraph 7 of the Evian G8 Declaration on Non Proliferation of Weapons of Mass Destruction, of 3 June. [120799]

  Mr. MacShane
  Under the terms of its safeguards agreement with the International Atomic Energy Agency (IAEA), North Korea is obliged to allow access by IAEA inspectors to its nuclear facilities.

  In October 2002 North Korea announced that it would restart nuclear activities at its Yongbyon reactor, which had been stopped under the terms of the 1994 Agreed Framework. Subsequent to this announcement North Korea expelled IAEA inspectors who had been in the country to monitor North Korea's compliance with its international obligations and to verify its declarations on past nuclear activity. By restarting activity at Yongbyon without IAEA monitors being present, North Korea is in clear breach of its obligations under the IAEA safeguards agreement and the Agreed Framework.

  Government Hospitality
  Andrew George
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the budget was for the Government Hospitality Section of the Conference and Visits Group in each of the last 10 years. [122845]

  Mr. Rammell
  The Government Hospitality Section (GHS) of Conference and Visits Group (CVG) managed a budget of approximately £0.6 million for the year 2002–03. This figure has been consistent (i.e. between £0.8 million and £0.6 million) since the formation of CVG in 1999. Prior to 1999 the work of the GHS was carried out by the former Government Hospitality Fund; the budget was similar to the current figure.

  Guantanamo Bay
  Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with the US about British nationals held in Guantanamo Bay; when he expects them to be charged; what he expects them to be charged with; and what maximum penalty he expects will apply. [121848]
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  Mr. Mullin
  Ministers and officials have regular discussions with the United States authorities about the British detainees held at Guantanamo Bay.

  We have been informed that the United States authorities have not yet made a decision to charge or release any of the British nationals detained at Guantanamo Bay.

  Iraq
  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what measures are being taken in Iraq to establish(a) security, (b) effective policing and (c) the rule of law. [110973]

  Mr. Ingram
  I have been asked to reply.

  Improving the security environment across Iraq remains a key priority for the Coalition Provisional Authority. Coalition forces continue to conduct up to 2,500 daily patrols, about 10 per cent. of which are joint patrols with the Iraqi police, arresting or detaining those suspected of criminal activities, including looting.

  There are now 30,000 operational Iraqi police officers across the country, and the number continues to increase. The Coalition continues its efforts to prepare them for their role in a self-governed Iraq.

  Courts and prisons are beginning to function. On 17 June, the Coalition Provisional Authority opened a new Iraqi Judicial College and announced the creation of a Judicial Review Committee and the establishment of a Central Criminal Court.

  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the(a) locations and (b) dates of visits by the survey group in Iraq searching for weapons of mass destruction. [120099]

  Mr. Hoon
  I have been asked to reply.

  I refer the hon. Member to the answer I gave on 29 April 2003, Official Report, columns 315–16W, to the Member for Southport (Mr. Pugh).

  The Coalition has several hundred sites we wish to examine and further sites are being identified as investigations develop. Investigations may require more than one visit to certain sites. The process of visiting and examining the sites and other evidence will not be quick, and the number of sites visited or left to visit is not an indication of the success of the task at hand.

  As the government has already made clear, we will aim to make public our findings where appropriate.

  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the International Atomic Energy Agency invited the Government to provide evidence to counter the International Atomic Energy Agency conclusion in its 7 March Report to the UN Security Council that the allegations that Iraq sought to procure uranium from Africa were unfounded. [121670]

  Mr. MacShane
  No.
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  Joan Ruddock
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the women's organisations which have been invited by the Coalition Provisional Authority to take part in the women's conference in Baghdad in early July. [122214]

  Mr. Rammell
  [holding answer of 30 June 2003]: The women's conference in early July is being organised by a steering group of Iraqi women. They are leading the event, which the Coalition Provisional Authority is helping to facilitate. Saddam Hussein proscribed, after 1991, all women's NGOs (although those in the Kurdish areas continued to function). Therefore it is predominantly individual women who will participate in this conference, as it will take time for women's groups to emerge in Iraq following the collapse of the former regime.

  Joan Ruddock
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the terms of reference are of the women's conference organised by the Coalition Provisional Authority in Baghdad in early July. [122215]

  Mr. Rammell
  [holding answer 30 June 2003]: The one-day women's conference in Baghdad in early July is being organised by a steering group of seven Iraqi women, who were elected by a group of 40 women at a meeting in May to take forward the process. The steering group comprises women from different backgrounds and with varied skills. The Coalition Provisional Authority is helping to facilitate the event. Workshops will focus on gender-related issues for the writing of a new Constitution and legal reform, plus education, health policy and the economy and employment.

  Israel
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Israel concerning arbitrary detention of young Palestinians. [121677]

  Mr. Rammell
  We have recently raised our concerns about the arbitrary detention of Palestinian minors at the highest levels of the Israeli Government. Israel, like all states, has the right to defend itself against terrorism, but it must act in accordance with international law. Our embassy in Tel Aviv monitor this issue closely, and will continue to do so.

  We remain committed to Quartet-led efforts to ensure implementation of the roadmap leading to the objectives of a two-state solution which will allow Israel and Palestine to live side by side in security and peace.

  Kenya
  Mr. Keith Simpson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance his Department is giving to the Kenyan Government to counter the terrorist threat in Kenya. [122050]

  Mr. Mullin
  [holding answer 30 June 2003]: We are giving the Kenyan Government substantial assistance to help them to counter the terrorist threat. This includes advice and training to improve security at airports, hotels and tourist destinations. We are also working with them to develop a long-term, sustainable strategy. My noble
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  Friend, Baroness Symons discussed this with the Kenyan Minister of Internal Security, Chris Murungaru, when he visited London on 27 June and I discussed it with the Kenyan Vice President on 30 June. Contacts will continue.

  Mr. Keith Simpson
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he will review his Department's travel advice to Kenya. [122051]

  Mr. Mullin
  [holding answer 30 June 2003]: We keep travel advice under careful review. As the hon. Member may be aware, the travel advice for Kenya was changed on 26 June and the warning against non-essential travel was removed. The new advice makes clear that there is a high threat from terrorism in Kenya and British nationals should remain vigilant at all times.

  Mr. Dawson
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the British High Commission in Nairobi has taken action regarding reported killings of Sudanese refugees in Kakuma refugee camp, Kenya. [122705]

  Mr. Mullin
  [holding answer of 30 June 2003]: The British High Commission in Nairobi is aware of ethnic clashes in the area of the Kakuma refugee camp. We understand that violence broke out between Toposa (Sudanese) refugees and local Turkana (Kenyan) people after the alleged theft of cattle stock by the Toposa. The situation is now stable, although tensions remain. The High Commission is monitoring the situation.

  Mr. Dodds
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the security risk to UK subjects(a) resident in Kenya and (b) travelling to Kenya. [121165]

  Mr. Mullin
  As the current Travel Advice for Kenya makes clear, there is a high threat from global terrorism in Kenya. However, the warning against non-essential travel has now been removed although UK nationals, whether residents or visitors, should remain vigilant in public places and tourist sites.

  Krishna Maharaj
  Peter Bottomley
  To ask the Secretary of State for Foreign and Commonwealth Affairs when Krishna Maharaj, a UK national, was arrested in Florida; and when the Consular service was officially informed of his arrest by(a) the Federal Authorities, (b) the State and (c) the local authorities. [122134]

  Mr. Mullin
  Mr Krishna Maharaj was arrested on 16 October 1986 in Miami, Florida. Our consular officials in the USA were never officially informed of Krishna Maharaj's arrest by any Federal, State or local authorities.

  Our consular staff in Atlanta first became aware of Mr. Maharaj's detention on 27 October 1988 when they were told of his presence on death row in the Florida State Prison by Professor Radelet, a death penalty researcher from the University of Florida. At the same time, Mr. Maharaj wrote to our embassy in Washington to alert them to his situation.

  Our embassy in Washington wrote to the State Department on 19 January 1989 to formally complain that the Florida authorities did not notify the Consulate

  207W
  General of Mr. Maharaj's arrest as they should have done under the bilateral UK/US consular convention. The State Department sent an apology on 20 May 1989.

  Moazzam Begg
  Mr. Godsiff
  To ask the Secretary of State for Foreign and Commonwealth Affairs what access by(a) the Red Cross and (b) British diplomats has been granted to Moazzam Begg who is detained in Guantanamo Bay; and with what result. [122306]

  Mr. Mullin
  Since his transfer to Guantanamo Bay in February 2003, Moazzam Begg has been seen once by British officials during their visit in April. The purpose of the visit was to check on his identity and welfare and to ask questions related to national security. Mr. Begg appeared to be in good health.

  The International Committee of the Red Cross has access to all the detainees at Guantanamo Bay on request.

  Occupied Territories
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with his European counterparts regarding the EU demand for reparations from Israel for damage done to projects and infrastructure paid for by the European Union. [121675]

  Mr. Rammell
  Action taken by Israel in self defence must be proportionate. Israel must avoid civilian casualties and avoid damaging civilian property and infrastructure.

  Together with our EU partners we have raised our concerns about the damage to EU and other donor-funded projects in the West Bank and Gaza Strip caused by Israeli military actions and demanded that this practice stop. The EU reserves the right to demand compensation. The European Commission continues to monitor and cost this damage.

  Pakistan
  Harry Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to his answer of 10 June 2003,Official Report, column 803W, on Pakistan, how many people from Pakistan have applied for a visit visa in a third country since the visa section in Islamabad was unable to accept applications; how many were successful; how many people from Pakistan have sought prior agreement for a visit visa from a mission in a third country; by what means they may seek such prior agreement; and if he will make a statement. [121599]

  Mr. Mullin
  We do not hold statistics on the number of Pakistani nationals who have applied for visit visas in third countries since the restricted visa service in Islamabad began. Gathering this information would incur disproportionate costs.

  Visitor visas can be applied for at any of our 164 visa issuing posts. However, applicants are advised to contact the embassy or High Commission at which they wish to apply before travelling to ensure that their application can be accepted.
  208W
  Applicants can contact any visa issuing post by fax, telephone or e-mail. Contact details can be found on the UK visas website at www.ukvisas.gov.uk

  Russia
  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to his answer of 3 June 2003,Official Report, column 9W, on Ingushetia, when he expects to receive the report from the Ingush government commission. [122335]

  Mr. Rammell
  We do not know when the Ingush government commission will publish its report. However, we hope that the commission will complete its work without delay.

  Travel Bans
  Mr. Cameron
  To ask the Secretary of State for Foreign and Commonwealth Affairs on how many occasions UK nationals(a) resident and (b) travelling abroad have been subject to a travel ban by an overseas government in each of the last five years. [122746]

  Mr. Mullin
  We do not record statistics on the point raised by the hon. Member. It would incur disproportionate cost to provide the information requested.

SOLICITOR-GENERAL

  Crown Prosecution Service (Dropped Prosecutions)
  Mr. Gordon Prentice
  To ask the Solicitor General how many prosecutions have been dropped by the Crown Prosecution Service on the grounds that it was not in the public interest to prosecute by reason of old age in the last five years. [122128]

  The Solicitor-General
  The Crown Prosecution Service's (CPS) centrally held case records do not include information on the reasons underlying discontinuance. It is therefore not possible to say how many prosecutions the CPS have dropped on the grounds it was not in the public interest to prosecute by reason of old age. This information is held on individual case files, and could be obtained only, at disproportionate cost, by examining each relevant file in every CPS office across the country.

  The only information currently available comes from a survey of the reasons for discontinuance undertaken in six CPS branches during the period October to December 1998. This showed that 2.7 per cent. of all discontinuances were attributable to the age or ill health of the defendant. Obviously however this information is considerably out of date and came from a limited sample.

  The Compass case management system, which is to be implemented throughout the CPS by the end of 2003 will enable a full analysis of the reasons for discontinuance including a record of cases discontinued because the defendant was elderly.

  Departmental Costs (Advertising)
  Mr. Bercow
  To ask the Solicitor General what the total expenditure on advertising by the Department
  209W
  was in (a) 2001–02 and (b) 2002–03; and what the level of planned expenditure is for (i) 2003–04 and (ii) 2004–05. [114422]

  The Solicitor-General
  A holding reply was given on 21 May 2003.

  Expenditure on advertising by the Crown Prosecution Service is restricted to advertising job vacancies in the local and national press. The total expenditure by the Crown Prosecution Service was £684,420 in 2001–02 and £1,123,294 in 2002–03. The planned expenditure for 2002–04 is £558,731. Budgets for 2004–05 have not yet been set but expenditure is expected to be similar to 2003–04

  The Serious Fraud Office has only incurred expenditure in 2001–02 of £64,000 and 2002–03 of £38,000 on recruitment advertising. It has not plans to incur expenditure in 2003–04 and 2004–05 on advertising other than for recruitment.

  The expenditure on advertising by the Treasury Solicitor's Department met from public funds in (a) 2001–02 and (b) 2002–03 was as follows:

  £

  2001–02

  122,300

  2002–03

  1115,000

  1Forecast

  The advertising budget for 2003–04 is £135,000. A detailed budget for 2004–05 has not been decided.

  Expenditure on advertising by the Treasury Solicitor's Department is directly related to the recruitment of lawyers to the Government Legal Service (GLS) and administrative staff.

  Within the Department, the specialist Bona Vacantia division regularly places advertisements in the press seeking kin in cases where individuals have died intestate with no apparent claimants to the estate under administration. The costs for this activity are treated as an expense on the Crown Nominee's Account that is presented separately to Parliament. The advertising costs falling on that account for 2001–02 and 2002–03 have been £192,800 and £130,300 respectively.

  The Legal Secretariat to the Law Officers and HM Crown Prosecution Service Inspectorate have no budget for advertising.

  Departmental Ministers
  Mr. Horam
  To ask the Solicitor-General how many Ministers there were in the Attorney-General's Department in each year since 1996. [120993]

  The Solicitor-General
  Two, the Attorney-General and the Solicitor-General.

  Mental Health
  Mr. Paul Marsden
  To ask the Solicitor General how many of her staff have taken sick leave due to mental health problems in the last year. [111977]
  210W
  The Solicitor-General
  The information is as follows:

  Crown Prosecution Service

  During the period 1 January 2002 to 31 December 2002 the Crown Prosecution Service had 256 staff take sick leave through mental health problems.

  Serious Fraud Office

  During 2002, six employees took sick absence due to mental health problems.

  Treasury Solicitor's Department

  Five staff have taken sick leave due to mental health problems in the last financial year, 1 April 2002 to 31 March 2003.

  The Treasury Solicitor's Department figures also cover the Legal Secretariat to the Law Officers and HM Crown Prosecution Service Inspectorate.

TRADE AND INDUSTRY

  Accident Surveillance System
  Mr. Gregory Campbell
  To ask the Secretary of State for Trade and Industry what plans there are to introduce an alternative surveillance system in light of the decision to abolish the Home and Leisure Accident Surveillance System. [117791]

  Mr. Sutcliffe
  Although no new data will now be collected for MASS, the Government recognise that the existing database will remain a valuable resource for many years which should continue to be available for users. It will, therefore, be looking for proposals from other organisations that would be interested in taking it over. The value of the database should be enhanced by the inclusion of the last three years data which has been delayed by IT problems. The Government hope to be able to publish this later this year.

  The report of the Accidental Injury Task Force identified a need to strengthen the surveillance of accidental injury at regional and local levels in the NHS. This will be the Government's first priority. However, it is too soon to say whether NHS surveillance will collect data on product involvement in accidental injuries in the sort of detail which HASS has provided. If detailed data is required on product safety issues, this can be collected through targeted surveys.

  Aviation Stakeholders
  Lembit Öpik
  To ask the Secretary of State for Trade and Industry whether planned future guidance documents from her Department on subjects affecting general aviation stakeholders will be the subject of consultation with their representative bodies; and if she will make a statement. [122036]

  Mr. Timms
  The Department will use the wind energy, defence and civil aviation interest working group as a forum for preparing future updates of the guidance material on wind energy and aviation interests. General aviation stakeholders can register an interest in this work by completing the stakeholder feedback pro forma on
  211W
  page 55 of the interim guidelines, which can be found at: http:/www.dti.gov.uk/energy/renewables/publications/pdfs/windenergyaviation.pdf

  Closed Consultations
  Dr. Cable
  To ask the Secretary of State for Trade and Industry pursuant to her answer of 3 June 2003,Official Report, column 322W, on closed consultations, if she

  Consultation title

  Date closed

  Expected response date

  Amendments to the Timeshare Act 1992; and proposed new Timeshare (Cancellation Information) Order

  31 January 2003

  End July 2003

  Advanced Television Services Regulations 2003

  2 May 2003

  End July 2003

  Employment Agencies: Consultation on new regulations

  1 November 2002

  Autumn 2003

  Employment status in relation to statutory employment rights

  11 December 2002

  End of year 2003

  Equality and Diversity—Making it Happen

  21 February 2003

  Date to be announced in due course

  Extension of the Application of the EU Regulation on International Accounting Standards

  26 November 2002

  End July 2003

  Export Control Act Draft Secondary Legislation

  30 April 2003

  Final orders are expected to be laid before Parliament in October 2003

  Future Offshore: A consultation on the future framework for developing offshore wind farms

  18 February 2003

  End July 2003

  Implementation of Directive 2001/90/EC (creosote)

  2 February 2003

  End June 2003

  WTO General Agreement on Trade in Service (GATS) Negotiations

  3 January 2003

  End July 2003

  Credit Card Industry
  Mr. Gardiner
  To ask the Secretary of State for Trade and Industry what(a) credit card industry representative bodies, (b) consumer bodies and (c) representatives of the Financial Services Authority her Department has met to discuss the Honesty Box. [116301]

  Mr. Sutcliffe
  The Honesty Box has been discussed at meetings organised by my officials. Representatives of organisations such as the British Bankers Association, the Finance and Leasing Association, the Association for Payment Clearing Services, the Consumers' Association and the Financial Services Authority have attended these meetings.

  I believe that the issue of transparency in the credit market constitutes a key element of the current review of the Consumer Credit Act 1974. As a result, I will be consulting later this year on proposals for simplifying the advertising regime for consumer credit and on standardising the form and content of credit agreements so that consumers receive key information in a clear and concise manner.

  In particular I will be consulting on some form of the "Honesty Boxes" to set out, in advertisements or application forms, the key applicable interest rates and charges, which I believe could be a key element of our proposals to increase transparency.

  Departmental Employees (Taunton)
  Mr. Flook
  To ask the Secretary of State for Trade and Industry if she will list the projects and programmes which are funded by her Department and are administered in Taunton; and how many people are employed in administering those projects and programmes, expressed as a full-time equivalent. [121979]

  Jacqui Smith
  The South West Regional Development Agency (SWRDA) is currently funding 'Taunton Visioning—Town Centre Regeneration' which is administered by the Somerset Area Team based in Exeter.
  212W
  will list the closed consultations that are awaiting a response; on what date each consultation closed; and on what date she expects to respond in each case. [119839]

  Ms Hewitt
  Further to my previous answer the Department now has 10 consultations awaiting a response.

  The expected response dates listed below are based on current plans but should be seen as a guide only.

  The RDA employs seven people in its Somerset Area Team whose fundamental role is to deliver the RDA Corporate Plan in Somerset. This Team is supported in its work by RDA staff in central functions and local and sub-regional partners.

  Electricity
  Norman Baker
  TO ask the Secretary of State for Trade and Industry what figures she has collated on the percentage of electricity generated lost in(a) transmission and (b) distribution in each EU country. [122217]

  Mr. Timms
  [holding answer 30 June 2003]: Information on electricity transmission and distribution losses in 2000 is to be found in "Electricity Information 2002" published by the International Energy Agency (IEA). The information requested is given in the following table. Transmission and distribution losses are not separately identified by the IEA.

  Country

  Electricity supplied (TWh)

  Transmission and distribution losses (TWh)

  Losses as a percentage of electricity supplied

  Luxembourg

  5.9

  0.1

  1.7

  Finland

  79.1

  2.8

  3.5

  Netherlands

  104.9

  4.1

  3.9

  Belgium

  82.8

  3.7

  4.5

  Germany

  530.6

  25.2

  4.7

  Italy

  298.5

  19.2

  6.4

  Denmark

  35.3

  2.3

  6.5

  France

  440.6

  29.9

  6.8

  Austria

  57.4

  4.1

  7.1

  Sweden

  142.4

  11.7

  8.2

  United Kingdom

  369.3

  30.8

  8.3

  Portugal

  42.6

  3.6

  8.5

  Greece

  49.3

  4.3

  8.7

  Ireland

  22.3

  2.0

  9.0

  Spain

  214.8

  20.0

  9.3

  Electronic Banking
  Huw Irranca-Davies
  To ask the Secretary of State for Trade and Industry if she will visit Wales to assess the effectiveness of the introduction of electronic banking at post offices. [122582]

  Mr. Timms
  Universal banking went live in post offices on 1 April 2003 as scheduled. The Post Office is now providing electronic access to a wide range of bank accounts and is looking to extend these further. The provision of electronic banking services at post offices is an operational matter for Post Office Ltd. I understand from the company that its introduction has gone extremely well and that the systems are working effectively. The Government's investment of £480 million on computerising the post office network means that the Post Office can achieve a new role as a convenient place for people to do their banking.

  Employers' Liability Insurance
  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry what estimate her Department has made of the legal costs of dispute resolution associated with employers' liability insurance. [120389]

  Mr. Browne
  I have been asked to reply.

  The Department published a first stage report on employers' liability insurance that looked at the issue on 3 June.

  This report and separate research in Scotland noted that definitive evidence on legal costs was not available. However an indication was given from the analysis of one leading insurer. They reported that legal costs represented on average 36 per cent. of the total claims cost for employers' liability insurance. This proportion varied by size of claim:

  Claim size

  Legal cost (Per cent.)

  Less than £10,000

  51

  £10,000–£25,000

  45

  Greater than £25,000

  23

  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry what estimate her Department has made of compliance rates for British firms for employers' liability compulsory insurance. [120390]

  Mr. Browne
  I have been asked to reply.

  The Department published a first stage report on employers' liability insurance that looked at the issue on 3 June.

  The information collated suggests that levels of compliance are high but not comprehensive. The report therefore suggests a range of measures to improve enforcement.

  Euro Roadshow
  Mr. Flight
  To ask the Secretary of State for Trade and Industry if she will list the events she plans to attend as part of the Government's euro roadshow. [121395]
  214W
  Jacqui Smith
  Ministers will be holding a series of meetings around the country, campaigning for a pro-European consensus.

  Flexible Working
  Dr. Kumar
  To ask the Secretary of State for Trade and Industry what plans there are to monitor and record the number of workers(a) requesting and (b) being granted flexible working in (i) central Government, (ii) local government, (iii) the public sector and (iv) the private sector; and if she will make a statement. [122224]

  Mr. Sutcliffe
  We are actively promoting flexible working policies across the workplace through the Government's Work-Life Balance Campaign, which aims to encourage best practice by demonstrating the benefits to both employers and employees in all sectors and size of business. To support and help speed up the spread of best practice, on 6 April 2003 we introduced new flexible working legislation, to ensure that employees with children under six or disabled children under 18 will only have their requests for flexible working turned down where there are valid business reasons.

  We are committed to commence a review of this legislation in three years' time, and as a baseline for this, we have already carried out two major surveys covering employers and employees, giving a clear picture of the current levels of flexible working in both public and private sectors. We are currently developing a detailed monitoring strategy for the next three years and are working closely with key employer and employee stakeholders. As part of this strategy we will be repeating the two baseline surveys in 2005.

  For further evidence on the numbers of people working flexibly, disaggregated into the public and private sectors, we are repeating the large scale Workplace Employment Relations Survey in 2004, and asking specific questions on flexible working to both employers and employees. The spring and autumn modules of the quarterly Labour Force Survey also provide some information on flexible working practices.

  We will be working with other Government Departments to gain information on how the new legislation is being implemented and the levels of take up across central Government. We are also establishing links with the Employers' Organisation for Local Government (EO) and the Local Government Association (LGA) in order to gather information specifically relating to flexible working practices within local government.

  Government Aid
  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry how much money has been recovered by her Department from regional aid grants made to industrial projects which have subsequently failed in 'the last five years. [121901]

  Jacqui Smith
  £26.1 million of regional selective assistance was recovered between 1 April 1998 and 31 March 2003. Much of this relates to offers and payments made in earlier years.
  215W
  Recoveries of grant under the Enterprise Grant scheme (introduced in January 2000) to date total £95,000.

  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry how much regional aid has been given by the UK Government since 1997 in terms of(a) cash grants, (b) tax relief and (c) other subsidies to industries investing in the UK; how many jobs were expected to have been created as a result; how many jobs were delivered; and if she will make a statement on the proportion of aid which has been given to projects that have subsequently failed. [121907]

  Jacqui Smith
  Since 1997, £119 million of grant offered under the Regional Selective Assistance scheme was accepted by companies in support of projects in England which have now been completed. These projects were expected to create or safeguard 38,997 jobs.

  The total amount of RSA that was eventually paid was £103 million and 39,841 jobs were created or safeguarded.

  In addition, £8 million has been paid for projects where there has been some recovery or write-off action. Of this, £1.5 million has been recovered. Many of these projects will have involved some investment and jobs but not on the scale anticipated at the time of offer.

  Under the Enterprise Grant scheme (introduced in January 2000) £56.4 million was offered to companies by 31 March 2003. £184,000 went to projects where there has been some recovery or write-off action. To date, £95,000 has been recovered. Job creation and safeguarding are not among the national criteria for Enterprise Grants.

  The Department is not responsible for tax issues nor for subsidies or grants given by other departments.

  Home Accident Surveillance Systems
  John Austin
  To ask the Secretary of State for Trade and Industry what plans she has for the future of the Home Accident Surveillance Systems; what representations she has received regarding the future of HASS; and if she will make a statement. [116355]

  Mr. Sutcliffe
  On 2 May, my hon. Friend the Member for Welwyn Hatfield the then Minister for Competition, Consumer and Markets, announced that the DTI will no longer collect statistics on the causes and nature of home and leisure accidents. Following increased pressure on resources and the need to focus on the Department's core priorities, hard decisions had to be made on what to stop. HASS did not fit with these priorities and I have no plans to replace it.

  I have received representations from several organisations regarding the impact of this decision.

  Mr. Drew
  To ask the Secretary of State for Trade and Industry if she will make a statement on the ending of the Home and Leisure Accident Surveillance System. [122479]

  Mr. Sutcliffe
  [holding answer 30 June 2003]: On 2 May 2003, my hon. Friend the Member for Welwyn Hatfield, the then Minister for Competition, Consumer and Market, announced that the DTI will no longer
  216W
  collect statistics on the causes and nature of home and leisure accidents. Following increased pressure on resources and the need to focus on the Department's core priorities, hard decisions had to be made on what to stop. The collection of accident statistics did not fit with these priorities.

  National Minimum Wage
  Mr. Hancock
  To ask the Secretary of State for Trade and Industry pursuant to her answer of 11 June 2003,Official Report, column 897W, on the national minimum wage, if she will break down by region the number of employers not complying with the minimum wage regulations; if she will list the provisions empowering enforcement officers to take action; under what circumstances offenders are prosecuted; and if she will make a statement. [120013]

  Mr. Sutcliffe
  Further to my earlier answer on 11 June, 1,996 employers were found not to be complying with the minimum wage regulations in 2002–03 and these can be broken down by region as follows:

  Region

  Number

  East

  122

  East Midlands

  94

  London

  236

  Merseyside

  27

  North East

  127

  North West

  181

  Northern Ireland

  212

  Scotland

  183

  South East

  94

  South West

  136

  Wales

  142

  West Midlands

  152

  Yorks/Humberside

  207

  Unknown

  83

  Total

  1,996

  There are a small number of cases (83) where unfortunately the regional details have not been recorded on the central database.

  The National Minimum Wage Act 1998 (NMWA 1998) contains a number of enforcement provisions: Section 14 deals with the production of staff records; Section 19(1) deals with Enforcement Notices; Section 20 covers tribunal and court proceedings where an Enforcement Notice is not complied with; Section 21(1) deals with Penalty Notices; Section 31 deals with prosecutions.

  As I said in my earlier answer, the Inland Revenue successfully resolves the great majority of cases (around 99 per cent.) without enforcement action being needed.

  Office of Fair Trading
  Dr. Stoate
  To ask the Secretary of State for Trade and Industry on what basis her Department is leading the Government's response to the OFT report and leading in the development of a package of measures to change regulations made under the National Health Service Act 1977; and if she will make a statement. [117412]
  217W
  Mr. Sutcliffe
  Ministers have agreed that the Department will coordinate the Government's responses to all market investigations by the OFT or the Competition Commission, which make regulatory recommendations and also monitor progress to follow up action. This reflects the Department's responsibility for consumer and competition matters. Any changes to regulations to be made under the National Health Service Act as a result of the Government's decisions on the merits of the recommendation on control of entry for pharmacies will be for the Department of Health to lead on.

  Personal Loan Charges
  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry what plans her Department has to abolish the rights of financial institutions to charge customers who repay personal loans early. [121908]

  Mr. Sutcliffe
  The early settlement of personal loans is one of the priority areas being covered under the current review of the Consumer Credit Act

  It is our intention to revise the current provisions to make them fair and equitable to both lenders and borrowers, and that consumers are better informed about these terms. A consultation document on proposed changes was issued last year to industry, consumer bodies and other interested parties and the responses are currently being evaluated.

  Robbin Rigg Wind Farm
  Mr. Peter Duncan
  To ask the Secretary of State for Trade and Industry if she will make a statement on her Department's policy on the Robin Rigg Offshore Wind Farm (Navigation and Fishing) (Scotland) Bill. [121769]

  Mr. Timms
  [holding answer 26 June 2003]: I understand the Bill receives its final hearing in the Scottish Parliament on 26 June 2003. The Department of Trade and Industry will, of course, consider any relevant aspects of the Parliament's deliberations.

  Sunset Clauses
  Bob Spink
  To ask the Secretary of State for Trade and Industry if she will make it her policy to include a sunset clause in all new legislation unless a specific case can be made to exclude a sunset clause. [120818]

  Ms Hewitt
  Revised guidance on Regulatory Impact Assessments, "Better Policy Making: A Guide to Regulatory Impact Assessment", was published by the Cabinet Office on 28 January 2003. It advises officials to consider time-limiting or a sunset clause at an early stage of policy development, and gives specific examples of where a sunset clause may be appropriate.

  The Department of Trade and Industry actively promotes the better regulation agenda and the use of sunset clauses where appropriate.

  Unsolicited E-mails
  Mr. Godsiff
  To ask the Secretary of State for Trade and Industry what plans the Government have to bring forward legislation to prohibit the distribution of unsolicited e-mails in the UK; and what steps may be 218W
  taken against companies who relocate to countries where the legislative framework covering the distribution of unsolicited e-mails is less strict. [122148]

  Mr. Timms
  There will be new controls on the distribution of unsolicited commercial e-mails (UCE) under the UK's implementing regulations for the Privacy and Electronic Communications Directive (Directive 2002/5 8/EC) which are due to come into force by 31 October.

  Under these regulations, commercial e-mails may only be sent to individuals with their prior consent, except where there is an existing customer relationship between the sender and the addressee.

  The new measures will apply to all EU member states and to instigators as well as senders of commercial e-mails within the EU. UK and other EU advertisers will therefore be unable to avoid the rules by using third part e-mail bureaux located outside the EU.

  Where a business decides to relocate its operations entirely to another country outside the EU, and no longer maintains a UK presence, it does become very difficult to enforce the UK rules. However, the fact that the European regime has now been agreed and is being implemented opens the door to agreements between the EU and other countries, which should result in a more unified approach towards the distribution of unsolicited e-mails.

  Veterinary Surgeons
  Mr. Paul Marsden
  To ask the Secretary of State for Trade and Industry what consultation was carried out with veterinary surgeons on the effects of the Competition Commission's inquiry into veterinary prescription only medicines. [121858]

  Mr. Sutcliffe
  During the course of its inquiry, the Commission received submissions from veterinary surgeons and veterinary organisations such as the Royal College of Veterinary Surgeons, the British Veterinary Association and the British Small Animal Veterinary Association. A full list of those who gave evidence, and details of their evidence, can be found in pages 273 to 537 of Volume I of the report.

  On 17 September 2002, the Commission published a statement of provisional conclusions and hypothetical remedies. Interested parties were invited to comment on these.

  At the request of my right hon. Friend the Secretary of State for Trade and Industry the Office of Fair Trading has written to veterinary organisations to consult informally on the appropriate terms of the order to implement the Commission's proposed remedies under the Fair Trading Act 1973. This will be followed by a public consultation where veterinary organisations, veterinary surgeons and any other interested parties can make their views known on the terms of such an order.

  Waste Management
  Mr. Sayeed
  To ask the Secretary of State for Trade and Industry what action her Department has taken since 2000 in its role as the sponsoring Department of the waste management industry. [122509]
  219W
  Mr. Timms
  As sponsoring Department, DTI has had regular liaison with representatives of the waste management industry including the Environmental Services Association (ESA) and the Chartered Institution of Wastes Management (CIWM). In particular, DTI has played an active role in the development of good practice initiatives by the National Resource and Waste Forum (NRWF)—a cross-sectoral forum led by the waste management industry, which was instigated by DTI following a study of industry competitiveness.

  The Department takes careful account of the views of the waste management industry in consideration of waste policy. This enables us to bring a waste industry perspective to discussions with other Government bodies such as Defra, the Environment Agency and HM Treasury.

  The Joint Environmental Markets Unit (JEMU)—which is jointly staffed by DTI and Defra—continues to promote the UK's waste management industry in international markets. An extensive programme of activities, including seminars and outward and inward trade missions, has benefited around 20 to 30 waste management companies over the past couple of years, and is beginning to achieve a far greater appreciation in the industry of global trade and investment opportunities.

  During 2002, an industry-Government Innovation and Growth Team (IGT) for the Environmental Goods and Services Sector (IGT-EGS) was set up to identify actions to help the UK environmental sector take advantage of changes in UK and overseas markets over the next 15 years. As a result, JEMU will expand its role, taking forward those actions that are of common interest across waste, water, energy and other sub-sectors and are not already being dealt with effectively elsewhere. This will include a particular focus on the innovation-related aspects of the IGT work.

  To this end, DTI and Defra have established an Environmental Innovations Advisory Group which will meet for the first time on 14 July 2003. The Group will bring together companies from different levels in three supply chains—waste recycling, energy efficient technology and water management—as well as people involved in supporting the innovation and commercialisation process. This theme of innovation in resource efficiency is consistent with policy goals, while the findings would be transferable to other areas of innovation in environmental technologies.

  The Department is also represented on the Defra-led Hazardous Waste Forum, and is currently considering options for a possible industry forum on waste, in line with a recommendation in the Strategy Unit report, "Waste Not Want Not".

  Wind Energy
  Lembit Opik
  To ask the Secretary of State for Trade and Industry what consultation her Department carried out with(a) general aviation stakeholders and (b) national representative bodies for general aviation aerodrome operations and users in the preparation of the Interim Guidelines on Wind Energy, published by her Department; if she will consult stakeholders within
  220W
  general aviation in the preparation of the final version of the Guidelines on Wind Energy; and if she will make a statement. [122033]

  Mr. Timms
  In addition to the Department, a number of stakeholders were involved in the preparation of the interim guidelines. These included the Civil Aviation Authority, National Air Traffic Services, Ministry of Defence, Department for Transport and the Airport Operators' Association who reported on progress to various consultative groups. Apart from this, a stakeholder feedback pro forma has been included on page 55 of the guidelines for other interested parties to register an interest in the work on future updates which can be found at: http://www.dit.gov.uk/energy/ renewables/publications/pdfs/wmdenergyaviation.pdf

INTERNATIONAL DEVELOPMENT

  Afghanistan
  Mr. Paul Marsden
  To ask the Minister of State, Department for International Development what health care checks are carried out on pre-school children in Afghanistan. [122160]

  Hilary Benn
  Immunisation of pre-school children has been the aim of the successful polio and measles vaccination campaigns carried out in Afghanistan over, the last year.

  Mr. Paul Marsden
  To ask the Minister of State, Department for International Development what the infant mortality rates were in Afghanistan in the last three years. [122161]

  Hilary Benn
  A UNICEF report from 1997 gave infant mortality rates as 165 per 1,000 live births. This was the figure also quoted by the first joint donor mission to Afghanistan to study health. The World Bank also provides the same figure of infant mortality for 1995 and 2000. There is no more recent data currently available.

  Mr. Paul Marsden
  To ask the Minister of State, Department for International Development (1) what financial support is being given to hospitals in Afghanistan to increase the number of woman health care providers; [122162]

  (2) what financial support is being given to hospitals in Afghanistan to train and recruit (a) nurses, (b) qualified birth attendants and (c) doctors. [122163]

  Hilary Benn
  The Afghan Transitional Administration requested US$173 million for the health sector as part of the Budget for the current year, of which at least US$22 million is specifically for training and capacity building. We estimate that donors will fund all or most of this. The Afghan Ministry of Health has devised an interim health strategy, which includes specific programmes for addressing institutional development and management and staff training. They are committed to addressing gender issues within these areas. DFID is helping the Ministry of Health to devise a long-term approach to policy and management, including recently by providing a consultant to assist with the assessment of human resource needs.
  221W
  Mr. Paul Marsden
  To ask the Minister of State, Department for International Development what steps are being taken to increase the number of hospitals in operation in Afghanistan. [122164]

  Hilary Benn
  The Afghanistan Transitional Authority is trying to improve the basic health services and primary health care for all and wants to avoid a rapid expansion of the hospital sector which will skew current and future resources away from primary care. The International Community supports this approach and is unlikely to fund the opening of large numbers of hospitals in the near future, while the Afghan Government lacks the capacity to manage and staff such institutions. However, DFID and others are assisting the Afghan Ministry of Health to develop its long-term strategy for health care provision in Afghanistan and this will include assessments of the needs of hospitals.

  Botswana
  Angus Robertson
  To ask the Minister of State, Department for International Development what reports the Department has received of the forced removal of groups from their tribal reserves in Botswana; and if he will make a statement. [122153]

  Hilary Benn
  In early 2002, the Government of Botswana ceased supplying water to San people living in the Central Kalahari Game Reserve, estimated to number about 500 at that time. Most of these people have since left the Reserve, many of them in a government co-ordinated relocation in February 2002. Representatives of the San are bringing a court case about the decision to cease supplying water. Our High Commission in Botswana is continuing to monitor the situation.

  The Secretary of State, Baroness Amos discussed the relocation of the San with the Government of Botswana during her visit there on 1–2 April as Foreign and Commonwealth Office Minister for Africa. Her discussion was part of an on-going dialogue between the two Governments about the San, and about wider poverty issues in Botswana.

  Deforestation
  Sue Doughty
  To ask the Minister of State, Department for International Development pursuant to his answer of 10 June 2003,Official Report, column 770W, to the hon. Member for Lewes (Norman Baker) on deforestation, if he will indicate the principal locations of forest cover lost between 1990 and 2000. [122778]

  Hilary Benn
  While "deforestation rate" is one official indicator for measuring success or failure of Millennium Development Goal 7 it is an imperfect one that hides differential impacts on poor people and does not capture the underlying causes of reducing forest cover—population growth, trade (including trade in illegal timber), macro-economic policies, weak governance, unclear access rights and conflict.

  Official estimates of forest cover are contested by independent organisations like Global Forest Watch. In addition, estimates disguise the fact that increased areas under plantation are replacing natural forest cover in, for example, parts of Asia and Costa Rica. According to
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  the Food and Agriculture Organisation of the United Nations, State of the World's Forests, the principle locations of forest cover lost between 1990 and 2000 are:

  Region

  Annual Rate of Change (%)

  Africa

  -0.8

  In particular:

  Comoros

  -4.3

  Rwanda

  -3.9

  Niger

  -3.7

  South America

  -0.4

  In particular:

  Ecuador

  -1.2

  Argentina

  -0.8

  Paraguay

  -0.5

  Oceania

  -0.2

  In particular:

  Micronesia

  -4.5

  Samoa

  -2.1

  Papa New Guinea

  -0.4

  Asia

  -0.1

  In particular:

  Yemen

  1.9

  Nepal

  -1.8

  Sri Lanka

  -1.6

  North and Central America

  -0.1

  In particular:

  Haiti

  -5.7

  Saint Lucia

  -4.9

  E1 Salvador

  -4.6

  Montserrat
  Mr. Rosindell
  To ask the Minister of State, Department for International Development what plans there are to increase aid to Montserrat. [122197]

  Hilary Benn
  Our financial provision for Montserrat, covering the 3-year UK Financial Year period 2003–04—2005–06, was increased in February of this year to a total of £45.6 million. This represented an increase of some 50 per cent. over the level that was previously set for the same period. It is estimated that, by March 2006, our assistance since the onset of the volcanic emergency in the mid-1990s will have totalled more than £225 million.

  Mr. Rosindell
  To ask the Minister of State, Department for International Development what recent discussions the Department has had with the Government of Montserrat. [122198]

  Hilary Benn
  We engage regularly in such discussions. For example, Montserrat's Chief Minister called on DFID Ministers during a UK visit in May; and several of our officials have visited the island already this year for talks on a range of issues, including construction of the new airport. Further missions are planned. We also enjoy frequent contact with the Montserrat Government Representative in London.

  Mr. Rosindell
  To ask the Minister of State, Department for International Development when the Secretary of State next plans to visit Montserrat. [122199]

  Hilary Benn
  My right hon. Friend has no such plans at present.

  Performance Targets
  Dr. Tonge
  To ask the Minister of State, Department for International Development if he will list the targets the Department for International Development set for the(a) Performance Assessment Network, (b) Performance Reporting Information System for Management and
  (c) Multilateral Organisations' Performance Assessment Initiative in (i) 2000–01, (ii) 2001–02 and (iii) 2002–03; and if he will make a statement. [122566]

  Hilary Benn
  The Performance Assessment Network was an informal network of officials from across DFID. It was created to ensure that lessons on performance assessment were shared widely across the Department. It had no formal targets and was disbanded in 2002. Lesson-learning is now undertaken throughout the organisation (rather than by a separate unit).

  Targets for improving the performance of our projects in each risk category, as measured by DFID's Performance Reporting Information System for Management (PRISM), were set under the Value for Money' target in DFID's 2001–04 Public Service Agreement (PSA) and rolled forward into the 2003–06 PSA. PRISM was rolled out throughout DFID in 2002. Now that a critical mass of performance information has been entered into PRISM, we will report progress against the baseline figures.

  The Multilateral Organisations Performance Assessment Network is an association of bilateral development agencies who assess multilateral performance at country level. It has no targets and it is not for us to set them. Its main activity is to pilot an assessment exercise, after which the members will assess how it has gone and whether and how to repeat it.

  Dr. Tonge
  To ask the Minister of State, Department for International Development how the Department for International Development assesses whether general targets under the Joint Funding Scheme have been met. [122567]

  Hilary Benn
  The Joint Funding Scheme (JFS) closed for new project funding in May 2000 and has been replaced by the Civil Society Challenge Fund. Pre-existing Joint Funding Scheme Projects continue to be supported, but this funding will cease at the end of 2004–05.

  All existing JFS projects have inbuilt Monitoring and Evaluation procedures. These produce annual progress reports and closing reports for each project. In 2000, DFID commissioned a review of the JFS which drew on this accumulated data to identify best practices and lessons learnt on the role of UK based civil society organisations in meeting the Millennium Development Goals. These findings contributed to the design and development of the new Civil Society Challenge Fund.

  The Civil Society Challenge Fund also has its own built in assessment and review mechanisms and a regular programme of visits to projects in the field by DFID staff and consultants. The overall principles of the Fund are based on and complementary to the UK Government's commitment to the achievement of the Millennium Development Goals.

HEALTH

  Leicester Royal Infirmary
  Keith Vaz
  To ask the Secretary of State for Health when he intends to visit the accident and emergency department at the Leicester Royal Infirmary to review recent changes in working practices. [122428]

  Mr. Hutton
  I have no current plans to visit the accident and emergency department at Leicester Royal Infirmary. I would like to take this opportunity to express my appreciation and thanks to all those working in the A&E department for their dedication and commitment to NHS patients.

  Smoking
  Andrew Mackinlay
  To ask the Secretary of State for Health what plans he has for further measures to combat smoking. [122429]

  Miss Melanie Johnson
  We are implementing a comprehensive tobacco programme to help the 7 in 10 smokers who want to quit and to prevent people starting. As well as introducing legislation, we are investing £138 million in the National Health Service stop smoking services over the next three years and £39 million in the next year on prevention.

  The most recent estimated cost to the NHS of treating smoking related diseases was for 1997 and was between £1.4 billion and 1.7 billion for England1'. As total net NHS expenditure for the year 1996–97 was £33.0 billion, the percentage of expenditure this represents is between 4.2 per cent. and 5.4 per cent.

  1"Cost Effectiveness of Smoking Cessation Interventions" by the Health Education Authority, in collaboration with the University of York published in 1997.

  Preventive Healthcare
  John Barrett
  To ask the Secretary of State for Health what steps he is taking to improve preventative healthcare. [122430]

  Miss Melanie Johnson
  This Government places the highest priority on preventing illness, promoting the health of all, and improving the health of the poorest people as a priority. This means tackling inequalities, reducing mortality from cancer and coronary heart disease as well as reducing the burden caused by infectious disease.

  Smoking-related Diseases
  Mr. Michael Jabez Foster
  To ask the Secretary of State for Health what recent estimate he has made of the annual cost of treatment of smoking-related diseases within the NHS; and what percentage that represents of the annual NHS budget. [122431]

  Miss Melanie Johnson
  We are implementing a comprehensive tobacco programme to help the seven in 10 smokers who want to quit and to prevent people starting. As well as introducing legislation, we are investing £138 million in the national health service stop smoking services over the next three years and £39 million in the next year on prevention.
  225W
  The most recent estimated cost to the NHS of treating smoking related diseases was for 1997 and was between £1.4 billion and £1.7 billion for England1. As total net NHS expenditure for the year 1996–97 was £33.0 billion, the percentage of expenditure this represents is between 4.2 per cent. and 5.4 per cent.

  1"Cost Effectiveness of Smoking Cessation Interventions" by the Health Education Authority, in collaboration with the University of York published in 1997.

  Foundation Hospitals
  Mr. Keith Bradley
  To ask the Secretary of State for Health if he will make a statement on the governance of foundation hospitals. [122432]

  Mr. Hutton
  The governance arrangements for NHS Foundation Trusts are set out in schedule 1 of the Health and Social Care (Community Health and Standards) Bill. For the first time in the history of the NHS, local people and staff will have the right to choose the Governors of their local hospitals, helping to improve the responsiveness and delivery of health care services.

  Miss Kirkbride
  To ask the Secretary of State for Health if he will make a statement on the number of hospitals wishing to apply for foundation trust status. [122439]

  Mr. Hutton
  Subject to legislation, the first wave of national health service foundation trusts will be established in April 2004. 29 NHS trusts are entering the preparatory stage for NHS foundation trust status. Each application for NHS foundation trust status will need the support of the Secretary of State. The applications will be submitted by autumn 2003.

  The applicant NHS trusts must retain three stars in the performance ratings to be published in the summer. They must also satisfy the requirements of the preparatory phase, outlined in The Guide to NHS Foundation Trusts, before they can be approved to become NHS Foundation Trusts.

  Mr. Mullin
  To ask the Secretary of State for Health pursuant to his oral answer of 3 June 2003 to the hon. Member for Sunderland South,Official Report, column 9, how candidates for membership of the governing boards of foundation hospitals will be selected; and if he will make a statement. [118173]

  Mr. Hutton
  Local people, patients and staff who become members of a national health service foundation trust will elect patient and public representatives onto a Board of Governors. It will be up to each individual NHS foundation trust to determine the detail of the arrangements for the membership and the election to the Board of Governors, within certain parameters. In particular, there must be fair and transparent elections. Governors elected by the public or staff constituency may hold office for a period of three years and are eligible for 226W
  re-election at the end of that period. Amongst other things, a NHS foundation trust's constitution will set out:
  eligibility requirements for membership and what membership means;
  the constitution of the Board of Governors, eligibility requirements for governors, provisions for the election and appointment of governors (including how prospective governors can be nominated) and the duties and responsibilities of the Board of Governors; and
  the membership and functions of the Board of Directors.

  Chronic Fatigue Syndrome (ME)
  Mr. Tom Clarke
  To ask the Secretary of State for Health what his policy is on the conclusion of the Donaldson Report on myalgic encephalitis/chronic fatigue syndrome. [122434]

  Dr. Ladyman
  On May 12 we announced £8.5 million for the development of services with Chronic Fatigue Syndrome/Myalgic Encephalitis. We asked the Medical Research Council to develop a research strategy for advancing biomedical and health services research on Chronic Fatigue Syndrome/Myalgic Encephalitis, subsequently published on 1 May. These actions will improve treatment and care for people with this debilitating condition.

  GP Prescribing Practices
  Kevin Brennan
  To ask the Secretary of State for Health if he will make a statement on innovation in prescribing practices by GPs. [122436]

  Mr. Hutton
  The NHS continues to expand investment in General Practitioner prescribing to meet the needs of patients. For instance, increasing the use of clinically effective drugs to prevent further heart attacks after an initial heart attack. Spending last year went up by 11.5 per cent.

  Thrombo-embolic Disease
  Mr. John Smith
  To ask the Secretary of State for Health what plans he has to record the incidence of thrombo-embolic disease among air travellers treated within the national health service. [122437]

  Miss Melanie Johnson
  The national health service does not currently record the travel history of patients with thrombo-embolic disease as a matter of routine. However we fully support the World Health Organisation's research into the subject and any plans to record such information will be informed by the results of the project.

  Care Homes
  Sir George Young
  To ask the Secretary of State for Health if he will make a statement on the provision of residential care for the elderly. [122438]

  Dr. Ladyman
  In recent years, the Government have provided substantial increases in the level of funding for social services which councils can use to increase fee levels if that is what is needed to increase local provision or re-balance the care home market.
  227W
  We are also committed to improving the quality of care, and this is evident in the development of national minimum standards for care homes.

  Ann Winterton
  To ask the Secretary of State for Health what constitutes personal care under the services provided by the care home sector. [122440]

  Dr. Ladyman
  Care of an intimate nature, including help with bathing, dressing and feeding, is usually considered to be personal care.

  Arthritis
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Health how many people in(a) England, (b) South Sefton, (c) Southport and (d) Formby have arthritis; if he will make a statement on Early Day Motion No.220; and if the Government will make arthritis a health care priority. [122234]

  Dr. Ladyman
  According to Arthritis Care, arthritis and rheumatism together account for one quarter of all visits to general practitioners. More than eight million people in the United Kingdom consult their family doctor about some form of arthritis. This includes about one million adults under the age of 45 and about 15,000 children. Figures are not available for South Sefton, Southport and Formby.

  Our policies to improve general hospital care, especially through the new single assessment process, will ensure that the health care needs of older people—who are the main sufferers from arthritis—will be properly targeted. This will ensure that the services that are provided are most appropriate to older people's needs, including people with arthritis.

  In the past year, two new classes of drugs, Cox II inhibitors and anti-TNF therapy have been made available to arthritis patients, following reviews by the National Institute for Clinical Excellence (NICE). In addition, NICE is reviewing the drug, Anakinra, for its clinical and cost-effectiveness in treating rheumatoid arthritis.

  We have issued directions obliging strategic health authorities and primary care trusts to provide appropriate funding for treatments recommended by NICE. This is in line with our manifesto commitment to ensure that patients receive drugs and treatments recommended by NICE on the national health service if considered appropriate by their clinicians.

  Priorities for health and social care are set out in "Improvement, Expansion and Reform", the Priorities and Planning Framework for 2003–6. Although arthritis is not identified specifically, people with this condition stand to benefit from the improvement in access to specialist care for patients suffering from any form of orthopaedic condition. Maximum waiting times have fallen over the past few years and will continue to do so, so that, by the end of 2005, the maximum waiting time for a first outpatient appointment with a consultant will fall to three months and the maximum wait for inpatient treatment will fall to six months. Also, the older people's national service framework set standards which will improve treatment and care for a range of older people, including those with arthritis.

  Aston Hall Hospital
  Mr. Todd
  To ask the Secretary of State for Health what steps he is taking to support the re-provisioning of Aston Hall Hospital in Derbyshire. [122423]

  Dr. Ladyman
  This Government have allocated £20 million per year to the capital element of the Learning Disability Development Fund (LDDF). In 2002–03, Greater Derby Primary Care Trust—the lead commissioner for Learning Disabilities in Southern Derbyshire—successfully hid for £200,000 of this, which will be used to help the re-provision of care to residents of Aston Hall Hospital.

  In 2003–04, responsibility for allocating LDDF capital fell to strategic health authorities.

  Carers Grant
  Mr. Tony Clarke
  To ask the Secretary of State for Health what the net expenditure from the carers grant by each social services authority in England(a) was in each year since 1997–98 and (b) is projected for financial year 2003–04. [122383]

  Dr. Ladyman
  The figures for net expenditure are not collected centrally.

  The Carers Grant started in 1999–2000 and information on gross expenditure is available for 1999–2000, 2000–01 and 2001–02. A copy of these figures has been placed in the Library.

  Continuing Care
  Mr. Burstow
  To ask the Secretary of State for Health, when he expects to announce the Department's response to the Health Service Ombudsman's report on continuing care. [122435]

  Dr. Ladyman
  The Department has been responding vigorously to the key recommendations since the publication of the Health Service Ombudsman's report on continuing care. We have already announced a number of actions to address the key issues raised.

  I will be meeting with the Ombudsman in the autumn to review progress.

  Mr. Burstow
  To ask the Secretary of State for Health (1) pursuant to his Answer of 9 June,Official Report, column 681W, on continuing care, how many people may have been wrongly denied full NHS funding for continuing care based on local information, broken down by strategic health authorities; [121596]

  (2) pursuant to his Answer of 19 June 2003, Official Report, columns 428–9W, on continuing care, how he will inform (a) the National Care Standards Commission, (b) the Health Service Ombudsman, (c) strategic health authorities and (d) individuals of the numbers of people who may have been wrongly assessed under criteria not consistent with the Coughlan judgment; and if he will make a statement. [121767]

  Dr. Ladyman
  [holding answer 26 June 2003]: We have no current plans to publish the numbers of people who may have been wrongly assessed under criteria not consistent with the Coughlan judgment.
  229W
  We will communicate with the National Care Standards Commission, the Ombudsman, strategic health authorities and individuals as and when appropriate.

  Domiciliary Oxygen Users
  Mrs. Helen Clark
  To ask the Secretary of State for Health what assessment he has made of the need for the provision of ambulatory oxygen for domiciliary use; and what plans he has to make conserving devices available on prescription for domiciliary oxygen users. [118480]

  Ms Rosie Winterton
  I refer my hon. Friend to the reply given to the hon. Member for South Swindon (Ms Drown) on 10 June 2003.Official Report, columns 1071–72W by the then Parliamentary Under-Secretary of State (Mr. Lammy).

  Endometriosis
  Mr. George Osborne
  To ask the Secretary of State for Health what steps he is taking to promote awareness of endometriosis. [122419]

  Miss Melanie Johnson
  We will be making funds available to the National Endometriosis Society to help raise awareness of endometriosis among women and general practitioners. They will produce two leaflets. The first will be a leaflet to raise awareness among women of the condition and encourage those with symptoms to discuss them with their GP. They will also produce a leaflet for GPs that will highlight the signs and symptoms to help early diagnosis and encourage appropriate treatment.

  Eye Health
  Mr. Gerrard
  To ask the Secretary of State for Health what the spending on preventative eye health education was(a) in total, (b) on school age children and (c) on people over the age of 50 in (i) 1980, (ii) 1990 and (iii) 2000; and what expenditure has been allocated for financial year 2003–04. [119705]

  Ms Rosie Winterton
  The Department does not allocate funding specifically to eye health education. We are, however, doing much to improve the detection and treatment of those with sight problems.

  Free sight tests are available under the national health service to large parts of the population, including all those aged 60 and over, children, those aged 16–18 in full-time education, people on benefits, those people at particular risk of developing eye disease, and people who are registered blind or partially sighted or who have a complex spectacle prescription. Sight tests are the ideal opportunity to review all aspects of eye health, including investigations for signs of disease. Those at risk of specific eye disease, for example, diabetic retinopathy, may be asked to attend regular screening. Overall, the number of NHS sight tests undertaken continues to increase. 9.8 million NHS sight tests were paid for by health authorities in 2001–02, an increase of three per cent. on 2000–01. 41 per cent. or four million, of these sight tests were performed on patients aged 60 or over, a group most vulnerable to eye disease. 24 per cent. or 2.4 million, were performed on children.
  230W
  In addition, we announced on 21 May the investment of an additional 52 million to deliver shorter waiting times for cataract patients, so that no patient will wait more than three months by December 2004, with most areas achieving this by the summer of 2004. We are also aiming to ensure that a minimum of 80 per cent. of people with diabetes are offered screening for the early detection and treatment, if needed, of diabetic eye disease, rising to 100 per cent. coverage by the end of 2007. This includes investment of £27 million for the NHS to purchase state of the art digital cameras and related screening equipment.

  We have promoted a system of child health and development checks. The programme of home visiting and community development makes an important contribution to many areas of health education, and fosters the early detection of problems, including those associated with eye sight in young, pre-school children. The programme also provides the opportunity to develop closer relationships between the family and the primary care team.

  Information about the extensive arrangements for providing help with NHS optical services and other health costs are publicised in leaflet HC11, "Are you entitled to help with health costs?" Posters are also available for display in optical practices and hospital out-patient departments.

  Falls
  Mr. Waterson
  To ask the Secretary of State for Health when he expects the National Institute for Clinical Excellence to issue guidance on falls. [122322]

  Dr. Ladyman
  The National Institute for Clinical Excellence (NICE) anticipates that the guidance on falls will be published in August 2004. Details of the anticipated publication date of all NICE guidance can be found on the NICE website at: www.nice.org.uk

  Food Supplements
  Dr. Iddon
  To ask the Secretary of State for Health when he last discussed his policy objectives for food supplements with counterparts in other European Union member states; with whom such discussions were held; what progress was made; and if he will make a statement. [119831]

  Miss Melanie Johnson
  The Government are firmly committed to the view that, in the interests of consumer choice, the law should allow food supplements that are safe and properly labelled to be freely marketed.

  The most recent formal discussions on this issue took place in the Codex Committee on Nutrition and Foods for Special Dietary Uses in November 2002 and involved representatives of all European Union Member States other than Luxembourg; no firm conclusions were reached. The next stage at EU level will be discussions about maximum permitted levels of nutrients in food supplements. The Government's view is that these should be based on safety considerations rather than supposed need so as to neither unnecessarily limit consumer choice nor unduly restrict trade.
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  The Food Standards Agency (FSA), which is responsible for negotiations on this issue, takes every opportunity to press this case bilaterally with Member States. In addition, in May, the FSA wrote to EU Member States to advise them of the conclusions of the UK Expert Group on Vitamins and Minerals (EVM) on safe intakes of vitamins and minerals. The EVM's advice will form the basis of the United Kingdom's position when substantive discussions at EU level take place in due course.

  Brian Cotter
  To ask the Secretary of State for Health what discussions he has had with his EU counterparts with regard to the setting of maximum permitted levels for nutrients in food supplements; and if he will make a statement. [120764]

  Miss Melanie Johnson
  [holding answer 20 June 2003]: I refer the hon. Member to the response I gave my hon. Friend the Member for Bolton South-East (Dr. Iddon) today.

  Health and Safety Training
  Dr. Kumar
  To ask the Secretary of State for Health what steps are being taken to develop a system to ensure that contractors have appropriate arrangements in place(a) to train their staff in health and safety and risk management and (b) to record and monitor contractors' health and safety performance. [120628]

  Mr. Hutton
  The Health and Safety at Work etc Act 1974 places a duty on all employers to train their staff in health and safety and risk management procedures. In order to comply with this, national health service trusts must satisfy themselves that training has been provided by their contractors to those contractors' staff.

  Enforcement is legally the responsibility of the Health and Safety Executive. The Department will also be reminding NHS trusts of their duties in this area and the value that good relationships with contractors can have in new guidance to be produced in the autumn of 2003.

  Hospital-acquired Infections
  Tom Brake
  To ask the Secretary of State for Health if he will make a statement on recent measures to(a) record and (b) combat infections acquired in hospitals. [122433]

  Miss Melanie Johnson
  Since April 2001 all acute trusts in England have had to report methicillin resistant staphylococcus aureus (MRSA) blood stream infections. This was the first phase of a mandatory surveillance scheme for healthcare associated infection and the first two years' results are available at the Public Health Laboratory service website: www.phls.org.uk/ publications/cdr/PDFfiles/2020/cdr2502.pdf and http:// www.phls.org.uk/publications/cdr/index.html

  These data have enabled the introduction of an MRSA improvement score into the national health service performance management system this year.

  The second phase of the mandatory scheme will be introduced this September when trusts will have to report blood stream infections due to glycopeptide resistant enterococci and serious untoward incidents associated with infection.
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  The Chief Medical Officer is spearheading a new Government drive to tackle healthcare associated infections, especially those acquired in hospitals. A long-term strategy to prevent and reduce infections in the NHS will be published in the autumn.

  Human Fertilisation and Embryology Authority
  Mr. David Stewart
  To ask the Secretary of State for Health (1) how many full-time equivalent staff were employed by the Human Fertilisation and Embryology Authority in each year from 1999; and what the salary costs were in each of those years; [121360]

  (2) how many Human Fertilisation and Embryology Authority staff members there were with media responsibilities in each year since 1999; and what their salary costs have been in each year. [121361]

  Miss Melanie Johnson
  [holding answer 24 June 2003]: The information requested is shown in the tables.

  Full time equivalent staff members in HFEA

  £

  Tax Year

  Number of staff

  1Salary cost

  1999–2000

  34

  690,625

  2000–01

  35

  721,229

  2001–02

  38

  835,784

  2002–03

  77

  1,587,136

  1Salary costs include National Insurance Contributions, Pension and Gross Salary

  Full time equivalent staff members with media responsibility in HFEA

  £

  Tax Year

  Number of staff

  1Salary cost

  1999–2000

  1

  28,057

  2000–01

  1

  34,996

  2001–02

  2

  228,314

  2002–03

  2

  85,759

  1Salary costs include National Insurance Contributions, Pension and Gross Salary.

  2One post was vacant for part of the year

  Mr. David Stewart
  To ask the Secretary of State for Health pursuant to his Answer of 18 June 2003,Official Report, column 280W, what categories of statistics are held by the Human Fertilisation and Embryology Authority. [121451]

  Miss Melanie Johnson
  The Human Fertilisation and Embryology Authority has a statutory duty to collect information about licensed treatments and their outcomes, and maintains a register of information compiled from data provided by licensed clinics. Information on the current dataset has been placed in the Library.

  Knee and Hip Joints
  Mrs. Calton
  To ask the Secretary of State for Health how NHS hospitals, carrying out private treatment for the replacement of knee and hip joints, account for the parts used for(a) private treatment and (b) NHS treatment. [121645]

  Mr. Hutton
  National health service trusts purchase their hip and knee prostheses direct from suppliers. Consultants will make a clinical decision on the actual
  233W
  implant required for each patient, and some will have a preference on the make of implant they use. The implants for both NHS and private patients would come from the stock the trust has in store. Private patients or their insurers will be invoiced by the NHS trust for the care that they have received.

  Details of the hip replacement operation for both NHS and private patients should then be entered on the National Joint Registry. This will assist NHS trusts to identify the any patients with a particular make of hip or knee if there is concern about the performance of the implant.

  Learning Disability Services
  Mr. Paice
  To ask the Secretary of State for Health (1) what action he plans to take concerning strategic health authorities which do not use allocation from the Learning Disability Development Fund for learning disability services; [121802]

  (2) what guidance he has issued to strategic health authorities concerning the ring fencing of allocation from the Learning Disability Development Fund. [121803]

  Dr. Ladyman
  [holding answer 26 June 2003]: The Learning Disability Development Fund (LDDF) is part of a national programme to support the delivery of the Government White Paper, "Valuing People—A New Strategy for the 21st Century". For 2003–04, it consists of £21 million revenue and £20 million capital.

  The revenue element was distributed direct to primary care trusts on a pro-rata basis with a letter explaining its purpose. The capital element of the LDDF was allocated to strategic health authorities (SHAs) as part of their strategic capital allocations notified in Annex D of HSC 2003/004. A note was included in the Chief Executive Bulletin confirming that the LDDF capital was included in the strategic capital allocations and drawing attention to an entry on the Department of Health's learning disability website at www.doh.gov.uk/ learningdisabilities about the priorities for its use.

  The capital is not ring-fenced. It is for SHAs to decide how best to use the money to support the needs of the people in their area.

  Lung Patients
  Chris Grayling
  To ask the Secretary of State for Health (1) what plans he has to provide secure funding for pulmonary rehabilitation programmes in NHS hospitals; and when he expects that such programmes will be universally available in the NHS; [122119]

  (2) if he will make a statement on (a) regional and (b) local variations in the provision by the NHS of pulmonary rehabilitation to lung patients. [122120]

  Dr. Ladyman
  Substantial new investment in both health and social care services was announced in the 2002 Budget. This amounts to the largest sustained increase in funding of any five-year period in the history of the national health service. Over the years 2003–04 to 2007–08, these plans mean that expenditure on the NHS in England will increase on average by 7.4 per cent. a year over and above inflation—a total increase over the 234W
  period of 43 per cent. in real terms. This means that, over the same five-year period, there will be an increase of £34 billion.

  It is the role of strategic health authorities, in partnership with primary care trusts (PCTs), to decide what services to provide for their populations including those with respiratory conditions. They are best placed to understand local health needs and commission services to meet them.

  The National Institute for Clinical Excellence (NICE) is currently developing a guideline on the management of chronic obstructive pulmonary disease in primary and secondary care. NICE is due to publish the guideline in 2004. In January 2003, the Respiratory Alliance published their guidance, "Bridging the Gap", which aims to help PCTs to commission and deliver high quality allergy and respiratory care. Local British Lung Foundation Breathe Easy groups often reinforce pulmonary rehabilitation programmes.

  Information is not held centrally regarding the proportion of people with chronic obstructive pulmonary disease who can access pulmonary rehabilitation locally or nationally. However, a recent survey by the British Lung Foundation and the British Thoracic Society found that 160 out of 266 hospitals across the country provide some form of pulmonary rehabilitation to lung patients.

  Mental Health
  Mrs. Calton
  To ask the Secretary of State for Health what recent assessment has been made of the risks from Seroxat to adults suffering from depression. [121263]

  Ms Rosie Winterton
  I refer the hon. Member to the responses given to her by my hon. Friend, the Parliamentary Under-Secretary of State for Health (Dr. Ladyman) on Friday 20 June 2003,Official Report, column 488–89W.

  Nerve Agent Antidotes
  Dr. Evan Harris
  To ask the Secretary of State for Health what stocks his Department have of antidotes to nerve agents which could possibly be used in a terrorist attack; and whether there are such agents for which his Department do not have suitable stocks of antidotes. [122100]

  Mr. Hutton
  Of the many compounds known to be toxic to man, only a very few are amenable to treatment with specific antidotes. For all that fall into this category and have been assessed as threats, the Department of Health has acquired sufficient stocks of antidotes.

  NHS Dentistry
  Mr. Hancock
  To ask the Secretary of State for Health what research has been done into the long term effects of people being unable to access non-urgent oral health services due to a shortage of dentists willing to treat NHS patients; and if he will make a statement. [118107]

  Ms Rosie Winterton
  I refer the hon. Member to the response given to him by the then Parliamentary Under-Secretary of State for Health (Mr. Lammy) on 11 June
  235W
  2003, Official Report, column 935W, regarding the research into the long-term effects of people being unable to access non-urgent oral health services.

  The Government recognises that access to routine dental treatment can be difficult in some areas of the country. This is despite a steady increase in the number of dentists seeing national health service patients between 1997 and 2001 and an increase in the number of courses of treatment completed under NHS arrangements by two million between 1996–97 and 2001–02. Currently, around 60 per cent. of all general practice dentists offer 90 per cent. or more NHS care. Some 25 per cent. of all general practice dentists offer NHS care exclusively. Around 90 per cent. of callers to NHS Direct seeking routine dental treatment are put in touch with a dentist within locally set and nationally benchmarked distance standards.

  The Health and Social Care (Community Health and Standards) Bill proposes the local commissioning of primary dental services by primary care trusts. It is the intention of the Bill that this will better match the provision of NHS dentistry with local oral health needs.

  Mr. Gordon Prentice
  To ask the Secretary of State for Health to what extent NHS dentists are expected to carry out a soft tissue examination; how long this procedure takes; and if he will make a statement. [121994]

  Ms Rosie Winterton
  There are three types of examination carried out in the general dental service. These are set out in the statement of dental remuneration (SDR) as follows:Clinical examination, advice, charting (including monitoring of periodontal status) and report.
  Extensive clinical examination, advice, charting (including charting of periodontal status) and report.
  Full case assessment (including full charting and report of periodontal status), treatment planning and report.

  Each of these procedures requires an increasing level of examination of soft tissues. The SDR can be found on the Department's website at www.doh.gov.uk/sdr.

  The time taken for these procedures will vary according to individual patients' needs.

  NHS Services (Gloucestershire)
  Mr. Nigel Jones
  To ask the Secretary of State for Health if he will make a statement on NHS dentistry in Gloucestershire. [121874]

  Ms Rosie Winterton
  The Government are committed to providing national health service dentistry for all who need and seek it. We recognise, however, that there are some areas of the country, including parts of Gloucestershire, where it is difficult to find a NHS dentist.

  In the forthcoming Health and Social Care (Community Health and Standards) Bill, the Government proposes to legislate for far-reaching reform of NHS dental services. It is proposed that each primary care trust (PCT) be given a duty to provide or secure the provision of primary dental services in its area to the extent that it considers reasonable to do so and be given the financial resources to do this. This will give
  236W
  PCTs the flexibility to address access issues in their areas. Dentists who contract with a PCT will have a secure income in return for making a longer-term commitment to the NHS.

  Mr. Nigel Jones
  To ask the Secretary of State for Health if he will make a statement on the contribution of hospices in Gloucestershire to the work of the NHS. [121876]

  Ms Rosie Winterton
  Ministers recognise the excellent work done by all hospices in supporting people with terminal or life threatening illnesses. We also recognise the importance of improving palliative care for all patients and that is why we pledged in the NHS Cancer Plan to invest an additional £50 million per annum in specialist palliative care, including hospices, by 2004. This extra £50 million is to help tackle inequalities in access to specialist palliative care and to enable the National Health Service to increase its contribution to the cost hospices incur in providing agreed levels of services.

  A £50 million per annum central budget has been set up for specialist palliative care for 2003–04 to 2005–06. A joint NHS/voluntary sector national partnership group, charged with ensuring the £50 million is spent wisely, is assessing investment plans from the local cancer networks for the use of the central budget. Once the plans are approved, allocations will be made to networks.

  Information on the contribution of hospices in Gloucestershire is available from the chief executive of the Avon Gloucestershire and Wiltshire Strategic Health Authority.

  Obesity
  Nick Harvey
  To ask the Secretary of State for Health pursuant to his answer of 3 April 2003,Official Report, column 856W, on obesity, how many obese (a) adults and (b) children there (i) were in 1998 and (ii) are expected to be in 2010. [117840]

  Miss Melanie Johnson
  The Health Survey for England showed that in 1998, 21 per cent. of women (approximately 5,251,570) and 17 per cent. of men (approximately 4,020,500) were obese. Figures on obese children are not available for 1998. However, analyses of the Health Survey for England 2001 showed the prevalence of obesity in 1999 was 10 per cent. (approximately 63,000) at age six rising to 17 per cent. (approximately 102,000) at age 15.

  The National Audit Office report "Tackling Obesity in England", published 2001, predicted that if trends continue at the present rate until 2010, the prevalence of obesity will have increased by 47 per cent. in adults between 1998 and 2010 from 19 per cent. to 28 per cent. No projections for children are available.

  Nick Harvey
  To ask the Secretary of State for Health pursuant to his answer of 25 March 2003,Official Report, column 206W, on obesity, how many children aged (a) six and (b) 15 there were in 1999; and how many of those children were diagnosed as clinically obese. [117843]
  237W
  Miss Melanie Johnson
  The Census Resident Population Estimates in England showed that in 1999 there were 631,558 children aged six years old and 599,843 aged 15 years old. The Health Survey for England 2001 showed that of these 10 per cent. (approximately 63,000) of six year olds and 17 per cent. (approximately 102,000) of 15 year olds were clinically obese.

  Personal Care
  Mr. Nigel Jones
  To ask the Secretary of State for Health what working definition of personal care is used when determining whether a patient is receiving personal care or nursing care, in order to determine eligibility for funding that care. [121880]

  Dr. Ladyman
  No definition of personal care is used in determining eligibility for funding care. Where a person's primary need is a health need, then the National Health Service is responsible for all their care. The NHS is also responsible for nursing care in any setting. This is defined, in section 49 of the Health and Social Care Act 2001, as "services provided by a registered nurse and involving either the provision of care or the planning, supervision or delegation of the provision of care, other than any services which, having regard to their nature and the circumstances in which they are provided, do not need to be provided by a registered nurse". Where a person needs care other than services for which the NHS is responsible, those services can be provided by a local authority on a means tested basis.

  The Royal Commission on Long Term Care defined personal care as care of an intimate nature, including help with toileting and other personal needs such as bathing, dressing and undressing, and with feeding. This definition is not used in determining eligibility for funding care. Where a person's needs are primarily and substantially for health care then all their care is funded by the NHS. The NHS also funds nursing care in any setting, this is nursing care as defined by section 49 of the Health and Social Care Act 2001 as "services provided by a registered nurse and involving either the provision of care or the planning, supervision or delegation of the provision of care, other than any services which, having regard to their nature and the circumstances in which they are provided, do not need to be provided by a registered nurse". Where a person needs care other than that provided by the NHS this can be provided by a local authority on a means tested basis.

  Pharmacies
  Dr. Evan Harris
  To ask the Secretary of State for Health if he will take lead responsibility for the Government response to the Office of Fair Trading report on pharmacy contract limitation. [121321]

  Ms Rosie Winterton
  The Government intends to come forward with proposals in response to the Office of Fair Trading's study on retail pharmacies before the summer recess. The Department of Health is working closely with the Department of Trade and Industry, which is co-ordinating that response.

  Prescription Charging
  Dr. Kumar
  To ask the Secretary of State for Health what plans he has to review the system of prescription charging; and if he will make a statement. [121637]

  Ms Rosie Winterton
  We have no plans to review the prescription charging arrangements.

  Radiotherapy
  Tim Loughton
  To ask the Secretary of State for Health what the ratio of linear accelerators to catchment area population is in each hospital trust area operating such equipment in England. [120379]

  Miss Melanie Johnson
  the number of radiotherapy centre treatment machines (linacs) serving catchment populations is published at www.canceruk.net/reports/ rtsurvey2002/index.htm.

  This information was derived from a survey of radiotherapy departments carried out in June 2002 by the National Cancer Services Analysis Team under the direction of the Royal College of Radiologists.

  Three major initiatives are on-going in the provision of radiotherapy treatment machines which are leading to an increase in the numbers of such machines in clinical use.

  Sunset Clauses
  Bob Spink
  To ask the Secretary of State for Health if he will make it his policy to include a sunset clause in all new legislation promoted by his Department unless a specific case can be made to exclude a sunset clause. [120843]

  Mr. Hutton
  The Department actively promotes the better regulation agenda. Measures to improve regulation that are considered during policy development include sunset clauses and time limiting of regulations.

  Work-related Stress
  Dr. Kumar
  To ask the Secretary of State for Health what services are available to NHS staff suffering from work-related stress; what plans there are to advise trusts to operate fast track referral systems for such staff; and if he will make a statement. [120627]

  Mr. Hutton
  The Department's long term plans for reducing organisational stress in the National Health Service are based around the improving working lives (IWL) programme. This covers a range of issues, including the provision of childcare, flexible working, improvements to work/life balance as well as ensuring the provision of counselling services for all staff.

  The National Audit Office report, "A Safer Place to Work: Improving the Management of health safety risks to staff in NHS Trusts", reported that 68 per cent. of NHS trusts already operate some form of "fast tracking" for staff. This is to ensure the earliest possible treatment for staff injured at work to facilitate their quick return to duty and maximise staff resources.

  The Department will be producing new guidance in the autumn of 2003, which will draw further attention to the use of quicker access services for those who aren't already implementing such systems.

  Waiting Lists/Times
  Mr. Ruffley
  To ask the Secretary of State for Health what the average waiting time for an out-patient appointment was in each strategic health authority in England in each year since 1998. [120421]

  Mr. Hutton
  The information requested for 1998–99 to 2002–03 has been placed in the Library. The tables show the estimated median waiting time, in weeks, for first outpatient appointments following written referral by general practitioner from 1998–99 to 2002–03. Over this period the number of people waiting over 26 weeks for their first outpatient appointment fell from 144,200 at end March 1999 to 17 at end March 2003.

  Dr. Evan Harris
  To ask the Secretary of State for Health what targets have been set on the maximum length of time patients should wait for their complaints

  Recommended time limits for resolving Complaints in the NHS

  Event

  Time recommended

  Local Resolution

  Oral complaint

  Dealt with on the spot or referred

  Acknowledgement

  Two working days of receipt, or full reply within five working days

  Full response by trust/health authority, or family health service practitioner

  20 working days of receipt, or 10 working days for practice-based complaints, with extended period if health authority becomes involved

  Independent Review for trust/health authority complaints

  Acknowledgement by convener of request for Independent Review

  Two working days of receipt

  Decision by convener to set up panel, or not

  20 working days of receipt of request

  Appointment of panel members

  20 working days of decision by convener to establish a panel

  Draft report of panel

  50 working days of formal appointment of panel and assessors

  Final report of panel

  10 further working days

  Response to complainant by trust/health authority

  20 working days of receipt of panel's report

  Independent Review for family health services practitioner complaints

  Acknowledgement by convener of request for Independent Review

  Two working days of receipt

  Decision by convener to set up panel, or not

  10 working days of receipt of request

  Appointment of panel members

  10 working days of decision by convener to establish a panel

  Draft report of panel

  30 working days of formal appointment of panel and assessors

  Final report of panel

  10 further working days

  Final report sent to complainant by chief executive of health authority

  Five working days of receipt of panel's report

CULTURE, MEDIA AND SPORT

  Commission for Architecture and the Built Environment
  Dr. Murrison
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement on(a) the performance-related targets her Department has set for the Commission for Architecture and the Built Environment and (b) the performance against those targets for the most recent year for which data are available. [121424]

  Mr. Caborn
  CABE's performance-related targets for the current year 2003–04 are set out in CABE's Corporate Strategy, a summary of which will shortly be placed in the Libraries of both Houses.

  I will write to the hon. Member with details of performance against target for the most recent period for which such data are available, namely, 2001–02.
  240W
  to be resolved; and what the performance against these targets was in the last year for which figures are available. [121750]

  Ms Rosie Winterton
  Guidance issued by the Department in the document, "Complaints—Listening Acting Improving", recommends various time limits for the handling of complaints. A list of these is shown in the table. These are for guidance only; there is no specific maximum length of time prescribed.

  In 2002–03, the last year for which figures are available, the performance target for local resolution of written complaints by trusts and health authorities was achieved in 62.9 per cent. of cases. Similarly, in 2002–03, the performance target for independent review panels to manage requests for independent review was achieved in 19.3 per cent. of cases.

  This date will be updated in CABE's Annual Report 2002–03. This is due to be published by the end of July 2003 and copies will be placed in the Libraries of both Houses.

  Community Fund
  Mr. Rosindell
  To ask the Secretary of State for Culture, Media and Sport what recent discussions she has had with the Community Fund on funding for village halls. [122203]

  Estelle Morris
  My right hon. Friend the Secretary of State has had no recent discussions with the Community Fund on funding for village halls. However, my right hon. Friend the Minister of State for Rural Affairs, who has lead policy responsibility for village halls, is chairing a group looking at the issues that currently face village halls. Officials from this Department, as well as representatives from the Community Fund sit on the group along with other external stakeholders. The group first met in February 2003 and plan to meet again in July.

  Departmental Ministers
  Mr. Horam
  To ask the Secretary of State for Culture, Media and Sport how many Ministers there were in her Department in each year since 1996. [120992]

  Mr. Caborn
  I refer the hon. Member to the answer given to him by my hon. Friend the Minister of State for the Cabinet Office (Mr. Alexander) on 24 June 2003,Official Report, column 661W.

  Football Clubs
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport what assessment she has made of the impact of financial pressures on small football clubs which receive funding from her Department and its agencies. [122830]

  Mr. Caborn
  The Government do not subsidise the sporting or business activities of professional football clubs from public funds, either directly or through its agencies. Public funding to football is channelled through the Football Foundation, and is used for grassroots development, community and education projects, and essential stadium safety work. The Government agreed to the Foundation making a £20 million grant to Football League clubs last November, on the conditions that it was made entirely from the contributions of the Football Association and the FA Premier League, and that the Foundation's funding activities in other areas would not be adversely affected.

  The Government are encouraging local communities to come to the assistance of struggling football clubs through the work of Supporters Direct. Supporters Direct is wholly funded from public sources under the Reduction in Pool Betting Duty.

  Lottery
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport how much revenue was raised by the Lottery in each year since 1994; and what proportion of revenue for each year was allocated to sport and sport-related activities. [122838]

  Estelle Morris
  The information requested is shown in the table.

  The figures shown for income include both that from the operator and from investments.

  Total (£000)

  Proportion to sport (£000)

  2002–03

  1,590,472

  258,326

  2001–02

  1,842,233

  301,556

  2000–01

  1,772,839

  298,411

  1999–2000

  1,766,394

  273,171

  1998–99

  1,918,906

  306,710

  1997–98

  1,952,219

  368,154

  1996–97

  1,587,759

  313,946

  1995–96

  1,535,966

  302,392

  1994–95

  298,580

  58,517

  The figures for 2002/03 have not yet been subjected to final audit.
  242W
  Mr. Amess
  To ask the Secretary of State for Culture, Media and Sport how many lottery tickets were sold in Southend West in each of the last two years. [122707]

  Estelle Morris
  Information about National Lottery ticket sales is not collected by constituency, but the National Lottery Commission is able to provide information about sales broken down by postcode area. In response to a question from my hon. Friend the Member for Morley and Rothwell (Mr. Challen) on 22 October 2002,Official Report, columns 182–83, my right hon. Friend the Minister for Sport placed in the Library a table provided by Camelot plc listing sales by postcode area since the Lottery's launch. I refer the hon. Member to that table.

  Sporting Facilities
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport what measures are in place to identify(a) existing sporting facilities and (b) need by locality in the UK; and if she will make a statement. [122831]

  Mr. Caborn
  The Development of community sports facilities is a key element in achieving the Government's objectives on health and increased participation in physical activity. DCMS recognises the need to identify existing sporting facilities in the UK and the demand for those facilities in each locality.

  To facilitate this, the Government are in the process of establishing a database of sports facilities. The database will assist local authorities in planning for the future needs of their communities in terms of sport and leisure provision and will help to target and inform the substantial investment the Government are making in sport and recreation facilities.

  Sport England is currently putting the project out to tender.

  Sports Funding
  Dr. Kumar
  To ask the Secretary of State for Culture, Media and Sport what support she makes available for(a) community football and (b) other sports-related activities; what Government funding such schemes will receive in each Government Office region in 2003–04; and if she will make a statement. [121634]

  Mr. Caborn
  The Lottery sports fund has made awards totalling over £1.5 billion for community sport projects since 1995, including £83,879,701 for community football. Funding is dependent on Lottery income and is not allocated against Government Office Regions. Applications are assessed on their merits as they are received

  The Football Foundation funds community football schemes as part of its work in the development of grass roots football. In addition to substantial contributions from the FA and the Premier League, the Foundation will receive a minimum of £62 million in public funding over the period 2000–04, from Sport England, the New Opportunities Fund and the Reduction in Pool Betting Duty. The level of public funding to the Foundation for 2003–04 will depend on the level of Pool Betting Duty receipts, but is expected to total £17 million. This is not allocated by reference to Government Office regions.
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  In addition to the The New Opportunities Fund's contribution to the football foundation the New Opportunities PE and Sport Programme will provide £581 million in England for school sports facilities, including a £25 million contribution to the Space for Sports and the Arts scheme. Some facilities will include community football. Provisional funding has been allocated to each Local Education Authority area and awards will be made once NOF staff have assessed individual applications. A regional breakdown of the provisional allocation is as follows:

  £ million

  Region

  Totals

  Eastern

  38

  East Midlands

  39.8

  London

  81.3

  North East

  37.9

  North West

  89.4

  South East

  51.8

  South West

  35.6

  West Midlands

  61.3

  Yorkshire

  60.1

  Total

  495.3

  The Space for Sport and the Arts programme will support the development of quality spaces and facilities for sports and arts activities in primary schools for school and community use. The programme covers a variety of sports activities, including community football. Between October 2001–March 2004 the regional allocations set out in the following table have been made:

  Region

  Allocation (£)

  East

  7,750,000

  South East

  10,150,000

  East Midlands

  14,000,000

  South West

  9,525,000

  West Midlands

  11,000,000

  London

  18,750,000

  Yorkshire

  15,450,000

  North East

  21,550,000

  North West

  23,025,000

  Total

  131,200,000

  Exchequer spending through Sport England in 2003–04 is planned to be £49.8 million. Within this total, spending on community football or by region cannot be separately identified.

  Sportsearch
  Mr. Paul Marsden
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement on the effectiveness of the Sportsearch programme in identifying ways to increase the amount of time children spend on sporting activities; and for what reasons funding for Sportsearch has ended. [122398]

  Mr. Caborn
  Sportsearch is being developed by Sport England. Independent evaluation shows that the programme can help young people to discover what sports they might be good at and that it is well regarded by those who have used it. Sport England is currently considering Sportsearch's future within the wider context of its modernization programme.

HOME DEPARTMENT

  Afghan Refugees
  Tim Loughton
  To ask the Secretary of State for the Home Department pursuant to his answer of 9 June 2003,Official Report, columns 659–60W, on Afghan refugees, when he intends to remove the remaining people. [121804]

  Beverley Hughes
  [holding answer 26 June 2003]: There was regrettably a typographical error in the answer of 9 June which significantly changed its intended meaning. The position is that action will be taken to remove the remaining people as soon as it is clear that there is no legal or other barrier to their removal.

  The Official Report will be corrected to reflect this. I wrote to the hon. Member on 18 June 2003 apologising for the confusion which this has caused.

  Anti-social Behaviour Bill
  Mrs. Brooke
  To ask the Secretary of State for the Home Department when he will publish a draft Code of Practice relating to the proposed use of the powers to disperse groups of people in the Anti-Social Behaviour Bill. [121168]

  Ms Blears
  [holding answer 23 June 2003]: The Government will issue a draft Code of Practice on the powers to disperse groups as far as is practicable, during the course of, and to assist with, Parliament's consideration of the Bill. The Government intend to consult widely in drawing up this Code of Practice in order to give officers the best possible guidance and advice on using these powers.

  Mrs. Brooke
  To ask the Secretary of State for the Home Department when he will publish additional guidance to accompany the Anti-Social Behaviour Bill. [121169]

  Ms Blears
  [holding answer 23 June 2003]: The Government intend to issue draft guidance notes on the powers contained in the Anti-Social Behaviour Bill, as far as is practicable, during the course of Parliament's consideration of the Bill.

  Anti-Terrorism, Crime and Security Act
  Simon Hughes
  To ask the Secretary of State for the Home Department whether special measures have been put in place to ensure the safety and security of those involved in appeal hearings before the Special Immigration Appeals Commission in respect of those prisoners detained under the Anti-Terrorism, Crime and Security Act 2001; and if he will make a statement. [121951]

  Mr. Lammy
  I have been asked to reply.

  Following consultation with the City of London Police and the Security Services a number of new measures have been implemented to ensure the safety and security of those involved in appeal hearings before the Special Immigration Appeals Commission. However, for reasons of security we would not wish to make public any specific details of the additional measures put into place.

  Anti-social Behaviour Orders
  Miss McIntosh
  To ask the Secretary of State for the Home Department if he will make a statement on the number of antisocial behaviour orders issued in North Yorkshire in(a) 2000, (b) 2001 and (c) 2002. [121352]

  Ms Blears
  Information held centrally up to 31 May 2000 is for the number of Anti-Social Behaviour Orders (ASBOs) issued within England and Wales by police force area only. From 1 June 2000 official statistics on the number of ASBOs issued and refused within England and Wales are based on quarterly returns from Magistrates Courts Committees (MCCs).

  Information is given in the table on the number of notifications, as reported to the Home Office, of ASBOs issued in North Yorkshire from 1 April 1999 up to 30 November 2002 (latest available).

  We are aware that the numbers of ASBOs made nationally have been consistently under reported in returns made by magistrates courts and are considering how reporting can be improved.

  The number of notifications, as reported to the Home Office, of ASBOs issued in North Yorkshire, from 1 April 1999 to 30 November 2002

  1 April 1999 to 31 May 20001

  4

  1 June 2000 to 31 December 2000

  0

  1 January 2001 to 31 December 2001

  7

  1 January 2002 to 30 November 2002s2

  0

  Total

  11

  1Data available by police force area only

  2Latest available. Fallowing implementation of the police Reform Act (2 December 2002), data for December 2002 will be incorporated into the first quarter 2003 data.

  Asylum Accommodation Centres
  Simon Hughes
  To ask the Secretary of State for the Home Department if he will make a statement on the progress made in securing planning permission for each of the planned asylum accommodation centres. [121958]

  Beverley Hughes
  Planning inquiries for the sites identified at DSDC Bicester and the former RAF Newton concluded on 3 March and 2 May 2003 respectively. We await decisions on these sites from my right hon. Friend the Deputy Prime Minister (John Prescott).

  Asylum Seekers
  Vera Baird
  To ask the Secretary of State for the Home Department (1) how many asylum claims from claimants living in the Redcar constituency have been refused since May 2002; and in how many cases deportation is pending; [121829]

  (2) how many asylum refusals (a) in Redcar and (b)in England have resulted in deportations since May 2002. [121830]

  Beverley Hughes
  Information on the numbers of refusals at initial decision, cases for which deportation is pending and removals relating to persons living in particular areas of the UK is not available. Deportations are a specific subset of removals alongside persons subject to administrative removal, removal due to illegal entry action or those refused entry at port and 246W
  subsequently removed. The requested information, for cases where the information is available, could be obtained only at disproportionate cost by examination of individual case records.

  Vera Baird
  To ask the Secretary of State for the Home Department in how many cases of asylum refusals(a) in Redcar and (b) in England no further action has been taken but all benefits to the asylum seeker have been stopped since May 2002. [121831]

  Beverley Hughes
  Information on initial decision and appeal outcomes relating to persons in particular areas of the UK is currently unavailable.

  Information on the number of applications for the National Asylum Support Service (NASS) support and the numbers of asylum seekers currently being supported by NASS can be found on the web site http:// www.homeoffice.gov.uk/rds/immigration1.html

  Burglary (Health Impact)
  Mr. Burstow
  To ask the Secretary of State for the Home Department if he will place in the Library a copy of his Department's research report on the impact of burglary on the health of older people in sheltered accommodation. [122669]

  Ms Blears
  [holding answer 30 June 2003]: We are publishing a report, entitled "Experiences of older burglary victims", on the Home Office Research, Development and Statistics website, together with a related report, "Distraction burglary among older adults and minority ethnic communities". Copies will be placed in the Library.

  The recommendations from the two studies cover three main areas: raising awareness of the crime of distraction burglary and how to prevent it, among both older people and professionals working with them; reducing vulnerability; and reducing the impact once a crime has occurred. They are highly relevant to practitioners and voluntary groups working with older burglary victims and vulnerable groups, and officials will be discussing them with a range of interested organisations, including Help the Aged and Age Concern, through the Home Office Distraction Burglary Task Force.

  Cannabis
  Paul Flynn
  To ask the Secretary of State for the Home Department when the reclassification of cannabis will be completed; and why this measure will not be introduced in July. [121865]

  Caroline Flint
  Subject to Parliamentary approval, cannabis will be reclassified to Class C under the Misuse of Drugs Act 1971 as soon as some related provisions in the Criminal Justice Bill currently before Parliament are brought into force. The related provisions introduce a power of arrest for the possession of Class C drugs and increase the penalties for trafficking Class C drugs. It is not expected that the Bill will receive the Royal Assent before the autumn, and the reclassification of cannabis will take effect as soon as practicable thereafter.

  Closed Circuit Television
  Mr. Sarwar
  To ask the Secretary of State for the Home Department what his Department's assessment is of the impact of closed circuit television cameras on crime. [121303]

  Ms Blears
  Police operational experience and various other research studies show that CCTV has considerable crime reduction and detection potential, particularly when used as part of a wider strategy.

  To help ensure maximum impact and sustainability of CCTV, a £1.5 million Home Office funded national evaluation programme is being carried out by the Scarman Centre, University of Leicester, on 15 approved CCTV Initiative schemes.

  The final evaluation report will not be published until 2004, but interim reports will be available before then. The first—providing guidance for practitioners on implementation of CCTV schemes—is available on the crime reduction website, www.crimereduction.gov.uk.

  Early findings from a number of Home Office funded schemes are very encouraging:

  Alhambra Shopping Centre, Barnsley:

  Retail property crime dropped by 35 per cent. in the first two years after launch in 1999.

  Firthmoor Estate, Darlington:

  Statistics from the police show that crime was reduced by 44 per cent. during the first year that CCTV was in operation.

  Criminal Records Bureau
  Bob Spink
  To ask the Secretary of State for the Home Department if he will list the categories of applications from Essex for search by the Criminal Records Bureau in respect of(a) foster care and adoption, (b) teaching staff and (c) schools non-teaching staff. [118750]

  Paul Goggins
  The information sought by the hon. Member is not available in the format requested. There are no IT procedures at present to differentiate between the categories of applicants within the occupations requested. There is no requirement to provide data on an occupation-specific basis, as each application is treated equally, and the Criminal Records Bureau (CRB) do not prioritise by occupation type.

  Drugs Seizures
  Mr. Wiggin
  To ask the Secretary of State for the Home Department how much illegal drugs were seized by the police during the latest 12 months for which figures are available; and what the cost was of such operations. [122013]

  Caroline Flint
  It is not possible to separate out the cost of seizing illegal drugs from police expenditure data available centrally.

  Numbers of drug seizures and quantities seized by police in the United Kingdom during 2001 are shown in the table. The data are taken from Home Office Findings 202 "Seizures of drugs in the UK 2001". This is available on the RDS website, http:// www.homeoffice.gov.uk/rds/pdfs2/r202.pdf, and in the Library.
  248W

  Number of drug seizures and quantity seized by police in the United Kingdom during 2001, by class and drug type.

  Drug class and type

  Number of seizures

  Quantity (kg)

  Class A

  Cocaine

  5,470

  1,024.5

  Crack

  3,645

  33.7

  Heroin

  18,075

  2,801.6

  LSD

  166

  9.41

  Ecstasy-type

  10,322

  2,349.61

  Methadone

  1,067

  114.6

  All Class A

  36,083

  -3

  Class B

  Amphetamines

  6,725

  1,089.7

  Cannabis (herbal)

  29,974

  7,243.1

  Cannabis plants

  1,874

  71,491.2

  Cannabis resin

  62,873

  22,518.3

  All Class B

  95,471

  -3

  Class C

  Benzodiazepines (exc.Temazepan)

  1,664

  10.2

  Temazepan

  443

  1.1

  Anabolic steroids

  93

  1.3

  All Class C

  2,180

  -3

  Total seizures

  125,912

  -3

  Notes:

  1. Thousands of doses/tablets.

  2. Number of plants.

  3. It is not meaningful to calculate total drug weights, as measures other than kilograms are used for quantities of LSD, Ecstasy-type drugs and Cannabis plants (see notes 1,2).

  Source:

  Home Office Findings 202 Seizures of drugs in the UK 2001

  Fingerprint Identification System
  Mr. Allan
  To ask the Secretary of State for the Home Department how many Livescan terminals used to access the National Automated Fingerprint Identification System are deployed, broken down by police authority. [121118]

  Ms Blears
  A total of 176 Livescan units are deployed among police forces in England and Wales. Broken down by police authority, they are as follows:

  Police authority

  Number of Livescan units

  Avon and Somerset

  2

  Bedfordshire

  3

  British Transport Police

  2

  Cheshire

  1

  Cumbria

  4

  Devon and Cornwall

  6

  Dorset

  3

  Essex

  11

  Gloucestershire

  3

  Gwent

  5

  Hampshire

  8

  Lancashire

  5

  Lincolnshire

  1

  Leicestershire

  1

  Manchester

  22

  Merseyside

  7

  Metropolitan police

  53

  Northumbria

  7

  North Wales

  3

  Nottingham

  11

  South Yorkshire

  11

  South Wales

  4

  Surrey

  5

  Sussex

  6

  249W

  Police authority

  Number of Livescan units

  Thames Valley

  3

  West Mercia Worcester

  1

  West Midlands

  11

  Wiltshire

  4

  West Yorkshire

  13

  Livescan units in the field

  176

  1These units are on trial.

  Graffiti
  Siobhain McDonagh
  To ask the Secretary of State for the Home Department what discussions his Department has had with representatives of the statutory undertakers about graffiti on their street furniture or other property; and if he will make a statement. [118086]

  Ms Blears
  We recognise the real problem of graffiti on street furniture, which my horn. Friend has done much to highlight. That is why we consulted on options in this area in our 2002 document on public space, "Living Places". A number of owners of street furniture responded to this consultation.The Government are considering the results of the consultation exercise and will decide what further action to take. Officials from the Home Office and Department of Environment, Food and Rural Affairs (Defra) also met with British Telecom recently to discuss the challenges in this area.

  At report stage of the Anti-Social Behaviour Bill, we also introduced new powers for local authorities to clean graffiti from street furniture.

  Health Care (Prisons)
  Dr. Murrison
  To ask the Secretary of State for the Home Department what evidence is collected centrally to benchmark(a) health outcomes and (b) healthcare provision in the prison population against the population at large. [121343]

  Paul Goggins
  The Home Office and Department of Health collect a range of performance monitoring data on health services for prisoners, covering both physical and mental health care activity. These data focus primarily on availability of and access to services, and do not at present provide a basis for benchmarking health outcomes. They are subject to ongoing refinement to facilitate more systematic comparisons with services available to the population at large.

  The Government also commissioned the "Toolkit for Health Care Needs Assessment in Prisons" (University of Birmingham 2000), which provides a summary of research information on the health status of people in prison, including comparisons with the wider population.

  Dr. Murrison
  To ask the Secretary of State for the Home Department what measures have been put in place to ensure that prisoners receive prompt thrombolysis. [121344]

  Paul Goggins
  Prisons and their local Primary Care Trusts are working in partnership to secure the best possible health outcomes for prisoners. They will be taking full account of the review of the Coronary Heart Disease National Service Framework thrombolysis targets to ensure that prisoners who suffer heart attacks are treated as promptly as possible.

  Internet Paedophile Offences
  Simon Hughes
  To ask the Secretary of State for the Home Department how many(a) police officers and (b) other law enforcement personnel are employed on a full-time basis to investigate online paedophile offences. [121956]

  Paul Goggins
  Investigations which are believed to involve paedophile activity or images, whether committed on or off line, are normally investigated by paedophile units, child protection or investigation teams. The allocation of officers to these units is a matter for individual chief officers, and information as to the staffing of these units is not held centrally.

  Jamaicans (Visitor Visas)
  Tony Lloyd
  To ask the Secretary of State for the Home Department how many Jamaicans were(a) given and (b) refused visitor visas to the United Kingdom in (i) the last month for which figures are available and (ii) the same month in 2002; and if he will make a statement. [121850]

  Beverley Hughes
  I am afraid the information requested on grants and refusals of visitor visas to Jamaican nationals is not available.

  Visitor visas for Jamaican nationals were not issued until January 2003 when the visa regime was introduced. Prior to that, however, some Jamaican nationals chose to apply for entry clearance for temporary purposes to aid passage through the immigration control.

  The published information relates to grants and refusals of entry clearance for temporary purposes, which includes visitors and others seeking temporary admission to the UK. The latest published information on grants and refusals of entry clearance (including visas), for settlement and temporary purposes, relates to 2000. Data for 2001 and 2002 will be published in November 2003 in the Home Office publication, "Control of Immigration: Statistics United Kingdom 2002", which will be available in the Library.

  Decisions made on applications for entry clearance are recorded according to where the application is made rather than by the nationality of the applicant. The published information therefore relates to the number of applications made in Jamaica. It is not possible to identify separately Jamaican nationals applying for entry clearance, either in Jamaica or elsewhere in the world.

  Mr. Rustam Artskanov
  Bob Russell
  To ask the Secretary of State for the Home Department if he will intervene in the case of Mr. Rustam Artskanov, a constituent, to enable him to remain living in the UK; and if he will make a statement. [122357]

  Beverley Hughes
  I am not aware of any factors at present that would justify allowing Mr. Artskanov to remain in the United Kingdom.

  Bob Russell
  To ask the Secretary of State for the Home Department if he will discuss with President Putin the case of Mr. Rustam Artskanov and seek a guarantee of his safe passage to his home in Chechnya. [122359]
  251W
  Beverley Hughes
  [holding answer 30 June 2003]: We will not be raising Mr. Artskanov's case with President Putin.

  Passports
  Mr. Burstow
  To ask the Secretary of State for the Home Department pursuant to his answer of 5 June 2003,Official Report, column 946W, on passports, how may special file section staff have been employed in each regional office in each of the last five years. [121597]

  Beverley Hughes
  The figures for staff in post within United Kingdom Passport Service Special Files Departments in each of the last five years are given in the table:

  UK passport service special file section staff

  1998

  1999

  2000

  2001

  2002

  Belfast

  3

  3

  3

  3

  3

  Durham1

  n/a

  n/a

  6

  6.5

  10.5

  Glasgow

  5.25

  5.5

  5.5

  6

  6.5

  Liverpool

  7

  8

  9

  9

  10

  London

  8

  8

  10

  15

  16

  Newport

  7

  7

  6.5

  7.5

  8

  Peterborough

  3

  3.48

  5.02

  6.02

  12.65

  1The Durham Passport Office opened in April 2000

  Police Discipline
  Mr. Martlew
  To ask the Secretary of State for the Home Department what plans he has to change the police disciplinary regulations; and if he will make a statement. [121093]

  Ms Blears
  We are reviewing the two existing sets of misconduct regulations—set out in the Police (Conduct) Regulations 1999 and the Police (Conduct) (Senior Officers) Regulations 1999, in order to remove unnecessary differences between them.

  In addition, we will be introducing changes to the regulations provided for in section 36 of the Police Reform Act 2002. In summary these will:

  (a) enable the Independent Police Complaints Commission to participate in disciplinary proceedings;

  (b) allow other persons to participate in, or be present at, disciplinary proceedings; and

  (c) change the current caution in order to permit a disciplinary hearing to draw adverse inferences from a police officer's failure to mention a fact when questioned about an alleged breach of the Code of Conduct.

  Police Firearms Training
  Simon Hughes
  To ask the Secretary of State for the Home Department how many police officers completed firearms training in each police force area in each of the last three years. [120914]

  Ms Blears
  Training in use of firearms takes place in individual force training establishments. Each officer receives regular training dependent on their role, in order to maintain authority from their force to carry weapons.

  No figures are held centrally about numbers of officers who undergo such training.
  252W
  However, the following table gives the numbers of authorised firearms officers in each force, during the last three years for which figures are available, all of whom undergo training more frequently than annually.

  Number of authorised firearms officers (AFOs)

  1999–2000

  2000–01

  2001–02

  Total

  6,262

  6,064

  5,776

  Avon and Somerset

  150

  135

  116

  Bedfordshire

  46

  45

  48

  Cambridgeshire

  77

  73

  56

  Cheshire

  75

  74

  81

  Cleveland

  80

  75

  85

  City of London

  73

  74

  73

  Cumbria

  98

  94

  92

  Derbyshire

  77

  81

  80

  Devon and Cornwall

  119

  100

  108

  Dorset

  66

  67

  57

  Durham

  101

  101

  86

  Essex

  228

  195

  180

  Gloucestershire

  77

  72

  71

  Greater Manchester

  218

  240

  219

  Hampshire

  111

  100

  87

  Hertfordshire

  52

  44

  46

  Humberside

  97

  102

  96

  Kent

  136

  136

  113

  Lancashire

  143

  132

  138

  Leicestershire

  90

  85

  69

  Lincolnshire

  78

  80

  91

  Merseyside

  96

  103

  78

  Metropolitan

  1,977

  1,940

  1,805

  Norfolk

  110

  114

  104

  Northamptonshire

  75

  77

  51

  Northumbria

  114

  109

  125

  North Yorkshire

  59

  66

  66

  Nottinghamshire

  116

  137

  136

  South Yorkshire

  100

  98

  92

  Staffordshire

  81

  67

  71

  Suffolk

  98

  90

  90

  Surrey

  71

  72

  62

  Sussex

  131

  118

  120

  Thames Valley

  187

  185

  156

  Warwickshire

  54

  45

  50

  West Mercia

  129

  130

  125

  West Midlands

  93

  83

  111

  West Yorkshire

  110

  117

  116

  Wiltshire

  89

  71

  71

  Dyfed Powys

  65

  61

  77

  Gwent

  68

  66

  57

  North Wales

  92

  67

  83

  South Wales

  155

  143

  138

  Power of Arrest
  Mr. Drew
  To ask the Secretary of State for the Home Department if he will make a statement on the relative powers of special constables and community safety officers, with special reference to the power of arrest. [121568]

  Ms Blears
  [holding answer 26 June 2003]: Special constables possess full constabulary powers, including the power of arrest, while they are in their own, or an adjacent, police force.

  Community Support Officers (CSOs) have not been given powers of arrest beyond those available to ordinary citizens. In the Police Reform Act 2002 CSOs have been given a power to detain a person who is suspected of a relevant offence, and who has not

  253W
  supplied a satisfactory name and address, for up to 30 minutes while awaiting the arrival of a police constable. A relevant offence is:
  a fixed penalty notice offence of littering, dog fouling, or cycling on the footway or
  an offence that appears to have caused harassment, alarm or distress to another or
  an offence that involves loss of or damage to another's property.

  This power of detention is being piloted by six police forces for two years until December 2004.

  Mr. Drew
  To ask the Secretary of State for the Home Department what plans he has to increase the powers available to community safety officers. [121569]

  Ms Blears
  [holding answer 26 June 2003]: Subject to parliamentary approval the Anti-Social Behaviour Bill will extend the following powers to community support officers (CSOs):
  The power to disperse groups
  The power to issue a fixed penalty notice for graffiti and fly-posting.
  The power to issue a fixed penalty notice to parents for truancy.
  The power to stop cyclists in order to issue a fixed penalty notice for cycling on a footpath.

  Prison Incidents
  Simon Hughes
  To ask the Secretary of State for the Home Department how many prisoners have(a) escaped and (b) absconded from prisons in England and Wales in each of the last 12 months. [118792]

  Paul Goggins
  The Public Service Agreement target for escapes was published in 'Public Services for the future: Modernisation, Reform, Accountability'.

  The target was to maintain existing performance of no escapes by high risk (category A) prisoners and to ensure that the number of escapes from prisons, and escorts undertaken by Prison Service staff, expressed as a proportion of the prison population, is lower than 0.05 per cent.

  The Prison Service met this target for 2002–03. There were five escapes from prisons and no category A escapes in 2002–03.

  The table illustrates the number of escapes from prison and absconds broken down by month in the last 12 months.

  Month

  Escape from prison

  Number of absconds

  May 2002

  0

  51

  June 2002

  1

  68

  July 2002

  1

  81

  August 2002

  0

  93

  September 2002

  0

  83

  October 2002

  0

  88

  November 2002

  2

  76

  December 2002

  0

  87

  January 2003

  0

  68

  February 2003

  1

  90

  254W

  Month

  Escape from prison

  Number of absconds

  March 2003

  0

  101

  April 2003

  0

  115

  Total

  5

  1,001

  Note:

  The Prison Service definition of an abscond is when a prisoner leaves an open/Category D establishment where there is no physical barrier between them and freedom.

  RAF Fairford
  Mr. Drew
  To ask the Secretary of State for the Home Department what the costs of policing operations at RAF Fairford between 1 March and 30 April 2003 were. [119940]

  Ms Blears
  The Chief Constable of Gloucestershire Police Authority informs me that the best estimate available of the costs of policing operations conducted by the constabulary to date is £3.26 million. Information for the specific period requested is not available.

  The additional costs incurred by the Ministry of Defence Police at Fairford in March and April 2003 are estimated at £3.79 million.

  Mr. Drew
  To ask the Secretary of State for the Home Department how many people were arrested in connection with protests at RAF Fairford between 1 March 2003 and 30 April 2003; and how many of those arrested were subsequently charged with criminal offences. [119941]

  Mr. Ingram
  The total number of arrests by Ministry of Defence Police and Home Department Police officers between 1 March 2003 and 30 April 2003 at RAF Fairford was 61. Of those persons arrested, 27 were subsequently charged with criminal offences and two are on police bail until September 2003.

  Road Safety
  Dr. Julian Lewis
  To ask the Secretary of State for the Home Department what guidance his Department has issued to the police on their role in(a) education about and (b) enforcement of standards of road use. [R] [121492]

  Ms Blears
  The National Policing Plan indicates that all police forces and authorities should include in their local policing plans targeted and intelligence led strategies for reducing deaths and injuries on the roads and achieving a safe environment for all road users.

  The police are also involved in various localised road safety educational initiatives across the country. The Department for Transport (DfT), which is primarily responsible for road safety education, makes available to police forces its campaigns calendar so that they are aware of the timing of national advertising and can co-ordinate their own activities accordingly. DfT also makes available to the police a range of materials for use in educational initiatives on road safety.

  The Association of Chief Police Officers (ACPO) has recently published a road policing manifesto (available at www.acpo.police.uk) with four key aims of enforcing the law, promoting road safety, investigating incidents and patrolling the roads.

  Suffolk Constabulary
  Mr. Ruffley
  To ask the Secretary of State for the Home Department what the clear up rate for the Suffolk constabulary was for(a) burglary of dwellings, (b) violence against the person, (c) vehicle crime, (d) robbery and (e) sexual offences since March 2002. [120423]

  Ms Blears
  The requested information is not yet available. It will be published on 17 July 2003 in the Home Office Statistical Bulletin, "Crime in England and Wales 2002–03"

  Trespassers
  Mr. Hendry
  To ask the Secretary of State for the Home Department what guidance he issues on the definition of reasonable force in the powers available to people in removing trespassers from their property. [120675]

  Ms Blears
  The Home Office has recently updated "Be Safe, Be Secure", a practical guide to crime prevention. This covers all aspects of personal safety at home, including how to deal with intruders and what to do on interrupting burglars. One page covers the law on self-defence, which makes clear the principles underlying what you can properly do in self-defence or to protect another person or your property.

  Voluntary Organisations (Criminal Records)
  Mr. Ruffley
  To ask the Secretary of State for the Home Department what estimate he has made of the additional costs to voluntary organisations(a) in the United Kingdom and (b) in Suffolk of the Criminal Records Bureau's increase in standard and enhanced disclosure fees. [120415]

  Paul Goggins
  I refer the hon. Member to the reply which I gave the hon. Member for Sutton and Cheam (Mr. Burstow) on 26 June 2003,Official Report, column 918W.

  Magistrates courts data

  April to June 2002

  July to September 2002

  October to December 2002

  (a) Total number of trials listed

  45,431

  46,179

  45,608

  (b) Number of trials vacated before the trial date

  4,697

  5,476

  4,893

  (c) Number of trials vacated before the hearing date because the prosecution were not ready for trial

  305

  392

  338

  (d) Trials vacated before the hearing date because the prosecution were not ready for trial as percentage of total trials listed

  0.67

  0.85

  0.74

  There is no similar joint scheme presently in existence across Crown court centres. Work is presently being undertaken between the Crown Prosecution Service and Department of Constitutional Affairs to develop a common scheme for implementation later this year. Pilot schemes have been undertaken in Dorset, Surrey and London since March 2003 with promising results.

  Woodhill Prison
  Dr. Starkey
  To ask the Secretary of State for the Home Department what the agreed staffing levels are at Woodhill Prison in the Close Security Unit; how many staff vacancies there are; and how many staff are normally on duty overnight in the Close Security Unit. [119056]

  Paul Goggins
  Woodhill prison has a close supervision centre. The agreed staffing level of the close supervision centre is 10 senior officers and 46 officers. On 16 June 2003, there were six officer vacancies. During the night, two officers are on duty. If necessary those officers on night duty are able to call for assistance.

CONSTITUTIONAL AFFAIRS

  Court Cases (Postponements)
  Mr. Hunter
  To ask the Parliamentary Secretary, Department for Constitutional Affairs how many court cases which have been set down for trial have been postponed because they have not been prepared properly by the Crown Prosecution Service in each year since 1997. [120690]

  The Solicitor-General
  The question has been transferred to me as [have responsibility for the Crown Prosecution Service.

  The Crown Prosecution Service is party to a joint scheme, with the Department for Constitutional Affairs, to monitor the levels of cracked, ineffective and vacated trials in magistrates courts. The scheme, jointly developed between the two departments, was implemented in all 42 criminal justice system (CIS) Areas in April 2002. The scheme enables court, prosecution and defence practitioners to agree reasons why cases listed for trial are vacated or do not proceed as planned on the day. The data on the agreed reasons is analysed locally, under the stewardship of the Local Criminal Justice Board, so that strategies can be developed to reduce the instances of trials not proceeding.

  The results of monitoring for the first three-quarters 2002–03 in respect of cases listed for trial but vacated before the trial date because the prosecution were not ready for trial (further preparation needed) is:

  Government Reshuffle
  Mr. Redwood
  To ask the Parliamentary Secretary, Department for Constitutional Affairs what the address is of the London office of(a) the Wales office, (b) the Scotland office and (c) the Department for Constitutional Affairs. [121475]
  257W
  Mr. Leslie
  The Wales Office continues to occupy Gwydyr House, Whitehall SW1A 2ER. The Scotland Office continues to occupy Dover House, Whitehall SW1A 2AU. The Department for Constitutional Affairs has its principal headquarters buildings at Selbourne House, 56–60 Victoria Street, SW1E 6QW and Southside, 105 Victoria Street, SW1E 6QT.

  Hearing Difficulties (Courthouses)
  Lady Hermon
  To ask the Parliamentary Secretary, Department for Constitutional Affairs if he will make a statement on the provisions for those with hearing difficulties in courthouses in Northern Ireland. [121919]

  Mr. Leslie
  The Northern Ireland Court Service is complying with the requirements of the Disability Discrimination Act 1995. In support of this, the Court Service commissioned an independent Survey Report of the court estate and has developed a programme of work that includes the provision of induction loop systems throughout the court estate. Currently, induction loop systems have been installed in the principal courtrooms at 13 locations with similar facilities scheduled for installation at the seven remaining court venues by 1 October 2003. All new court buildings are fitted with induction loop systems as standard. The Northern Ireland Court Service also arranges for the provision of interpreters for deaf and hearing impaired litigants and witnesses in all court proceedings.

  Immigration Appeal Tribunal
  Keith Vaz
  To ask the Parliamentary Secretary, Department for Constitutional Affairs pursuant to his answer of 18 June 2003,Official Report, column 274W, on the Immigration Appeal Tribunal, how many (a) groups, (b) individuals and (c) organisations have been consulted on his proposals; when he last met the Chief Adjudicator to discuss his proposals; and what representations he has received following the announcement on legislative proposals made by the Government on 22 May 2003. [121890]

  Mr. Lammy
  As stated in my reply of 18 June 2003,Official Report, column 274W, we are currently developing detailed proposals for the creation of a single tier. Before finalising these proposals, I will take steps to seek the views of interested parties. As for representations received since the Government's announcement on 22 May 2003, the Chairman of the Select Committee on the Lord Chancellor's Department wrote to the Secretary of State on 20 June 2003 in connection with the handling of the announcement.

  Judicial Appointments Commission
  Keith Vaz
  To ask the Parliamentary Secretary, Department for Constitutional Affairs what research the Department has commissioned on the creation of a Judicial Appointments Committee. [120831]

  Mr. Leslie
  The Department for Constitutional Affairs commissioned and received research on the use of Judicial Appointments Commissions in foreign jurisdictions. This research was published under the title "Judicial Appointments Commissions: the European and North American experiences and the possible 258W
  implications for the United Kingdom" [Drs. Thomas and Malleson, LCD Research Series 06/97]. A copy is in the House of Commons Library.

  National Assembly for Wales
  Mr. Llwyd
  To ask the Parliamentary Secretary, Department for Constitutional Affairs (1) on what dates his Department has held meetings with the Commission on the Powers and Electoral Arrangements of the National Assembly for Wales; [122976]

  (2) if he will give evidence to the Commission on the Powers and Electoral Arrangements of the National Assembly for Wales. [122893]

  Peter Hain
  I am replying. As Secretary of State for Wales, I have lead responsibility for the Government's dealings with the Commission on the Powers and Electoral Arrangements of the National Assembly for Wales. In that capacity I submitted a memorandum to the Commission on behalf of the government and gave oral evidence to it on 13 March 2003.

  Works of Art
  Pete Wishart
  To ask the Parliamentary Secretary, Department for Constitutional Affairs if he will list the works of art held on loan by the Lord Chancellor's Department on Wednesday 11 June by value; and if he will make a statement on his plans for the acquisition of further such works by his Department. [122327]

  Mr. Lammy
  There were no works of art on loan to the Lord Chancellor's Department (as it was) on 11 June, and this remains the position.

  Forty-one works of art on loan to the Palace of Westminster are located within the Official Residence of the Lord Chancellor, as the Speaker of the House of Lords, and the offices currently occupied by the Department for Constitutional Affairs within the Palace of Westminster. The value, and the arrangements for the loan of these works, is a matter for the Palace of Westminster authorities who deal exclusively with the loan of works of art within the Palace.

  The Department currently has no plans for the acquisition of such works.

WALES

  Asbestos
  Dr. Cable
  To ask the Secretary of State for Wales what actions his Department, its agencies and non-departmental public bodies are taking to comply with the requirements of the Control of Asbestos at Work Regulations 2002; whether he has made an estimate of the cost of the compliance; and if he will make a statement. [118847]

  Peter Hain
  The Wales Office arranged for a complete asbestos survey in 2002 subsequently, all the recommendations of the survey have been undertaken. Therefore the Wales Office is compliant with the 2002 regulations.

  The Wales Office does not have any agencies or non-departmental public bodies.

  259W
  The cost to the office is approximately £1,300.

  Departmental Website
  Dr. Cable
  To ask the Secretary of State for Wales if he will list the actions he(a) has taken and (b) is taking to ensure that the websites of his Department, its agencies and non-departmental public bodies are accessible to partially sighted and blind people; and if he will make a statement. [118843]

  Mr. Touhig
  The Wales Office website as it currently stands is not accessible to partially sighted and blind people; however, a redesign of the site is forthcoming and among the changes planned will be provision for all potential users.

  Euro Roadshow
  Mr. Flight
  To ask the Secretary of State for Wales if he will list the events he plans to attend as part of the Government's euro roadshow. [121396]

  Mr. Touhig
  I refer the hon. Member to the answer given to the Member for Folkestone & Hythe on 20 June 2003,Official Report, column 459W, by my hon. Friend John Healey (Economic Secretary) HM Treasury.

  Leisure and Tourism Industries
  Dr. Francis
  To ask the Secretary of State for Wales what recent discussions he has had with the First Secretary of the National Assembly for Wales on the future of the leisure and tourism industries in Wales. [121939]

  Peter Hain
  I have regular bi-lateral meetings with the First Minister of the National Assembly for Wales, and discuss a wide range of issues, including the leisure and tourism industries.

  There are encouraging signs for the future of leisure and tourism in Wales. I welcome the recent announcement that 103 beaches throughout Wales have won Seaside Awards in 2003, more than the English Riviera, Scotland, Northern Ireland and the Channel Islands put together.

  I was also encouraged by the results of research undertaken on behalf of the Wales Tourist Board (WTB) following the Easter weekend which revealed that 78 per cent. of accommodation providers were full over the Easter weekend.

  This contributes to a very positive outlook, and builds upon the WTB's largest marketing initiative to date, the £10 million three-year UK based Big Country campaign and the £5 million the WTB have committed to their first ever overseas campaigns in key markets. The campaigns were targeted to make sure that last summer Welsh tourism was a success and to build a solid foundation for the future.

  Ombudsman Services
  Kevin Brennan
  To ask the Secretary of State for Wales (1) if he will make a statement on the review of Ombudsman services in Wales; and when he will publish his response to the review; [118584]
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  (2) when he expects to publish the results of the Ombudsman services for Wales review; and if he will make a statement. [110087]

  Peter Hain
  [holding answer 10 June 03]: The First Minister of the National Assembly for Wales and I expect to publish the results of the review of Ombudsman services in Wales at the end of this month.

  Pay Audits
  Angela Eagle
  To ask the Secretary of State for Wales what progress has been made on completing a pay audit in his Department and its non-departmental public bodies to measure any disadvantage in terms of remuneration for(a) women, (b) ethnic minorities and (c) people with disabilities; and if he will publish the results of such an audit. [117427]

  Peter Hain
  Staff in the Wales Office are all on loan or secondment from other Government Departments and so are paid in accordance with the various pay schemes of their home Departments.

  Staff Numbers
  Mr. Yeo
  To ask the Secretary of State for Wales how many staff the Department and each agency and non-departmental public body for which the Department is responsible had in each year since 1997; and what the cost of those staff was in each of those years. [122258]

  Peter Hain
  The Wales Office was created in July 1999, it has no agencies or NDPBs.

  Staffing level and running cost information is provided at pages 23 and 27 of the Wales Office Departmental Report 2003, published in May 2003 as Cm 5928.

  Terrorism
  Llew Smith
  To ask the Secretary of State for Wales pursuant to his answer of 20 May 2003,Official Report, column 722W, on terrorism, how many mobile radiation detection units are available for deployment at Welsh ports and airports; and what counter terrorism coverage is available at Welsh ports in advance of a decision on the location of new equipment. [116799]

  Mr. Touhig
  For security reasons Customs do not provide specific details of the equipment they have available or how it is deployed.

DEPUTY PRIME MINISTER

  Administration Costs
  Mr. Pickles
  To ask the Deputy Prime Minister how much has been spent by his Ministers on administration in each year since 1997. [104186]

  Mr. Bercow
  To ask the Deputy Prime Minister what the running costs in 2002 were of(a) his Ministers' private offices, separately identifying expenditure on staff, and (b) his Department. [105995]

  Yvette Cooper
  The Office of the Deputy Prime Minister was established following the Machinery of Government changes on 29 May 2002.
  261W
  (a) The following table shows the total administration resource and pay expenditure on Ministers' private offices.

  Administration resource and pay expenditure

  £000

  Administration resource expenditure

  2002–03

  Private office total

  2,346

  of which Pay total

  1,489

  (b) The gross administration resource expenditure for the Office of the Deputy Prime Minister (including Government offices but excluding its executive agencies) for 2002–03 is £264 million. This figure is provisional and subject to the final accounts being signed off.

  Commission for the Built Environment
  Dr. Murrison
  To ask the Deputy Prime Minister what funding the Commission for Architecture and the Built Environment receives from the Department. [121339]

  Mr. Caborn
  I have been asked to reply.

  This year (2003–04) the Commission for Architecture and the Built Environment (CABE) will receive £3.53 million grant-in-aid from DCMS. CABE will also receive up to £7.35 million from the Office of the Deputy Prime Minister, primarily to reflect the commitment to urban parks and green spaces made in the Government's policy document "Living Places: Cleaner, Safer, Greener" and the priorities set out the Communities Plan published in February 2003: "Sustainable Communities; Building for the Future".

  Green Belt
  Mr. Brady
  To ask the Deputy Prime Minister when he plans to issue new planning policy guidance relating to the removal of green belt designation. [123022]

  Keith Hill
  The Office of the Deputy Prime Minister has indicated that it intends to review all planning policy guidance (PPG) notes to provide clearer expressions of national planning policy. The review of PPG2 on green belts will commence later this year but the Government have no current plans to make fundamental changes to green belt policy.

  Housing
  Mr. Pickles
  To ask the Deputy Prime Minister how many special needs houses there are in England, broken down by(a) Parliamentary constituency, (b) local authority area and (c) region. [121816]

  Keith Hill
  Information on the number of accommodation-based services and associated household units for the people with physical or sensory disability and people with learning disabilities, at December 2002, funded through the Supporting People programme by County and unitary authority area and region is available on the Supporting People Web at http:www.spkweb.org.uk under General Documents and DiscussionV General Documents. December 2002 Supply data. December Supply Reporting Spreadsheet-Table 4.
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  Information at the parliamentary constituency level and the non-unitary local authority level is not held centrally and could only be provided at disproportionate cost.

  Mr. Hancock
  To ask the Deputy Prime Minister pursuant to his Answer of 20 June,Official Report, column 525W, on housing, what the timescale is for the consultation process; and if he will make a statement. [122031]

  Keith Hill
  The aim is as soon as possible.

  Mr. Hancock
  To ask the Deputy Prime Minister pursuant to his Answer of 20th June, Official Report, columns 524–25W, on housing, if he will commission research to(a) determine the current and future demand for social housing in the South-East and (b) devise a strategy that will ensure the demand is met; and if he will make a statement. [122032]

  Keith Hill
  Assessing the level of housing demand in the South East is the responsibility of the Regional Planning Body, in conjunction with the Regional Housing Board and other interested parties, and will be undertaken as part of the drafting of the next round of Regional Planning Guidance for the South East (RPG9). Wholescale reviews of RPG9 will commence later this year to produce a new Regional Spatial Strategy (RSS).

  The Regional Assembly, together with the Government Office for the South East has commissioned work to provide a regional level methodology for assessing the level of households in need in anticipation of this review. The work is ongoing, and will provide one of the factors that will feed into the assessment of housing supply and demand in the South East to support the eventual Regional Spatial Strategy. Following public consultation and independent testing draft RSS9 will then be submitted to my right hon. Friend the Deputy Prime Minister.

  The Sustainable Communities Plan, which was published by the Office of the Deputy Prime Minister in February, sets out a programme of action which includes measures to address the imbalance between supply and demand in the South East and elsewhere, through increasing housing supply and making better use of existing housing stock.

  Ms Oona King
  To ask the Deputy Prime Minister pursuant to his Answer of 17 June 2003,Official Report, column 167W, if he will place in the Library a copy of the research into the health impacts of overcrowding on which policy decisions on tackling overcrowding are being based. [122325]

  Keith Hill
  The relevant research is reported in "Statistical Evidence to Support the Housing Health and Safety Rating System", published by the Office of the Deputy Prime Minister in May. Two volumes of the document Volume 1: Project Report and Volume 2: Summary of Results—have been placed in the House of Commons Library and are available, together with previous research in support of the Housing Health and Safety Rating System, at www.housing.odpm.Rov.uk/research/hhsrs/index.htm. Volume 2 provides an outline of the issues associated with all the hazards to be assessed under the system, including hazards related to

  263W
  crowding and space, and lists the key references on which estimates of health outcomes have been made for the purposes of the system. A third volume, the technical appendix, will be published shortly.

  David Davis
  To ask the Deputy Prime Minister what data he has collected on abuses of right to buy. [122899]

  Keith Hill
  In 2002, the Office of the Deputy Prime Minister commissioned Heriot-Watt University to examine the scale, nature and impact of the misuse of the Right to Buy policy by companies. The results were published in March 2003. The full report is available on the Office of the Deputy Prime Minister's website at http:// www.housing.odpm.gov.u1c/information/rtb/index.htm; a summary is at http://www.housing.odpm.gov.uk/hrs/hrs177/index.htm.

  The research found that some properties sold under the Right to Buy scheme had been acquired by companies offering tenants financial help to buy their homes on condition that they resold them to the company after the three-year discount repayment period had ended (deferred resale' arrangements). Both tenant and company thereby evade the statutory requirement, in place since 1980, to repay discount where a property is resold within three years of being sold under the Right to Buy scheme, and the companies acquire former social homes at substantially less than their market value in order to rent them out. This means that homes formerly available at subsidised social rents then command substantially higher market rents, reducing the availability of affordable housing.

  Such exploitation is prevalent in Inner London, where the report estimated that at least 2,000 properties had been acquired in this way by companies since 1998. It also noted that at least one such company was advertising nationally.

  Mr. Austin Mitchell
  To ask the Deputy Prime Minister whether arms length management organisations are treated in the same way as housing associations for the puposes of(a) housing benefit and (b) borrowing; and what plans he has to allow ALMOs to raise loans in their stock. [123000]

  Keith Hill
  Tenants of dwellings managed by Arms Length Management Organisations (ALMOs) remain tenants of the local authority and are treated in the same way as other local authority tenants for housing benefit purposes. As announced in the Sustainable Communities Plan in February, we intend to consult further on the financial regime that should be available to the highest performing ALMOs.

  Local Government
  Harry Cohen
  To ask the Deputy Prime Minister what the outcome was of his Department's stocktake of Local Government Pension Scheme funds, with special reference to ongoing sustainability and affordability of the Scheme; and if he will make a statement. [122745]

  Mr. Raynsford
  The Stocktake of the Local Government Pension Scheme is continuing. Consultations on two discussion papers, about the scope for simplification of the regulatory framework and future benefits package, have already taken place and the responses to each are being analysed. A third paper is being prepared to seek views on 264W
  how best to develop finding strategies within the Scheme, linked closely to the actuarial valuation process that each local authority pension fund is obliged to carry out every three years. The next valuation round takes place on 31 March 2004 and this planned consultation is intended to inform that statutory exercise.

  Consideration is being given to implementing the necessary changes to the Scheme arising from the issue of Simplicity security and choice: Working and saving for retirement—Action on occupational pensions (Cm 5835, June 2003). Consultations on these, and any which emerge from earlier Stocktake discussion papers, will be brought forward as soon as practicable for consideration by all the interested parties.

  Planning (Lancaster)
  Geraldine Smith
  To ask the Deputy Prime Minister if he will make an assessment of the implications of his decision to refuse planning permission for development at Whinney Car, Lancaster for planning applications for housing within the Lancaster City council district. [120686]

  Keith Hill
  It would not be appropriate for me to comment on the decision in respect of the planning application for proposed housing development at Whinney Carr, as the matter is sub judice. The decision has been challenged in the High Court and is the subject of legal proceedings.

  However my answer of 23 June 2003, Official Report, column 642W, set out the general position concerning the consideration of planning applications for housing in Lancaster.

  Regional Government
  Mr. Redwood
  To ask the Deputy Prime Minister what is the estimated cost is of(a) setting up and (b) the annual running cost of a regional assembly in the northwest. [121472]

  Mr. Raynsford
  The setting-up costs of elected assemblies will vary from region to region, mainly because of the different sizes of their electorates. But the Office of the Deputy Prime Minister expects these to be around £30 million in each region, including the northwest. This estimate includes all costs necessary to establish an assembly, including the cost of local government reviews, referendums and the first elections.

  The Government's estimates of the costs of running a regional assembly were set out in our White Paper "Your Region, Your Choice". The Office of the Deputy Prime Minister estimates that the north-west assembly would cost around £25 million a year to run. But about £5 million of this cost will be directly offset because staff will be transferring from existing bodies, such as the region's Government Office. The remaining costs could be absorbed within the assembly's programme budget through efficiency savings of around 5 per cent.

  Mr. Pickles
  To ask the Deputy Prime Minister which regional assemblies he has visited since May 2002. [121780]

  Phil Hope
  My Rt. Hon. Friend the Deputy Prime Minister has not formally visited any of the English Regional Assembly since May 2002. However, on his
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  regular visits to the regions he has met a number of representatives from the assemblies as have other Departmental Ministers. The Office of the Deputy Prime Minister hosts the English Regions Network meetings, which bring together the leaders of the English Assemblies in one forum to discuss issues of mutual interest and aims for a ministerial presence at least twice a year. Most recently on the 5 December last year, this meeting was attended by the then Parliamentary under Secretary of State the member for Shipley.

  Geraldine Smith
  To ask the Deputy Prime Minister what percentage of the population entitled to vote responded to the soundings exercise to test the level of interest in holding a referendum for regional government in the north-west. [120647]

  Mr. Raynsford
  3,611 individuals from the north-west region responded to the soundings exercise.

  In addition, the Office of the Deputy Prime Minister received 336 responses from representative organisations, many of whom had conducted wider consultation or commissioned public opinion polls to inform their response.

  We have no specific information on the proportion of respondents who are registered on the electoral register in the north-west region.

  St Oswalds Park, Gloucester
  Mr. Clifton-Brown
  To ask the Deputy Prime Minister when Gloucester city council originally granted permission for the development at St. Oswalds Park, Gloucester; when he received the planning inspector's report; and when he expects to make a decision on the called-in appeal. [122770]

  Keith Hill
  The city council resolved to allow the development in August 2001, but were not formally able to grant permission because the application was called in for determination by my right hon. Friend the Deputy Prime Minister on 11 June 2002. The Inspector's report was received on 25 February 2003. On 15 May 2003 my right hon. Friend the Deputy Prime Minister invited 266W
  representations on the implications for the proposals of the statement made to the House on 10 April 2003, Official Report, columns 27–29WS about town centre planning. The responses are being circulated before the final decision can be made, which will be in due course.

NORTHERN IRELAND

  Asylum Seekers
  Lady Hermon
  To ask the Secretary of State for Northern Ireland if he will make a statement on the facilities available in Northern Ireland for the processing of asylum applications. [120892]

  Beverley Hughes
  I have been asked to reply.

  The Immigration and Nationality Directorate has 13 staff based at offices at Belfast International airport. These resources are used for various aspects of immigration control in Northern Ireland, including processing applications for asylum.

  In 2002, the Belfast office received 174 applications for asylum. No statistics exist on the numbers of these applications that were successful, or unsuccessful. Statistics only exist for the UK as a whole and no breakdown is available by region.

  In 2002, the Belfast office removed 62 failed asylum seekers from the UK.

LORD CHANCELLOR'S DEPARTMENT

  Mental Health
  Mr. Paul Marsden
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many of the Department's staff retired on medical grounds due to mental health problems in the last year. [111959]

  Mr. Lammy
  I refer the hon. Member to the answer given to him by the Minister of State for the Cabinet Office, the hon. Member for Paisley, South (Mr. Alexander) on 24 June 2003,Official Report, column 662W.

DEPUTY PRIME MINISTER

  Beacon Council Scheme
  The Minister for Local Government, Regional Governance and Fire (Mr. Nick Raynsford)
  The Office of the Deputy Prime Minister is launching the fifth round of the Beacon Council Scheme on Wednesday 2 July with the publication of the Application Brochure setting out instructions on how to apply, the detailed criteria that will be used to assess applications, and what being a Beacon will mean. Copies of the brochure will be placed in the Library of the House.

  The Beacon Council Scheme provides a successful, positive way of recognising achievement and spreading best practice. It enables authorities to learn from each other to improve the services they deliver. In the first four rounds of the scheme, 186 Beacon awards have been made in 39 service themes. Nearly all councils in England have attended at least one learning event. Independent research has shown that real improvements are taking place as a result of this learning and that the scheme is really having an effect in raising achievement.

  The Office of the Deputy Prime Minister is inviting all councils and best value authorities that believe they have achieved excellence in one or more of this year's Beacon themes to apply for Beacon status. This round's themes for which we are now inviting applications are:

  Benefits Administration

  Better Local Public Transport

  Crime and Disorder Partnerships

  Early Years + Childcare: the Sure Start Agenda

  Housing Renewal

  Services for Older People

  Supporting People

  Transforming the School Workforce

  Promoting Sustainable Tourism

  Supporting Social Care Workers

  Applications are invited by 10 September 2003. Successful applicants will be announced in April 2004 and hold Beacon status until the end of June 2005.

  Local Government Information
  The Minister for Local Government, Regional Governance and Fire (Mr. Nick Raynsford)
  The Office of the Deputy Prime Minister received eighty written responses to "Access to Information in Local Government. A policy paper on the current and future framework government access to information for Local Authorities in England". As foreshadowed in the paper, we are setting up a review group involving the Local Government Association, the Campaign for Freedom of Information, the Information Commissioner, the 8WS
  Newspaper Society and local authority practitioners to consider these further. The responses, which we are now considering carefully, contain a wide range of helpful comments and suggestions.

  Our aim, in taking forward this review, is to ensure that the legislative framework governing the public's right of access to information held by local authorities is clear for users and workable in practice for local authorities. We want a system which promotes a culture of openness throughout councils which delivers accountability and transparency in decision making and equally guarantees the protection of information such as personal details where this is necessary.

  Respondents to the consultation expressed a range of views about how the system is working currently. Some councils judge that he system is working well, although point out that it is too early to draw firm conclusions. Others, outside local authorities, have expressed the view that the existing legislation does not provide sufficient access to information and that councils are not developing a culture of openness.

  The Office of the Deputy Prime Minister wishes to consider further with the Review Group how to build on the good work which is evident in many authorities and how to address the concerns that have been raised. We believe that implementation of the Freedom of Information Act from January 2005 by councils will help create the culture of openness which some respondents feel is lacking. In addition, we intend specifically to ask the Review Group to consider whether it would be appropriate to achieve greater consistency between the categories of information which authorities can classify as exempt under schedule 12A of the Local Government Act 1972 with those in the Freedom of Information Act 2000.

  In the light of responses to consultation and of research, which we are planning to publish shortly, we will provide councils with advice on best openness practice. We will seek the Review Group's views on how this can best be done. The Group will also need to consider the interface with other data and information regimes, including the environmental information regulations and data protection legislation.

  A list of all the responses is available in the Libraries of the House and full copies of the responses are available from the Office of the Deputy Prime Minister's library.

  Local Government Act 2000
  The Minister for Local Government, Regional Governance and Fire (Mr. Nick Raynsford)
  The Government are today publishing a consultation paper and draft Order on the nature of the powers to be conferred on relevant authorities under s.101 of the Local Government Act 2000.

  There has been uncertainty about the extent of the powers of authorities to indemnify their members and officers out of public funds for any personal liability arising from actions or decisions taken by them in the course of their official duties. The consultation paper and draft Order will pave the way for the clarification of the situation.

  9WS
  One important feature of the new Order is that it is intended to facilitate joint working between authorities and partners. It will make clear the ability of members and officers to be covered by an indemnity for work that they do on boards and partnerships, provided certain conditions are met.

  The proposals and draft Order would permit (but not oblige) authorities to provide indemnities and insurance that would provide "cover" for a member or officer in the following circumstances:
  if the member had acted honestly and in good faith when taking the action giving rise to the liability;
  if the authority was found to have acted outside its powers, but at the point at which the member or officer acted they honestly and reasonably believed that the action or advice giving rise to the liability was within the powers of the authority.
  The proposals would also allow indemnities to be provided in certain cases to cover the costs incurred by a councillor in relation to defending proceedings under the Code of Conduct. These cases are ones in which the member is finally either found not to have breached the Code or is found to have breached it but in a case in which the matters complained of, or circumstances, did not warrant any sanction.

  Copies of all the consultation material have been placed in the Libraries of both Houses.

HOME DEPARTMENT

  Money Laundering
  The Parliamentary Under-Secretary of State for the Home Department (Caroline Flint)
  I have today placed in the Library of the House a copy of a report on the effectiveness of the regime for reporting suspicions of money laundering—Suspicious Activity Reports. A copy has also been placed on the Home Office website.

  The Home Office commissioned the review, which was carried out by KPMG and funded from recovered criminal assets, because we recognised that the current system needs to work better in the fight against money laundering and the tracking of criminals' assets.

  The report concludes that the present reporting system does lead to criminals being caught but makes a number of recommendations to make it much more effective. The Government welcome the broad thrust of the report. We are determined to ensure that all elements of our asset recovery strategy, of which the money laundering reporting system is one, are working effectively. As a first step we are taking forward the report's principal recommendation and setting up a high level task force, chaired by a senior Home Office official and comprising senior representatives of the private sector and law enforcement, to oversee the changes which are necessary.

  10WS
  We will be working with the key stakeholders to ensure that the reporting system delivers maximum intelligence and benefit to law enforcement agencies in the fight against crime and that it operates as efficiently as possible.

FOREIGN AND COMMONWEALTH AFFAIRS

  Zimbabwe
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Chris Mullin)
  With the support of Her Majesty's Government, the General Affairs and External Relations Council of 18 February agreed both Common Position 2003/115/ CFSP and Council Regulation 313/2003. The Common Position extends EU sanctions against Zimbabwe for twelve months; clarifies the grounds for an exemption to the travel ban; and changes the procedures for granting an exemption.

  Liberia
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Chris Mullin)
  With the support of Her Majesty's Government, the United Nations Security Council on 6 May 2003 unanimously adopted United Nations Security Council resolution 1478(2003). The resolution rolled over the measures that had been in place against Liberia (a travel ban against senior government officials and members of their immediate families, a diamond embargo and an arms embargo). The travel ban was also extended to members of Liberians United for Reconciliation and Democracy (LURD). In addition, timber sanctions were imposed against all round logs and timber products originating in Liberia. Sanctions against timber do not come into place until 7 July 2003.

  NATO Parliamentary Assembly
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
  The Baroness Ramsay of Cartvale has replaced the late Lord Gladwin of Clee CBE as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.

  Strategic Export Controls
  The Minister for Trade and Investment (Mr. Mike O'Brien)
  The 2002 Annual Report on Strategic Export Controls will be published at 14.30 today as a Command Paper, and copies will be placed in the Library of the House. The Report includes information on licensing decisions made during 2002 as well as describing UK policy and international developments in export control regimes.

  Since 1997 the Government have taken great strides to make our defence exports licensing system one of the most rigorous and open in the world and this annual report, the sixth of its kind, is a symbol of our commitment to transparency and accountability. The report will be available on the FCO website and also published through The Stationery Office.

TRADE AND INDUSTRY

  Landward Licensing Round
  The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)
  In the 11th Landward Licensing Round, my right hon. Friend the Secretary of State for Trade and Industry will offer eight Petroleum Exploration and Development Licences (PEDLs) to seven companies, as set out below:

  Licence Number

  Companies

  Location (by county)

  PEDL 125

  Northern Petroleum (GB) Limited; Magellan Petroleum (NT) Pty Limited

  Hampshire

  12WS

  Licence Number

  Companies

  Location (by county)

  PEDL 126

  Northern Petroleum (GB) Limited; Magellan Petroleum (NT) Pty Limited

  Hampshire and West Sussex

  PEDL 127

  Roc Oil (UK) Limited

  Norfolk

  PEDL 128

  Egdon Resources (UK) Limited

  Lincolnshire

  PEDL 129

  Midmar Energy Onshore Limited

  West Sussex

  PEDL 130

  Stag Energy Limited

  Nottinghamshire

  PEDL 131

  Alkane energy UK Limited

  Nottinghamshire

  PEDL 132

  Stag Energy Limited; Alkane Energy UK Limited

  Nottinghamshire

  Notes:

  Where more than one company appears, then first-named will be the operator.

  Each licence carries a work programme whose drilling component is a single-well 'Drill or Drop' commitment. Must also include seismic acquisition elements.

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

Palace of Westminster: Smoking Policy
Baroness Galeasked the Chairman of Committees:
What action is being taken to help asthma sufferers by making the Palace of Westminster smoke free.
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I can of course answer only for the House of Lords' half of the Palace. With regard to staff, since 1992 the administration has observed the principle that staff are entitled to work in a smoke-free atmosphere. With regard to Members, the rules on smoking are a matter for the House as a whole. The current rules were agreed in March 2001, following a survey of Members. There are no current plans to review those rules.
Baroness Gale: My Lords, I thank the Chairman of Committees for his Answer, although I am sure he will understand that I am not completely happy with his response. Does he agree that research shows that passive smoking is one of the main triggers for asthma attacks? Does he further agree that there should be a duty of care towards members of staff, and, indeed, Peers, and that, in the light of all the evidence that shows that passive smoking causes ill health and in the long term can cause death, we should now be moving towards a smoke-free environment for all the staff and Peers in your Lordships' House?
The Chairman of Committees: My Lords, I cannot comment on the research on passive smoking, some of which I have seen goes both ways. As I said in my original Answer, the rules were last changed just over two years ago. There were considerable improvements from the point of view of restrictions on where smoking was permitted. As far as I am aware, no member of staff has complained about being made to work in a smoky atmosphere. All those who work in the Bishops' Bar do so as volunteers.
Baroness Trumpington: My Lords, is the noble Lord aware that since I gave up smoking I have developed a very sensitive nose? Is he further aware that, at the age of 80, there are very few pleasures left to me, but one of them is passive smoking? Does the noble Lord agree that it is not possible to smell smoke or tobacco in the Palace of Westminster except in the smoking areas, so there is really no need to generate hot air?
The Chairman of Committees: My Lords, I congratulate the noble Baroness on having given up smoking. I have given up as well, except for the occasional small cigar, I must admit. I, too, perhaps enjoy the occasional smell of someone else's smoke.
Lord Geddes: My Lords, as always, I declare an interest as a member of the Lords and Commons Pipe and Cigar Smokers' Club. I also declare an interest as a member of the Refreshment Committee of the House, although of course I do not speak for it. Is the noble Lord aware that there have been some 260 replies to the recent survey on the catering outlets of the House which was sent to every Member of the House, of which more than 230 were from regular attenders, and that of those replies only a handful—the Clerk was unfortunately unable to give me the precise number but said that it was definitely fewer than 10—even mentioned smoking?
The Chairman of Committees: My Lords, I was aware of the survey of Members of the House about the refreshment facilities. I was aware that only a small number had commented on smoking, but I am glad that the noble Lord pointed that out to the House. Of course, as I said in my original Answer, in 2001 various changes were made to the various outlets of the Refreshment Department. Smoking is now not allowed in some of the places where it was allowed before.
Baroness Finlay of Llandaff: My Lords, is there an attempt to cull this House by allowing smoking to continue here among Peers and therefore bring their deaths forward?
The Chairman of Committees: Not by me, my Lords.
Lord Faulkner of Worcester: My Lords, is the Chairman of Committees satisfied with the quality of ventilation in the areas of the House where smoking is permitted, particularly in the Barry Room, where there is a hard core of smokers at the Long Table? The effect of that smoking is for the smoke to drift throughout the whole of the room. Indeed, I cart see one or two Peers opposite are nodding after their experience in the Barry Room last night. Is not the answer for us to make the building non-smoking, but to provide designated closed smoking areas for those who wish to continue?
The Chairman of Committees: My Lords, the ventilation in the Barry Room has been looked at. I hope that there has been some improvement there. I am aware that the noble Lord, Lord Faulkner, took part in the debate when these measures were

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introduced in March 2001. At that time he congratulated the Offices Committee on proposing what is for many of us an acceptable compromise.
Lord Brookman: My Lords, would it be possible for the Chairman of Committees to think about issuing white masks? It would have the added advantage that one would not know to whom one was speaking.
The Chairman of Committees: My Lords, I shall take away that suggestion.
Viscount Simon: My Lords, is the Chairman of Committees aware that a motion proposing a ban on smoking in all public places was overwhelmingly agreed to by doctors attending the annual conference of the BMA in Torquay today? If we institute a ban in the Palace of Westminster, would we not be setting a good example to others?
The Chairman of Committees: My Lords, I was aware of that because I saw it on the news this morning. If the Government wish to introduce a ban on smoking in public places, they no doubt will do so and we will, of course, have to follow.
Lord Wallace of Saltaire: My Lords, do the Government accept that it should be a principle of liberal democracy that government should interfere with people's lives as little as possible, and that further bans should be very carefully justified before the detail of government regulations extend into every aspect of our private lives?
The Chairman of Committees: My Lords, I do not answer at the Dispatch Box for the Government, but it is nice to hear from the noble Lord, Lord Wallace, of proper liberal principles.
Lord Janner of Braunstone: My Lords, does my noble friend believe that the Government should interfere as much as possible to prevent people's unnecessary deaths?
The Chairman of Committees: My Lords, I really cannot be drawn on questions for the Government.

Smoke-flavoured Food Additives
2.43 p.m.
Earl Ferrersasked Her Majesty's Government:
Whether European Union regulations are being drawn up which will prevent the use of smoke-flavoured additives in food.
The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, a European Union regulation bringing controls on the use of smoke flavourings in food into line with existing
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controls for other food additives has been proposed. The proposal would prevent only the use of smoke flavourings that present risks to the consumer.
Earl Ferrers: My Lords, I am grateful to the Minister for that reply, but does he agree that the introduction of such constraints will affect the smoky bacon crisp industry, the smoked salmon industry and all the others? Does he further agree that, in the end, those are only flavourings, and that one would have to eat a monumental amount of such food—as a result of which one would die of obesity and a heart attack—before one would ever die of cancer?
Lord Warner: My Lords, let me reassure the noble Earl that his ability to consume smoky bacon crisps will remain unaltered by the regulation. Smoke flavourings are produced from condensed wood smoke, which contains substances known to be harmful to human health, especially those called polycyclic aromatic hydrocarbons—of which I am sure every member of the House will be well aware—which are known to cause cancer in humans.
Traditionally smoked foods, such as kippers and smoked salmon, to which the noble Earl referred. would be unaffected by the proposed regulation. The regulation is likely to require the assessment of no more than 20 primary products from which all smoke flavourings are produced, none of which is produced in the UK.
Lord Clement-Jones: My Lords, is this not just the thin end of the wedge? Are not exactly the same chemicals contained in smoked foods such as kippers or smoked cheese?
Lord Warner: My Lords, I am reliably advised that traditionally smoked foods, such as kippers and smoked salmon will not be affected by the proposed regulation. Smoke contains certain chemicals that are of health concern, hut it is the primary products that are the cause of concern.
Lord Skelmersdale: My Lords, is this not another example of the European Union going over the top? What peer review has been undertaken by doctors on the carcinogenic effects of polcyclic aromatic polycarbons?
Lord Warner: My Lords, other member states have quite strict controls on smoke flavours. As I mentioned, the primary products that produce those flavourings represent a hazard to human health. If I may, I dare to say that this is an example of the EU protecting UK consumers from potentially dangerous products manufactured abroad. I know how many Conservative Members are interested to know about the benefits of belonging to the European Union.
Lord Tanlaw: My Lords, what of the smokies of Arbroath? The noble Lord did not include them. The

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terms "smokies" and "Arbroath" are synonymous. Can he assure us that that product is excluded from the regulation?
Lord Warner: My Lords, if it is a traditionally smoked product, it will be covered by my earlier remarks.
Baroness Trumpington: My Lords, does it make a difference from where the smoke comes? For instance, smoked salmon proudly boasts that it comes from oak chippings. Is smoke regardless bad for one's health? Is it the end of bonfires? Is it the end of barbecues?
Lord Warner: My Lords, we are discussing the production of the primary products that would lead to smoke flavourings. We are not discussing barbecues, and so on, in this Question.
Lord Livsey of Talgarth: My Lords, is the Minister aware that blow torches are used with some meat—lamb, in fact—for minority use? Some of that meat is not properly cooked and is the subject of investigation by environmental health authorities. Does he have any plans to keep a register of those retail outlets, which are causing great health concern?
Lord Warner: My Lords, if the noble Lord will write to the appropriate Minister, I am sure that he will take up those concerns. The Question concerns smoke-flavoured additives to food.
Baroness Masham of Ilton: My Lords, if those additives were dangerous, why were they allowed in the first place?
Lord Warner: My Lords, what I am saying in answer to the Question is that there are controls on those additives in other countries. That concern has been brought to the attention of other members of the European Union and the regulations will deal with the issue in due course.
Baroness Sharpies: My Lords, can the Minister tell us how many prime products there are?
Lord Warner: My Lords, as I said earlier, there are 20 primary products, all of which are produced overseas.
Viscount Simon: My Lords, if smoking were banned in public places, what would be the status of food flavoured with tobacco smoke?
Lord Warner: My Lords, I do not think that I can give any advice on passive exposure to smoky bacon crisps.

Specialist Schools
2.50 p.m.
Lord Dormand of Easingtonasked Her Majesty's Government:
Whether the progress being made by specialist schools is satisfactory.
Baroness Andrews: My Lords, the progress being made by specialist schools is very satisfactory. In 2002, 54.1 per cent of pupils in non-selective specialist schools achieved five or more GCSEs at grades A*-C, compared with 46.7 per cent for all other comprehensive schools, even though the intake of ability at age 11, as shown by key stage 2 results, was broadly similar to that for non-specialist schools. By this September there will be 1,454 specialist schools in place, providing for 46 per cent of all pupils.
Lord Dormand of Easington: My Lords, given the massive and continuing growth in the number of specialist schools, can my noble friend tell me how many schools wishing to become specialist schools have been unable to do so because of the shortage of certain specialist teachers? Can my noble friend also confirm that the specialist schools receive much more in the way of grants than do non-specialist schools? In those circumstances, how can the non-specialist schools pretend to have the same standards as the specialist schools?
Baroness Andrews: My Lords, my noble friend is very interested in specialist schools and has been for a long time, but I regret that I cannot give him any information about the number of schools that have not been designated "specialist" because of the shortage of teachers. We know that some schools have not been able to achieve the £50,000 sponsorship that they need but, again, we do not know how many because schools are not required to provide that information. However, I do believe that the results that are being attained in specialist schools demonstrate that the status is part of a very effective schools improvement programme, which I hope my noble friend will want to support and thereby enable more schools to achieve that aim.
Baroness Gardner of Parkes: My Lords, the Minister said that over 50 per cent of those pupils in need of a special school place are catered for, which means that well over 40 per cent are not. Do the 40 per cent of pupils who do not have a special school facility available to them not wish to attend such schools—some people believe that it is better not to be educated at a special school—or is there still a desperate need to be met among that proportion of well over 40 per cent?
Baroness Andrews: My Lords, the noble Baroness is talking about special schools, while I am referring to specialist schools. Specialist schools are those which have a specialism in one of 10 different subjects.
Lord Quirk: My Lords, as the specialist school programme now spreads its wings into areas of the

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humanities where there is less consensus on a canonical core curriculum than is the case for the sciences, to what extent are the Government encouraging such schools to develop their own curricula, either individually or collectively?
Baroness Andrews: My Lords, it is true that the two most recent specialisms to be announced are in music and the humanities and, as with all other specialist schools, we want to see those curricula being developed to the highest standards. But the schools themselves are all bound by the national curriculum and will have to abide by it.
Just as we have seen from the excellent and quite outstanding work being done in the arts colleges in both history and geography, we now look forward to seeing the same in music.
Baroness Sharp of Guildford: My Lords, is it government policy to roll out specialist status to every secondary school in the United Kingdom? If that is the case, how are the Government proposing to help those schools which cannot find sufficient local resources to meet the £50,000 sponsorship required for specialist status?
Baroness Andrews: My Lords, the noble Baroness is absolutely right. The Secretary of State has made it clear that we intend to roll out the specialist school programme nationally because the status forms part of the improving schools programme, and it is successful.
We know that many schools are experiencing difficulties in raising the required sponsorship. For this year we have made available £3 million in the form of partnership money on which schools may draw. The application forms are now being made available and, if they meet the criteria, the first schools will be able to draw down from that fund from September to March of next year. When we come to the end of this funding year we shall look again at the situation to see what else we can do.
Lord Renton: My Lords, is the noble Baroness aware that great confusion has arisen over the use by the Department for Education and Skills of the terms "special schools" and "specialist schools"? Special schools are for those with learning disabilities and thus are quite different from the specialist schools. Could not something be done to rename either the special or the specialist schools in order to avoid further confusion?
Baroness Andrews: My Lords, I do not believe that generally there is any confusion between special and specialist schools. Perhaps I was not clear in my pronunciation of the word "specialist", which may not have helped the noble Baroness. However, the specialist school status is very much about schools having specialisms in different subjects.
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Of course within those schools there will be children with special needs, who are also helped by the programme. But there is no confusion between the different types of school.
Baroness Blatch: My Lords, does the noble Baroness agree that my noble friend has made a very good point? Special schools do have a specialism: they are specialist in the field of teaching young people with learning difficulties. So I do think that my noble friend has a point.
Further, does the noble Baroness accept that specialist schools were established by my government when last in office and that we are delighted that the proposal is being built upon? However, concerns are now being expressed that many schools are being given specialist status when in fact the particular subject in which they are declared to be specialist is one that is very weak within some schools? I think that the rigorous selection process for allowing a school to become a specialist establishment should at the least insist that a school is specialist in the subject for which it is given specialist status.
Baroness Andrews: My Lords, I agree with the noble Baroness's first point: that special schools are very specialist. We have seen the results and we admire the wonderful achievement of all those children.
Turning to specialist status, it is true to say that certain specialist schools have been in some sense weak in their specialism. The funding and extra help they have been given has enabled them to develop and improve in those areas. Certainly the application process, as it has developed, has become more rigorous. I think that we are now seeing the benefits of that in all kinds of ways, including in the improvements schools are making in developing their partnership arrangements with other schools.
Lord Hunt of Kings Heath: My Lords, as every school will now be able to become a specialist school, is not the answer to the problem of the confusion over names to call them comprehensive schools?
Baroness Andrews: My Lords, I am sure that my noble friend heard me talk about "other comprehensive schools" in my first Answer. Specialist schools are within the family of comprehensive schools, although a very small proportion—under 6 per cent—selects by aptitude. Specialist schools are certainly comprehensive schools.
Lord Dormand of Easington: My Lords, can my noble friend comment on the view of the House of Commons Select Committee on Education and Skills that the expansion of specialist schools is taking place without any evidence to show that they are successful?
Baroness Andrews: My Lords, without wanting to anticipate the Government's response, which I think will be fairly robust, I have to say that we do not agree with that view. The evidence that we have gathered in support of the expansion of the scheme comes not only

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from the Government's own evidence, but also from a very wide range of quantitative and qualitative data from academic sources, Ofsted, the National Foundation for Educational Research and, just as importantly, from the experience of those schools which are part of the programme and that of others wishing to join.

Coinage: Supply
2.58 p.m.
Lord Razzallasked Her Majesty's Government:
Whether there is adequate competition to supply United Kingdom coinage following the collapse of the Birmingham Mint.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, the Government have an agreement with the Royal Mint for the supply of circulation coinage that has some time to run. The Royal Mint will continue to meet demand for the duration of this agreement.
Lord Razzall: My Lords, does the Minister accept that Birmingham Mint is now in administration primarily as a result of the termination by the Treasury of the Royal Mint's market-sharing agreement with Birmingham Mint? Does he further accept that, as a result, a significant reduction has taken place in competition for the supply of UK coinage?
Lord McIntosh of Haringey: My Lords, I am afraid that I am not able to comment on the commercial relationship between Birmingham Mint and the Royal Mint because it is a matter of legal dispute. I cannot give the assurance being sought by the noble Lord, Lord Razzall.
Lord Corbett of Castle Vale: My Lords, is my noble friend aware that many in the City of Birmingham and beyond will be saddened that the Mint has a hole in it? Can he confirm that part of the reason for the loss of business has been the introduction of the euro? Will he have a word with his colleagues in the Department for Work and Pensions to ensure that every assistance is given to those who may lose their jobs at the Mint to find work elsewhere in the manufacturing sector?
Lord McIntosh of Haringey: My Lords, it is not true to say that the Royal Mint has a hold of the Birmingham Mint.
Noble Lords: A hole!
Lord McIntosh of Haringey: My Lords, I have not seen the ads recently. I thought that they had been discontinued, but I may be wrong.
The Birmingham Mint went into administration and the administrators sought a purchaser. The only thing to have happened since is that the Royal Mint
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has bought some of the equipment belonging to the Birmingham Mint and that is the limit of their connection. No, it is not true that the Birmingham Mint has gone into administration because of the euro. We expect—and have always expected—that we shall be responsible in this country for the production of most, if not all, of our coinage under the euro. Therefore there should be no loss of business.
Lord Skelmersdale: My Lords, the original Question of the noble Lord, Lord Razzall, was about competition. I did not hear the Minister refer to competition in his Answer. Be that as it may, the Royal Mint is a failing organisation and has been losing money hand over fist. When will it live up to the Government's trading fund rules by at least breaking even? When will it stop entering into costly plots such as contracting to mint euros, for which it was always ill equipped?
Lord McIntosh of Haringey: My Lords, perhaps I may concentrate on the last part of the noble Lord's question. The Royal Mint did not succeed in its tender to mint euros for other member states which were entering stage three of European monetary union. There are indeed lessons to be learnt from that. I do not believe that it was well enough prepared; I do not believe that it appreciated the extent of the competition; and I do not believe that it appreciated the quality requirements demanded for the euro coins. So, to that extent, the noble Lord, Lord Skelmersdale, is right.
As to the relationship between the Treasury and the Royal Mint, clearly the Crown has a contract with the Royal Mint which is reviewed from time to time. It was last reviewed in 1997–98; it will come up for review fairly shortly.

Hong Kong
3.2 p.m.
Lord Goodhartasked Her Majesty's Government:
Whether they have made representations to the Government of China or Hong Kong about the terms of the National Security (Legislative Provisions) Bill which is about to be considered by the Legislative Council in Hong Kong.
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, we have made frequent representations to the Hong Kong Special Administrative Region Government about their draft national security legislation under Article 23 of the Basic Law. We have also discussed the issue with the Chinese Government. My right honourable friend the Foreign Secretary did so with the visiting Chinese Foreign Minister last week. My honourable friend the Parliamentary Under-Secretary of State, Mr Rammell, issued a further statement about the draft legislation yesterday, 30th June.
Lord Goodhart: My Lords, I am aware of and grateful for the concern which the Government have

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expressed on a number of past occasions on this issue, but we are now getting to the crunch point when the Bill will be voted on. Indeed, I understand that there has been a big demonstration against the Bill in Hong Kong earlier today. Do the Government agree that there are still serious defects in the Bill which raise concerns about the rule of law in Hong Kong? Are the Government aware that the democratic movement in Hong Kong sees intervention by the Government as a last hope of achieving changes in the Bill? Will the Government therefore make representations to the authorities in Hong Kong and Beijing at the highest possible level?
Baroness Symons of Vernham Dean: My Lords, I am aware of the demonstrations and I can assure the noble Lord, Lord Goodhart, that we are following this issue very closely indeed. I have made the point that my honourable friend Mr Rammell and my right honourable friend the Foreign Secretary have made representations. I also had some brief discussions about this matter last week.
We welcome the fact that the Hong Kong Special Administrative Region Government have improved the legislation in many areas from the original proposals put forward last autumn and the legislative proposals published in the spring. We are particularly concerned about the proposed new provisions on prescription, which I believe may be the issue troubling the noble Lord, Lord Goodhart. We believe that these provisions blur the dividing line between the separate Hong Kong and mainland legal systems by introducing into Hong Kong legislation links to mainland law. That is the real problem and the nub of the issue. We share the view of many in Hong Kong—who may well have been demonstrating today—that this is inconsistent with the one country/two systems principle that underlies the joint declaration.
Lord Howell of Guildford: My Lords, did we not tell the people of Hong Kong six years ago that they would not be forgotten? Does the Minister agree that the rule of law and freedom under the law that we bequeathed to Hong Kong is its most precious asset today? While I am glad to hear that some of the effects of the Article 23 measures and subversion legislation may have been modified—or, indeed, exaggerated in the first place—will the Government nevertheless be very bold indeed, as the noble Lord, Lord Goodhart, suggested, in pointing out to the Government in Beijing, at the highest level, that their pressure for these changes could lead to very serious long-term damage for Hong Kong? Does the Minister agree that quiet dialogue is no longer the appropriate medium for handling this issue? Does she further agree that we must avoid the accusation being levelled at the British Government—as it has been—that they are mere spectators in this very serious situation?
Baroness Symons of Vernham Dean: My Lords, if such a charge is being levelled at the Government it is quite unfounded. Quiet dialogue has its place and it is
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important that we are able to engage frankly with both the SAR and Chinese Governments on this issue. That does not and has not precluded our making quite robust public statements. I remind the noble Lord that the former Lord Chancellor and Mr Rammell have put across our concerns in person when visiting Hong Kong. There was a period when such visits were not possible because of the SARS outbreak, but we have continued these exchanges at official level and we have made frequent representations. On 20th June, Mr Rammell sent a personal message to the Secretary for Security on this issue and, as I indicated in my original Answer, the matter was raised only last week by my right honourable friend the Foreign Secretary with the visiting Chinese Minister. We have also spoken out on this issue—not only in private but in public. We have now issued three statements—on 18th November last year and on 27th March and 30th June this year—and we have led international efforts to improve the legislation, with the US, the EU, Canada and Australia following our lead. The EU, of course. issued a statement yesterday.
Lord Dubs: My Lords, does my noble friend hold out any hope that there will be a change of heart on the part of the authorities in Hong Kong or in Beijing? What has been the Chinese response to the many representations made by the Government?
Baroness Symons of Vernham Dean: My Lords, the Chinese Government have responded today in relation to the statements that have been made. I have referred to the statement put forward by the EU yesterday and the United States Government have also made a statement. The Chinese Foreign Ministry has said that the allegations made in these statements are "unfounded" and that Article 23 is an internal matter in which foreign countries have no right to interfere. That is the public statement being made by the Chinese Government. That is why I was so emphatic in saying to the noble Lord, Lord Howell of Guildford, that this is not only a matter for public exchanges; there also have to be quiet exchanges between those who are able to talk frankly to each other. Of course we should say what we believe to be the case publicly but it is enormously important not to lose the value of quiet diplomacy.
Lord Hylton: My Lords, can the Minister confirm that this objectionable law is likely to come into effect as early as 9th July? Does she see any prospect, in the short time remaining between now and then, of achieving changes in the sweeping provisions which are liable to affect the media, the churches and groups such as Falun Gong?
Baroness Symons of Vernham Dean: My Lords, the noble Lord is right. This continues to be a matter for discussion in Hong Kong. Our representations and the representations of others have led to some changes in the original points put forward by the Hong Kong Special Administrative Region Government. We now have a period of about eight days. I have told the House what the Chinese Government have said. Your

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Lordships are in a position to make judgments, as are the British Government, about how much progress we are likely to make by shouting the odds at the Chinese Government rather than trying to pursue some well-argued points with them. In your Lordships' anxiety to do the right thing, I hope that your Lordships will not lose sight of the importance of diplomacy as well as public statements.
Lord Geddes: My Lords, I wish that the Minister's remarks had been used in the two, three or four years immediately before the hand-over. That is now history. The Minister mentioned several times representations being made in this respect to the government in Beijing. I am sure that the House welcomes that. Have representations also been made directly to Mr Tung Chi Hua, the chief executive of the Hong Kong SAR? If not, could they please be made?
Baroness Symons of Vernham Dean: My Lords, yes. I had hoped that I had made that clear in my initial Answer, when I said that we had made frequent representations to the Hong Kong Special Administrative Regional Government about the matter. We shall of course continue to make sure that they are left in no doubt about our views on this issue.
Baroness Williams of Crosby: My Lords, given that there has been a strong statement from the White House, which the Minister has confirmed, that there has been a statement from the European Union, and also repeated representations from the British Government, will the Minister consider drawing to the attention of the Chinese Government the damaging effect on foreign direct investment that this is likely to have, if it is pursued in its present form? If Hong Kong, as the Minister indicated, does riot have full recognition of its special status, there is likely to be concern among foreign investors about continuing to invest in that region.
Baroness Symons of Vernham Dean: My Lords, I would add that there have also been statements made by Australia. This is a difficult issue and I appreciate that your Lordships are enormously concerned and wish to leave no stone unturned in the arguments that may be put forward. There are judgments to be made about the efficacy of what might be seen as a threat in relation to what otherwise might be seen as encouragement. I was specific in reading out what I understand is the reaction of the Chinese government.
We have to make some quite difficult judgments over the next few days about the most efficacious way to proceed. If I may say very gently to the noble Baroness, it is just possible that pointing out what might happen over foreign direct investment—which I would suggest is self-evident—might be seen as more on the threatening side, rather than on the persuasive side, of the equation.
Lord Eden of Winton: My Lords, the original Question of noble Lord, Lord Goodhart, referred to the fact that the issue is about to be considered by the
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Legislative Council in Hong Kong. Can the Minister say whether the Legislative Council is in a position to amend or reject the proposed Bill, and if so, what would be the consequences?
Baroness Symons of Vernham Dean: My Lords, as I understand the matter, it does have some powers of amendment, although they might not be the same types of powers enjoyed, not so much by your Lordships, but by another place. The matter is under consideration and the discussions should be completed by 8th July. As I understand it, there is some room for manoeuvre. I hope that we focus on the continued good will and persuasion of those who feel that there are some outstanding issues about the effect on the Joint Declaration, and the whole point about one country/two systems and the consistency of what is suggested in the legislation, even as it stands with that principle in the Joint Declaration.

Liaison: Select Committee Report
3.14 p.m.
The Chairman of Committees: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Second Report from the Select Committee (HL Paper 126) be agreed to.—(The Chairman of Committees.)
Following is the report referred to:
Appointment of an additional Sub-Committee of the European Union Committee
1. At their previous meeting on 17 February, the committee considered a proposal from Lord Grenfell that two additional sub-committees of the European Union Committee be set up. This request was related to the review of scrutiny of European instruments conducted by the European Union Committee. The Liaison Committee took the view that it was at that stage premature to come to a decision on Lord Grenfell's proposal before the House had debated the European Union Committee's report and before the Government's response had been received.
2. The report was debated by the House on 9th May 2003. At the end of the debate Baroness Symons of Vernham Dean indicated that the Leader of the House would support the creation of one additional sub-committee. In the light of this Lord Grenfell has proposed that one additional sub-committee be set up, so that the division of policy responsibilities between sub-committees might be improved; to deal better with the increase in workload of the Select Committee; and to anticipate outside pressure for an enhanced role for national parliaments in the European Union stemming from the proposals of the Convention on the Future of Europe. Lord Grenfell has indicated that the European Union Committee would be content to reduce slightly the number of Members of the House serving on each sub-committee so as to minimise the effect of the appointment of an additional subcommittee on the availability of Members to serve on them.
3. A majority of the committee agreed that an additional subcommittee should be appointed for the reasons provided by Lord Grenfell in his original proposal. Concern was expressed, however, that the appointment of such a sub-committee might lead to an increase in the number of reports recommended for debate. Current pressure on time for debates was already very high. Concern was also expressed that the appointment of another sub-committee should not place undue pressure on the availability of Members of the House to serve. Accordingly, the committee recommends that the European Union Committee appoint an additional sub-committee with effect from the next Session; that

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the committee exercise restraint in the number of reports recommended for debate; and that the number of Members of the House serving on sub-committees should not exceed ten.
Lord Peston: My Lords, I rise to ask the Chairman of Committees a couple of questions. I shall place the matter in context. When I first saw this document I assumed that it was a wind-up and as such one of the most brilliant spoofs I have seen in this House.
First, there are the remarks that whatever we do we must minimise the effect of the appointment in this case, but we must generalise it to cover any case, on the availability of Members to serve on the subcommittees. The expression,
"should not place undue pressure on the availability of Members of the House to serve".
Given that there are several hundred people who comprise the membership of your Lordships' House, is it not odd that the availability of Members to serve on important sub-committees is so limited? Whenever we debate the role and future of this House—and I assume we are due for another such debate any minute—we always emphasise our enormous contribution, our total commitment, the fact that we do this marvellous job, and so on, yet when one comes to a small subcommittee, which is not put forward frivolously by the noble Lord, Lord Grenfell, one of the immediate considerations is the somehow limited availability of Members to serve. This is not a trivial matter, because, regarding the Finance Sub-Committee, which your Lordships are keen on—where I was told that this House was full of experts in the scrutiny of the Government's finances—I had to go around cap in hand to persuade almost anybody to serve. Whenever someone asked, "Do I have to turn up?", I replied "Yes, you not only have to turn up but this committee will be meeting continuously for about four weeks". The answer was, "Regretfully, no". This is a serious matter. If our House is being prevented from doing its job because of availability, there is something much more wrong with our House than I was willing to take seriously.
The more important wind-up—and this is brilliant of the Liaison Committee—is that whatever this new sub-committee does it must exercise restraint on the number of reports recommended for debate. This is not doing what, again, I thought we set up committees to do, which is to look at the subject, study it properly, write a report and then rather pathetically hope that people are interested so that we might have a debate. Now the approach is, "Well, we have been set up, but we had better not do anything in case it might lead to a request to debate our recommendations". It is so ridiculous that, if this is the way our House is to run in future, one starts to come to the view that perhaps the world would be better off without us altogether.
I do not believe that for one minute. But the lesson we must learn is that if we decide to so something—and in this case the noble Lord, Lord Grenfell, has put forward a serious suggestion—the correct response is to say, "If it's worth doing, we will provide the
734
resources to do it. We will, I am sure, find Members to serve, and when they have produced a first class report, we will find time to debate it". That is our justification.
Baroness O'Cathain: My Lords, I largely support the comments of the noble Lord, Lord Peston, about membership of committees. However, is there a minimum level below which there should not be a committee? Ten members sounds fine. But has there been any research on all the committees of this House that have sat over the last two or three years, and on their attendance levels? There are a large number of people who accept membership of committees and are unable to serve for all sorts of reasons. Some of the reasons are manufactured in this House. As the noble Lord, Lord Peston, knows, I have been unable to attend this committee on two successive weeks through being involved in discussion of amendments in the Chamber or in Grand Committee. There are around 100 people who are doing an enormous amount of work; the remaining people are not sharing the burden. It would be useful to know the attendance figures. The last thing we would wish to do is to appoint 10 members, and then find that only five ever turn up regularly.
Lord Brooke of Alverthorpe: My Lords, as a former chairman of a sub-committee I am also concerned that we are reducing the number of members from 12 to 10. Is it possible that the situation might be reviewed in light of the views expressed? The European Union Committee actually asked for two additional subcommittees to undertake its work, but we have ended up with only one. The principal reasons seemingly being given are that we are short of resources. In light of the fact that we have nearly 700 Members of this House and that we have problems ensuring that EU scrutiny is carried out correctly, would the Liaison Committee be prepared to set up an investigation to try to see why we are having difficulty finding sufficient people, and can it take steps to ensure that we have sufficient people?
Lord Grenfell: My Lords, I would like to shed a little light without pre-empting what the noble Lord the Chairman of Committees has to say.
I start by saying that I am grateful to the Liaison Committee for granting us one of the two committees we asked for. That will help. There is tremendous pressure at the moment. The mandates of individual sub-committees are very wide. They are all important, but a particularly significant one at the moment is the Environment and Agriculture Sub-Committee, which is also meant to deal with public health and consumer affairs. We wanted an extra sub-committee so that we could have a committee devoted to social policy and consumer affairs, which would include health, worker protection and education and other issues. I am grateful to the Liaison Committee for providing us with an extra committee. I am particularly grateful to the noble Baroness the Deputy Leader of the House, who told me first that the Government Front Bench would support it. I am grateful to her for having promoted it in the Liaison Committee.

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With regard to numbers, I think that we can make things work with 10. I have never been a great supporter of large committees. The question is whether we get people who will attend. If we have a committee of 10 and we can guarantee that seven or eight will be there for the meetings, it will work. What we must avoid is a situation in which the usual channels feel that they must put so-and-so on to a committee because they need the party numbers, and so-and-so does not show up. My philosophy is to keep the numbers reasonable but to make sure that those on committees are genuine attenders.
The noble Lord, Lord Peston, raised a concern about debate times. There may be a slight misunderstanding here. I do not think that it was the intention of the Liaison Committee—the noble Lord the Chairman of Committees can confirm it—that the extra committee, which will be known as Sub-Committee G and will deal with social policy and consumer affairs, would have to go slow in producing reports. The Liaison Committee was saying that the whole constellation of sub-committees must not produce more reports than the House can digest. I accept that; it is a fair point. It does not invalidate the point that I have made for a long time, which is that we should try to get prime time for our reports. We are making determined efforts to ensure that reports that can be for information only, rather than debate, will not be brought to the Floor of the House.
One of the reasons why we are doing a great deal in the Select Committee and the constellation of subcommittees to improve our external relations and our publicity is that we want to make sure that reports that are for information will not just be for the information of the House but will be made available to the outside world.
We can live with 10 members. We are grateful to have a seventh sub-committee. Provided that we can get time in the House for the really important reports, the Select Committee on the European Union and its sub-committees will deliver what your Lordships want.
Lord Barnett: My Lords, I pay tribute. first, to the work done by the noble Lord, Lord Grenfell. I know how much he does and what a great job he does. I understand why he does not want to upset the Liaison Committee. Having got one of the two committees that he requested, he might want to go back sometime for the other one.
I never thought that I would find myself in disagreement with my noble friend Lord Peston. When he said that he had to go cap in hand to get anybody to serve on the Finance Bill sub-committee, I was quite offended on behalf of those who did join, including the noble Lord, Lord Wakeham, who is certainly not "anybody" and was an excellent member of the committee, as was my noble friend Lord Sheldon. We had an excellent Finance Bill sub-committee as, I am sure, those noble Lords would agree.
I agree with my noble friend on one important point. It is not that relating to the size of committees. I agree with the noble Lord, Lord Grenfell, that a committee
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of 10 members, provided that even nine of them work full-time, can do a great job. Usually, on our committee—the Economic Affairs Committee—we do not have 100 per cent. The more important question has been raised before; I have raised it before. How do we find time to debate the reports? There is no point in having reports from committees if we do not find time to debate them on the Floor of the House. I noted the recent suggestion that time might be found for debate in the Moses Room or in a Grand Committee room. That is an excellent idea, and I hope it will be followed up, although 1 would prefer reports to be debated on the Floor of the House. There are so many excellent reports from committees of your Lordships' House. It is an important matter.
Those on the Government Front Bench always say that they do not have control of more than 27 per cent—even then, it is only for some of the time—of your Lordships' House so they cannot decide how many days should be allocated for Select Committee debates. That is a matter for the usual channels, as we call them—that is, those on all the Front Benches. I hope that they will take note of the mood of the House, and I hope that time will be found, one way or another, if necessary. We might even sit for an extra day or evening in order to debate important reports. As I said. that is not a matter for the Government Front Bench alone; it is a matter for all Front Benches. I hope that they will take note of that and that the last words of paragraph 3 of the Liaison Committee's report will be, if not deleted, noted with some concern.
The Chairman of Committees: My Lords, first, I can assure the noble Lord, Lord Peston, that the report is neither a spoof nor a wind-up. It is the work of the Liaison Committee. As noble Lords will see, the committee was not unanimous in wishing to set up an additional European Union sub-committee. It agreed to do so only with the accompanying recommendation about reducing the number of members of the committee from 12 to 10. At present, there are six European Union sub-committees. They are not all up to strength, but, if they were, they would involve 72 noble Lords. There will now be seven sub-committees of 10, adding up to 70.
The committee was conscious of the additional work of committees in train at the moment. A new statutory instruments committee is to be set up in the new Session. There are pre-legislative scrutiny committees for several Bills, and the number is likely to increase. There is also, of course, the finance subcommittee, to which the noble Lord, Lord Peston, referred, not to mention the Select Committee on the Speakership of the House that is due to be set up later this week.
The noble Lord, Lord Peston, made a second point about whether reports should he recommended for debate or information. That was answered by the noble Lord, Lord Grenfell, to whom I am grateful for his intervention. I am grateful that he is happy with what the Liaison Committee has come up with.

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In response to the noble Baroness, Lady O'Cathain, I must say that I have no research into attendance at committees. So far as I am aware, there has not been a problem finding a quorum, whatever that may be. We can look into it. No doubt, the noble Lord, Lord Grenfell, will wish to do that in respect of the European Union sub-committees.
The noble Lord, Lord Grenfell, also, I think, largely answered the point made by the noble Lord, Lord Brooke of Alverthorpe. The noble Lord, Lord Brooke of Alverthorpe, referred to a membership of 700 in the House. The active membership of the House is considerably fewer than that.
The noble Lord, Lord Barnett, asked for more time for debates. I am sure that the usual channels will have heard that request. I hope that they will be able to respond to it. All the report asks is that the committee exercises restraint in the number of reports recommended for debate, does not insist that all reports should be debated and agrees that some should be only for the information of the House. I hope I have answered most of the questions. I commend the Motion to the House.
On Question, Motion agreed to.

Sunday Working (Scotland) Bill
3.30 p.m.
Lord Hogg of Cumbernauld: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Hogg of Cumbernauld.)
On Question, Motion agreed to.

Marine Safety Bill
Lord Donaldson of Lymington: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Donaldson of Lymington.)
On Question, Motion agreed to.

Communications Bill
3.31 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that the Bill be now further considered on Report.
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Moved, That the Bill be further considered on Report.—(Lord McIntosh of Haringey.)
On Question, Motion agreed to.
Viscount Astor Viscount Astor moved Amendment No. 109:
After Clause 195, insert the following new clause—
"DUTY OF OFCOM IN RELATION TO THE BBC'S NEW SERVICES
(1) Prior to the Secretary of State approving under the Charter or the Agreement the provision by the BBC of any new service or changes to an existing service whether or not a broadcasting or programme supply service it shall be the duty of OFCOM to prepare and publish a report commenting on whether the proposed new service or changes to the existing service will satisfy the objectives set out in subsection (2).
(2) The objectives referred to in subsection (1) are—

(a) the new service or the changes to the existing service are compatible with the BBC's primary public service role as set out in the public purposes of the BBC or any of the services it provides as set out in those documents;

(b) that the value to the public of the new service or changes to an existing service will be proportionate to the likely impact on the market;

(c) that the new service will be universally accessible within a reasonable period of time free at the point of use;

(d) that the new service or the changes to the existing service will represent value for money for licence fee payers.

(3) It shall be the duty of OFCOM—

(a) as soon as practicable after the end of the period of twelve months beginning with the commencement of this section; and

(b) as soon as practicable after the end of each subsequent period as may be selected by OFCOM for the purposes of this section,

to satisfy, for that period, the review and reporting obligations of subsection (4).
(4) The review and reporting obligations are—

(a) an obligation to carry out a review of the extent to which new services provided by the BBC and changes to existing services—

(i) comply with the terms of the approval granted by the Secretary of State for such new services or changes to existing services; and

(ii) satisfy the objectives set out in subsection (2);

(b) an obligation to prepare a report on the matters found on the review.

(5) In this section—
"Charter" means the Royal Charter for the Continuance of the British Broadcasting Corporation of May 1996 and any renewal or replacement thereof;
"Agreement" means any agreement made (whether before or after the coming into force of this section) between the BBC and the Secretary of State to regulate the provision of the BBC's services and the carrying on by the BBC of other activities for purposes connected with the provision of those services.
(6) In this section for the purposes of the review and reporting obligations of OFCOM "new services" shall mean all new services approved (whether before or after the coming into force of this section) by the Secretary of State under the Charter or the Agreement."
The noble Viscount said: My Lords, I shall not move or speak to Amendment No. 110 in the light of our previous debate on the amendment of the noble Lord, Lord Gordon. My amendment is long, but its purpose

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is short and simple. As currently drafted, approval for new BBC services lies solely with the Secretary of State. My amendment would ensure that before the Secretary of State can approve any new BBC service Ofcom must review, first, whether the service is compatible with the BBC's public service remit; secondly, whether it represents good value for licence fee payers; and, thirdly, its potential impact on the wider broadcasting market. That is the most important aspect of the amendment.
Ofcom is well placed to advise on those issues, and any such review would he of benefit to the Secretary of State in reaching a decision. The reason Ofcom is so suitable is that, as your Lordships are aware—and it bears repetition many times—other broadcasters also have public service remits: ITV, Channel 4, and so on. They are therefore regulated by Ofcom, so any new service from the BBC in the new area affects their channels and their public service remit.
In the past new BBC services have resulted from negotiation, or—perhaps more aptly—complicated horse trading between the BBC and the Secretary of State with the trade-off of new services, licence fee increases, and so on. Ofcom's involvement would make the process more open and accountable and the public interest would be better served by it. I must stress that nothing in my amendment would bring the BBC under Ofcom; it purely allows Ofcom to advise the Secretary of State when she makes a decision on new services for the BBC. I beg to move.
Baroness Buscombe: My Lords, we support the amendment.
Lord McIntosh of Haringey: My Lords, the amendment is an odd hybrid between the approval of new services by the Secretary of State under the terms of the BBC's charter and agreement, and Ofcom. I am not sure that it makes a huge difference to what will happen in practice, but there are some difficulties in the way that it has been framed. It seeks to bring the process for approving new BBC services within the statutory framework, although the Secretary of State would continue to grant the approval for new BBC services or changes to existing ones under the BBC charter and agreement.
A statutory requirement would be placed on Ofcom to prepare a report on whether BBC new service proposals satisfied certain objectives. There would be a duty on Ofcom to review and report periodically on the extent to which new and changed BBC services complied with the relevant approval, and the objects mentioned in the amendment.
I am sure that, having been involved in broadcasting legislation in the past, the noble Viscount, Lord Astor, is aware that the amendment conflicts with the principle that the BBC is not, generally speaking, regulated by statute. It has a special status as a chartered body with a special relationship to Parliament. As I said, it is anomalous that the amendment leaves the grant of approval to be carried
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out under the charter or agreement but makes statutory provision for the process. I might understand it the other way round, but not this way round.
Let us be clear: new BBC services are already subject to rigorous assessment by the Secretary of State—anyone who has followed the process of approval of BBC3 and BBC4 will be aware of that. The guidelines provide for full public consultation. They set out the factors to which the Secretary of State has regard in taking her decision. We always take into account the views of the ITC and the OFT—the ITC, at any rate, will be subsumed within Ofcom. The guidelines are published, and the amendment draws on them. It is well drafted in the sense that imitation is the sincerest form of flattery.
In future, Ofcom will have an important role in the approval process for new BBC services. Ofcom will be consulted on any new BBC service proposals and on any reviews of existing BBC services. The Secretary of State is committed to an independent review of the BBC's new digital television and radio services in 2004, and she is committed to the involvement of Ofcom in those reviews. I believe that that is what the noble Viscount, Lord Astor, is looking for. We are not persuaded that formal provision is needed to ensure that Ofcom plays an appropriate role in relation to the approval of new BBC services, or changes to existing services.
Viscount Astor: My Lords, I am grateful for the Minister's reply. He has given me the assurance that Ofcom will have a role in the approval process and will be consulted. I am always attempting to move the BBC gently further away from the Secretary of State, because at the end of the day it will be in a safer place. Perhaps the relationship between the Government and the BBC in recent days has shown that more clearly.
We now have the rather bizarre prospect of the BBC possibly using licence fee money to take the Government to court, who will be using taxpayers' money to defend the action: a somewhat circular process that will benefit only lawyers. But I am grateful for the Minister's assurance. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 110 to 112 not moved.]
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 112A:
After Clause 195, insert the following new clause—
"APPOINTMENT OF ADVISERS TO CHAIRMAN AND BOARD OF GOVERNORS
(1) All staff responsible for advising the Chairman and Governors of the BBC on their duty to ensure that political, news and news-related programmes are impartial, wide-ranging and fair shall be employed by trustees independent of the Governors.
(2) The trustees in subsection (1) shall be appointed by the Secretary of State."
The noble Lord said: My Lords, it is with some diffidence that I move this amendment tabled in the name of the noble Lord, Lord Pearson of Rannoch. He has asked me to apologise to the House for his absence. He had hoped to move the amendment last Thursday,

741
but today he has an important business engagement involving his company and has asked me to move the amendment in his absence.
The justification for my moving the amendment is that, together with the noble Lord, Lord Pearson, and the noble Lord, Lord Harris of High Cross, I am a co-founder of the Global Britain research unit, which has commissioned deep and extensive research into the BBC's coverage of the United Kingdom's relationship with the European Union. The amendment would provide that all staff advising the chairman and governors on their duty of impartiality are employed by independent trustees appointed by the Secretary of State rather than the BBC operational staff who cannot be absolutely impartial since they have an interest.
The results of this research are published on Global Britain's website, www.globalbritain.org. The highlights have been revealed by the noble Lord, Lord Pearson, in a debate in your Lordships' House on 11th March 2002, during the Second Reading of this Bill on 25th March this year, and in Committee on 20th May. So your Lordships will be glad to know that I do not need to repeat any of the detailed findings of the analysis now, which run into hundreds of pages, suffice to say that the BBC stands accused of consistent Europhile bias over several years.
Perhaps our most important complaint against the BBC over the handling of these reports is that the chairman always appears to give them to management for adjudication and not to the governors, who are responsible for ensuring that the corporation fulfils its fundamental duties to "educate, inform and entertain", and that its political coverage should be "impartial, wide-ranging and fair". The BBC has also refused our offer of independent arbitration.
Our contention is, therefore, that for whatever reason, the governors are not doing their job. Indeed, it is interesting to note that in the present drama between the Government and the BBC over its coverage of the Iraq war, the governors have yet to appear on stage. They have said nothing—we have heard nothing from them. Yet they alone are vested, under the Broadcasting Act, with the supreme responsibility to ensure that the BBC does not behave as No. 10 believes it did. In their defence, it may be that the Government's terms of reference are impossible—they are judge and jury in their own court.
The amendment is designed to alleviate that dilemma by creating new BBC trustees, perhaps three in number, who would in effect become the employers of all those in the BBC whose duty it is to advise the governors on whether the corporation has fulfilled its public service remit. This might solve the present difficulty, which is that those employees, in. for instance, the Governors' Programme Complaints Committee and the Governance and Accountability department, are most unlikely to advise the governors that Mr Dyke and the BBC's management, who control their careers, have got it wrong. Can we imagine their predicament if Mr Alastair Campbell complains to the programme complaints committee?
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Of course one would hope that in such a high-profile case the governors would get personally involved, but there is necessarily a large volume of complaints in the BBC where their predicament is less obvious but, cumulatively, perhaps just as great or even greater.
The noble Lord, Lord Pearson, moved an amendment in Committee designed to alleviate the problem, in which he suggested that a committee of the governors should have been formed to specialise in this public service remit and report annually to Parliament. Critics of the amendment felt that this was bringing the Government too much into the affairs of the corporation. This amendment would not have that effect.
This is still a probing amendment, and it will be most interesting to hear your Lordships' views. At the very least, I should have thought that the governors should be encouraged to form a sub-committee to concentrate on their public service remit even if reporting to Parliament or separate trustees are not thought to be appropriate.
If I may conclude on a more personal note, I have supported the BBC's licence fee in your Lordships' House as being a very good bargain. I support the BBC and hope it can survive by providing truly independent and wide-ranging political coverage. I opposed the war in Iraq, so I cannot be accused of wanting to get at the BBC in any way at all. I am just, as usual, trying to help the House and Ministers and, indeed, to help the BBC itself to become more respectable. I beg to move.
3.45 p.m.
Lord McNally: My Lords, I do not think the noble Lord, Lord Stoddart, needs to apologise for the absence of the noble Lord, Lord Pearson. I can think of no more perfect substitute for the noble Lord.
I intervene for two reasons—the remark of the noble Viscount. Lord Astor, about whether the recent events concerning Mr Alastair Campbell are a sign of things to come, and the amendment in the name of the noble Lord. Lord Pearson, spoken to by the noble Lord, Lord Stoddart. It is a hit of a warning cloud that we must be quite sure that the independence and integrity of the BBC as a news organisation is protected and retained. I agree with the noble Lord, Lord Stoddart, to the extent that I am a little perplexed at the silence of the governors during the recent furore. There is a need for a clear statement on two sides. I am intrigued about whether the spat between Mr Campbell and the BBC is a personal vendetta or a statement of government policy. There needs to be clarification.
I think the governors should tell Mr Campbell and the Government, in no uncertain terms, to get their tanks off the BBC lawn. I do not think it is any accident that the personal standing of the Prime Minister has plummeted during a time when there has been a mudfight between the Government's spokesman and the BBC. The reason is very simple: the British public inherently understand that when politicians in government try to intimidate the BBC, the public interest is being threatened, along with the independence of the most trusted news organisation in

743
the world. It is interesting that 93 per cent of the UK population used BBC television, radio, text or online services during the first two weeks of the war in Iraq, and that there were over 140 million hits on BBC News online in the first week, after which there were 3 million a day.
I have said before that we have a unique national asset in the BBC. The current structure, with the governors providing a cordon sanitaire between the BBC practitioners and the politicians, has stood the test of time. I am glad this is only a probing amendment, but if ever it came to the vote, I hope that the Government would resist it.
Baroness Cohen of Pimlico: My Lords, a nervous glance around the Chamber suggests that I am the only serving or former BBC governor present. I feel, therefore, that I should speak against the amendment and remind noble Lords of the existence of something called the Governors' Programme Complaints Committee. I was a member of the first one of these committees; anybody has the right to appeal to it, wherever their appeal first comes in. They will be informed that they have the right to go to the governors.
There were four of us then. We saw everything and read all the papers if the appeal came to us. It is not that governors do not see complaints about the news or fairness—they see them all right.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord, Lord Stoddart, for not rehearsing the long-standing complaint that the noble Lord, Lord Pearson, has against the BBC about its attitude to Europe. We have had it not only in a debate but at two stages of the proceedings of the Bill. I hope that the noble Lord, Lord Stoddart, will convey the message that some of us think we have had enough of it.
Nor shall I follow the noble Lord, Lord McNally, who seems to want me to use the amendment as an opportunity to clarify the dispute between Alastair Campbell and the BBC. I shall certainly not do that. It is a matter for the governors of the BBC, Mr Campbell and his friends, which does not arise out of the wording of the amendment.
The amendment would require advisers to the chairman and governors of the BBC to be employed by independent trustees appointed by the Secretary of State, which is an interesting thought in itself—bringing the Secretary of State into the issue. I certainly agree, and the noble Baroness, Lady Cohen, has confirmed it, that the governors need access to independent and informed advice on which to make decisions. I am not sure whether it is well known that the governors already have access to independent advice through the governance and accountability department.
The BBC announced last year a number of significant reforms to its internal governance arrangements. which were to establish a clear delineation of the functions of the governors and the
744
executive committee to enhance the role of the governors in monitoring performance and regulatory compliance, to provide the governors with independent advice and support on compliance, and to introduce objective setting and accountability through a new governance and accountability department.
The amendment would provide unnecessary and inappropriately intrusive government interference in the way in which the governors operate. It is clear that the governors have the power to ensure that they have suitable advice that is independent of the BBC executive. Again, the noble Baroness, Lady Cohen, confirmed that. If they become unhappy with the existing arrangements for obtaining independent advice they can change them. The governors themselves are independent and ought to be left to get on with their job, which includes ensuring that they have appropriate advice.
I stress that the Government have full confidence in the governors' ability, and it is offensive to suggest that they are incapable of doing so. The suggested role for trustees appointed by the Secretary of State would mean needless additional bureaucracy that could impede the governors' effectiveness. The governors who actually do the job of regulating the BBC are clearly the best people to decide how and by whom they should be advised in order to maximise their own effectiveness. Giving that role to trustees over whose decision the Government would have no control would undermine that. As the noble Lord, Lord McNally, asks, we resist the amendment.
Lord Stoddart of Swindon: My Lords, I thank all the noble Lords and the noble Baroness who took part in the debate.
It is interesting that the noble Lord, Lord McNally, had some sympathy with the amendment. He was right to do so because the BBC is held in very high esteem—make no mistake about that. I am concerned that that esteem should not be undermined and that the BBC retains the trust of licence-payers and the whole community. That was one of the reasons for moving the amendment.
To illustrate that, I saw on ITN a poll as to who people trusted more—Mr Campbell or the BBC in the recent spat. The result was decisive. Ten per cent said that they trusted Mr Campbell more and 90 per cent said that they trusted the BBC more. The BBC should guard that reputation very closely. I was glad to hear from the noble Baroness, Lady Cohen, that the governors do take an interest. However, it is not patent that they do so. The people who make complaints do not understand that they do so. The replies that they receive from the BBC are entirely unsatisfactory in many instances. I know that because I have taken up many complaints with the BBC and have been completely dissatisfied with the way in which they have been handled and replied to.
I did not expect the noble Lord, Lord McIntosh, to support the amendment. Indeed, it is a probing amendment. I am sorry that he has had enough of it. We always enjoy the interventions of the noble Lord,

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Lord Pearson, especially in European and BBC matters. I hope that he will not be deterred by the view of the noble Lord, Lord McIntosh, that we have had enough of it, but will continue to bring matters of importance to the House.
The noble Lord, Lord McIntosh, said that the governors of the BBC already have independent advice. But we are not sure whether that advice is independent, and we shall be watching it. I hope that in time we can have full confidence in the BBC in how it handles European matters and complaints about its coverage of such matters. Having said that, I thank everyone who has taken part in the debate, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 205 [The Gaelic Media Service]:
Lord Luke Lord Luke moved Amendment No. 113:
Page 182, line 42, at end insert—
'the retail prices index' shall have the same meaning as in section 19(10) of the Broadcasting Act 1990 (c. 42) (additional payments to be made in respect of Channel 3 licences);"
The noble Lord said: My Lords, in moving this amendment, I wish to speak also to Amendment No. 114. Amendments Nos. 211, 212, 214, 215, and 216 are consequential.
As your Lordships are aware, Amendment No. 113 relates to Clause 205. We on these Benches strongly support the aims of the Government in creating the new Gaelic media service. I shall not try to pronounce it in Gaelic. While we feel that the provisions in the Bill for a Gaelic service are to be commended, there are some concerns about the effectiveness of the legislation. In another place the Government stated that they were unwilling for funding issues to appear on the face of the Bill. I do, however, believe that there are a number of funding issues that need to be addressed, given the unfortunate experience with the Gaelic Television Fund.
It is essential to secure and protect the new Gaelic media service so that it is sufficiently funded at the outset and to ensure that the funding is protected from erosion in the future. That was not the case when the Conservative government set up the Gaelic Television Fund in the Broadcasting Act 1990. Unaccountably the budget of £9.5 million was neither inflation-proofed nor ring-fenced. In 1991, £1 million was promptly diverted to education—I am sure for perfectly worthy causes. That happened every year. Therefore, the amount available for the Gaelic Television Fund is now £8.5 million a year. When taking into account inflation through the years, it should be some £12.5 million. That is a shortfall since 1991 of 33 per cent. Consequently, television hours financed by the fund have now fallen to 150 hours from 195 in 1991.
While Gaelic television was in its infancy, Welsh television, in the shape of S4C, was going from strength to strength. It continues to do so, and has contributed significantly to the revival of the Welsh language. During the Committee stage in this House, on 22nd May, the noble Lord, Lord Evans of Temple
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Guiting, promised a review of funding for S4C, necessitated by the increased costs associated with digital development. We on these Benches welcome this. S4C funding has been index-linked since 1997. After the Broadcasting Act 1996 a minimum funding level was set.
As the Government have accepted the arguments for a funding review of S4C, surely Gaelic deserves the same—or better—consideration. If the Government are serious in their commitment to regional broadcasting and to fulfilling their obligations to Gaelic—a language identified by UNESCO as endangered—they must seek to improve on the measures proposed in the Bill.
The Bill as it stands allows a new Gaelic Media Service to establish a Gaelic channel. That will not only serve the Gaelic-speaking audiences but will also provide a most welcome economic boost. An impact assessment by Highlands and Islands Enterprise has shown that in excess of 100 jobs could be created in the region. That is a very large number in such a sparsely populated area. We support that commitment to promoting economic development in rural areas.
Amendment No. 114 relates to Clause 206 and the supply of programmes to the Gaelic Media Service for broadcast on a Gaelic channel. That would be an enormous leap in the service available to Gaelic consumers who would no longer have to channel surf round the terrestrial channels for the odd snippet of their mother tongue but would finally feel that their language was being brought to them in a better, more coherent package. The Broadcasting Act 1996 created a digital service available via satellite through the Multiplex A licence holder. The Gaelic service provision is for a minimum of 30 minutes per year. The 1996 Act prescribed that programmes previously broadcast by the BBC and the Channel 3 licence holders be made available "free of charge" to the channel. Unfortunately neither the BBC nor the Channel 3 licence holders have done that, and they have not supplied programmes to the Multiplex A licence holder. Only programmes funded by the Gaelic Broadcasting Fund have been made available. The situation contrasts sharply with that of S4C which receives 10 hours per week from the BBC alone.
We feel that the Government are missing an opportunity to utilise resources already available to the new Gaelic Media Service. The amendment empowers the Secretary of State to impose the requirement that broadcasters provide a minimum 30 hours per week to the Gaelic Media Service. This amendment makes it clear to the broadcasters that they have to supply programmes other than those funded by the Gaelic Media Service. While that obviously places a burden to fulfil the requirements, we believe that it is achievable and that it constitutes much less of a burden than is endured by BBC Wales in its commitment to S4C. I beg to move.
4 p.m.
Baroness Michie of Gallanach: My Lords, as I have said previously, I welcome the setting up of Seirbheis

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nam Meadhanan Gàidhlig, the new Gaelic Media Service. By tabling these amendments we return to the issue of funding and the provision of programmes in Gaelic—that is, the number of television hours per year from the suppliers going out at peak times and not in the middle of the night as so often happens. I am grateful to the noble Lord, Lord Luke, for his support. He spelled out the reasons for these amendments and explained their purpose. I reiterate that the value of the Gaelic Broadcasting Fund has been eroded by cuts and inflation each year since its establishment in 1991 when its value was £9.5 million. If its value had been maintained, it would now be worth £12.5 million. Instead there has been a 33 per cent real-terms reduction which has severely weakened the fund.
Under the Broadcasting Act 1996 the remit of the Gaelic Committee was expanded to include radio as well as television programmes. Furthermore, it was expected that Grampian, Scottish Television and the BBC would each provide from their own resources at least 30 hours of Gaelic programming a year to the current licence holder, S4C Digital Networks. That has not happened.
The Gaelic Broadcasting Fund requires protection at least similar to that for the Welsh language. The Welsh language has not been subject to the same squeeze because, as we have heard, its fund has been index linked since 1998. However, I understand that the Welsh S4C funding has not kept up with the requirements of digital development coupled with inflation in the broadcasting industry. We have been told, and, I believe, that the Government have promised a review of funding for Welsh broadcasting. However, I am always very suspicious of reviews and ask myself when they will happen and how long they will take. Nevertheless I am sure that Welsh broadcasting will welcome the fact that the funding is to be reviewed. I submit to your Lordships that Gaelic deserves at least similar treatment.
These amendments seek to secure some sort of stability at last for future funding. I simply do not understand how the arrangements currently work. In Committee, the Minister said:
"I can confirm that the matters addressed in the current Bill as regards Gaelic broadcasting are wholly within the reserved policy area".
I welcome that statement. He went on to say:
"However, it is true to say that the funding of Gaelic-medium programmes through the Gaelic Broadcasting Committee is being provided by the Scottish Executive".
Then he said:
"The executive is not responsible, however, for programmes supported by the Gaelic Broadcasting Committee".—[Official Report, 22/5/03; col. 988.]
It seems a huge muddle. Perhaps the Minister can explain by what method this very specific fund, the Gaelic Broadcasting Fund, reaches the Scottish Parliament. He may say that it goes in some mysterious and opaque manner via the Barnett formula and the block grant. That may be so, but I doubt it. The Barnett formula operates on the basis of planned spending in departments in England. I believe that it works by identifying whether a spending area
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within a devolved administration is a comparable sub-programme in terms of spending by the United Kingdom Government on services in England. However, no programme in England is comparable to the need to fund Gaelic broadcasting in Scotland. So presumably funding does not come through the block grant. There are areas where various forms of funding are passed directly to the devolved administrations and simply bypass the Barnett formula. Perhaps that is the answer to the problem.
I do not like mysteries in government. We are supposed to be open and transparent these days—freedom of information and all that. Noble Lords can perhaps sense my frustration. Why do we have to argue about such a paltry sum when we know the benefits of a secure Gaelic broadcasting service—which would be of such enormous value to a language that is still alive despite having endured years of deliberate proscription and denigration? We believe that it is at last beginning to turn the corner. I ask the Government to give Gaelic broadcasting a long-term and secure future.
The Duke of Montrose: My Lords, I support these amendments. I must first apologise for being unable to take part at the Committee stage. However, I have read Hansard. On Second Reading I declared my interest as a life member of An Comunn Gaidhealach.
In Committee the Minister gave some very reassuring comments about the opportunity now afforded for having a dedicated Gaelic language television channel. Gaelic may or may not, as some of its apologists have asserted, have been the language spoken in the Garden of Eden, but it is a language and a tradition which for the best part of 2,000 years relied exclusively on oral communication to relay its truths and histories. Some historians have liked to cast doubt on the authority of that as opposed to a written history. However, it would be nice to think that technology has finally come up with a complete means to redress the balance which, particularly since Caxton went to work with his printing press, has worked against that sort of communication for this particular culture.
Speaking particularly to Amendments Nos. 113,211 and 212, the noble Baroness, Lady Michie, explained at Second Reading how the original concept in setting up the Gaelic Television Fund was that the target for production of Gaelic language programmes should be 200 hours per year. As my noble friend Lord Luke said, if the money provided then had been index-linked it would now be worth £12.5 million. He also made the point that it is sad that, since then, some of that money has been transferred to other purposes.
There is currently no legislative provision for maintaining, far less increasing, the fund, which is no doubt very comforting for those who have to deal with the purse strings. These amendments are a modest effort to ensure that current funding will at least keep up with inflation.
I shall try to follow up on the arguments made by the noble Baroness, Lady Michie. The Government have made an effort to point out that all funding is taken

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care of by the Scottish Parliament, which we understand. However, considering that such funding is presently based on Section 183 of the Broadcasting Act 1990—neatly transferred to Scottish Ministers by the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999—can the amendments that we are proposing to the 1990 Act be similarly neatly transferred as the basis for consideration to the Scottish Parliament? A number of your Lordships feel that this issue is much in the interests of our historical cultural diversity.
Lord Crickhowell: My Lords, as a Welshman, I rise to support my Scottish colleagues in this House. In the days when I was Secretary State for Wales, I greatly regretted that I did not speak the Welsh language. I was, however, energetic in my support of it, and the late Lord Whitelaw and I played the major role in establishing S4C. Against that background, I have the greatest sympathy with those who want to see the Gaelic language supported and adequate broadcasting provision provided. I confess that I have not followed the exact arrangements in detail, and if the Minister can convince me that they are entirely satisfactory, and that there is adequate funding and so forth, fine. However, some reassurance would be helpful. This issue is of interest not only to Scottish Members.
4.15 p.m.
Lord Evans of Temple Guiting: My Lords, the amendments to Schedule 15 and the consequential amendments to Clause 205 would link the resources provided for the Gaelic Broadcasting Fund with the retail prices index. We believe that it is not acceptable for the Bill to provide for a guaranteed level of funding as measured against the retail prices index or, indeed, any other indicator.
The implied comparison with the funding for Welsh language broadcasting is clearly inappropriate. The Welsh Authority service was set up on a distinct basis to provide a fully-fledged channel, S4C. The formula approach to funding was therefore a basic element in its construction.
In the case of Gaelic broadcasting, although the Bill empowers a new Gaelic Media Service to broadcast a dedicated channel following the granting of relevant licences from Ofcom, that is a longer-term aspiration. What we are dealing with at the moment is a body that administers grants from the Gaelic Broadcasting Fund to provide a more limited service of up to 200 hours of Gaelic programming. In future, the Gaelic Media Service will take over that role. Any moves to create a dedicated channel for Gaelic programming are more likely to be evolutionary than revolutionary in nature. Moreover, this is expenditure wholly within the competence of the Scottish Parliament. Even if the other factors that I mentioned did not apply, I would not see the Bill as the right vehicle for imposing unilaterally a spending obligation for Gaelic broadcasting on the Scottish Executive.
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Amendment No. 114 after Clause 206 would give the Secretary of State the power to impose an obligation on the BBC, the Channel 3 licensees in Scotland and Channel 4 to provide at least 30 hours of Gaelic programming each year, free of all charge, to the Gaelic Media Service. None of those programmes may be funded wholly or partly by the service.
Under the Broadcasting Act 1996, read in conjunction with the Mulitplex Licence (Broadcasting of Programmes in Gaelic) Order 1996, the BBC and Channel 3 licence holders in Scotland are already obliged to provide, free of charge, the holder of the multiplex licence under which Channel 5 and SC4 Digital are broadcast with at least 30 hours of Gaelic programmes each year. Therefore, the amendment would effectively double the quota which the BBC and Channel 3 licensees have to make available. It is not clear from the amendment whether the same programming could be supplied to both SDN and the Gaelic Media Service.
The effect of the amendment would be to impose on the BBC and Channel 3 licensees an increase in their existing obligations with regard to the provision of Gaelic programming. That increase has not been the subject of any consultation or negotiation. As the 1996 order has not thus far been extended to Channel 4, it could also impose new obligations on Channel 4.
Amendments Nos. 214, 215 and 216 to Schedule 15 to the Bill would amend Section 32 of the 1996 Act to make the existing requirement on the BBC and Channel 3 licensees in Scotland, which is to provide 30 hours of Gaelic programming each year to SDN, subject to the proviso that such programming should not be funded by the service.
As with the previous amendment to Clause 206, the effect of the amendment would be to impose on the BBC and the Channel 3 licensees an increase in their existing obligations with regard to the provision of Gaelic programming to SDN, which, again, has not been the subject of any consultation or negotiation.
The noble Lord, Lord Luke, asked for—to put it bluntly—more money and for a review of funding for Gaelic broadcasting. It would not he proper for this House to commit those responsible for the funds, the Scottish Executive, to such a review of funding. However, the Scottish Executive will consider the case for an increase as part of its spending review in 2004.
The noble Baroness, Lady Michie, referred to the mystery of the funding arrangements, the lack of transparency and a general difficulty in coming to terms with where the money comes from and where it goes. We are aware that the funding for Gaelic broadcasting is met by the Scottish Executive from within the Scottish block grant. We will, however, write to the noble Baroness with precise details of how the money moves from one part to another.
The comparison with Wales is interesting, but we should all bear in mind that there are estimated to be 57,000 Gaelic speakers inside and outside Scotland and 500,000 Welsh speakers. That may give us some clue as to why Welsh television is more highly developed than its Scottish counterpart. As I said, we

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are looking not at revolution, but at evolution. It is the Government's wish to support the Gaelic language. It is the Executive's wish. If the demand is there, I am sure that a Gaelic television station will emerge in due course. In light of what I have said, I hope that the amendments will not be pressed.
Lord Luke: My Lords, while I thank the Minister for that answer, I found it pretty unsatisfactory. I cannot understand why it is inappropriate to compare the S4C and the Gaelic situations merely because one is one-tenth the size of the other. It still should be considered and surely it should have the same amount of money that was designated for it in 1990. The fact that it lost so much of its value should be taken care of. I am not asking, as the Minister suggested, for more money; I suggest that we should now have the money that was originally available. The fact is that the money comes in some mysterious way from the block grant to the Scottish Parliament but it still comes from Whitehall; that is where the block grant comes from in the first place. I find it rather strange that the reference involved the Scottish Parliament when I understand—I believe that the noble Baroness, Lady Michie, shares this view—that that is a reserved arrangement.
I thank the noble Baroness, Lady Michie, for her support; she knows so much more about this subject than I do. I also thank the noble Duke, the Duke of Montrose, and the noble Lord, Lord Crickhowell, for their support. This is not a very satisfactory situation. However, at this stage there is nothing more that I can say. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 114 not moved.]
Baroness Finlay of Llandaff Baroness Finlay of Llandaff moved Amendment No. 115:
After Clause 209, insert the following new clause—
"DUTY TO ESTABLISH AND MAINTAIN NATIONAL COMMUNICATIONS COUNCILSM
(1) It shall be the duty of OFCOM to establish and maintain National Communications Councils for England, Scotland, Wales and Northern Ireland.
(2) The chair and members of these Councils shall be appointed by OFCOM.
(3) In making appointments under subsection (2) in respect of Scotland, Wales and Northern Ireland, OFCOM shall seek nominations from the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly respectively.
(4) The National Communications Councils may review OFCOM's work in respect of their individual territories where such work affects devolved matters.
(5) The National Communications Councils may issue such recommendations to OFCOM or the Secretary of State with respect to their territories as they see fit.
(6) The National Communications Councils shall produce an annual report on their activities."
The noble Baroness said: My Lords, the amendment seeks to insert a new clause after Clause 209. The amendment is based on the recommendations of the specialist advisory committee chaired by Geraint Talfan Davies. The report was accepted in January 2003 by the Welsh Assembly Government.
In Wales and Scotland, the rural and remote agricultural communities experience financial hardship. They have poorer infrastructure in most domains. They are more dependent on broadcasting and telecoms for vital information as well as entertainment. New technology and e-mail can bring new jobs, education and employment diversity to those areas. Despite telecoms being an increasingly important component of the Welsh economy, the smaller Welsh economy is more susceptible to monopolies or quasi-monopolies.
The Bill as it stands runs contrary to the philosophy and policies of devolved government. With devolution has come an increased awareness of local issues and a clear recognition of the difficulties in rural areas for all aspects of education and communication, and health and other services delivery. The Scottish Parliament has many devolved powers and functions. The Welsh Assembly Government have been communicating closely with all agencies in Wales to ensure that concerns arc noted and, where possible, plans are put in place to address them. The Welsh Assembly Government are debating and making policy in all of those areas, which will directly impact on the people of Wales.
The development of the media goes far beyond the delivery of programmes. The infrastructure for communication networks is particularly complex in remote areas to strive towards equity of access. Devolved territories require their own separate advisory councils, reporting annually. Those can then be sensitive to local culture, including Welsh-language or Gaelic-language programming; to local topographical problems; to meeting local history, culture, education and information needs; and to the entertainment opportunities of its innovative and high-standard programming industries.
The proposed councils will be able to relate directly with the devolved government at civil servant and ministerial level over the devolved functions, especially health, environment, education, culture and economic development. Their responsibilities will be substantial.
The accountability will have clear management lines to the central structures of Ofcom, thereby strengthening Ofcom in devolved institutions, within a unified UK system of regulation. Ofcom's intelligence on the ground will he strengthened and formalised, and consistent connections will be built with relevant areas of civil society in each country. I beg to move.
Lord Roberts of Conwy: My Lords, I, too, shall speak primarily about Wales. I point out that the new clause applies to England, Scotland and Northern Ireland as well as to Wales.
The noble Baroness was good enough to accept my earlier Amendments Nos. 116 and 117 to her new clause and I hope that their incorporation in the new clause that is before us will make it more acceptable to the Government and to my noble friend Lord Crickhowell, who spoke on this issue in Committee.
The amendments were drawn up specifically to take account of the comments of the Minister, Dr Kim Howells, in Committee in the other place on a not

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dissimilar clause, which was moved by Mr Simon Thomas, the Plaid Cymru Member for Ceredigion. The new clause as amended will confine the national council's review of Ofcom's work in respect of Scotland, Wales and Northern Ireland, solely to the extent that it affects devolved matters. That Ofcom will affect devolved matters such as the economy, education and, in Wales, the Welsh language, is beyond question. Communications are all pervasive in regional and national life.
That the new clause is essential seems to me beyond doubt. If we do not have formal, statutory councils of the kind proposed, I am sorry to say that I can see nothing but trouble ahead for Ofcom in the national regions. My noble friend Lord Crickhowell mentioned S4C in our previous debate. Those of us who have had anything to do with broadcasting in Wales know that it can be a troublesome area. That was so long before the difficult birth of S4C in the early 1980s and I am sure that it will continue to be so.
The Minister, Dr Howells, in the other place told the Committee that the Government would,
"expect Ofcom to consult the relevant territorial departments and, through them, the devolved Administrations in order to seek nominations for suitable candidates".—[Official Report, Commons Standing Committee E, 12/12/02; col. 106.]
The candidates would be for the content and consumer panels. That is all right so far as it goes; indeed, since the Government accept it, I see every reason for its inclusion in the new clause—and included it is. However, there will be matters outside the scope of the consumer and content panels—matters relating to policy and direction. Who will advise Ofcom in those circumstances and warn it of the likely public reaction? It may not be known to local directors and so on. Ofcom will certainly need a sounding board of the kind that the councils will provide.
The Minister also anticipated consultative arrangements set up in a memorandum of understanding between Ofcom and the relevant Secretary of State for each nation. That is better than nothing, but my preference is for councils, enjoined by statute, similar to those of the BBC. Such councils will be a good sounding board for Ofcom, and I am sure will be found invaluable.
4.30 p.m.
Lord Currie of Marylebone: My Lords, in considering this amendment, it may be helpful to your Lordships to know what Ofcom intends to do on its own account with respect to advisory structures in Scotland, Wales and Northern Ireland.
Ever since I was appointed chairman of Ofcom last summer, I have made it clear and public that we will set up national advisory councils for each of Scotland, Wales and Northern Ireland, whether or not we are specifically required to do so under the statutes as finally determined. We consider that it will be of the highest importance to Ofcom that we receive advice at a senior level from those who can reflect the concerns
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and interests of people living in the home nations, such as those issues that have been highlighted by the noble Baroness, Lady Finlay.
There is a national representative from each nation already on the Ofcom content board and we would expect a similar arrangement to be put in place for the consumer panel, with the detail subject to the outcome of our consideration of the Bill. More generally, we are determined that Ofcom shall be present and properly represented in each nation. Ofcom executives have already made contact with the territorial offices and, while respecting the principle of reserved powers, with the devolved administrations.
We are engaged in discussions about how good, effective working relationships can he established. Those discussions will cover procedures for consultation; the appointment processes for the national councils; seeking advice on Ofcom's physical presence in each nation; and arrangements for the maintenance of regular contacts with the devolved administrations.
I greatly hope that that will serve to reassure noble Lords about Ofcom's own plans. We intend to do this well. I hope also that Ofcom will be allowed enough freedom in the wording of the Bill to allow these structures and processes to evolve organically from those discussions, and to demonstrate appropriate flexibility. Too much detailed prescription on the face of the Bill could be counterproductive.
Lord Crickhowell: My Lords, the whole House can be grateful to the noble Lord, Lord Currie, for his important contribution to our debate. It was precisely because I was worried that the original wording of the amendment would be in conflict with his closing words that I was critical of a similar amendment at the Committee stage, and pressed my noble friend Lord Roberts of Conwy to seek to put down amendments.
I entirely share the noble Lord's view that we must not put wordings into the Bill that might suggest to the national assemblies or to the other devolved bodies that they have responsibilities for the operations of Ofcom that they do not have. Similarly, we should not write into the Bill directions which go outside the proper role of advisory committees. I therefore understand and sympathise with the comments made by the noble Lord.
Having said that, the amendment now before us is very similar to the amendment suggested by the joint scrutiny committee and also to the amendment which I put forward in Committee. In a sense, the noble Lord, Lord Currie, has undermined any arguments against having it written into the Bill—clearly what this amendment suggests is very much in line with what they are already going to do—but, for the reasons that my noble friend Lord Roberts of Conwy has hinted at, there are some quite powerful arguments for having it actually covered in the statute, if only to give the reassurance that is sought in the nations and regions, and perhaps to eliminate some of those sources of conflict to which he referred.

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When my noble friend looks back to past history and to the troubles that we had in the very first days of the administration of which we were both members, I hope that he will not prompt anyone else to start, or threaten to start, a fast unto death, to get what they want. But those were the sorts of emotions that were raised at that time about broadcasting. He is quite right to say that these are touchy subjects.
I hope that the noble Lord, Lord Currie, and his colleagues will be able to accept the proposed wording. Alternatively, if there are some minor amendments that would make it easier for him to do so, perhaps they could be brought forward on Third Reading. If the noble Lord could accept something along these lines, which is broadly similar to what he is going to do anyway, it would, as my noble friend Lord Roberts suggested, help his task. It would calm things. It would give reassurance. I think that it would be a wise move. I therefore support the amendment. I hope that it, or something very like it, will emerge from the Bill when it leaves this House.
Lord McNally: My Lords, the intervention of the noble Lord, Lord Currie, was extremely helpful, but I have one small point to make. He indicated that Ofcom was planning to set up such councils for Scotland, Wales and Northern Ireland, whereas the amendment also specifically mentions England. This relates to the reason why we on these Benches support the amendment.
We are still coming to terms with and grappling with the realities of devolution. We shall also have to come to terms with the realities of devolution for England. I think that it would be sensible to have this kind of amendment on the face of the Bill—particularly as the noble Lord, Lord Currie, has gone so far in indicating his own thinking.
I believe that my credentials on this are sound because, both when I chaired a party committee and when I sat on the Joint Committee, I resisted the idea of specific national nominees on the main Ofcom board. I believe that it was right to do so. However, there has also been the powerful point made by the noble Baroness, Lady Finlay, and the noble Lord, Lord Roberts, that there are national sensitivities. It was put rather brutally by my noble friend Lord Thomas of Gresford in Committee that Ofcom would be run from the bar of the Groucho Club. Perish the thought! However, such sensitivities exist—namely, that what is happening in the regions and nations will not be fully appreciated by a metropolitan organisation—and they will have to be counteracted.
I believe that this amendment has the right balance. It addresses the right issue, as we understand that Ofcom is already well down that road. I think that it would be a very smart move on the part of the Government simply to accept it.
Lord Northbourne: My Lords, the noble Lord, Lord Crickhowell, in what may have been a Freudian slip, referred to "the regions". This amendment would appear to refer to the three devolved nations and then, in rather general terms, to England. There is an
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asymmetry about the amendment that distresses me, because I believe that in England there are many different regional concerns, which ought also to have the opportunity to be expressed on a level footing with the concerns of the devolved nations.
Baroness Buscombe: My Lords, I rise briefly to support the amendment. I entirely agree with all that noble Lords have said. My noble friend Lord Roberts of Conwy referred to the possibility of trouble in the national regions. I was also interested in that statement. Perhaps we could have a debate on the definition of "national" and "national regions".
I agree with my noble friend Lord Crickhowell. Notwithstanding the fact that it is extremely helpful to have the noble Lord, Lord Currie, offer his reassurances on this matter today, it would be better if this issue were covered properly in statute. The changes introduced by my noble friend Lord Roberts of Conwy are extremely helpful and sensible. I hope that the amendment will be accepted.
Lord Davies of Oldham: My Lords, I am very grateful for the way that the noble Baroness, Lady Finlay, presented her arguments—reinforced, as they were, by subsequent contributions—on an area which we debated at considerable length in Committee. This amendment advances the issues which were discussed in Committee, and the debate has taken place in a very constructive way.
I have listened carefully to the debate and I want to respond as constructively as I can. Of course. we are sympathetic to the anxieties reflected among the nations and to the obvious concern expressed fully in the opening speech that broadcasting is a significant feature of life in scattered communities, as is the case in certain parts of Scotland, Wales and Northern Ireland.
I am very grateful, too, for the contribution of the noble Lord, Lord Currie. He reinforced a point that we also expressed in Committee; that is, there is no way that Ofcom would go about its business without having due regard to the needs of the nations which make up the United Kingdom. I recall that at that time the noble Lord said that there had been a considerable number of visits to outlying possibilities. Much constructive work has been done, and I do not need to do anything other than thank him for his contribution and reinforce what he said this afternoon.
We are somewhat hesitant about expressing in the legislation a degree of rigidity in relation to the committees that Ofcom would set up. It is recognised that Ofcom has provision for representing the nationalities with regard to contact sports, and so on. But we are anxious about the degree of rigidity that would be involved in establishing four committees of Ofcom in the way that has been argued. Throughout the passage of the Bill, we have sought to avoid placing unnecessary constraints on the structure of Ofcom or limiting its flexibility in dealing with changing circumstances.
However, the case has been well deployed today. We do not wish to accept the amendment at this stage and hope that it will not be pressed. But we undertake to

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consider this debate in full, to look at the issues again and to see the extent to which we can amend the Bill without, at the same time, falling into the trap of rigidity, which would do harm to the broad objectives that we all share. On that basis, and heartened by the debate, I hope that the noble Baroness will feel able to withdraw the amendment.
Lord Maclennan of Rogart: My Lords, before the Minister sits down, can he indicate whether he has consulted the Welsh and Scottish Executives and whether they have given any indication as to what their attitude would be?
Lord Davies of Oldham: My Lords, certain aspects of their attitude have been well expressed. With regard to the feeling in Wales on this matter, I leave that to the eloquence of the contribution of the noble Lord, Lord Roberts. In introducing the amendment, the noble Baroness sought to reflect proper concern for the nations, and we all recognise that concern. But the noble Lord will also recognise that some difficulties arise with regard to this issue. Broadcasting is not a devolved issue. Respect for the views of Wales, Scotland and Northern Ireland is very important. Suggesting that this matter should be directed from Scotland, Wales and Northern Ireland is a different matter altogether.
Baroness Finlay of Llandaff: My Lords, I am most grateful to all who have spoken in the debate. In particular, I express my gratitude to the noble Lord, Lord Currie, for his contribution and for his very reassuring remarks. I accept the advice of the noble Lord, Lord Crickhowell, that some improvements could be made to the wording of the amendment. I am extremely grateful to the Minister for his sympathetic remarks concerning the spirit of the amendment, and I accept that some rewording should take place. In the light of those comments, I should like to take up the offer to reconsider the amendment and to reword it. Therefore, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 116 and 117 had been withdrawn from the Marshalled List.]
Clause 215 [Duty to secure the provision of a public teletext service]:
4.45 p.m.
Lord Addington Lord Addington moved Amendment No. 118:
Page 191, line 5, at end insert "and which is, so far as practicable, accessible to persons who are blind or have a dual sensory impairment".
The noble Lord said: My Lords, in moving Amendment No. 118, I shall speak also to Amendments Nos. 135 and 139. The noble Baroness, Lady Wilkins, will not be here to support the amendment. I have been informed that she was injured
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in a fall from her wheelchair and thus will not be present in the Chamber today. I hope that we can all join in wishing her a hearty recovery.
Noble Lords: Hear, hear!
Lord Addington: My Lords, the amendments concern issues that we have already addressed. However, we did not come to a satisfactory conclusion with regard to the idea of teletext services being available. As a result of various technical innovations—for example, through items such as a Braille printer being attached to the system—the analogue system is currently available to those who have a sight impairment and to those with a dual impairment in sight and hearing,
I have been assured by the RNIB and its specialist adviser that great difficulties will arise under the changeover. When the adviser spoke to Portset—the Talking Teletext manufacturer—it was said that no device could be made to read the digital teletext in its current format. However, we were assured that, with a new software programme, it would be possible for the service provider to provide a programme which accesses and reads the contents in different ways—that is, it would be compatible with assisted technology. Effectively, such a programme can be devised if one takes the time to apply pressure and ensure that people think about the problem.
When it comes to providing news, it is particularly important that we remember those who have dual sensory impairment. I had a meeting with the Minister and other Members of this House at which the subject of dual sensory impairment—that is. deafness/blindness—was discussed. I hope that this will be a warning shot with regard to later amendments. It was said that if one deals with problems affecting the blind or with those affecting people with hearing impairment, then one deals also with problems affecting the deaf/blind. That is not true. One simple reason is that usually if a person has a hearing problem, he can go primarily to a visual medium for support, or vice versa. In this case, the teletext and the printer which provides Braille enables the sense of touch to provide the information, and that would greatly assist certain groups. As people live longer, the number of those with dual impairment is bound to rise. Effectively, in Amendment No. 118 we are suggesting that the Government should place upon Ofcom the duty to ensure that the best use is made of technology. According to technical advice, we believe that that is now possible.
I turn to Amendments Nos. 135 and 139. These Benches become rather more friendly towards Sky than is normally the case. We suggest that public broadcasters should allow and pay for audio description to be used on the Sky system so that it can reach those who already have the Sky box. Radio 4—it is nice to use the BBC against the BBC—in its "In Touch" programme, asked its listeners for their views on this matter. One response was, "Why should we not use the Sky system?". I must apologise for not being present at one of the briefings, but Sky now has a

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system which delivers audio description. A secondary system which delivers audio description—it may not be quite so good—is infinitely better than a good system that is not available.
A response to the "In Touch" programme stated:
"You asked if the listeners wanted AD [audio description] well this one does. You also asked how we wanted to receive it. Any way we can. When do we want it?—I wanted it the day I got my audio description set on my Skybox. I despair of this penny pinching and mean spirited country sometimes, it is shameful".
The sentiments and language are probably true of all phone-ins. What are the costs? There was an initial cost of £6,000 and then £20,000 per annum per channel of extra bandwidth. Of course, it is not only £20,000. It expands some local/national channels. But the sum is probably under half a million pounds per year.
The RNIB, whose hand lies heavily on these amendments, suggests that there may be a case to answer under the DDA for not taking reasonable steps to ensure that people receive the system. I suggest that there is a case to answer. If the Government accept the amendments they will he dealing now with the problem for a large number of people. Approximately 480,000 people with a visual problem have access to Sky. It would be a step forward which would not get in the way of those who choose to receive the free-to-air services in other ways. It would merely ensure that those with systems in place receive access now. I beg to move.
Lord Morris of Manchester: My Lords, I congratulate the noble Lord. Lord Addington, on the success he has achieved in the proceedings so far on this important Bill. None of his amendments is more important than Amendment No. 118 with its concern for people who have a dual sensory impairment: the Helen Kellers, as it were, of contemporary Britain.
When I was Minister for disabled people from 1974–9, I was asked what combination of disabilities I thought was the most devastating in its effects. The question was, of course, unanswerable; but I recall that my first inclination was to offer blindness combined with pre-lingual deafness as my response. For it takes scant imagination to appreciate the extent and severity of the handicapping effects of being without hearing, without sight and without speech.
My noble friend Lord Ashley played a leading role in 1970 in enacting the world's first-ever legislation on the dual sensory impairment of deafness and blindness; and this must he an evocative moment for him, fighting the good fight for them again as he is today.
There are those who think that without any action in Westminster or in Whitehall someone will turn up and design new equipment to replace talking teletext and that this will sort the problem out. But it will not. It has to be understood that it is the format of digital teletext itself which is the fundamental problem. The technical expert for the Royal National Institute for the Blind has studied the issue and looked at the structure of digital teletext and how it works. He has concluded that Portset (talking teletext manufacturers) are right to say no device could be made to read digital teletext in its
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current format. That is why this amendment is so important. It would ensure that Ofcom does all it can to ensure blind and deaf-blind people's continued access to teletext post-digital switchover.
What would he untenable would be for Westminster and Whitehall to do nothing. The experience of audio description should teach us that these things should not he left to chance. Nor is it tenable to expect small specialist providers to continue to fill in the gaps in the market and expect cash-strapped, deeply excluded consumers to pay exorbitant amounts of money for a service which everyone else gets at no extra charge.
Amendment No. 118 is very much about social inclusion. I hope that the House as a whole will recognise its importance as today's debate proceeds.
Lord Carter: My Lords, in Committee I tabled amendments which dealt with audio description. Therefore, I wish to speak to Amendments Nos. 135 and 139.
The technology is there. As we heard from the noble Lord, Lord Addington, it is available already on Sky for approaching half a million blind and partially-sighted people. It is available on other broadcasts but only to about 65 people who had the trial modules. There seems to be a real problem in persuading the manufacturers that there is a market for producing set-top boxes. We are told that the technology on trial at present with the 65 trial modules is better. I believe that it is an accepted European standard. But there is still the problem of bridging the gap.
In Committee, the Minister said that requiring the BBC and ITV to simulcast audio description on Sky digital would somehow jeopardise the development of receiver-mixed audio description for digital terrestrial. I wonder sometimes—I dismiss it as an unworthy thought—whether broadcasters who are invoked with free-view consider that if consumers could obtain the service on Sky they would be less inclined to have free-view. Later amendments deal with how the percentage of audio description is calculated; and the powers of Ofcom to vary it.
The set-top boxes could be adapted extremely cheaply. We are told that the chip for the set-top boxes costs only about £10 and that the facility will soon be available on all set-top boxes. If it is available, but that does not take place, I ask the Government seriously to consider the possibility raised by the noble Lord, Lord Addington, of a case brought against the broadcasters under the Disability Discrimination Act. It would be unfortunate, if I may so put it, if the Government were to side with the broadcasters and perhaps resist these amendments, or similar provisions, and then find that they are conniving in a situation which could result in the broadcasters losing a case under the Act. The RNIB is prepared to back a legal case against the broadcasters because we are talking about a very reasonable adjustment.
The DDA applies explicitly to access to and use of a means of communication. Section 21 of the Act places a duty on service providers including broadcasters to amend policies, procedures and practices which

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prevent disabled people using a service and to provide auxiliary aids and services. Therefore, I ask the Minister to consider the issue extremely carefully. The technology is there. There are two kinds of technology. We are not clear why there is this delay in the more advanced technology being adopted. However, if it is not adopted, there is a strong chance that a case could be brought under the Disability Discrimination Act. It would be unfortunate if the Government were backing a situation which turned out to be illegal.
5 p.m.
Lord Ashley of Stoke: My Lords, I make two basic points. First, I thank the noble Lord, Lord Addington, and my noble friends Lord Morris and Lord Carter for their contributions. I appreciate what they have said. They have covered most arguments.
However, on Amendments Nos. 135 and 139 there is a clear conflict about the facts of the situation which should be resolved to the satisfaction of the House. In Committee, the Government said that the cost of Amendments Nos. 135 and 139 was an issue—and for our briefing we have relied heavily on the RNIB and the RNID, both of which have been excellent—but the RNIB, on the contrary, states that nothing could be cheaper or easier to arrange. Only one is right: it is either an issue of cost or it is easy and cheap.
I have enough confidence in my noble friend to assume that he will treat these amendments with great sympathy, but if for any reason he cannot, I do think that it is incumbent on the Government to illuminate the costings and to say what these expensive costings are. Of course we could think about different wording or something of that kind. However, I hope that the Government will he able to give us the details of why these developments will be very expensive.
My second point is on discrimination. I am a great advocate of the DRC taking legal action if one gets recalcitrant employers or organisations and so on. I press all the time to start legal action but I wonder in this case. It occurs to me that it is a form of discrimination if blind or partially-sighted people cannot use these wonderful advances. So I agree with the noble Lord, Lord Addington, that the Government or the DRC should consider taking action.
But why take that risk? Why bother? The simple answer is to accept the amendments and one would not then need to argue about legal action. The answer is plain and simple for the Government and lies in the amendments tabled by the noble Lord, Lord Addington. I hope that they are able to accept these three amendments.
Lord Luke: My Lords, I associate noble Lords on the Conservative Benches with the sending of best wishes to the noble Baroness, Lady Wilkins, and hope that she will be back with us before too long.
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We support Amendment No. 118 in principle. I was most interested to hear the noble Lord, Lord Carter, say that the technology—I hope I have this right—with regard to the digital teletext is there, but that it is too expensive to deliver.
Lord Carter: My Lords, I was speaking about technology on audio-description, which is in Amendments Nos. 135 and 139.
Lord Luke: My Lords, I beg the pardon of the noble Lord, Lord Carter. Nevertheless, I just want to say that we support the amendment and hope that the Minister can give us some joy on what is being delivered. It is very important that the discrimination described by the noble Lord, Lord Ashley, does not take place. 1 am not sure that I go along with the idea of suing, but certainly we wish to see progress on this as on other issues.
The Lord Bishop of Manchester: My Lords, we on these Benches have consistently supported amendments tabled by the noble Lords, Lord Addington and Lord Ashley. I simply want to say that I endorse and repeat that support for these amendments.
Baroness Howe of Idlicote: My Lords, my contribution will also be brief because everything that I want to say has been said. I have read the RNIB briefing. Like the noble Lord, Lord Addington, I was particularly moved by the pleas made by those who wrote to say that they would have wanted these services and facilities from the moment they arrived.
It is clear that this is a growing market. We are told that the longer people live, the more likely they are to be disadvantaged in this way. So the market is there. The costs are going down the whole time. So, again, there is every reason to be doing this. Inclusiveness was mentioned, which the Government have as a main objective. I think it is a very desirable objective. We can now see that if push comes to shove there is a clear possibility that a case could be made under the DDA.
So I hope very much that the Minister when responding will be able to accept the role that government must play if the broadcasters are to have this responsibility. It must be overseen and underwritten by the Government.
Lord McIntosh of Haringey: My Lords, I share with all noble Lords who have spoken today our keenness that people with sensory impairments should benefit by improved access to all television services including the public teletext service. I think that view has been universally expressed. In particular, we recognise the peculiar problems of those with dual sensory impairment. My noble friend Lord Ashley was particularly eloquent on that point in Committee.
There is a problem between analogue and digital. Those who are visually impaired and those with dual sensory impairment have access to analogue public teletext services and other analogue text services through Talking Teletext equipment, which uses a

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teletext decoder and a voice synthesiser to translate written teletext into audible speech. The information can be stored on a computer and printed out in Braille. That is fine for analogue teletext services, but the digital technology, for reasons I shall not go into, does not enable the same thing.
The amendment would require Ofcom to introduce a new kind of technical requirement in the regulatory regime for the public teletext service with no certainty of how and at what cost the broadcaster might fulfil any condition imposed. We want the legislation to be future-proofed. In so far as we can, we want to provide for any anticipated new beneficial technologies, but we really cannot include in a Bill an obligation on Ofcom to do something that we do not know can be done, and which, even if it could be done, we do not know how to do it.
The fallback situation—I realise that this will not be entirely satisfactory—is that in carrying out its functions Ofcom has a general duty to have regard to the needs of persons with disabilities. Of course that includes the needs of those with dual sensory impairment. So there is the general duty pushing Ofcom in this direction, but we are arguing that it does not need a special provision of the kind set out in Amendment No. 118.
We do not just rely on the wording. One of the key tasks of the technology and equipment group of the digital action plan is to consider the specific equipment needs of disabled people. We will ensure that the issue of accessibility to digital teletext services is taken forward within the work of the group. The most effective way would be a commercial solution, but it does not need to be reflected in the provisions of the Bill.
Lord Addington: My Lords, I intervene in the hope that it will save time later on. Is the noble Lord saying that, to the best of his understanding, if, say, a new software system was designed that would make access to teletext possible, it would have to be brought into being and used in the existing structure?
Lord McIntosh of Haringey: My Lords, certainly the digital action group would take that forward, yes. The general duty on Ofcom would oblige it to take action on it. I do not know what that action would be. It depends on whether the technology is inherent in the broadcasting process or is much wider, which is converting the spoken word into something which is intelligible, particularly to those with dual sensory impairment. So I cannot tell on whom the obligation would lie, but I can say that the digital action group has a responsibility to take it forward and that if it takes it forward and finds the solution, Ofcom has a duty to progress it under its general duty towards people with disabilities.
On Amendments Nos. 134 and 139, we fully understand the need to ensure that, where a channel must be offered on a network or satellite service, any viewing aids that relate to that channel are also carried. But in fact, audio description, which is what is in play here, is just one form of ancillary service. As is clear
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from subsection (6) of Clauses 268 and 269, the Bill already provides a "must offer" obligation to encompass ancillary services, as well as the main "must offer" channels to which they relate. Given Ofcom's general duty, to which I referred, under Clause 3(3)(i), to take into account the needs of persons with disabilities, we have every sympathy with the motivation behind the amendments, but there is already specific provision.
I turn to the issue of the Disability Discrimination Act 1995, to which several noble Lords referred. That Act relates to persons who provide the services—in other words, to the broadcaster, certainly not to the Government or Ofcom. Although the debate about the type of audio description is for Ofcom to deal with, the question of compliance with the Disability Discrimination Act is for the broadcasters. If nothing were done, they could be prosecuted under the Act. It is in their interests to take the necessary steps. That needs no further action from Ofcom or the Government.
I hope that it is clear that we are in sympathy with the amendments. We believe that we are taking the necessary steps, both for dual sensory impairment and for audio description, to advance provision as fast as technically feasible.
Lord Addington: My Lords, the Minister's argument—"Don't worry; it is already covered twice"—was plausible. As for his answer on Amendment No. 118, it was interesting and should be considered in detail by those who helped me with—let us be honest, performed—the drafting. I am prepared to withdraw the amendment to consider exactly what sort of cover is available and whether the process is strong and quick enough.
However, when it comes to Amendments Nos. 135 and 139, I am less happy. We are basically dealing with the cock-up school of history come to life. We are producing audio description that no one can receive. Boxes do not have the technology available; no manufacturer has been going through a system. Then we have a system through which we could access a huge chunk of those using a free-to-air service—something that the public are funding and which the public should be able to access but which, because of an administrative disagreement, they cannot.
To be honest, that is on the edge of sanity. If our figures are right—the Minister did not challenge them, as the noble Lord, Lord Carter, said—we have every grounds for pressing ahead. But the Minister then effectively said, "If you have a case, go and do it". To pick up on the words of the noble Lord, Lord Ashley, if we must use the existing legal structure, we shall. I am not sure whether the Bill is the right way with which to deal with the matter, but I say to all those listening, please remember that if you are to give us nothing other than a legal option, we shall use it.
Lord McIntosh of Haringey: My Lords, before the noble Lord decides what to do about those later amendments, there are two aspects to what I said. First, under Clauses 268(6) and 269(6), Ofcom will

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already have the powers sought under the amendments. Secondly, under the Digital Action Plan, we are already taking steps to act using those powers.
Lord Addington: My Lords, with due respect, I accept that, but the fact is that audio description, which has previously been allowed for in legislation, has been produced but still is not getting through. There is no guarantee in the Bill or in any discussion about it that we will have the box with a chip in place. We have heard good noises; we have heard of things going forward. Perhaps we should not press the amendments; we have not reached the appropriate stage in the Bill. I am trying to listen and to be as co-operative as possible.
However, good intentions were already there. That is why the issue arises. We have not achieved them. Having said that, there is a case for further discussion and for returning to the issue at a later date—if, indeed, there is still a live issue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 229 [Meaning of "television licensable content service"]:
5.15 p.m.
Baroness Buscombe Baroness Buscombe moved Amendment No. 118A:
Page 205, line 36, at end insert "if such service is accessible from the main service immediately by the execution of a single action"
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 119 and 120. The Government have stated that they have no intention of regulating the Internet. On Second Reading of the Bill in another place, the Secretary of State stated that,
"we do not intend to regulate the internet, but … we intend broadcasting to be subject to a tough content regulatory regime".—[Official Report, Commons, 3/12/02; col. 784.]
The Government have further stated that they,
"have tightened the definition of television licensable content so that it only covers, and can only cover, services that consist of radio and television programmes that are available for reception by the general public—in other words, so-called push technology. In that way, we exclude the internet—a point about which several hon. Members were particularly concerned, because it is pull, rather than push, technology".—[Official Report, Commons, 4/3/03; col. 777.]
However, the world in which we live is one in which the distinction between television and the Internet is becoming increasingly blurred. It is possible to access the Internet via digital television; it is possible for near-broadcast quality pictures to be distributed via broadband connections on the Internet. That is why it is important to define what is meant by television—and therefore is capable of being regulated—and what is Internet content, and therefore not regulated. That is what Clauses 229 and 230 are intended to do.
Clause 229 sets out a definition of what should be regulated—that is, what is to be considered as a,
"television licensable content service".
That includes not just television programme services and electronic programme guides but other services that can be accessed via digital television, such as enhanced facilities that provide alternative camera angles or background information. Subsection (3) provides that where there are direct links to other services, such as websites, the links to those services and, potentially, those services themselves—both being within the definition of relevant ancillary services in Clause 229(6)—should be seen as part of the television service and therefore subject to regulation.
Clause 230 makes clear that there are a number of exemptions to the definition of "television licensable content services". Those include all websites, as specified in Clause 230(3), if they are accessed via a personal computer, and most types of website that can be accessed via digital television.
However, increasing amounts of the content that can be accessed on websites is of a broadcast-type nature, known either as "webcasting" or "webstreaming". If such content can be linked to via digital television, it appears that Clause 229 will make that content subject to content regulation by Ofcom, as the webcasting service providing it will be defined as a relevant ancillary service. Such a service will not fall within the exclusions set out in Clause 230(3).
At present, the functionality is still being developed that will allow webcast material to be screened on a television set, but it will not be long before satellite and cable set-top boxes can play webcasts that are accessed via websites available on television.
There is an argument that someone sitting in his or her sitting room watching the television not only expects what he or she sees on television to be regulated but also expects any television-type material that he or she can access to be regulated as well. But in the converged world, that is surely anomalous: the consumer expects to be able to access the same material from a website on his or her PC as he or she can access from a website that he or she can reach via the television.
Equally, a website that provides web-streaming will be capable of being accessed both via television and from PCs. There is a real danger that, as presently drafted, these clauses would allow for the back-door regulation of Internet content. Any company that provides both a television service and a web-streaming service would be at risk of its web-streaming service being classified as television licensable content if it could be linked in any way, however remotely, from a television service.
Our amendments seek to deal with the situation by introducing the principle of putting distance between the television service that viewers are watching and the web-stream they are capable of accessing. Everyone can agree that the viewer should not he able to switch by a single click of the remote control from a regulated television environment to an unregulated web-streamed one. However, if viewers see a link in a television service and have to follow a route out of the regulated environment, then they ought to be able to access the same web-based material as they could access via a PC.
These amendments seek to introduce the idea of web-streaming provided via a website accessible by television being at least two clicks away from the regulated television environment so that viewers would know that they were leaving a regulated environment and entering an unregulated one.
These are probing amendments aimed at elucidating exactly how the Government intend to address the issue. The Explanatory Notes to Clause 229 state that although a link to a website would be regulated as part of television licensable content, the website at the end of the link would be neither regulated nor within the licence of the main service. But the note fails to point out that this is not true for websites that consist of web-streaming services provided by companies that also provide television services where the web-streaming service is accessible, however remotely, from the television service. The amendments seek to reintroduce the principle of an unregulated Internet which, we understand, has been government policy. I beg to move.
Lord Avebury: My Lords, when I first read the amendments I was not entirely clear what the noble Baroness was driving at and I am grateful to her for that explanation, which has made matters a great deal clearer. I understand that a television licensable content service means TV or EPG, whether broadcast from a satellite or distributed through an electronic communications network, and that "relevant ancillary service" includes any other service apart from advertising which is ancillary to a programme and relates directly to its contents. Thus if the web-streaming service to which the noble Baroness referred was not immediately relevant to the content of the main service, then she need not worry about it. However, the noble Baroness seeks to limit this to a service which is accessible from the main service by the execution of a single action, which I think would be rather too limiting.
An example is given in the Explanatory Notes. At this point I must say that the notes for this particular clause are much more helpful than is usually the case. Often when I turn to them I find that generally they paraphrase what is set out in the Bill, whereas for this clause the Explanatory Notes give an excellent description of a service that might be covered.
They cite a wildlife programme which allows the viewer to choose different camera angles via a menu or to access factual material about the animals from within the broadcast stream. Those would be relevant ancillary services because they are made available by the provider of the main service, but they might not be accessible by the execution of a single action. The viewer might first have to bring up the menu on screen and then perform a second action to pick one of the options displayed. No doubt the provider would try to make the choices as simple as possible, but the effect of the amendment would seem to be to exclude these menu-driven services from the definition and thus to require the provider to obtain a separate licence for
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them, even though from a common-sense point of view they are ancillary to the main service because they come directly under the control of the main provider.
Lord McIntosh of Haringey: My Lords, I am not qualified to know whether the response of the noble Lord, Lord Avebury, to the noble Baroness, Lady Buscombe, has been effective, but I am sure that she will be glad to have had it fed into the debate. This is a horribly complex subject and one on which we know that there is not immediately in sight a definition that will please everyone. That is why we have provided in Clause 231 for amendment of the definition if future technological and other changes require it so that policy objectives continue to be met.
The central distinction we want to make here is that of keeping broadcast services within regulation and leaving on-demand services outside. I think we are all agreed on that point. We have already held discussions with representatives of Channel 4, which is interested in the issues raised by these amendments, and no doubt we shall continue to hold those discussions. We think that the concerns of Channel 4 are misplaced, but we want to ensure that the definition is right. Officials are available to continue to discuss these matters.
Let me explain why we cannot accept these particular amendments. Amendment No. 118A would have the effect of ensuring that an ancillary service which could be accessed from the main service only by "two clicks" should be unregulated. However, that would take out of regulation ancillary broadcast services such as interactive Wimbledon camera angles accessed from BBC1 if they could be accessed only via the BBCi interactive area. I do not think that that is what is intended.
Amendments Nos. 119 and 120 seem to try to ensure that any Internet service dedicated to broadcast material is excluded from regulation as a television licensable content service so long as it is at least two clicks away from a television or radio programme. Our definitions already effectively exclude Internet services of the kind with which we are familiar, but the scenario which our forward-looking colleagues in the industry may have in mind is a service wholly dedicated to web-casts and operated in such a way that it met the criteria for television licensable content services and so fell within regulation. Where that happens, the power in Clause 231 to change the definition would come into force.
However, the particular service to which Channel 4 has referred in discussion is that which provides on the web an uncut version of a film which can be broadcast only in cut form. Channel 4 did this with the Danish film "Dogme #2—Idioterne". We think that such services are already excluded from regulation by way of the definitions in the Bill.
As I said, we are more than happy to continue our discussions to ensure that the definitions work well, but I hope that the noble Baroness will not press her amendments.
Baroness Buscombe: My Lords, I thank the Minister for his response and I agree that this is a complex

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subject. It is certainly helpful to have the contribution of the noble Lord, Lord Avebury, and I admit that I should like to reserve my thoughts until I have had an opportunity to read in Hansard what he said.
This is an important area and I am grateful to the Minister for his reassurance that the Government are in discussions with representatives of Channel 4. This is a matter that will be of growing interest and debate as the distinction between television licensable content services and the Internet inevitably blurs with the further development of the technology. Indeed, I recall that, prior to Second Reading, I had long and really interesting discussions with various people in the media industry about this situation, which will grow. Indeed, the blurred distinction here might test the lifeline of this legislation. It may bring about the need to consider in the future how we deal with licensable content for broadcast television and then find that something available on the Internet is not regulated in any way.
I am grateful to Channel 4 for its two-clicks proposal. It has certainly helped me to understand the potential problem that may arise as the distinction becomes more blurred. I am grateful that the Minister will continue discussions. I hope that the definitions will work and reassure Channel 4 and others in the broadcast media. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 230 [Services that are not television licensable content services]:
[Amendments Nos. 119 and 120 not moved.]
Clause 245 [Services that are not radio licensable content services]:
5.30 p.m.
Lord Davies of Oldham Lord Davies of Oldham moved Amendment No. 121:
Page 218, line 38, leave out "or"
The noble Lord said: My Lords, in moving Amendment No. 121, I shall speak also to the other government amendments in the group. I shall delay commenting on three amendments that have been tabled. In Committee, I attempted a pre-emptive strike against amendments. It resulted in a colossal failure on my part. I sought to pre-empt some quite brilliant speeches and suffered the ignominy of being put in my place. I also gave away all the arguments that I had intended to deploy against the amendments and I therefore came off rather worse. So this evening I shall make no comment on those amendments, but I hope, with the leave of the House, to reply to them in due course.
The government amendments relate to the agreement we made in Committee, following an amendment tabled by the noble Lord, Lord Avebury, and the noble Baroness, Lady Howe, that we would consider the need to regulate electronic programme guides provided on radio and giving access to radio services.
In this fast-moving environment, we need to ensure that EPGs for digital audio broadcasting radio, such as the one recently launched, are regulated whatever form they take, whether they are purely sound services, visual or audio-visual services. This is the purpose of Amendments Nos. 121, 122, 164, 220 and 221.
Amendment No. 218 is a minor amendment to correct a drafting error. It removes the exclusion of digital additional sound service from the definition of "additional radio service". I beg to move.
Lord Avebury: My Lords, I speak to Amendment No. 161, which is grouped with these amendments. The amendment clarifies the meaning of "due prominence" for public service broadcasters on electronic programme guides and ensures that due prominence is given to the correct national or regional variation of public service channels—for example, BBC Wales in Wales and Granada in the North West.
When this issue was debated in Committee, there was considerable support for these arguments. However, at the same time, concerns were expressed by the noble Lord, Lord Lipsey, and the noble Baroness, Lady Buscombe, that the amendments as tabled were rather too prescriptive. Others were concerned that we might be getting involved in a commercial dispute between the BBC and Sky over the electronic programme guide listings.
Since then, I am happy to say, the BBC and Sky have resolved their difference in a way that satisfies the public interest. The BBC will no longer purchase an encryption service from Sky and will therefore broadcast its channels in the clear on digital satellite. BBC1 and BBC2 will continue to be located at slots 101 and 102 on Sky's electronic programme guide.
The BBC will purchase a regionalisation service from Sky to ensure that viewers with viewing cards within the UK receive the right national and regional services. That applies to everyone who has pay TV. In future, new customers will have to buy a card if they wish to access the regional variation of their choice at slots 101 and 102. They will still of course be able to access those channels by memorising a three-digit number if they do not want to buy a card.
The way in which the dispute has been resolved does not guarantee that the outcome of any future commercial arguments between platform operators and public service broadcasters will necessarily be in the public interest. The dispute has underlined the need for Parliament to set as clear objectives as possible for Ofcom while leaving it adequate discretion to implement the policies set by Parliament. That is the purpose of the amendment.
Unless Ofcom is given greater clarity than we gave to the ITC, it is possible that the same problems that led to the recent dispute between the BBC and Sky will

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arise with other public service broadcasters. That cannot be in the interests of the consumer, Ofcom or your Lordships' House.
Baroness O'Cathain: My Lords, I support Amendment No. 161, which has been spoken to by the noble Lord, Lord Avebury, and to which my name is attached.
In Committee, great prominence was attached to the importance of public service broadcasting. It is important that the public service channels—BBC, ITV and Channel 4—are able to broadcast their programmes in a way that makes them easily accessible to viewers across all platforms. There is little point in insisting that our public service channels should produce in their programming a certain amount of regional news if in order to find it you have to scroll down to the nether regions of the electronic programming guide.
In our deliberations on the Broadcasting Act 1996 I fought for top prominence for the public service broadcasting channels in the electronic programming guide. This was accepted. However, some seven years later, we are now re-engaged in the same issue. When we had those debates in 19961 am certain that we never even considered that Sky would be in a position unilaterally to move the BBC from the top positions 101 and 102 in the EPG—but that is what it recently proposed.
However, I believe that the voices raised in this House—in a period when, by chance, we happened to be debating relevant legislation—made clear the importance that Parliament attaches to the ability of citizens to find their public service broadcasters. Fortunately, as the noble Lord, Lord Avebury, said, the dispute between the BBC and Sky has been settled. But we cannot expect such legislation to be on the Floor of the House when there is a future dispute between commercial platform operators and a public service broadcaster. We need to do more than make our views known. We need to give clarity to the regulatory framework and we need to ensure that public service broadcasters will always have prominence.
Technology has moved on since 1996. The purpose of the amendment is to provide clarity for the regulator in the light of that change. I hope that the Government and my own Front Bench will listen sympathetically to the arguments that the noble Lord, Lord Avebury, and I have made.
Baroness Howe of Idlicote: My Lords, I rise briefly to explain why I have attached my name to the amendment spoken to by the noble Lord, Lord Avebury.
It is important to emphasise that the purpose of the amendment is to ensure that all public service channels remain easily accessible to viewers. This concerns not only the BBC, but ITV, Channel 4 and Channel 5.
As has been mentioned, the BBC and Sky, thankfully, have resolved their current dispute. But ITV's contract, for example, expires in autumn 2004.
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The amendment establishes that public service channels should be at a position on the EPG that is no less prominent than will be the case at the enactment of the Bill.
The amendment also importantly clarifies that when we refer to "due prominence" we mean for the right regional version of a public service channel. This is particularly important for ITV, with its unique regional structure. A viewer in Manchester expects to receive Granada on button 103. The viewer in Belfast expects to receive Ulster TV. How can we urge ITV to uphold its long-standing public service tradition if we are not prepared to will the means to ensure that viewers are guaranteed easy access to their regional services?
Lord Lipsey: My Lords, I rise to speak to Amendment No. 162 standing in my name. I am delighted to see the noble Lord, Lord McNally, back in the Chamber because he gave the House wise counsel in a previous debate. He said that in this dog fight between the BBC and Sky it would be sensible for Parliament to keep its distance. He slightly spoiled the effect by then supporting the amendment drafted by the BBC. Never mind, his advice was wise. It was shown to be so by the agreements, to which the noble Lord, Lord Avebury, has referred, reached between Sky and the BBC without any help from us. Those wise words should resound with us as we consider these amendments.
Again we have to choose between two extreme positions, although "extreme" is perhaps unfair. One favoured by the BBC is put forward by the noble Lord, Lord Avebury, and others in Amendment No. 161, and we have heard the case for it. The other, favoured by Sky, is at the other extreme, arguing there should be no change in the Bill. I am not sure who will put that case. I said from the beginning that I thought that Parliament could do with giving a nudge, but not a push, on this matter—not siding with one side or the other, but nudging in favour of the public service channel. That is the thrust of my amendment. It may be feeble, but it endeavours to say that Ofcom should use its best endeavours to make sure that the public service channels do not lose their present prominence. There may be situations in which it is right for that prominence to be reviewed. If, for example, BBC Four was doing incredibly well and BBC Two was doing incredibly badly, it might be a good idea for BBC Four to be promoted, and Ofcom should allow that. That would register with Ofcom Parliament's will that due prominence should be given to the public service channels. I hope that the Government will he sympathetic.
Lord Crickhowell: My Lords, I agree with virtually everything said by the noble Lord, Lord Avebury, my noble friend Lady O'Cathain, and the noble Baroness, Lady Howe of Idlicote. My former company HTV believes the issue to be of crucial importance for it and similar companies for the reasons that the noble Baroness, Lady Howe, argued well. As to which amendment to choose, I would prefer a firm push

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rather than a gentle nudge, so I strongly support the amendment proposed by the noble Lord, Lord Avebury.
Baroness Gibson of Market Rasen: My Lords, I shall speak to Amendment No. 163 in my name. This is a plea on behalf of smaller broadcasting channels and for clarity within the proposed code of practice. I have placed the amendment at the request of S4C, a channel that broadcasts in Welsh and which I had the pleasure of seeing, if not totally understanding, on my recent visit to Cardiff.
Ofcom has a duty to draw up and revise periodically a code of practice to be followed in providing EPGs and especially to give due prominence to public service broadcasting channels. S4C has already experienced some problems with its placings in Wales, and it does not believe that the due prominence element on EPGs is being followed. EPGs will be a key issue in future broadcasting and may well alter people's viewing habits perhaps more than any other aspect of the digital revolution in broadcasting. Most people do not know the number of the channel that they want to watch but instead surf the channels, as I often do. This presents a problem for channels like S4C, which are not genre based.
For example, S4C hosts a well-known and, I understand, well-respected children's programme, "Planed Plant", which in English is "Children's Planet", but this cannot be found in the children's section of the EPG and has to be searched for. Any codes of practice must be strong enough to protect not only the larger broadcasters, but the smaller broadcasters, such as S4C. The channel number on an EPG is crucial in that the smaller broadcasters do not have large marketing or promotional budgets, so their profile must be prominent enough to give ease of access to them by channel hopping. This amendment aims to ensure that the smaller broadcasters such as S4C are given a fair chance in the code of practice.
5.45 p.m.
Baroness Buscombe: My Lords, I reassert my comments in Committee. We believe that public service channels should have prominence, especially those channels referred to—BBC One, BBC Two, and ITV. The noble Baroness, Lady Howe, referred to ITV's unique regional structure. It is important to ensure that these public service channels are easily accessible across all platforms. Notwithstanding, I sympathise with the amendments proposed. I am still concerned about the prospect of putting something into the legislation as opposed to leaving it with Ofcom. Technology is moving ahead all the time, the introduction of new channels is growing, we are going to have more and more public service channels, and I am concerned about those kinds of channels—such as the History Channel, which does not happen to be a public service channel but has all the characteristics of one—being pushed further down because they do not happen to have that label, PSB.
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The amendments do not answer my continuing concerns. It is important that Ofcom should take on the task early in its life of drawing up a code on the application of EPGs. As noble Lords have said, there has been a long expectation for a code on EPGs to be put forward by Oftel and the ITC. It is important that Ofcom takes this work forward at an early opportunity so that easy access to the channels of viewers' choice is safeguarded, but I am concerned about the lifeline of this legislation, which I mentioned in the last amendment, and the flexibility for Ofcom to be able to respond to what I hope will be an ever-increasing number of channels. There should be more choice for the viewer, good, high quality public service channels, but there should also be no discrimination against other channels that do not happen to be PSB but provide high quality viewing.
Lord Davies of Oldham: My Lords, I sound a note of dreadful warning. The two Front Benches are in total agreement. My contribution is almost otiose after the careful arguments deployed by the noble Baroness, Lady Buscombe. However, I shall also say that as there has been no dissent I hope that the Government's attempt to meet the requirements of the agreement that we struck in Committee are agreed in the form of a government amendment.
First, I turn to Amendment No. 163, spoken to by my noble friend Baroness Gibson. She is right that it is necessary for Ofcom to consult widely, and we expect that to be done. Before it draws up and revises the code on electronic programme guide, they should consult, as we expect them to consult on all significant decisions. I point out to my noble friend that appropriate consultation by Ofcom is already required as part of its general duty to follow the best regulatory practice. We provide for that in Clause 3(3)(d), and, therefore, we do not believe that there is any need for a specific statutory provision regarding this area of consultation, although I do value the fact that my noble friend has emphasised that fact, and it will be part of Ofcom's remit. There is also a danger that accepting a specific amendment might give rise to the implication that Ofcom is specifically enjoined to consult in this area but not in others. In fact, I think that it is recognised that we want maximum consultation by Ofcom on all crucial decisions.
I must say—this relates to a point touched upon by the noble Baroness, Lady Buscombe—that it is not just a question of public service channel providers. It might not be just those providers who ought to be consulted. They are affected by the "due prominence" provision, but they are not the only parties affected by that provision or by the other topics that will be dealt with in the code, such as fair terms between EPG operators and service providers or accessibility for people with disabilities. It is for that reason that we think that it would not be right to make the amendment, even though it is an important reminder to Ofcom of its obligation to carry out due consultation on a matter as important as the code.

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I turn to the amendments to which I shall have the most difficulty replying. I do not want to go too much into the general argument, as I agree with the way in which the noble Baroness, Lady Buscombe, expressed the matter. She may feel that that is a nod of congratulation warmly to be wished, but, in that area, we are in agreement. We are all convinced of the benefits of EPGs and the need for viewers to find their public service channels easily. We are strongly committed to ensuring that public service channels are given due prominence on EPGs.
As was mentioned by the noble Lord, Lord Avebury, an important step forward was taken during the deliberations on the Bill in the agreement reached by the BBC and Sky, which the noble Lord defined with great accuracy. Obviously, I hope that, if similar issues arise in relation to other public service channels, they will also be solved in such an appropriate way. In case there is any doubt, I shall make it clear that, when I talk about due prominence being given to a public service channel, I mean it to apply to all the regional variations of that channel. Each of those variations should benefit from due prominence to the same extent. As it is a matter of public policy, I agree that it is something that Ofcom should address in its code.
For the same reason, I have some sympathy with the provisions in new subsection (2A)(b) and new subsection (2B), proposed in Amendment No. 161, so ably spoken to by the noble Lord, Lord Avebury. I shall consider further whether we should include something to a similar effect in the Bill. Having said that, however, I have reservations. They relate to the reservations emphasised by the noble Baroness, Lady Buscombe. They were also reflected in the speech made by the noble Baroness, Lady O'Cathain, who referred to the fact that things had changed apace since the Broadcasting Act 1996—only seven short years ago.
We are trying to put into statute significant arrangements for the industry, and we are all too aware of the fact that things move on apace and we must come to terms with the rapidity of change. We just do not know how things will evolve in the all-digital world. Our perception of what "due prominence" should mean might change—for instance, when new channels are created. The inevitability of such change is the reason why we have aimed to ensure that Ofcom has the necessary powers and flexibility to regulate EPGs of every form and on every platform. The code will be central to that regulation and will need to balance our policy objectives with the need, to which we have often referred, to leave commercial operators as much room as possible to negotiate their affairs without interference. Finding that balance is not easy. Given the increasing importance of EPGs, which several noble Lords accurately identified, we must think about how we deal with the matter. However, it would be unwise to allow Ofcom only six months in which to draw up that important code.
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We will move towards the significant arguments that were presented. My noble friend Lord Lipsey referred to the concept of the "nudge"; it is a bit more than a nudge. The argument has caused us to think about how we can move towards the objective, while not so confining ourselves in legislation that we cannot keep up with the rapidity of technological change that we are wrestling with.
Baroness O'Cathain: My Lords, I said that the world had moved on since 1996, and, of course, that is true. It has moved on in a big way: at that stage, I was battling with my party's government over the prominence of public service broadcasters on the EPG.
What I really wanted to say—perhaps I did not express it well—was that, although the world is moving on, it is important that we always maintain public service broadcasts in the prominent position. Of course, that also involves regional channels, as the noble Baroness, Lady Gibson of Market Rasen, said. The Minister threw back at me my remark that the world had moved on, but I have not changed my focus. The public service broadcasters must be in the prominent position.
Lord Davies of Oldham: My Lords, I apologise to the noble Baroness if I gave that impression. It never crossed my mind that, when she was thinking about how the world had moved on, she was talking about the arrival of a different administration. Such a thought would never cross my mind, as the noble Baroness will readily understand.
I sought to emphasise that we all recognise that, with any Act that aims to establish a framework for broadcasting at a time of rapid technological change and development, we must move with great care. We must put in statute and try to maintain a degree of flexibility that enables Ofcom to do its work without being cabined and confined too much. I was merely making that point.
Baroness Howe of Idlicote: My Lords, I wanted to follow up one point. My memory may be at fault. Certainly, the concept of public service broadcasting—
Lord McIntosh of Haringey: My Lords, this is Report stage. Interventions are supposed to be made before the Minister sits down and are supposed to be related to what he has said. They are not to be used to expand on previous points.
Baroness Howe of Idlicote: My Lords, my intervention relates exactly to what he said. I thought that I had got up before he sat down. I shall, of course, do what is required. I was going to say that the Bill is meant to be sufficiently future-proofed to take account of the speed of change, so that, if and when it becomes necessary to deregulate in this area, it will be possible to do so. That was my only point.
Lord Davies of Oldham: My Lords, I agree entirely. The noble Baroness puts it more succinctly than I did.
On Question, amendment agreed to.
Lord Davies of Oldhammoved Amendment No. 122:
Page 218, line 40, at end insert "; or
() it is comprised in a television licensable content service."
On Question, amendment agreed to.
[Amendment No. 123 had been withdrawn from the Marshalled List.]
6 p.m.
Lord Davies of Oldham moved Lord Davies of Oldham moved Amendment No. 123A:
After Clause 257, insert the following new clause—
"RENEWAL OF RADIO MULTIPLEX LICENCES
In section 58(2) of the 1996 Act (renewal for twelve years of radio multiplex licences granted within six years of commencement)—

(a) for "which is granted within six years" there shall be substituted "granted within ten years"; and

(b) for the words from "for a period" onwards there shall be substituted

"(a) in the case of a licence granted within six years of that commencement, for a period of twelve years beginning with the date on which it would otherwise expire; and

(b) in any other case, for a period of eight years beginning with that date."

The noble Lord said: My Lords, the UK leads the world in digital audio broadcasting. One of the reasons, I am informed by the industry, is the early supporting legislation, to which reference has already been made. One of the attractive features of the Broadcasting Act 1996 was that radio multiplex licences could be automatically renewed on one occasion. That automatic renewal applied to all radio multiplex licences issued before October 2002. The amendment proposes to extend such renewals to those issued before October 2006. That would include those issued between October 2002 and the commencement of the new provision. We consider the four-year extension necessary to help keep going the momentum of digital radio. Although the UK leads the way in the field, it is only now that sufficient numbers of affordable receivers are available in our shops. Digital radio is still in its infancy. It is still not economically viable.
The aim of the amendment is to continue to encourage investment in digital radio multiplexes. Licences issued between 2002 and 2006 can be extended for eight rather than 12 years, so that all the licences will expire no later than 2026. We believe that, in view of the development of the digital radio industry, eight years is the right figure. It strikes a balance between offering an incentive to those considering taking up a licence while not committing Ofcom to using the spectrum in question for radio multiplexes too far into the future. I beg to move.
On Question, amendment agreed to.
Clause 258 [Access radio]:
Viscount Falkland Viscount Falkland moved Amendment No. 124:
Leave out Clause 258 and insert the following new Clause—
"COMMUNITY RADIO
(1) In subsection (2) of section 84 of the 1990 Act (regulations by authority of independent radio services) after paragraph (a)(iii) there shall be inserted—
"or—
(iv) for the benefit of members of the public in a defined geographical locality or of a particular community and not operated by the BBC or for commercial purposes (a "community service")".
(2) In subsection (6) of section 104 of the 1990 Act (application for other licences) in paragraph (b) after "satellite" there shall be inserted ", community".
(3) After that subsection there shall be inserted—
"(6A) In determining whether or to whom to grant a licence to provide a community service and the duration of such licence OFCOM shall have regard to the extent to which the proposed service—

(a) would confer significant benefits on the public or on the particular community for which it is proposed to be provided;

(b) demonstrates evidence of support by the public or the particular community for which it is proposed to be provided;

(c) includes provision for public access to training, production and broadcast facilities;

(d) includes measures to ensure accountability to and participation by the public or the particular community for which it is proposed to be provided; and

(e) would be distinctive from existing local sound broadcasting services licensed to cover over 50 per cent of the proposed service's coverage area."

The noble Viscount said: My Lords, the amendment introduces a new clause to replace Clause 258. It has been drafted by the Community Media Association in consultation with the Commercial Radio Companies Association. It has the purpose of placing community radio in the Bill rather than leaving it to secondary legislation.
Community radio has stimulated a good deal of interest, not only among members of the public but also in government circles. The amendment seeks to provide a clear definition of community radio, among other things. I do not think anyone could disagree with the definition—it may not be perfect, but definitions seldom are. It states that community radio is,
"for the benefit of members of the public in a defined geographical locality or of a particular community and not operated [either] by the BBC or for commercial purposes".
It is a growing sector, and it is surprising that the Government have not sought thus far to recognise that fact by hastening the right support and structure for community radio. Most noble Lords will agree that the unfortunate term "access radio" seems to have been dropped: it was not a happy choice of description of community radio, which is generally the term used in other countries. The Government have acknowledged the benefits of community radio. There has been strong parliamentary support for it. Over the past 12 months, with the Government's agreement, the Radio

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Authority has introduced some experimental services, including what was known as the access radio pilot scheme.
The independent evaluation of the scheme was completed in February this year by Professor Everitt, former secretary-general of the Arts Council. It lends strong support to the case for a distinct licensing framework for community radio, which the amendment introduces. Professor Everitt remarked that the new tier of radio provision,
"promises to be the most important cultural development to take place in this country for many years".
The question that the amendment addresses is not whether to proceed but how and under what rules. While the detail of licensing can obviously be left to Ofcom, there does not seem to us any remaining reason why there should not be provision for community radio in the Bill. That would give clarity to those who aspire to become community radio broadcasters and to the radio industry generally. It will ensure increased confidence in the growth of community radio, building on a clear parliamentary mandate for development.
There has been considerable discussion and consultation on community radio, starting with the White Paper and involving a Select Committee, the Joint Scrutiny Committee, a draft Bill, and debates in both Houses of Parliament, as well as the pilot scheme that I mentioned. The amendment has three major components. I have dealt with the definition, which is the first, but the second component—namely, the selection criteria—is also important. Such criteria should confer significant benefits to the public or a particular community, and demonstrate clear public support.
Further, provision for public access to training, production and broadcast facilities should be included, as well as,
"measures to ensure accountability to and participation by the public or the particular community",
for which the service is to be provided. It is also important that the community radio service should be clearly,
"distinctive from existing local sound broadcasting services licensed to cover over 50 per cent of the proposed service's coverage area".
The third component relates to the regulatory framework. The amendment would ensure that community radio would fall into the regulatory framework of the Broadcasting Act 1990 as a "sound broadcasting service" alongside "national services", "local services" and "restricted services". The same rules would apply to community services as currently apply to restricted services, including requirements to conform with the relevant programme content, advertising and sponsorship and technical regulations. Similarly, the regulatory powers to impose financial penalties or shorten a licence period and to revoke licences would also cover community services.
Various questions arise from the amendment regarding the financial viability of those who seek licences, but such issues are clearly understood by your
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Lordships and I shall not, therefore, elaborate further on them. I hope that we have now reached the point where the Government might give further support—which is already gathering momentum—to community radio, as the amendment suggests. I beg to move.
Lord Bragg: My Lords, I support what the noble Viscount, Lord Falkland, said. This provision should be in the Bill; it would provide a clear definition, and help, to community radio. Anything that helps community radio does great good for the duties and opportunities in this country of local communication. We can hammer on and on. We live in a technological world, not only at a massive level but also at a local level. Such local opportunities are golden. If we can get it right here, it will be a great help to many communities in this country. In fact, for what it is worth, I think the two great areas of technological growth in the future are global and intensely local.
Community radio in this country is encouragingly advanced. I think it is our duty to sow this marram grass and help prevent the shifting sands of merely global, national and moneyed technology from drifting around without roots.
Lord Phillips of Sudbury: My Lords, I, too, strongly endorse this amendment. In many ways, it is as important an addition to the Bill as virtually any we are discussing. We have developed, and are developing, a society which is increasingly, as the noble Lord, Lord Bragg, has just mentioned, money-driven and top-down. This is the part of the broadcasting spectrum that is bottom-up—of the people, by the people, for the people. It surely must find a place in the Bill.
I refer the Minister to the fact that his own Government have placed huge store—rightly, in my view—on the 10th report of the policy action team which came out of the first initiative taken by the Prime Minister after Labour was elected to power in 1997. That action team encapsulates in its report perhaps the most important single insight of all 18 action teams: that social inclusion—and this amendment is about eliminating social exclusion—can come only from self-help and by communities doing for themselves what they think appropriate and what they want to do, rather than being told from on high. I very much hope that the Government will give this a fair wind.
Baroness Howe of Idlicote: My Lords, I, too, will be extremely brief. Everything that I have heard and seen about access radio—now renamed community radio—since debates on the Bill have begun has left me with the feeling that it is very worth while. As the noble Lord, Lord Phillips, has said, it will certainly help regarding social exclusion. To be able, within a community, to help it communicate about the various issues that concern it is a crucial part of how communities and citizenship develop.
Lord Puttnam: My Lords, I add my support to a very important concept. I would go further—I would like to

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think that this is a beginning, not an end. The whole notion of community building is surely at the heart of Labour Party policy and, interestingly enough, was the theme the shadow Home Secretary, Oliver Letwin, used in an excellent speech in Brixton last week. He said:
"I believe in the miracle of the establishment of a neighbourly society—the bringing about of sustainable social programmes in our inner cities".
It is surely beyond question that the ability of communities to talk to each other, to communicate with each other, to get to know each other better has to be the most fundamental paving stone towards better and more neighbourly communities.
I was very lucky a couple of weeks ago in Liverpool to be shown a facility that has been built whereby I was able to webcast question and answer sessions with elderly people trapped in tower blocks. The creation of this type of technology and this type of opportunity in the process of building communities in this country should surely be a priority for the Government, not an add-on to a very large and complicated Bill. I should have thought this could be central to the Bill and the beginning of something far more important than the brief discussion we have had this afternoon would suggest.
6.15 p.m.
Lord Evans of Temple Guiting: My Lords, Amendment No. 124 seeks to replace the existing community radio clause and to bring community radio directly within the existing regulatory regime for applications for radio licences. There is a real problem with the amendment, as it refers to Section 84 of the 1990 Act, which is to be repealed. Leaving that to one side, we feel that there are very good reasons for rejecting the amendment.
Fundamentally, we believe that our Clause 258 is simply more effective. As drafted, it already gives Ministers the power to set up community radio regimes. All noble Lords who have contributed to this debate will be happy to hear that we plan to do this by introducing an order later this year, following consideration of Anthony Everitt's report, which the noble Viscount, Lord Falkland, mentioned.
The Government believe strongly—to echo the comments of every noble Lord who has spoken—in community radio and in the future of community radio. As I said when we considered the same amendment in Committee, the amendment also seems problematical in that it seeks to bring community within the mainstream radio licensing regime by inserting a reference to community radio into Section 104 of the 1990 Act. But Section 104 deals simply with the process of making an application, and would not allow us to introduce, for instance, specific content regulation. Were we to accept the amendment in place of the provisions in Clause 258, we would lose the ability that we have deliberately reserved to tailor the regulatory regime in a way that is more appropriate to
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community radio. The result would he that community radio would be subject to the same rules as commercial radio services.
I ask the noble Viscount to withdraw his amendment, recognising, I hope, that the Government believe very strongly in community radio and that, by introducing an order later this year for consultation and debate in both Houses, they will demonstrate their commitment to this extraordinarily important cultural and social matter, which my noble friend Lord Bragg described so eloquently.
Viscount Falkland: My Lords, I thank all those who have taken part in this brief debate for the support which has been given to the amendment, particularly the noble Lord, Lord Bragg, the noble Lord, Lord Puttnam, the noble Baroness, Lady Howe, and my noble friend Lord Phillips of Sudbury, all of whom added an element of their own to the argument. All those arguments added up, as I interpret them, to an agreement that there should be something on the face of the Bill. The Minister said that that was not possible; I shall look very carefully at what he said in Hansard—
Lord Evans of Temple Guiting: My Lords, I do not think that I said it was impossible; I argued that the provision was already in Clause 258 and, in connection with the order which we wish to introduce later this year, that shows the Government's commitment to community radio.
Viscount Falkland: My Lords, that is exactly the point. I would like to read carefully what has been said and to consult the authorities in community radio on their reaction to the Minister's remarks. They may well receive them more favourably than I appear to have done.
It is quite clear that we have moved on apace during the Bill's proceedings in accepting the importance of community radio, as has been said by those noble Lords who were kind enough to support the general drift of my amendment. Obviously reserving the right to come back should it be necessary, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 260 [OFCOM reports on the fulfilment of the public service remit]:
Lord Lea of Crondall Lord Lea of Crondall moved Amendment No. 124A:
Page 231, line 13, at end insert—
"() that sufficient high quality original drama is broadcast covering a range of issues in a variety of formats:"
The noble Lord said: My Lords, there was very wide support for the principle of this amendment in Committee. For example, people of the eminence and wide experience of my noble friend Lord Bernstein, who speaks with great authority, pinpointed exactly why it was important to have a specific reference to high-level drama. The spirit of Report stage being very brief and succinct, perhaps I may say that many of us

783
have been very selective in the amendments that we have pressed. That is why I think this one is of considerable importance.
There is wide anxiety in the House, and in the country that the defining quality of British television, which is admired by people around the world, is very much bound up in drama—both contemporary and classical—as well as other facets of broadcasting, notably news analysis. It is a treasure and it would be an historic mistake and hard to put Humpty-Dumpty back together again if drama were to be abandoned.
That is the heart of the problem, from the informal observations of people in the industry, and those who are not in the industry but who are part of the wider cultural establishment, such as the British Council, television and drama critics, and so on. Superb, high quality drama is not a question of division between ourselves and the Front Bench, but there is division over whether, as the Minister said in Committee, it is necessary to include it in the Bill. The Minister said that it was a fair enough point, but that it was not necessary to add it to the Bill because drama is one among many other programme types referred to in the earlier recital in the Bill. However, the question needs to be discussed a little more face to face. We have not gone past the stage of discussion although it is becoming a little late in the day. We are not two ships passing in the night, with classical drama dying a death. International comparisons arid research demonstrate unequivocally that simply having a list of programme types in the recital is exactly what will allow the removal of that sort of quality television. Therefore, general lists do not cut too much ice.
I am sure that my colleagues who support the amendment would think it timely if the Minister were to agree to meet to consider this question. I beg to move.
Lord McIntosh of Haringey: My Lords, without wishing to pre-empt debate—clearly, there will be a debate after I have spoken—we could be in some procedural difficulty as a number of amendments in the group are government amendments to which other noble Lords will wish to respond. I hope that the House will agree that I should intervene now to debate the government amendments and then, with the leave of the House, respond to that debate before the mover of the prime amendment decides what to do.
Amendment No. 127 imposes a requirement on broadcasters to include programmes of an educational nature and other programmes of educative value. After we debated the amendment tabled by the noble Baroness, Lady Howe, in Committee, we concluded that the requirement for broadcasters to provide programmes on educational matters did not accurately reflect our intentions. Amendment No. 127 clarifies that programming covered in Clause 260(6)(e) should not apply only to issues relating to education such as school class sizes, for example, but should extend to programmes whose purpose is to educate and which have educational value.
784
Amendments Nos. 128, 129 and 133 relate to programmes dealing with religion. Amendments were proposed in Committee both to modify the focus of the current reference to religion in Clause 260(6)(f) and to make reference to other forms of belief.
Having reflected on that, we have identified two separate concerns that we can meet. The first is to make it clear that the reference to religion within the remit encompasses both factual programmes about religion and programmes of a religious nature. We interpret that as meaning the portrayal of religious activity, including acts of worship. The second is to add a reference to other beliefs, which would include ethical systems or philosophies such as humanism or secularism.
Amendment No. 128 expands the reference to religion in the matters listed in subsection (6) of Clause 260 to "religion and other beliefs". Amendment No. 129 sets out the range of issues to be encompassed by programmes dealing with religion and other beliefs. The effect is that public service broadcasters as a whole will have to provide programmes which, first, convey factual information relating to religion and other beliefs, including news, tenets of faith or belief, and history. Secondly, they must portray activity relating to religion and other beliefs, in particular, by showing acts of worship and other ceremonies and practices, such as church services and the equivalent for other faiths. That includes some services or ceremonies in their entirety.
I shall not respond to Amendment No. 129A at this time if the House agrees. Amendment No. 133 defines "belief" to mean a collective belief in, or other adherence to, a systemised set of ethical or philosophical principles or mystical or transcendental doctrines.
On Amendment No. 130, the noble Lord, Lord Lea, argued in Committee for a strengthening of the reference to programming for children and young people in the public service television remit. The provision for children's television in the public service remit is already unique among the list of requirements in that it specifies that programming should be both high quality and original. Nevertheless, we accept the case for an additional safeguard. Amendment No. 130 therefore expands the existing wording to refer to a suitable quantity and range of programmes for children and young people. That is similar to the formulation used in respect of the requirements for education programming and programming on topics such as science, religion arid international issues.
I think that I have dealt with the government amendments, and if the debate proceeds, I can then, with the leave of the House, respond to other amendments.
Baroness Howe of Idlicote: My Lords, in speaking to my Amendment No. 131, may I say that I am in favour of all the other amendments, including the government amendments? I am most grateful to the Minister for the amendment on educational nature and value.

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I resubmitted my amendment because there appeared to be some misunderstanding about its intention when it was debated in Committee. The misunderstanding came particularly from the noble Baroness, Lady Buscombe. My noble friend Lady O'Neill had kindly taken over the task in Committee of moving the various amendments in my name to Clause 260, as I could not be present the day on which they were called; or it may have been a question of divorce.
I had intended to stress the importance of ensuring on the face of the Bill that programmes for children included a significant quantity about the UK's history, culture and traditions—and specifically geared to audiences in this country. That is particularly important for the child audience who will shortly become the UK's adult citizens.
There are two reasons behind that thinking. First, with an increasingly multi-ethnic and multi-cultural population, the commissioning of this kind of programme would be an important public service duty for broadcasters. The intention is perhaps not dissimilar from that of Amendment No. 125, which will be moved later by the noble Lord, Lord Holme. I am glad to have the opportunity again of correcting any misunderstandings that there may have been about what I said on another occasion. I am very enthusiastic about the noble Lord's amendment. My amendment is intended better to equip today's young people to play a full and active part in the UK, particularly in their citizenship role.
Secondly, the amendment is intended to act as a further hedge against the possible consequences of foreign ownership. Should a global player take over a major part of our broadcasting industry, it would need a regulation requirement of this kind to avoid the temptation to produce nothing but homogenised programmes that were saleable world wide.
I thank the Minister for tabling so many amendments. We are all most grateful to him for having listened to the many concerns about the wording of the clause and its subsections. I am therefore sure that he will be able to reassure me that his Amendments Nos. 127 and 130, I think, will meet the concerns on this point that many people have voiced to me.
6.30 p.m.
The Lord Bishop of Manchester: My Lords, in speaking to my Amendment No. 129A I welcome most warmly government Amendment No. 129. I am very grateful to the Government for listening carefully to the views that have been expressed from these Benches and across the House about the importance of reflecting in broadcasting the significant place that religion and other beliefs have in our national life. Amendment No. 129 does in my view meet the aspirations of many people both within the Churches and in the population at large of whatever faith and none. Certainly there are many elderly or disabled and others who for various reasons are confined to their homes who will be especially grateful for the emphasis on the broadcasting of worship.
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Amendment No. 133 is an interesting definition of "belief", not least because it repeats as part of its definition the very word it seeks to define—an echo perhaps of what I think was Sydney Smith's much quoted answer to the question about the functions of an archdeacon:
"an archdeacon is one who performs archidiaconal functions".
I take Amendment No. 133 to be an entirely appropriate attempt at an umbrella definition. In that sense it meets the need adequately. What Christians mean by belief is quite different, for example, from what Jews mean by belief. Each faith, or non-faith, sees things differently and poses different sets of questions. So as far as these Benches are concerned we are willing to back this definition of belief. As a distinguished theologian with whom I shared my views and sought his put it:
"I should have thought that if you were to support this amendment you would be standing on a not uncertain wicket".
Amendment No. 129A in my name and that of the noble Lord, Lord Phillips of Sudbury, makes what I hope will be seen as a benign drafting point in relation to government Amendment No. 129. I think that it is the Government's intention that news and other information about different religions and other beliefs should include discussion programmes. I am sure your Lordships would agree that intelligent engagement and dialogue is particularly important in areas of religion and belief, not least because it is often the most effective way of building up tolerance and respect between people of differing viewpoints, and thereby encouraging greater harmony and understanding on these fundamental issues within local communities. It is a point which in a different way the noble Lord, Lord Puttnam, has recently made in relation to an earlier amendment.
So I hope that, at least by specific mention in the record of this debate, the desirability of such positive exchange in discussion—being as it were a genre within the programmes dealing with religion and other beliefs—will be affirmed by the Government.
Baroness Whitaker: My Lords, I rise very briefly to support all these amendments. They seem to me to be an extremely worthy group. I should particularly like to welcome my noble friend's amendments and Amendment No. 129A in the name of the right reverend Prelate the Bishop of Manchester and the noble Lord, Lord Phillips of Sudbury. They all seem to me to strike exactly the right balance for a modern, tolerant and civilised democracy.
Lord Holme of Cheltenham: My Lords, I rise briefly to comment on Amendment No. 124A and on the government amendments to do with the definition of belief, including Amendment No. 133. I very warmly support the aspirations of Amendment No. 124A. I think that drama—and I choose my words carefully—is the jewel in the crown of broadcast television. We need it, and it is one of the things that we do best in this country.

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If I can be marginally pedantic, perhaps I may say that I was not sure in the amendment as drafted about the notion that drama covers a range of issues. I recognise the place that "Cathy Come Home" has in that tradition of issue-based drama, but does all drama have to have an issue? Can it not be the product of imagination and not simply of issues? Does every drama have to have a helpline attached at the end of it? Is Brideshead Revisited about student homosexuality or interfaith marriages? Is "King Lear" about care in the community for ageing monarchs? I am not at all sure that the movers of the amendment have not slightly constricted themselves. Perhaps if the word "imagination" found its way in there as well as "issues" it would improve the amendment. But that is not to say that it detracts in any way from my support for it.
In the same mood of pedantry I shall move on, if I may, to Amendment No. 133 in particular. I was impressed by how easily pleased the right reverend Prelate was with this definition, which seems to me extremely tricky. I am not saying that I for one could do any better. I think that it is a matter that has vexed philosophers down the ages. However, there are certain problems with this definition in terms of Ofcom, which has to make it work. First, are all "beliefs" equal? I imagine that at one time the Government considered using the word "faith" rather than -belief', but they have come up with belief in the end. I think that "a not uncertain wicket" probably is not what our Lord had in mind when he talked about St Peter as a rock. I think that a "not uncertain wicket" is probably slightly different from the rock of faith which sustains most religions.
I think that the Government have problems, for example, in contrasting within the definition of belief a systemised set,
"of ethical or philosophical principles",
on the one hand,
"or of mystical or transcendental doctrines",
on the other. Certainly Christianity, Islam and Hinduism combine those so that—in this mood of pedantry—the amendment at least should read, "and/or of mystical or transcendental doctrines", which would describe most of the major faiths.
More practically, rather than picking at this very difficult piece of drafting, how far does this extend? Would the so-called Church of Scientology now be able to apply for judicial review if it did not receive proper coverage from public service broadcasters? My observation is that the smaller the number of people who adhere to the so-called systemised system of beliefs, the more intense is their fervency. It seems to me that if the Government are not very careful they are going to make it extremely difficult for Ofcom to distinguish between the major faiths which we would all like to see receive adequate coverage in the way that the right reverend Prelate described and the more
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marginal and very significantly minority views which would nevertheless claim to have codified their views in one way or another.
Lord Bragg: My Lords, I should like to support my noble friend the Minister in his amendments which I think are very welcome and very well thought through. I should also like to support the right reverend Prelate the Bishop of Manchester with regard to his remarks about religious programmes. Those of us who make them find them extremely difficult to make. They are extraordinarily valuable. They reach out across the community in ways that no other programmes do. It is very welcome indeed to have the Bill reinforce them.
In this supportive mood, I should finally like to support the noble Lord, Lord Lea of Crondall. However, I should like to extend his definition which provides,
"that sufficient high quality original drama is broadcast covering a range of issues in a variety of formats".
Why does that not apply to the arts, sciences, politics, documentaries and nature programmes which are often more distinctly for British public service broadcasting across the four channels than is drama? I know that this is a quixotic request and that the time is late. I am not going to press it. I nevertheless thought it worth burying in Hansard. Who knows, one day it could be excavated.
Baroness McIntosh of Hudnall: My Lords, I rise simply to support with great pleasure the amendment moved by my noble friend Lord Lea of Crondall. Having spent most of my life working in and around drama I find it enormously encouraging to see it put forward as an issue itself. It would also be particularly nice to imagine a future in which less of the drama that appeared on television involved police uniforms and white coats. Perhaps we were looking at a slightly wider range.
Viscount Falkland: My Lords, I am prompted to rise—and I had not intended to—to speak to the amendment of the noble Lord, Lord Lea of Crondall, Amendment No. 24A, concerning original theatre. Over the weekend, I was sitting in my car and I heard a radio broadcast by the celebrated actor, Tim Piggott-Smith. As many of your Lordships will recall, he was one of the stars of "A Jewel In The Crown". He spoke interestingly about his life in the theatre, but I was interested particularly in a remark that he made towards the end of that broadcast that is relevant to this amendment. He said that he thought that legitimate theatre in this country had shifted over the past 20 years slightly away from the centre of our culture. That rang a bell with me. As an impressionable young man, I worked for a theatrical agent and went around the country to repertory companies. At that time, theatre and drama were available to a much wider range of people. Nowadays, West End theatre relies increasingly on celebrities and star performers to draw audiences. Admittedly, there is interesting work going on in fringe theatre, but this amendment is absolutely correct. Television drama,

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which reaches large audiences, can explore areas which perhaps legitimate theatre is finding more difficult to address. It is important that that fact should be given recognition in the way that is suggested by the amendment of the noble Lord. I have no disagreement. I cannot follow my noble friend Lord Holme of Cheltenham on the drafting of it. "Issues" perhaps has some connotations which might be worrying, but I cannot think of a better word myself, so I shall not criticise it.
Lord Phillips of Sudbury: My Lords, perhaps I may speak to Amendment No. 133E. It is in this group, but it has so far been orphaned. I am not surprised, because it seems to be ill-grouped. However, it is there and unless someone speaks to it now, it will be lost.
The amendment would toughen up Clause 266, which is the enforcement clause in the Bill. That is a vital clause because, frankly, all of the laboured and intense discussion that we have had over many days, including the one just now about the content of Clause 260, which relates to public service broadcasting standards and the purposes of public broadcasting, would come to nought if Ofcom has such feeble powers to uphold those standards as to be, so to speak, honoured in the breach.
As it stands, Clause 266(1) states that if Ofcom is of the opinion that a licensed public service provider has failed to meet the requirements of Clauses 260 or 261, no action can be taken unless—and this is the rub—
"Ofcom are of the opinion that the failure of the provider is serious"—
well, fair enough—
"and is not excused by economic or market conditions".
Many Members of this House are of the view that that excuse does so much to weaken the enforcement test that it should be taken out. Ofcom has to be of the opinion that the provider has failed; it has to be a serious failure; and that is enough. As I have said on previous occasions, it is a little like saying that in future shoplifting will not matter if the person who has done it is hard-up on the day.
A further point to which I wish to draw your Lordships' attention is that Clause 266(3) states that even if Ofcom is of the opinion that the failure of the provider is serious, it still cannot proceed unless it has regard to a number of further factors, one of which is,
"general economic and market conditions affecting generally the providers of television programme services".
So, at any event, it is there later on in the clause. I wonder what power Ofcom will ever have to make sense of the key cause, Clause 260, if those words are not removed.
In closing, I ask a pregnant question. The enforcement clause begins by saying:
"This section applies if OFCOM are of the opinion that the provider … has failed",
but can Ofcom come to that opinion at any time, or is it implied that the decision must be taken during one of the five-yearly reviews provided for in Clause 260? I sincerely hope that the Minister will say that Ofcom
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can come to such an opinion at any time. Otherwise, again, the whole mechanism vis-à-vis enforcement will be altogether too feeble.
6.45 p.m.
Lord Lipsey: My Lords, I rise in response to the noble Lord, Lord Phillips of Sudbury. I understand why he is concerned about the economic tests, but they seem to offer a sensible flexibility for Ofcom. We may be entering a world in which ITV will be a much less economically healthy organisation, although I hope that that is not true. Inevitably, that would affect its ability to pay its way—which it must do—and also its ability to meet its public service obligations. If we are to future-proof the Bill, Ofcom must be able to make allowances of some kind for that. The Bill as drafted allows for that, but the amendment would not assist with it.
Lord Phillips of Sudbury: My Lords, before the noble Lord, Lord Lipsey, sits down, will he not concede that there is already a second provision, which I just read out? There is a double provision, so the first reference is not needed.
Lord Lipsey: My Lords, it may be otiose, but I would prefer to have belt and braces than neither.
Baroness Buscombe: My Lords, I rise briefly to welcome the government amendments. I also strongly support Amendment No. 124A. which was moved by the noble Lord, Lord Lea of Crondall. It is hugely important to include high quality drama in the public service remit, although I question the point raised by the noble Lord, Lord Bragg, when he said, "Why should we stop with drama? What about arts and science?" The noble Lord, Lord Bragg, even mentioned politics, God forbid. It is certainly a good amendment and I hope that the Government accept it.
I also have a lot of sympathy for the amendments proposed by the right reverend Prelate the Bishop of Manchester. Although I accept some of what the noble Lord, Lord Holme of Cheltenham, said—such as his concern about the definition of "beliefs", which does present a problem—the spirit behind the amendment is tremendously important. The more that young people can be exposed to programmes containing discussion of different religions and beliefs, the more we support practical ways of breaking down barriers, so it is hugely helpful.
I am also very grateful to the noble Baroness, Lady Howe of Idlicote, for clarifying the intention behind Amendment No. 131, about which, as the noble Baroness quite rightly said, I was concerned in Committee. Now that I understand that the amendment would encourage original programmes for children and young people that have a high content of the United Kingdom's history, culture and tradition, I entirely support what the noble Baroness is trying to achieve.
Lord McIntosh of Haringey: My Lords, I respond to the non-government amendments in this group. First,

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we have some difficulties with the wording of Amendment No.124A, including those mentioned by the noble Lord, Lord Holme of Cheltenham. However, I gladly invite everyone who put their names to the amendment—indeed, anyone who has spoken on the subject—to talk to me between now and Third Reading to see whether any progress can be made.
Amendment No. 129A, in the names of the right reverend Prelate the Bishop of Manchester and the noble Lord, Lord Phillips of Sudbury, would amend the wording of our amendment to include a specific provision for discussion of different religions and beliefs. I can give an absolute assurance or an unqualified undertaking—I could use any of the appropriate phrases in such circumstances—that the provision of news and information, which is in our amendments, can encompass discussion, for example, by way of analysis and the presentation of different perspectives and points of view. The same could go for programmes about the history of different religions and other beliefs. So the additional wording proposed by Amendment No. 129A is unnecessary. I liked the example, on the definition issue, given by the right reverend Prelate the Bishop of Manchester involving Sydney Smith. My favourite definition is from Ernest Bevin, who said that socialism is the policy of the Labour Party at any one time.
Lord Lea of Crondall: My Lords, the Labour government.
Lord McIntosh of Haringey: Thank you, my Lords. I rely on a trade unionist to correct me on these matters.
Amendment No. 131, the amendment of the noble Baroness, Lady Howe, also relates to programming for children and young people. It would specify that a significant proportion of such programming should be intended for audiences in the United Kingdom. In Committee we were of the view that the amendment was not necessary, and we are still of that view. The obligations for broadcasters to provide programmes for children and young people which are both high quality and original will in themselves be sufficient to ensure that such programmes appeal to the tastes and interests of the relevant audiences within the UK.
We acknowledge the unique importance of programmes for children and young people. That is why we tabled Amendment No. 130, which requires broadcasters to provide a suitable quantity and range of high quality and original children's programmes. In those circumstances, we believe that there is no case for Amendment No. 131. I hope that the noble Baroness agrees that it has been overtaken by the government amendment.
Amendment No. 133E is interesting. I was glad that the noble Lord, Lord Phillips, explained it. The answer was given by the noble Lord, Lord Lipsey. Clearly, not all broadcasters will be financially healthy and there may be circumstances in which, if they are on the point of going bust, one relaxes the rules for a short while until they can recover afterwards. That is rather like the difficulty that the Strategic Rail Authority has with certain train operating companies. It may be desirable
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to close them down, as happened recently, or to bail them out. One cannot lay down cases in advance. In the Bill we have allowed the option for Ofcom to temper the wind to the shorn lamb under certain circumstances. However, the circumstances will be determined by Ofcom. I am sure that Ofcom will riot wish to see that as a general let-out from the obligations on broadcasters.
Lord Phillips of Sudbury: My Lords, does the Minister believe that lawyers and some television companies will see this as a marvellous weapon with which to bash Ofcom if it tries to exercise any of its disciplinary powers? That is my fear.
Lord McIntosh of Haringey: My Lords, I do not see how they can when it is specifically stated that Ofcom is of the opinion; it is its judgment that is provided for in the Bill. Lawyers would have to prove that it was not of the opinion, which I believe would be rather difficult.
On the noble Lord's point about waiting for a five-year review before taking action, I can assure him on that. Where a report has been made under Clause 260, that will help Ofcom to formulate its views on enforcement under Clause 266. However, there is nothing to require such a report before action is taken. In other words, the enforcement procedure laid down in Clause 266 relating to the obligations under Clause 260 is pretty fierce. I hope that I have responded to the non-government amendments.
Lord Lea of Crondall: My Lords, I thank all the distinguished contributors who commented on Amendment No. 124A. The noble Lords, Lord Holme of Cheltenham and Lord Bragg, the noble Baronesses, Lady McIntosh of Hudnall, Lady Whitaker and Lady Buscombe, and the noble Viscount, Lord Falkland, were all in support. I thank the Minister for his ready agreement to the fact that there could be some issues to tease out at a meeting to see whether we can make progress.
I cannot resist the temptation to respond very quickly to the intriguing point made by the noble Lord, Lord Holme of Cheltenham. He asked what the issues were in, for example, Brideshead Revisited. I was trying to work that out. What are the issues in Hamlet? Well, existentialism, obviously. What are the issues in Waiting for Godot? I believe that the play begins with the line, "Nothing to be done". Is not the answer to what the issues are that we do not know what they are, and that that is the nature of the drama? I do not know whether the noble Lord asked a rhetorical question and whether I am doing OK in trying to respond, or whether another sort of question was involved. In that spirit of pedantry, I believe that there may be a question about how we address this conundrum of words.
My noble friend Lord Bragg put his finger on another important question. We should avoid going into a great litany—we did that earlier in the Bill—and stating that broadcasting must cover everything in Rogets Thesaurus. We want somehow to give a very

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strong message, which Ofcom somehow cannot ignore. As the noble Baroness, Lady Buscombe, said, that is the point.
In conclusion, I welcome the Minister's response to Amendment No. 130 and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Holme of Cheltenham Lord Holme of Cheltenham moved Amendment No. 125:
Page 231, line 20, after "facilitating" insert "civic understanding and"
The noble Lord said: My Lords, in Committee I moved an amendment with a similar intention to that in this amendment and Amendment No. 126. The intention was and is that whatever else public service broadcasting is or is not taken to mean, it includes beyond peradventure proper coverage of Parliament. On that occasion, despite support from every quarter of the Chamber, and with no one dissenting—I am grateful to the noble Baroness, Lady Howe, for confirming that she then supported and still supports the spirit of the amendments—I regret to say that I received a rather dusty answer from the then Minister, the noble Baroness, Lady Blackstone. To some extent, that was probably my fault for having put the amendment in the wrong place. I am sorry about that but I have now remedied the matter and the amendments are now in the right place.
It is essential to a healthy democracy that citizens understand their institutions. Repeated opinion polls in this country, on which the noble Lord, Lord McIntosh, is deeply expert, show that they do not understand their public institutions. Despite good work by many individual editors and reporters at the BBC and other public service broadcasters, there is a deep deficit in understanding of Parliament in particular. That is no doubt partly our own fault and we should see what we can do to make ourselves more understandable. However, it is also due in no small measure to a culture of entertainment and sensationalism in relation to public life—tabloid values, if you will—which pervades too much of news and current affairs, which are referred to in these provisions. There is what sometimes seems to be a fairground mentality which takes our shared democratic decision-making in Parliament and reflects it through distorting mirrors to play to that showbiz culture. I am afraid that that tone is often set from the top of the broadcasting organisations.
I am well aware of the need not to overload Ofcom but my aim in this regard is much humbler. I seek a definitive recognition in the Bill that Her Majesty's Government believe that the proper reporting of Parliament and other elected bodies is part of the news and current affairs coverage referred to in Clause 261(3)(c). It is important for our civic understanding and democratic future that that should be so. I beg to move.
7 p.m.
Lord Peyton of Yeovil: My Lords, I should like to express my warm agreement with what the noble Lord, Lord Holme of Cheltenham, said. This is not a disguised plea for kinder or fairer treatment of individual politicians. They, for better or worse, will remain fair game, whatever we say. It is a plea on behalf of the manmade institution of Parliament. If people are not told about it, have no information about it or only minimal information, accompanied by generous doses of derision, Parliament will not survive. Unhappily for the media, if they are to remain free, the only certainty they have is that there is a free Parliament in existence.
I would be in favour of keeping this Bill within manageable proportions, even though it started fairly gross. However, the noble Lord, Lord Holme, was absolutely right in requiring some acknowledgement by the Government that it is important that the media should understand and recognise that, without fair ventilation, the institutions which are important to civilised life will have little chance of survival.
There is no need for me to prolong these remarks, but I share the hope of the noble Lord, Lord Holme, that the same representations, which received a rather abrupt dismissal by the noble Baroness, Lady Blackstone, at an earlier stage, will be treated more kindly, more understandingly, more generously and more wisely by the noble Lord, Lord McIntosh, who is more than capable of doing so.
Lord Fowler: My Lords, I should like to support what the noble Lords, Lord Holme of Cheltenham and Lord Peyton of Yeovil, have said. What the noble Lord, Lord Holme, said—that citizens should understand their institutions—goes to the heart of this amendment.
What has not been mentioned in quite such detail, however, is that there is absolutely no question but that the reporting of Parliament has steadily, year by year, gone down the scale of media priorities. When I joined The Times in the 1960s, we had a trained staff of seven or eight trained shorthand writers, all of whom could do incredible shorthand speeds of over 200 words per minute. We had two pages devoted to Parliament and were reporting Parliament absolutely straight—reporting what Members of Parliament or noble Lords had actually said. The same kinds of standards were also applied by the broadcasting organisations. Issues were reported fully and the reporting of the proceedings of Parliament was heard in programmes at peak times or in adjoining programmes to which people would listen.
We have therefore come a long way down the scale over the past years. The sketch writers now seem to reign supreme. If there is a Budget Statement or a debate on fox-hunting or something of that kind, then there is straight reporting. Often, however, it is to try to get some amusement out of the proceedings of Parliament. Straight reporting of what is taking place in Parliament is a very low priority, and that is a very great pity.

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This is an amendment to a clause on public service broadcasting. The clause itself requires a comprehensive and authoritative coverage of news and current affairs. I think that is right. One of the great things about organisations like the BBC is that that can be provided. What these amendments also require, however, is that the coverage and the reporting of Parliament and other legislatures should be on the face of the Bill. That would be a very sensible step forward and I therefore totally support what the noble Lord, Lord Holme, has said.
Lord Phillips of Sudbury: My Lords, 1 rise briefly to make sure that, in his response, the Minister does not say that the clause concerned, Clause 260(6)(c), already deals with the matter. I suspect that he may.
The amendment would make the clause read that the,
"services (taken together) provide … for Facilitating civic understanding and fair and well-informed debate".
There is a difference between civic understanding and fair and well-informed debate. The former is wider than the latter, and it is very important that one does not simply rely on the British adversarial tradition of debate.
My other point, which I make briefly but I hope relevantly, is that the Government themselves introduced citizenship education into the curriculum last autumn. I very much hope that they accept this amendment, because it directly underpins that very important initiative.
Lord Bridges: My Lords, I have great sympathy with this amendment. It seems to me to be an object that we should all pursue. I do see some difficulty with it, however.
We would clearly regard it as wholly inappropriate to lay down any guidelines for what the printed press say about proceedings in Parliament. That would seem to infringe upon censorship and would be deeply unpalatable to all our traditions. Why is it, therefore, that we are prepared to lay down quite clear guidelines for the television world?
There needs to be some clarity of thought here. The only conclusion I would draw is that what we say to the world of television must be in the form of exhortation and general principles but not of statutory enforcement.
Lord McNally: My Lords, I take the point which has just been made by the noble Lord, Lord Bridges. However, I think that it is worth Parliament drawing the media's attention to the correlation between the apathy, cynicism and other maladies which affect our political system, and the fact that media coverage has moved away from factual reporting towards entertainment. One has only to look, as the noble Lord, Lord Fowler, has said, at the growth in the number of sketch writers and the almost total absence of any actual parliamentary reporting, even in the broadsheets.
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There is the paradox that we have the technology to have 200 television channels, but not one that can or wants to carry Parliament regularly. There is the parliamentary channel. However, that in itself has its dangers. I do not want to see politics driven into a safe ghetto of a parliamentary channel, which can be reached only by the few.
I return to an old theme and it is one of exhortation. Most of the BBC's political programmes are over 20 years old in concept. It recently had a major rethink in its political coverage, which resulted in some presenters appearing not wearing ties and one programme for young people, which it is about to abandon.
I believe that much more effort could be made to cover politics seriously, particularly the working of this Parliament—if only for the benefit of journalists themselves. I receive a number of telephone calls from political journalists, who clearly do not know how this place works. It could certainly benefit them.
There is an obsession with viewing figures. One cannot run a programme that has only 800,000 viewers, although that is probably more than Gladstone addressed in his whole political life. I believe that much is still worth saying to the media about their responsibilities in making democracy work. There is more need for civic education—an idea pioneered by both my noble friends Lord Holme and Lord Phillips. There has been a tendency within the United Kingdom to think that somehow belief in democracy and democratic institutions come with one's mother's milk. That is a complacent attitude. Democracy needs democrats in order to work, and we need a great deal of help in creating those democrats.
Baroness Howe of Idlicote: My Lords, I rather disagree with my noble friend Lord Bridges but very much agree with what the noble Lord, Lord McNally, said. First, we must not forget that we are regulating a system—the broadcasting system—to which approximately 70 per cent of those who receive information go for that information. Secondly, one knows that a certain slant comes with the information in newspapers. Impartiality, which is important, certainly does not preclude new concepts relating to the things that we regard as so important—the broadcasting of Parliament and the fact that we need to get over to the rising generation the importance of such institutions in upholding democracy and so on. Therefore, I very much agree with the noble Lord's amendment. I hope very much, too, that the Minister will take it to heart.
Lord Norton of Louth: My Lords, I add my support for Amendment No. 126. I believe that a very special case is to be made for it. We must remember that Parliament, as an institution, is unique. It is the core institution at the heart of our political system. It is the means through which people speak authoritatively to government and the means through which government seek to regulate the activities of citizens. Therefore, it is distinguishable from all other institutions. For that reason it deserves particular treatment in terms of

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coverage. That does not necessarily equate with supportive coverage. I believe that it is possible to provide objective and fair coverage of proceedings. I think of BBC radio's "Today in Parliament" programme as demonstrating what is possible.
Therefore, I regard the amendment as extremely important. But, although I regard it as necessary, it is not sufficient. It is necessary in the context of this clause. I do not consider it to be sufficient, but I believe that sufficient conditions must then be provided by Parliament itself in demonstrating its relevance, making it appropriate and attracting those outside to show that it is able to deliver. The mass media are a means through which we are able to show that. Therefore, I believe that Parliament deserves special treatment. I strongly support the amendment.
Baroness Buscombe: My Lords, I support Amendments Nos. 125 and 126, to which my name is added. While I am reluctant to be too prescriptive as to what precisely is required in order to fulfil the public service remit, ensuring that there is sufficient coverage of the proceedings of Parliament and of the other elected legislatures in the United Kingdom is a very important aspect of public service broadcasting. The broadcasts provide a primary means by which the electorate educate themselves in the process of government and the legislature, and it is vital for the successful functioning of a democracy that the electorate are well informed.
I am particularly keen on the words "civic understanding", and here I think especially of young people. I agree entirely with all that the noble Lord, Lord McNally, said about the BBC's programming in relation to Parliament and politics. Much of the format is so old-fashioned that it is a turn-off for most young people. I hope that the Government will accept the amendments so that this matter can be treated as something of a priority.
One of the upsides today is that young people are not prepared to mark their cross or tick the box unless they feel that they understand the issues. That must be a good thing. They are far more questioning; they do not take anything for granted; and they do not vote just as their parents did. However, they are not prepared to vote or to take part in the democratic process unless they are comfortable that they understand the issues. We must all encourage broadcasters to respond. They have a very powerful platform from which they can assist in encouraging young people to become involved in the democratic process and in showing in a good light the many ways in which Parliament and, indeed, all other forms of parliament—local government, too—contribute to a civic society. Therefore, I hope that the Minister will be able to accept the amendments and, in particular, the one relating to civic understanding because it is all-encompassing.
7.15 p.m.
Lord Evans of Temple Guiting: My Lords, one of the requirements under the public service television remit
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is that broadcasters must provide comprehensive and authoritative coverage of news and current affairs and that they must do so to the extent that is appropriate for facilitating fair and well-informed debate on news and current affairs.
Amendment No. 125 would make the facilitating of "civic understanding" a further objective of the news and current affairs requirement. Taking civic understanding to mean an awareness of the processes of government and politics at all levels seems an entirely proper consideration for public service broadcasters to have in mind. We are therefore very happy to accept the amendment.
Noble Lords: Hear, hear!
Lord Evans of Temple Guiting: My Lords, that is the good news. We have more difficulty with Amendment No. 126. This would require that, in addition to the news and current affairs obligations, broadcasters must provide comprehensive and authoritative coverage of Parliament and other UK legislatures.
The BBC agreement does, indeed, include an obligation on the corporation to broadcast an impartial daily account of proceedings in both Houses of Parliament. BBC Parliament offers daily, very full coverage of Westminster and the regional parliaments and assemblies. The noble Lord, Lord McNally, may not like what he sees, but that is the reality. Parliament is shown every day on BBC Parliament. The BBC also provides extensive television coverage of major parliamentary debates on BBC News 24, daily news bulletins and programmes such as "Newsnight". It also offers coverage of parliamentary debates on radio and online on BBCi.
That said, we do not believe that it would be right to include coverage of Parliament or other UK legislatures within the public service television remit and thereby impose it as a specific obligation across the whole public service broadcasting sector. All the public service broadcasters have obligations in respect of news and current affairs in both the tier 2 and tier 3 contexts.
At tier 2 the broadcasters will be subject to specific quotas for news and current affairs programming while, at tier 3, news and current affairs coverage is, as I said, an aspect of the overall public service remit. Fulfilment of those obligations must, in the nature of things, involve attention to the work of Parliament and other legislative bodies. That will be reinforced, at the tier 3 level, by the inclusion of the reference to civic understanding, to which we have agreed.
However, we cannot see our way to accepting that coverage of Parliament should become a direct obligation on broadcasters other than the BBC. Our overall approach to the regulation of public service broadcasting involves a spectrum of obligations, with the BBC at one end and Channel 5 at the other. Within that framework, a specific requirement to provide parliamentary coverage would seem to us an unduly heavyweight obligation to apply to the public service sector as a whole.

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To summarise, we are very willing to accept Amendment No. 125, and hope that this will be taken as clear evidence that the Government understand and have sympathy for the concerns raised in this very interesting debate. But we are not persuaded that the proposal embodied in Amendment No. 126 would be a sensible way forward. I hope that the amendment will not be pressed.
Lord Holme of Cheltenham: My Lords, I thank the Minister for that reply, which, in terms of Amendment No. 125, is extremely welcome. I am grateful for the graceful and ready way in which the Government have accepted the inclusion of the words "civic understanding". I am not entirely confident that the way in which the noble Lord chose to define civic understanding as automatically implying the coverage of Parliament which Amendment No. 126 seeks would stand up. However, I shall read his remarks most carefully.
I am most grateful to the noble Lords, Lord Peyton and Lord Fowler, the noble Baroness, Lady Howe, the noble Lord, Lord Norton, the noble Baroness, Lady Buscombe, and my noble friends Lord Phillips and Lord McNally for their contributions. I believe that the House would care to remember the point raised by the noble Baroness, Lady Buscombe; namely, that young people are keenly interested in issues. All the polling evidence to which I referred earlier shows that they are well informed and concerned about contemporary issues. The total disconnect arises because they do not connect those issues to the Palace of Westminster, and the work that we do at both ends of the palace. There is only a small connection. Broadcasters need to be sensitive to that problem.
The noble Lord, Lord Bridges, voiced interesting dissent. I should not advance these amendments were it not for the fact that we were talking not about broadcasting but about the public service obligations of broadcasters. I can conceive of no more central public good than that people understand their democratic institutions.
We shall study carefully what the Minister said. We welcome the concession on Amendment No. 125. I reserve my position for a later stage. I commend Amendment No. 125.
On Question, amendment agreed to.
[Amendment No. 126 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 127 and 128:
Page 231, line 28, at end insert ", of programmes of an educational nature and of other programmes of educative value"
Page 231, line 31, after "religion" insert "and other beliefs"
On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 129:
Page 231, line 32, at end insert—
"() that the programmes included in those services that deal with religion and other beliefs include—

(i) programmes providing news and other information about different religions and other beliefs;

(ii) programmes about the history of different religions and other beliefs; and

(iii) programmes showing acts of worship and other ceremonies and practices (including some showing acts of worship and other ceremonies in their entirety);"

The noble Lord said: My Lords, I beg to move.
[Amendment No. 129A, as an amendment to Amendment No. 129, not moved.]
On Question, Amendment No. 129 agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 130:
Page 231, line 34, after "quantity" insert "and range'"
On Question, amendment agreed to.
[Amendment No. 131 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 132 and 133:
Page 232, line 19, leave out from beginning to second "and" and insert "the BBC Charter and Agreement"
Page 232, line 38, at end insert—
"() In this section "belief means a collective belief in, or other adherence to, a systemised set of ethical or philosophical principles or of mystical or transcendental doctrines."
On Question, amendments agreed to.
Clause 261 [Public service remits of licensed providers]:
Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 133A:
Page 232, line 40, at beginning insert "In addition to the requirements of section 260,"
The noble Lord said: My Lords, I bring before the House another gritty amendment. Again, it deals with the relationship between Clause 260, the public service remit for television, and Clause 261, public service remits of licensed providers. As I understand it, the full public service broadcasting remit is to be found in Clauses 260 and 261. Clause 260 is the overall public service broadcasting remit. Clause 261 is the individual remit for the licensed broadcasters referred to in it.
In Committee, at col. 1174 of the Official Report of 3rd June, I asked this question of the Minister, the noble Lord, Lord McIntosh of Haringey:
"Do I summarise fairly the Minister's proposition by saying that the provisions of Clause 261 are in addition to the provisions of Clause 260; that is, that where one refers to Channel 3, Channel 4 or Channel 5 services, all of the provisions of Clause 260 will apply to those channels notwithstanding the provisions of Clause 261?"
The noble Lord, Lord McIntosh of Haringey, replied with his usual direct succinctness:
"That is correct".
It is in pursuance of that that I put forward the amendment, which puts clearly and unequivocally on the face of the Bill for the poor devils hereafter who must construe this gargantuan and Byzantine piece of legislation that the Clause 261 remit is in addition to the general overall remit of Clause 260. It is a helpful amendment. I believe that the two amendments grouped with it are in the same spirit and to the same effect. I beg to move.
Lord McIntosh of Haringey: My Lords, I understand the motives that lead the noble Lord again to bring forward the issue. I shall reply but in more than three words because it is important to have on the record the relationship between Clauses 260 and 261.
Amendment No. 133A would add to Clause 261 a statement that the conditions imposing individual public service remits for Channels 3, 4 and 5 set out in that clause apply "in addition" to the overall public service remit in Clause 260. Amendments Nos. 133C and 133D would add to the public service remit for Channels 3, 4 and 5 by providing that the requirements to provide high quality and diverse programming would be applied,
"in accordance with the standards as set out in Clause 260"—
in other words, the requirements of the overall public service broadcasting remit.
The issue underlying all three amendments is the relationship between the overall public service broadcasting remit in Clause 260 and the individual remits applying to the licensed public service broadcasters under Clause 261. That is what the noble Lord has just said in effect. There is concern that the effect of the overall remit is weakened by what appear to be less stringent obligations under the terms of Clause 261. Again, that is what the noble Lord has just said. I hope that I reassure him that that concern is misplaced.
Clause 260 defines the overall remit for public service television broadcasting and applies to the BBC, the Welsh Authority, ITV, Channel 4, Channel 5 and the public teletext provider. It defines the purposes of public service broadcasting and will be used by Ofcom as the basis for its review and reporting function, which we have just been debating.
Clause 261 specifies public service remits for each of the individual licensed public service channel providers and for the public teletext provider. These remits constitute the programme quality obligations that broadcasters individually must satisfy, according to the terms of their individual remits, within the self-regulatory framework provided at tier 3.
Lord Crickhowell: My Lords, perhaps I may interrupt the noble Lord to raise a point that has been puzzling me. In the debate on 3rd June, in referring to Clause 260 and the questions that had been posed, he said:
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"it is not an obligation on broadcasters; it is a very detailed set of standards set out for Ofcom".
In the next column he said:
"Clause 260 is not just a set of words but standards that have to be adhered to, and if they are not adhered to Ofcom has a duty to take enforcement action".—[Official Report, 3/6/03; cols. 1172–3.]
What I am left uncertain about—and perhaps he can clarify—is which clause imposes obligations on Ofcom and which clauses impose obligations on the broadcasters. There is a contradiction between his two statements.
Lord McIntosh of Haringey: My Lords, perhaps the noble Lord, Lord Crickhowell, will allow me to develop the argument. I agree that it is a complex relationship, but I shall read out the rest of my text and I hope it will become clear. If not, a note from the Box will enable me to answer the noble Lord's question.
A licensed broadcaster cannot ignore Clause 260 just because it is a matter for self-regulation rather than a licence condition. Indeed, I think I have answered the noble Lord's question already. The fact that a matter mentioned in Clause 260 is not mentioned in Clause 261 does not mean that it is unenforceable. It is clear from Clause 266 that licensed broadcasters must each contribute to fulfilment of the overall remit or face Ofcom enforcement action under Clause 266. Ofcom can of course also take enforcement action under Clause 266 in the event of a licensed broadcaster failing to fulfil its own individual remit under Clause 261.
I would further emphasise that the full remit for each public service broadcaster comprises not only the tier 3 programme quality obligations but also the specific, objectively measurable tier 2 requirements; that is, when we are talking about percentages and regional obligations and so on. The combined effect of the tier 2 and tier 3 remits is to establish a spectrum of obligations across the public service sector, ranging from the BBC at one end to Channel 5 at the other. The BBC's remit is set out in the agreement and that of the Welsh Authority services in Schedule 12 to the Bill.
I hope that demonstrates why we cannot accept the amendment tabled by the noble Lord, Lord Phillips. It does not reflect the careful balance we have constructed between the overall public service remit in Clause 260 and the individual public service remit of each licensed broadcaster. That is because it implies that the overall public service remit falls to be treated as though it formed part of the licence conditions of each individual broadcaster. The same applies to Amendments Nos. 133C and 133D. That is not our intention; but, as I have explained, it does not mean either that the overall public service remit is unenforceable.
The relevant measure for each licensed broadcaster will be whether it has made an adequate contribution towards fulfilment of the public service broadcasting purposes and not whether broadcasters have individually satisfied those purposes.
I return to the point of the noble Lord, Lord Crickhowell. Clause 260 provides the requirement for the public service broadcasting sector

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as a whole; it does not apply directly to individual broadcasters. But the enforcement action can be taken against a broadcaster that fails to contribute to the fulfilment by the broadcasting sector as a whole of the Clause 260 remit.
Lord Phillips of Sudbury: My Lords, I am grateful to the Minister for that careful reply and to his civil servants. They have been extremely courteous and helpful in engaging with me on this difficult issue. I am particularly obliged for a letter written on 17th June, which to some extent the noble Lord has reiterated today.
I suppose that I feel a little sad that this issue cannot be made a little plainer in the language of the Bill. It is so esoteric. I have to say that the Bill as a whole strikes me ever more as being a bounty for my profession that it does not deserve. I understand what the Minister says. I am at least reassured by his affirmation of what he said on 3rd June that the provisions of Clause 261 are in addition to the general requirements of Clause 260. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 133 B had been withdrawn from the Marshalled List.]
[Amendments Nos. 133C and 133D not moved.]
Clause 266 [Enforcement of public service remits]:
[Amendment No. 133E not moved.]
Lord Evans of Temple Guiting: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage begin again not before 8.36 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Mental Health
7.36 p.m.
Lord Chanrose to ask Her Majesty's Government how they intend to implement the recommendations in the Department of Health report on mental health in ethnic communities, Inside, Outside.
The noble Lord said: My Lords, I am grateful for this opportunity to discuss the report on improving mental health services for black and ethnic minority communities in England, which was published in March this year. I also thank all noble Lords for participating tonight.
Your Lordships may consider me rather impatient as I asked a similar Starred Question of the Minister two months ago. In my defence, I was not expecting my request for this dinner-hour debate to be agreed to so soon after 28th April. But I must point out that Inside, Outside is the first report in 55 years of the NHS of a national approach taken to reduce and eliminate ethnic inequalities in mental health service experience and outcome for patients from black and ethnic minority groups in Britain.
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For 30 years before this important report, African-Caribbean people have been over-represented in our psychiatric hospitals. Although they make up less than 2 per cent of the British population, African-Caribbean people formed 25 to 40 per cent of the in-patient population. Their admission to hospital was two or three times more likely than white patients to be on a compulsory order and twice as likely to be under Section 136 of the Mental Health Act 1983. In addition, African-Caribbean people were twice as likely to have been admitted to hospital from prison and less likely to have been referred to psychiatric services by GPs. African-Caribbean young men were more likely to receive treatment in secure facilities. The admission rates for schizophrenia have been seven times the rate in men and 13 times for women in African-Caribbean communities.
The experience of Asian and Chinese communities in mental health services has been hindered by language and cultural barriers. Presentation of mental illness tends to be through physical symptoms such as loss of energy, poor appetite and dizziness. Whether these symptoms are determined by the stigma of mental illness among ethnic minority communities or by cultural factors has not been conclusively determined.
In that context, I am pleased to note that this report recommends that minority ethnic groups will not be excluded from any research unless there are very good reasons for such exclusion. There are financial implications of this recommendation, of course. Bilingual professionals who understand the culture and speak the same language as patients are needed to cross the cultural and linguistic divide. Suicide rates are also higher in young Asian women and among Irish-born people living in the United Kingdom compared with the majority population.
Against these experiences of black and minority ethnic people in Britain, mental health advocates have developed in these communities in order to argue for culturally appropriate services in mainstream mental health.
The Government's National Service Framework for Mental Health and the NHS Plan surprisingly have only limited references to black and minority ethnic patients. The NHS Plan identifies the need for crisis resolution services for acute mental illness among ethnic minority patients to be in place by this year—2003. It does not adequately address the particular needs of black and minority ethnic groups.
So how comprehensive is the new report, and will it fulfil its aim of improving mental health services for black and minority ethnic communities in England? First, the report acknowledges that problems experienced by minority ethnic groups within our mental health services may be worsening. It sets out to tackle ethnic inequalities within mental health services, including tackling racism and institutional discrimination within the services. That comprehensive approach is to be welcomed and fully supported.

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Secondly, extensive consultation has taken place among ethnic minority communities across England in the production of the report. That exemplar of best practice must be applauded and continued for other service issues. Thirdly, the document aims to set out proposals:
"for reforming the service experience and service outcome of people from black and minority ethnic groups who experience mental ill health and who come into contact with mental health services as users and carers".
That emphasis on mainstream services is absolutely correct.
However, fourthly, I am surprised that no emphasis has been placed on encouraging leadership commitment of clinicians and support services—especially as mental health services operate in a range of settings such as primary care, hospitals, the community and prison. The document states:
"it is essential to place progressive community based mental health at the centre of service development and delivery".
For that to become a reality, surely clinical leadership should be identified to implement that progressive objective. Therefore, would the Minister inform us of plans to develop clinical leadership in the care and support of black and minority ethnic patients in mental health services?
Fifthly, in primary care, the capacity of general practitioners to recognise psychiatric disorder in black and ethnic minority patients appears to be more limited than in others. That has not improved since 1996–97, when I conducted focus groups to listen to GPs in seven inner-city locations in England when I was director of the NHS Ethnic Health Unit.
As a result, all minority ethnic groups are more likely than white patients to be, to cite the report,
"misunderstood and misdiagnosed and more likely to be prescribed drugs and ECT (electro-convulsive therapy) rather than talking therapies such as psychotherapy and counselling".
Readmission rates are also higher among those diverse groups. I am pleased to note the report's suggested standards for all GPs to have training in cultural awareness, and for culture and mental health to become part of GP training. Can the Minister give details of the programme to train GPs and staff in the mainstream mental health services to provide a culturally competent service?
Sixthly, national service framework 7, on preventing suicide and reducing the national suicide rate by at least one fifth by 2010, makes the important observation that UK death certificates do not record ethnic data. That deficiency needs to be corrected. I therefore urge the Minister to encourage the Government to include the ethnic group of the deceased to replace place of birth in all UK death certificates to improve mortality data—particularly on suicides.
Seventhly, the report recommends the recognition and use of community development workers to improve the capacity of communities to support members with mental health needs. That is a long-awaited recognition of voluntary groups which have
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been developed over at least three decades among ethnic minority communities. But those workers need to be part of the mainstream mental health services if the scheme is not to be marginalised. Will the Minister therefore outline how community development workers will be integrated into mainstream mental health services?
My final question concerns plans to monitor and audit the implementation of the report. If that is to be through clinical governance, it would merit inclusion in the race equality schemes of NHS trusts and local authorities.
In conclusion, I commend the Government on publishing this highly significant report. It has the potential to fulfil the wishes of people, such as Geoff Thompson in Manchester, who work with young disaffected black men. He has identified high-quality mental healthcare as a means of helping those young men to rejoin society with a feeling of self-worth and well-being and to contribute positively to the local community. I look forward to hearing the Minister's response.
7.45 p.m.
Baroness Howells of St Davids: My Lords, it is often considered by some that any debate raising the concerns of minority groups is "political correctness". This topic concerns us all. That is why I am pleased to support the noble Lord, Lord Chan, by adding a few thoughts to this debate on the Department of Health's report on mental health in ethnic communities, Inside, Outside.
Let me begin by drawing attention to a report published by the Sainsbury Centre for Mental Health entitled, Breaking the Cycle of Fear. That report highlighted the client group as African and African-Caribbean. It explored circles of fear and identified impediments to change. The document referred to by the noble Lord, Lord Chan, Inside, Outside, addresses an identical list of findings and recommendations.
The report found that professional staff who worked in areas with significant populations of black people do not have opportunities to talk about their needs and concerns as professionals in working effectively with the client group. It also found that mental health services were re-enforcing the disadvantages of being black in this society.
The report found that the culturally sensitive organisations in the community were doing a much better job than the NHS, despite being poorly resourced. That lack of adequate funding prevented the groups from giving long-term care. That type of user community care has been a catalyst for promoting the best practice on offer, but voluntary groups need funding to provide the right structure for sustainability.
I could go on about the similarity between the recommendations, but that is not the point that I want to pursue. I want to draw the House's specific attention to the long-held belief in our community that we are the most researched group to date in the UK. Empirical data continue to be collected, with a

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significant lack of interest in implementing the findings and recommendations. I hope that the Minister can assure the House tonight that the recommendations in the report will be given due care and attention—with a view to implementation. Both reports contain recommendations for black mental health services.
The report recommends that that service should be delivered within a culturally appropriate environment. The agenda should be client-based to address the needs of parents, carers and other family. A strong partnership between statutory and voluntary agencies is needed. Services must be developed and rooted in the local community. Personal and professional staff development is a necessity. Patients must be treated as people with very defined needs. Those recommendations also form part of the National Health Service's own report. My question to the Minister is this: will anything be done to implement the recommendations, and if so, what?
I should like to turn to an area of deep concern to the black community, that of spirituality and mental health. Spirituality and mental health are more intertwined in the African-Caribbean community than in any other. There is now a growing body of evidence which suggests that the relationship between mental health patients and their religious and spiritual lives is very intertwined and that beneficial health outcomes can be derived from encouraging patients to share their beliefs. It can also bring about great benefit not only to the patient, but to those who listen to and care for them. Yet there seems to be a reluctance on the part of practitioners to engage with religion even though the patient may display a strong need for the solace of his or her religious beliefs.
Another point for consideration is that, because of society's perception of mentally ill people as dangerous, society's perception of black men as dangerous and the minority communities' fear of psychiatric services, the reaction between these competing attitudes is all-important in perpetuating the problems of service delivery. From the various reports, we are led to believe that those perceptions delay treatment and society suffers.
Could the Minister say what action, if any, has been taken to overcome the complex interactions between the perceptions of the patient and the service providers? These are areas of consistent concern and have been much researched, revealing a lack of non-pharmacological treatments, poor communication, low levels of involvement in treatment delivery, ignorance on the part of psychiatrists of any spiritual dimension to patients' problems and a general failure of services to acknowledge that racism is a factor in their illness.
I welcome the proposals in the NHS document. I urge the Government seriously to consider those proposals and to seek implementation.
7.52 p.m.
Baroness Finlay of Llandaff: My Lords, I am grateful to my noble friend Lord Chan for raising the
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issue of the mental health of those in minority communities. Both he and the noble Baroness, Lady Howells, have outlined the issues for black and ethnic minority groups and the importance of this report. My noble friend Lord Chan also mentioned the importance of further research to move forward the quality of care and to ensure that services meet needs.
I should like to widen the debate and go beyond the visible markers of race and the report itself, which addresses England. There are many important subtleties in the delivery of services to those whose first language is not English. The most stark examples come from members of the refugee population, many of whom have been deeply traumatised. Among them, the women are often culturally mistrustful of male professionals.
Language is for the communication of facts. It also communicates beliefs and expressions of value. But it is also for the communication of empathy and confidence. In the setting of a doctor's surgery or a hospital, patients feel anxious and therefore inhibited. That is a sad inevitability. Even the stammerer will have difficulty expressing himself and will communicate less fully than when relaxed. Anxiety makes people more tongue-tied, especially in their second language. So for all patients it is important that the setting is comfortable, quite apart from the language used.
Even when healthcare professionals have a few words of a patient's language, whatever that language may be, it can help to break down barriers. The patient feels that the doctor, nurse or other healthcare worker has some understanding of their culture and values and, therefore, of their needs. This topic is not about political correctness, as the noble Baroness, Lady Howells, emphasised. It is about the quality of care for all.
When my son came back from a placement in Hong Kong, as a keen cook he had learnt a few words of Cantonese to shop in the markets. As a medical student back on the hospital wards, he joined the morning ward rounds. One day a woman with no word of English had been admitted as an emergency. She looked frightened and so he stepped forward from behind the consultant and greeted her in Cantonese. She grabbed his hand and, with great relief, managed to communicate with him, and him with her. Her anxiety levels fell as she realised that, even with limited language, he had some understanding of her culture—he was communicating empathy and compassion, but I think probably remarkably little factual information.
In general medical illness, around 20 per cent of patients develop psychiatric illness. In women the rate is slightly higher than in men; in breast cancer patients it is probably because of all the body image and sexuality issues as well as the trauma of illness and treatment. Add to that issues of race and culture, along with the approach to sexuality within different racial groups, and one can see that quickly a problem can develop which demands great sensitivity.
In those with neurological or endocrine disease, the incidence of psychiatric illness is particularly high. Liaison psychiatry is crucial, but the service is

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currently woefully undermanned. Many ill patients feel most comfortable when communicating in their primary language. When delirium or dementia occur, the ability to communicate in a second language may be lost completely and patients retain only first-language skills learnt early in life. It is the language of their mothers, with which they were comforted, that they retain. There are case reports of patients who were severely depressed and became mute, unable to communicate in their second language. As their depression lifted, their communication skills in English returned.
I should like briefly to turn to the Welsh dimension. There are many living outside Wales whose first language was Welsh. Many spoke only Welsh until the age of five when brought up in bilingual families; a few were raised in monoglot families and did not use English until much later, in their education. In Wales it is often said: "English for intelligibility, Welsh for identity". Until the mid-1880s, around 90 per cent of those living in Wales spoke or understood Welsh—the history and culture is integrally linked to language. Today there are around 3,000 Welsh speakers but, interestingly, S4C, the Welsh language TV channel, has total viewing figures of 900,000, which shows that there are many in England who watch Welsh language television.
There are many ethnic minorities living in the UK who are not identified by racial or other groups. I used the Welsh as a specific example whose needs must not be overlooked, but the same applies to those from eastern European backgrounds and so forth. Only today I heard from a psychiatrist of a patient whose language is French. He was looking for a psychiatrist sufficiently fluent in French to speak to the patient. Despite not being a psychiatrist, I volunteered to help out as my knowledge of the French language is not too bad.
So whenever there is a consideration of communication with those with psychiatric needs who are traumatised by life events or otherwise disturbed secondary to systemic illness, care must be culturally sensitive. It is as if a louvred window can open when empathy is expressed in the patient's own language, recognising the culture with which they are familiar. Thus communication can come through to those in need.
The report makes some important recommendations which could potentially improve the care of all patients and raise the quality of care right across the board. I hope that the Department of Health will take them very seriously because we could see improvements in care for all, not only for those in the black and ethnic minority communities specifically identified in the report.
8 p.m.
Lord Alderdice: My Lords, I am grateful to the noble Lord, Lord Chan, for introducing the debate. He does not need to apologise for his remarkable success in achieving it.
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I might be thought to have a particular interest in this subject, both as a psychiatrist and as an Irishman, because on a number of occasions in the report my ethnic minority is mentioned as having difficulties in this area, particularly in regard to suicide and the diagnosis of alcoholism.
In my part of the world, the whole notion of people being discriminated against is more often regarded as sectarianism, whereas both here and in the United States it is regarded more often as racism. It is an issue that has been of substantial interest to me for a long time. It is not easy to deal with. Whether in terms of mental health or outside of it, this is an extremely difficult issue.
The report is valuable because, for the first time, it sets out the enormity of the problem in a particular way, although other reports through the 1990s and at the start of 2000 identified some quite striking matters. For example, they identified that African-Caribbean citizens were six times more likely to be diagnosed with a schizophrenic illness; that they were more likely to have ECT and physical treatments, as the noble Lord, Lord Chan, said; and that they were much more likely, as the Royal College stated in its submission to the Health Select Committee, to be admitted and detained against their will.
These are striking matters and cannot be ignored. But when one becomes convinced that there is a problem—as any reading of the report and its predecessors would demonstrate—what precisely does one do about it? The first thing to do is to consider the problem. So the first question I would ask the Minister is what arrangements have been made for this report to be distributed to enable wide consultation? Reports such as this benefit a great deal from being circulated to all health and social service trusts and to a wide range of responsible individuals and groups, who can then respond to it. So what has happened so far with the report? One would expect something of this kind to have happened.
Dealing with the problem will be difficult. In the United States and my own part of the world—where we have tried to deal with these matters over quite a long period of time—we have set down many of the kinds of procedures identified in the report. For example, the compiling of figures requires the identification of those involved. As the noble Lord, Lord Chan, said, the fact that there is no identification of ethnic background on death certificates makes it difficult for anyone to carry out research on suicide figures. There are many other ways in which it would be possible to carry out research work if there was an identification of ethnic background.
People are very often wary of doing this. In my own part of the world it was very worrying when it was suggested that one's religious background should be noted down. People thought that that would only emphasise differences. We have to strike a balance and, on balance, I and my colleagues have felt over the years that it is important to have such identification. It is not without its dangers but it is very difficult to get figures if it is not done. The idea is put forward in the

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report that it should be on death certificates and, by analogy, in many other areas, for instance, on admission forms and so on. It would be extremely valuable if ethnic background were noted down—not only for research into the size of the problem but for ongoing monitoring to ascertain whether there have been any better or worse developments.
However, I cannot respond to the report as though it is the answer to all the problems. I know that the authors of the report do not suggest that it is, but I should like to point out one or two matters that need to be considered along with the report. It is stated that most of the reforms have rarely been implemented and that not much research has been carried out previously. That is only partly true. Some of the recommendations have been implemented, particularly on the wider issues not only of mental health but of racism and sectarianism.
One of the worries is that after 30 or 40 years we still have in the United States of America and in my part of the world many of the same underlying difficulties. Even when you have improved the figures, you have not necessarily changed the feelings people have inside. That is a real problem. In the United States it has now reached the point where approximately half the population believe that the problem of racism has been sorted out when of course it is manifestly clear that it has not been. Even among those who believe that it has not been resolved there is something of an impasse. There are those who one might describe as anti-racists, who take the view expressed in the document that anti-discriminatory practice will follow from ensuring the eradication of discriminatory attitudes. However, there are others, who one might describe as pragmatists, who believe that the way to deal with the problem is to ensure that there are anti-discriminatory practices and that changes in attitude will then flow from that.
The difficulty in the United States is that these two groups of people, who are both concerned to deal with the racism that manifestly still exists, have got into a stand-off with each other. It would be a serious mistake if we started arguing about which of these attitudes should come first. On its own, simply trying to change people's attitudes may not bring the results we want.
There is a suggestion that board members and so on should go on courses. That is all very well, but we have an old saying at home that "a man convinced against his will is of the same opinion still". People can go through all kinds of educative training methods, but they will still feel the same inside.
So what might change people's attitudes? It is quite clear from a practical point of view that people from ethnic backgrounds, particularly African-Caribbean backgrounds, are six times more likely to be diagnosed as suffering from schizophrenic illness. In the past, some people said, "That is because we know that when people are taken out of their normal culture there is a much greater likelihood that they will break down in psychotic illness". That was all very well 15, 20 or 30 years ago, but the vast majority of these people are
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second and third generation—they are not out of their cultural environment, they are in it. This is their home. That explanation clearly does not work.
So what is the reason? Is it the expression of religious faith, as the noble Baroness suggested, of culture or background or ways of relating? Or is it simply a misunderstanding of language? Are these the reasons for people being misdiagnosed? Or is it the case that the diagnosis is correct—in which case one would expect to see appropriate treatment leading to rapid remissions? But have we done the research to know that? Are we following these matters up? The truth is that we do not know for sure. Before we assume that a sixfold increase in diagnosis is only about racism it might be worthwhile for my psychiatric colleagues and others to look at the issue more closely and to recognise that it is not good psychiatric practice to get it wrong in terms of diagnosis and treatment.
It is fortunate that within the psychiatric community there is a substantial body of people from different ethnic minorities. Indeed, the Royal College of Psychiatrists is not restricted to England, England and Wales or even these islands, but has many members throughout the world who could be collaborating in these kinds of studies. But research takes money, resource and encouragement from government. I should like to feel that even today we might have an indication from the Government that they regard the issue as so important and they regard mental health as so important that they not only give encouragement, as asked for in the report, but provide resources for the research, which, as is pointed out in the report, is at the moment inadequate.
All of us could say much more about this subject, but for the moment it is perhaps enough to say that it is important that the debate is pursued by this report going around the country. Perhaps in another few months the noble Lord, Lord Chan, might feel free to come back so that we might see something of the reporting back from those consultations.
8.9 p.m.
Earl Howe: My Lords, I understand why the noble Lord, Lord Chan, should wish to table this Question before the summer recess, since it provides us with a timely opportunity to debate these complex and important issues. I say "timely", not only because we now have a new cohort of Ministers in place in the Department of Health who are, doubtless, eager to hang upon our every word, but because the implementation framework for Inside, Outside is something that will be uppermost in all their minds very soon.
It is excellent to be able to welcome back to our debates the noble Lord, Lord Alderdice, who has such first-hand knowledge and experience of mental health matters. The noble Baroness, Lady Howells is also an indispensable participant in any debate that touches on ethnic minorities. I listened to both, as I did to Lord Chan, with great attention, and agree very much with what they said.

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A charge of institutional racism against clinicians and mental health workers is an extremely serious one. If there is one thing that I hope Inside, Outside is able to do before any implementation framework is even discussed, it is to make people sit up and question their own behaviour. Of course, the racism we are dealing with is usually not an arrestable offence of a kind that overtly infringes the Race Relations Act. But if there is discrimination in the delivery of care, whether conscious or not, against patients of particular ethnic backgrounds, the charge of racism unfortunately sticks. I find this disturbing enough to ask the Minister whether the Government have considered a public inquiry. We are into that territory. The report suggests that the problems experienced by minority ethnic groups, in terms of both patient experience and health outcomes, may actually be getting worse. But even if that is an overly pessimistic perception, that kind of racism, as MIND has pointed out, is difficult to eradicate. That is why the remedial measures proposed in the report focus on what have to be seen as longer term strategies. Cultural awareness training, entrenching quality standards and involvement of consumers in the delivery of services—all are sensible ideas but require sustained commitment and resources.
Whenever we debate mental illness, we refer to the stigma that accompanies it. I think that gradually it is becoming less stigmatised. Indeed, a survey published by the Department of Health only last Friday contained, for me, some encouraging statistics about public attitudes. The vast majority of people, nearly 90 per cent, have a caring and sympathetic view of mental illness; and about three-quarters of respondents thought it should be treated as an illness like any other. Those results send out a rather different flavoured message than the one of institutional racism contained in Inside, Outside. The two messages do not contradict or nullify one another. They simply point up valid but contrasting truths from different perspectives. What really matter are the perceptions of service users, and here the data are more worrying.
The noble Baroness, Lady Howells, referred to the recent work by the Sainsbury Centre which focused on what it terms "the circles of fear" surrounding service users. That is not so much referring to fear about this or that kind of treatment. It is the fear that by merely engaging with mental health services it will ultimately cost the patients their lives. They see before them a system that appears coercive and inhumane. They associate it automatically with that other system characterised by compulsion and control, namely, the criminal justice system. Black people are therefore deterred from accessing services. They have little confidence in the care pathways that are on offer and there is therefore no incentive for the relevant communities to become actively engaged with the design or delivery of those services. It is truly a vicious circle, which is why I say again that none of us should underestimate the difficulty of the problems that have been identified.
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Those difficulties are compounded by the perceptions surrounding the Government's Mental Health Bill, published last year. The debate on the Bill—rightly or wrongly—concentrated on the potential dangers that psychiatric patients posed, rather than on the far more important issue of appropriate treatment for all patients. We need to shift the debate away from the rare incidents of violence that all too easily tend to stigmatise anyone with a mental health problem.
Even if those problems can be tackled effectively and we begin to move away from those perceptions—I am sure that it is possible to try—there are other hurdles that stand in the way of timely and effective interventions for ethnic minorities. Many have been mentioned, not least by the noble Lord, Lord Chan. Many GPs lack the training to identify psychiatric disorders. There is often a language barrier. The significance of a patient's ethnic and social background is sometimes overlooked. There are shortages of trained staff, especially in London, as identified by the King's Fund in its report last year.
It is the resource issue that many of us regard as central to the forthcoming implementation strategy. If I were being critical of the Government's performance in this area of healthcare, I would say that it is now six years since they promised as a manifesto commitment to treat mental health as a priority. Yet, in many crucial respects, they have not delivered. The experience and opinions of 27 mental health trusts, recently garnered by my party, reflect real concerns about the Government's engagement in the area and about the future.
To be sure, some new funding is flowing in, but many trusts feel constrained by national service frameworks to spend money on developing new services while baseline services are pared back. In some trusts, there are large inherited deficits, and the books can be balanced only by maintaining vacancies deliberately. That is not a healthy climate for progress in service delivery, either for patients or for those looking after them. A good number of trusts depend heavily on agency staff—again, not exactly a marker of stability—while many others have not yet employed any primary care mental health workers, which is a key requirement under the NHS Plan.
It is good to see that assertive outreach teams are gradually becoming established, although that is not by any means universal, and the majority do not have 24-hour cover. Early intervention teams—another key target in the NHS Plan—are still a rarity, largely, it seems, because of funding constraints. The same applies to crisis resolution teams. If we are in that situation today, what hope is there for making a reality of the kinds of resource-intensive initiatives recommended in Inside, Outside? With that in mind, it would be helpful if the Minister could say why there is no indicator in the mental health trust performance indicators to measure a trust's ability to deal with the needs and health outcomes of patients from ethnic minority communities.

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A year ago the Department of Health published a survey of ethnic minority psychiatric illness rates carried out by the National Centre for Social Research and University College, London. It was, I think, the first time that any sort of detailed analysis had been done of the mental health of ethnic minority groups and how it compared with that of the white population. The key finding—I found it surprising—was that, contrary to what is commonly perceived and despite their over-representation in the mental health system, black Caribbeans do not have significantly higher rates of psychotic illness, including schizophrenia, than other population groups.
One can take that result in isolation and, perhaps, question it, but if one then looks at that finding in tandem with the results of a recent study by King's College, London, one sees an even more interesting picture. King's found that, although rates of schizophrenia were up to twice as high among British Afro-Caribbeans as in the rest of the population, they were also markedly higher than the rates among blacks living in Trinidad and Barbados. What that suggests, as the study points out, is that the reasons for the high incidence of illness among British black people are social, not genetic. Unemployment and separation from both parents are frequent common markers. If the roots of much mental illness lie in social disadvantage, rather than elsewhere, there are obvious major implications for other areas of government policy-making.
Modern society is often alienating and fragmented, which is why we all agree that governments have a duty to shape health services to support those who are most vulnerable. The way they do that is, in many respects, a measure of how civilised society is or aspires to be. Tonight's debate has shown that we still have a considerable hill to climb.
8.20 p.m.
Lord Warner: My Lords, I thank the noble Lord, Lord Chan, for his support on the issue and on maintaining its high profile. He need not apologise, certainly to me, for any sense of impatience he may feel he is exuding. We welcome continuing attention to this area and his concerns are totally justified by the history in this area.
I am also grateful for the thoughtful contributions from all noble Lords. I assure the noble Earl, Lord Howe, that I am hanging on everyone's words. I want to spend most of my time outlining how we shall be taking forward the ideas in Inside, Outside. Where I do not have time adequately to cover all the detailed points raised I promise to write to noble Lords.
I share my noble friend Lady Howells's concerns that we want implementation, not just more fact finding—as do the communities affected. The ministerial foreword recognises that we have to tackle racism in institutional discrimination in this area. The points made by the noble Earl, Lord Howe, and the noble Lord, Lord Alderdice, are well taken. I am not sure that a public inquiry, which the noble Earl,
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Lord Howe, mentioned, would be the right approach as it could delay pushing on with the changes we want to make, which I will outline.
I do not have time to go into the wider mental health issues raised by the noble Earl, Lord Howe. It is fair to say that we tried to give some information about progress in answer to a Question in this area last week and I am happy to write further to him and other participants with details of progress in the area. I do not think money is the issue in making progress in many of the areas. The noble Earl acknowledged that the assertive outreach teams were progressing well. There is also a human resource issue. It is not just about money, but finding the right people with the right skills and attitudes in the right places to work in the area.
The content of Inside, Outside is not new, but for the first time the inequalities faced by these groups in mental health services have been put across in a powerful manner. It is worth quoting briefly from the report:
"There does not appear to be a single area of mental health care in this country in which black and minority ethnic groups Tare as well, or better than, the majority white community"—
That is a damning statement. The report continues:
"Both in terms of service experience and the outcome of service interventions, they fare much worse than people from the ethnic majority do".
That state of affairs cannot continue. The Government acknowledge that inequality and we are committed to taking action to improve the situation.
The noble Lord, Lord Alderdice, asked about dissemination. There was a ministerial launch of the report in March. Considerable media coverage was attracted, and the report is freely available on the Internet and from the department in hard copy.
Inside, Outside only sets out on paper the harsh reality faced by many black and minority ethnic people today: unacceptable numbers of young black men being detained under the Mental Health Act: higher rates of suicide by women of South Asian and Irish origin; and delays in accessing services and higher readmission rates by most groups. Inside, Outside only gives additional weight to the testimony given by the families, carers and friends of service users of their needs.
I turn to what the department is going to do. Inside, Outside advocates a way forward by reducing and eliminating ethnic inequalities in mental health service experience and outcome, by developing cultural capability within the workforce and by capacity-building within communities.
The Department of Health and the Modernisation Agency, with the National Institute of Mental Health in England, will be carrying out a wide range of activities to ensure that those recommendations take place. First, we will reduce the current ethnic inequalities in mental health services and outcome by a variety of methods. The story of people from minority ethnic groups contacting mental health services reported in Inside, Outside is unsatisfactory. To rectify this, the national institute will develop what we are

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calling a pathways to recovery model to identify critical paths in mental healthcare. The model will seek to construct a more positive pathway for people in distress by offering an earlier and wider choice of treatment and helping to reduce distress. The national institute will be working with partners with the objective of creating a better pathway into and out of mental health services. This is an initiative long asked for by the communities themselves.
We will also promulgate examples of effective practice, such as the innovative work of Antenna Outreach in Tottenham. Antenna provides a range of innovative services—home tuition, developing work placements, developing sports programmes and community involvement. These initiatives help with early intervention and improve outcomes.
Secondly, we will develop the capabilities of the mental health workforce in providing appropriate and effective services for a multicultural population. The National Institute of Mental Health in England will be developing a cultural capability framework for services, and this will involve developing a set of indicators for cultural competence, a curriculum on cultural competence for NHS staff, and developing and nurturing leadership in the field of cultural competence. The noble Lord, Lord Chan, is quite right to emphasise the importance of leadership in this area. This will enable services to deliver a more person-centred approach that fits people's cultural and linguistic background, to which many noble Lords referred.
We will also help local services. Albert Persaud of the national institute, in collaboration with local communities, has been leading on development of How are you feeling booklets aimed at the early detection of emotional distress in mothers. The booklets were developed in collaboration with local women in Sheffield and local minority ethnic organisations, and have already been greatly welcomed.
We are also seeking international collaboration on development of multicultural values in mental health. The national institute is supporting a meeting of the Values in Psychiatric Diagnosis Research Methods Working Group later this month. Eminent researchers from the UK, USA, Spain, Israel and Italy will be looking at how to include culture in models of interdisciplinary team working.
Thirdly, Inside, Outside identifies the important role of the voluntary sector in this field. We recognise that to ensure any significant change in mental health services, we will have to work better with communities and voluntary organisations. These are the areas my noble friend Lady Howells outlined so eloquently. We will actively work across government departments to ensure greater collaboration in ensuring local communities and voluntary organisations are involved with local mental health services. This is an area where, if we are honest, government departments have not always hit the highest spot in terms of performance.
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The national institute will also be hiring a fellow to work with the black and minority ethnic voluntary sector to help ensure that effective action takes place. We have already ensured that one of the key recommendations of Inside, Outside, the community development worker, will be introduced. The requirement of having 500 workers by 2006 was made a target in the current NHS priorities and planning framework. These are a new cadre of worker designed to improve access to mental health services and provide greater linkages between the statutory and community sectors.
Turning briefly to the department, these changes will take place and we will seek to modernise the services. The action plan will be in the shape of actions needed to be taken by health and social care services to combat the inequalities faced by service users.
We have consulted with the black, south Asian, Chinese and Irish communities across England over the past few months about what communities want and what they thought of the recommendations of Inside, Outside. In total, 12 community consultations were carried out, using community languages. They provided evidence of people's experience, their advice and the proposed impact of the recommendations of Inside, Outside. We will make public the findings from these consultations and they will be fed into the action plan work we are doing.
The National Institute of Mental Health for England, which is part of the Modernisation Agency in its role as the implementation arm of the department's mental health policy, will help trusts to implement the action plan being developed. But we are not waiting for the action plan to be issued.
Changes have already begun. Apart from the initiatives already outlined, the national institute will have a specific work programme on ethnicity and mental health. The chief executive will personally co-chair a national steering group with the noble Lord, Lord Adebowale, to help ensure close working with mental health services and effective change. The steering group will oversee the action plan implementation.
I can announce today that the national institute has appointed Professor Kamlesh Patel as the national strategic director of its black and minority ethnic programme. Professor Patel will provide overall leadership of the programme. Professor Patel is with the national institute in an acting capacity. In due course the post will be advertised nationally. Professor Patel is currently chairman of the Mental Health Act Commission and head of the Centre for Ethnicity and Health at the University of Central Lancashire. He has an established track record as both a practitioner and an academic in the fields of mental health and substance misuse. He is well qualified to undertake this important task.
The national institute's programme will push forward work on research and development, training, workforce development and service development. It will be done in a culturally sensitive way, as the noble

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Lord, Lord Chan, seeks. It will also promote black and minority ethnic leadership in conjunction with the leadership centre in the Modernisation Agency.
The institute will continue to work with community groups, professional organisations and voluntary organisations to bring about change on how black and minority ethnic mental health services are delivered.
The Inside, Outside report recognises that mental health services are going through a period of significant change. We need to harness this change to ensure the best outcome for black and minority ethnic service users. To deliver the principal objectives of Inside, Outside, immediate work is now starting. There are no quick fixes, but I hope that I have communicated to noble Lords that we are trying to give some impetus for this.
In conclusion, I pay tribute to and thank Professor Sashidharan and his colleagues for their work in producing Inside, Outside.
Baroness Andrews: My Lords, I beg to move that the House do now adjourn during pleasure.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.32 to 8.36 p.m.]

Communications Bill
Consideration of amendments on Report resumed.
Clause 72 [Conditional access systems and access to digital services]:
Lord Gordon of Strathblane Lord Gordon of Strathblane moved Amendment No. 134:
Page 72. line 36, at end insert—
"() It shall be the duty of OFCOM to draw up and to issue guidance as to the manner in which access-related conditions set in accordance with subsection (2)(b) (and in particular the first indent to sub-paragraph (b) of Part I to Annex I to the Access Directive) may be satisfied in relation to each protected programme service.
() Such guidance must be issued by OFCOM within twelve months from the commencement of this section.
() Before publishing or revising the guidance, OFCOM must consult with every person providing a protected programme service and any other person as they think fit.
() It shall he the duty of OFCOM to carry out regular reviews of the operation of the access related conditions set in accordance with subsection (2)(b) and the guidance in respect of them, and to prepare and publish a report on every review in such manner as they consider appropriate for bringing it to the attention of persons who, in their opinion, are likely to be affected by it.
() Every report published by OFCOM under this section must set out OFCOM's findings in carrying out the review, any recommendations made by them and any changes to the guidance as OFCOM consider appropriate.
The noble Lord said: My Lords, I was enormously encouraged by the reply of the noble Lord, Lord Davies, to the earlier debate on electronic programme guides and ensuring that there was due prominence, in that I recall his saying that he thought that it would be appropriate for Ofcom to publish a code on the matter. That is exactly what I am seeking by these
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amendments; nothing more elaborate than that. I was also at least mildly encouraged by the response of the noble Lord, Lord McIntosh, when I raised this issue in Committee. He said:
"I hope that when Ofcom takes over those responsibilities and has in addition the responsibility for complying with Part 1, Annex 1, of the directive and the wording of Clause 72, it will provide the guidance that my noble friend seeks without spelling that out in the Bill".—[Official Report, 3/6/03; col. 1194.]
I hope that the Minister is right, but I should like some reassurance. The honest truth is that we have had Oftel for a very long time but we have not seen the sort of transparency of code for which I am looking.
I know that some noble Lords think that this amendment is unnecessary and that it is the sort of thing that Ofcom would do automatically. I wish that that were true. Unfortunately it cannot be guaranteed. Oftel, for example, has not so far declared that Sky Subscriber Services Ltd has a significant market power. That is self-evidently obvious. A market survey would demonstrate it in about a quarter of an hour. However, Oftel has not done that yet. So there is no guarantee that Ofcom is going to give this the priority that we are seeking.
Some people are unaware that no one really knows what people are currently paying for conditional access. The BBC has just done a deal but no one knows what the rate is or what rate other channels are paying for conditional access. I know that it is not quite conditional access in the case of the BBC but I will come to that in a moment. The fact is that we should have a transparent regime. If it is possible for various regulators to spell out the price of electricity and gas then it should be possible for Ofcom to spell out the price of conditional access. It is an important issue. Without that the whole digital revolution cannot take place properly.
The BBC deal does not make my amendment redundant; far from it. I am very glad that the BBC has reached agreement with Sky, but what that agreement has thrown up is that quite clearly the BBC still needed what Sky has referred to as "regionalisation" in order to deliver the appropriate BBC regional service in slot 101 and slot 102. Sky is regarding that as a form of conditional access, which is probably right—I make no complaint about that. However, that means that nobody knows what rates the BBC is paying. Perhaps more importantly, because it has not yet been decided, nobody knows what rate Channel 3—which has much more specific regional obligations—will have to pay to Sky. If the BBC has just done a deal, we should be able to assume that the same will automatically apply to ITV when it comes to look for that agreement. However, we cannot make that assumption and that cannot be right.
The conditional access costs will continue to be crucial. It has been a contentious issue for a long time. I do not blame the Government for introducing 34 pages of clauses exactly a year ago, withdrawing them before the Bill even hit the Commons and then relying entirely on the European directive. However, we need some assurance that someone will put flesh on the bones and that we will have a transparent regime that

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we can all understand. Indeed, we should be able to forecast what will have to be paid for conditional access. All that my amendment does it to ask Ofcom to do that—to spell it out clearly and quickly. If the Government are not disposed to accept the amendment, will they at least confirm that it is their view that Ofcom should act in such a way as a matter of urgency when it takes over in December? I beg to move.
Lord Thomson of Monifieth: My Lords, I apologise for not being in my place when the noble Lord, Lord Gordon of Strathblane, began his speech. I strongly support the case that he has made for some means—preferably legislative and statutory—to make the conditional access system open and transparent.
Conditional access has created a major problem and distortion for the broadcasting system in this country from the earliest days following its introduction. I remember arguments about it in earlier Broadcasting Acts. The decision that the BBC has apparently been able to make is a healthy one in terms of the overall situation, but very many problems remain to be solved. The noble Lord, Lord Gordon of Strathblane, has performed a service by putting down this amendment and pressing, in one way or another, for total transparency about the pricing arrangements associated with conditional access. It is in the interests of the general viewer of television in this country.
Lord Bragg: My Lords, I support the amendment of my noble friend Lord Gordon of Strathblane. I, too, apologise for not being in my place. That adjournment put us all at a disadvantage. We thought that we had seven or eight minutes; we had two or three.
I support every word said by my noble friend Lord Thomson, as I have done over the years in listening to his wise counsel. We have been on the same side in many battles. Transparency for conditional access is absolutely essential. Otherwise, there is an opportunity for fudge and for exploitation. Heaven forfend, but the opportunity is there.
There is no reason why there should not be transparency. There is no reason why there should not be a relationship established between different broadcasters seeking that access. If one particular organisation can monopolise and manipulate it, that is another distortion in what is supposed to help a market process. I therefore heartily support the amendment of my noble friend Lord Gordon of Strathblane.
Baroness Buscombe: My Lords, we on these Benches also support the amendment proposed by the noble Lord, Lord Gordon of Strathblane. As noble Lords have said, it would oblige Ofcom to publish guidance on how it will interpret the obligation placed on conditional access providers to offer their services to all broadcasters on fair, reasonable and nondiscriminatory terms. A transparent regime is important. The amendment would not set a price for conditional access, nor would it prejudge how Ofcom
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goes about determining what is a fair and reasonable price. However, it will ensure that Ofcom reviews the pricing regime as a matter of priority.
I also want to speak to Amendments Nos. 136 to 138. Those amendments return to an issue debated in Committee. There remains a concern that wording used in Clause 269 and subsection (2) in particular suggests that there are other intermediary players in the satellite broadcasting process to or through which PSBs may offer their service. Consequently, the digital satellite platform is not an open platform.
I welcome the Minister's statement in Committee that the satellite platform is open in the sense that any broadcaster can approach the operator of a satellite and negotiate facilities for the transmission of a service and also buy conditional access and EPG services from Sky in the UK. Clearly, that is not in dispute. In view of that consensus, it is difficult to understand the Government's explanation of the clause in Committee when the Minister said:
"The first objective aims to secure that the channel provider does not refuse to provide his channel to the provider of a satellite service, if they can agree terms".
He also said:
"It is, therefore, quite different from the second objective which requires the channel provider to ensure that its service will be made available to satellite viewers, and to ensure that as many people as practicable can receive the service. The second objective does not mean that an intermediary is required".—[Official Report, 3/6/03; col. 1196.]
It appears from those statements that the first objective has been designed to apply to instances at which an intermediary provider and a satellite broadcasting process exists. Why otherwise would a PSB be refusing to provide its channel to that provider? But why is the first objective needed at all? Given that we all agree that the satellite platform is open, it is difficult to see how a situation could arise in which a PSB could refuse to provide its channel to the provider of an intermediate satellite service.
We contend that there is no possibility of that happening in the UK because the only satellite platform that exists is open and the PSBs already conform to objective 2 by making their services available to viewers directly without any intermediary players being involved. The Minister in fact confirmed in Committee that as things stand the second objective might suffice,
"but if the situation changes, the other objectives could be brought into play to ensure universal availability".—[Official Report, 3/6/03; col. 1197.]
I should be grateful if the Minister would explain how the situation might change to where a PSB is in a position to refuse to provide his channel to a satellite service, which justifies the existence of the first objective. Otherwise, I urge the Minister to accept my amendments, which would ensure that Clause 269 is a more accurate reflection of the way in which the UK's satellite platform actually operates.
8.45 p.m.
Lord McIntosh of Haringey: My Lords, let me begin by addressing Amendment No. 134. The intention of this amendment is to place Ofcom under a duty to issue guidance on how the requirements of conditions set under Clause 72 can be met. Subsection (2) of the clause deals with the setting of access-related conditions in relation to conditional access systems. One of the key requirements of those conditions, set out in Part I of Annex I of the access directive, is that operators of conditional access systems should offer those services to all broadcasters on a fair, reasonable and non-discriminatory basis.
The Government recognise that the question of what constitutes "fair, reasonable and non-discriminatory" access is of crucial importance, not least to public service broadcasters; it is a very difficult issue. It is therefore entirely appropriate and desirable that Ofcom should issue guidance on how those requirements can be met. In any case, it has been Oftel's practice to do so, and I am confident that Ofcom will follow that practice.
The only question is whether it is necessary to place a duty on Ofcom on this point in the Bill. That is not the Government's view. There are a great many things which it is sensible—even desirable—for Ofcom to do but which we do not think it necessary to put in the Bill. Except for a few questions of very fundamental importance, such as the use of its powers to impose financial penalties, we do not think it necessary or desirable to specify all the matters on which it would be desirable for Ofcom to issue guidance. It has been said amiably enough that the Bill is long enough. The proposed requirement is unnecessary and would add to Ofcom's procedural load without in practice adding anything to the degree of transparency and regulatory certainty which will be provided in accordance with the directive because, as I say, I am sure that Ofcom will follow Oftel's existing practice on this point; I would expect it to do so.
Lord Thomson of Monifieth: My Lords, is the noble Lord really saying that the way conditional access works is a matter for guidance and not a matter for proper regulation? Is it not a much more serious matter than simply one of providing reasonable guidance?
Lord McIntosh of Haringey: My Lords, guidance is quite a powerful thing, in its place. Ofcom has the responsibility of adhering to the conditions of part 1 of annex 1 of the access directive. If it does not: do so, then we are in trouble with Europe. It is therefore Ofcom's responsibility to achieve that aim. How it does it is a matter for Ofcom. If it can do it through guidance, then it is entirely proper that it should do it through guidance.
Perhaps I may now turn to Amendments Nos. 136, 137 and 138. Here I do not have very much more to add to what I said in Committee. We all share the objective of providing universal and free availability of the public service broadcasting channels. The debate in Committee demonstrated that we all share a
824
common understanding of the processes by which satellite television reaches us today. But we also agree that technology moves faster than legislation and that we should, if we can, make the Bill as future-proof as possible.
As we explained in Committee, there is scope for various models of satellite broadcasting. While some broadcasters will do all the work themselves, others will use a satellite service operator. Some will broadcast in the clear; others will have their services encrypted. Again, as we made clear in Committee, it is a mistake to think that Clause 269 implies that public service broadcasting channels can only he made available to viewers by offering their channels to, for example, Sky to broadcast on satellite. What matters for us is not the means by which the channels are made available but the result that the clause delivers, which is the availability to satellite viewers of public service channels.
Ofcom will impose the conditions that it considers appropriate to secure that the licensed public service channels are at all times offered as available to be broadcast by means of every major satellite television service. Ofcom will pursue three objectives, but it might not need to impose conditions to secure all three of them for any one channel. That will depend on the means by which the channel provider ensures that its service will be available to satellite viewers. The second objective can be secured in a way that does not imply that an intermediary is required.
As I explained in Committee, as things stand, we might be able to achieve our goal of universal availability through the second objective alone; but if the situation changes, the other objectives could be brought into play. It might also be the case that, because a public service broadcaster is broadcasting its channels itself, no further conditions need to be imposed in order to achieve the third objective, as public service broadcasters are already required to make their services available free of charge—otherwise, it serves the purpose that the provider of a satellite television service cannot charge for reception of the public service channels alongside the pay channels that it provides.
Perhaps I may finish by repeating what we are trying to do: whatever the market or technical conditions prevailing in the future, we aim to ensure that public service channels continue to be universally available free of charge. We think that that is provided by the clause as drafted. Therefore, we do not see any need for the amendments.
Lord Gordon of Strathblane: My Lords, I thank the Minister for his reply and those noble Lords who took part in the debate entirely in my support. I have in mind, in particular, the noble Lords, Lord Thomson and Lord Bragg, and the noble Baroness, Lady Buscombe.
I am slightly unhappy that the Minister has chosen to say that Ofcom should follow the example of Oftel. I am quite happy to accept the noble Lord's expression of hope that it is the proper function of Ofcom to spell

825
this out and give us a transparent regime; but to add that Oftel's practice should be followed rather vitiates it.
There is no transparent regime at the moment. There are no noble Lords in this House, including, I suspect, government Ministers, who know who pays what to Sky for conditional access. That cannot be a satisfactory situation.
When the Minister liaises with Ofcom, I trust that he will see the need to stress that we hope that Ofcom will behave in a very much more transparent and speedy manner than Oftel. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause 268 [Must-offer obligations in relation to networks]:
[Amendment No. 135 not moved.]
Clause 269 [Must-offer obligations in relation to satellite services]:
[Amendments Nos. 136 to 139 not moved.]
Clause 273 [Programming quotas for independent productions]:
[Amendment No. 140 had been withdrawn from the Marshalled List.]
Baroness Buscombe Baroness Buscombe moved Amendment No. 140A:
Page 245, line 24, after "programmes" insert "which are made by independent producers"
The noble Baroness said: My Lords, in moving Amendment No. 140A, I shall speak also to Amendment No. 141A. These amendments seek to introduce an alternative definition of "independent" for the purposes of the independent production quota. The quota requires that each licensed public service channel ensures that a minimum of 25 per cent of broadcasting time is allocated to independent production.
Currently, production companies which have an ownership relationship—that is, those that share the same parent but have no preferential commissioning relationship with a broadcaster—are deemed to be non-qualifying independents. The current regime determines independence based on common shareholding criteria. The Broadcasting (Independent Productions) (Amendment) Order has recently revised the requirements for independent production companies. Share restrictions now apply only in respect of any broadcaster which provides a television service intended for reception anywhere in the United Kingdom.
The amendment adopts a definition of "independence" that would allow companies which gain no economic advantage from an ownership relationship with another broadcaster to produce programmes that qualify for the quota. The amendment proposes an economic dependency test which requires producers who have more than a 25 per cent common shareholding with a broadcaster to show that they have derived no more than 33 per cent of their gross revenue from production activity from that
826
broadcaster. The test would be easy to measure and proposes that if a production company should change status and become economically dependent on the main broadcaster, it would automatically lose its independent status.
The amendment differs slightly from the one tabled in Committee as it includes a provision that prohibits any producers who are owned or controlled by a broadcaster from qualifying for the independent production quota if a sister company receives more than 33 per cent of its revenue from that broadcaster, even if the company concerned makes nothing at all from the broadcaster. The amendment has been refined to alleviate concerns expressed in Committee that such a test could allow the quota to be attacked by the back door.
We urge the Government to consider these amendments as we feel that the independent sector is of fundamental importance to the broadcasting industry. I beg to move.
Lord Crickhowell: My Lords, earlier in the evening I warned my noble friend that I had some anxieties about her amendment. I had read it only during the course of our proceedings, and I was worried that it might raise the difficulty with which I dealt in Committee. On hearing what my noble friend said and on reading and re-reading the definitions in Amendment No. 141A, I believe that my anxieties may be misplaced. As my noble friend said, they are concerned with ownership relationships.
But perhaps I may explain my anxieties. During the Committee stage, I raised the issue of ITV companies being able to bid for independent production. I said that that was the kind of argument that Ofcom was being established to settle. It is for Ofcom to decide what role the ITV companies can play in the UK programme supply market over and above their regional licence obligations. For that reason, I tabled the amendment. The Minister who replied to me on that occasion said that, indeed, this was an issue for Ofcom. The noble Baroness, Lady Blackstone, said:
"These subsections give Ofcom a duty to consider all aspects of the programming quota for independent productions, including the definitions that the Secretary of State has made by order under Clause 273 and Schedule 12 to define qualifying programmes and independent production".—[Official Report, 3/6/03; cols. 1209–10.]
I emerged satisfied from that debate because I felt that a clear steer had been given to Ofcom: that it was Ofcom which would deal with the matter. We were dealing with Clause 273 which defines in subsection (2)(b) that,
"independent productions is a reference to programmes of such description as the Secretary of State may by order specify as describing the programmes that are to be independent productions for the purposes of this section".
Perhaps my suspicions were aroused because the noble Lord, Lord Alli, withdrew Amendments Nos. 140 and 141 which would have raised the issue of quotas by value as well as volume. I wondered whether there was a connection with the fact that this amendment had been tabled.

827
All I seek is an assurance that the amendment introduced by my noble friend relating to programmes which are made by independent producers, which are then defined, will not later impose a restriction preventing Ofcom going down the route for which I argued in Committee and which the Minister said that Ofcom would be able to follow. I hope that it does not inhibit the ability of the Secretary of State to produce suitable definitions.
On re-reading several times my noble friend's amendment on ownership relationships, I think that the position is all right. But I seek reassurance that the position established earlier, which I think was wholly satisfactory, has not in some way been undermined.
9 p.m.
Lord Bragg: My Lords, on the noble Lord's last point, is it possible for the Minister to give us some reassurance that the smaller regional public service television companies in ITV, which for many reasons are languishing at present, can under well-regulated and transparent circumstances be allowed to behave and pitch as independents in the grander scheme of things? They are quite restricted with ITV. They are excluded from the BBC at present. They are in a very difficult position all round. This is a very good chance to help regional television and everything that goes with it. I should be pleased if we could have a reassurance on that.
Lord Lipsey: My Lords, I support my noble friend and the tenor of the debate. It is quite curious that when the BBC had a problem with its independent suppliers about Endemol which caused it to miss its quota the Government rushed forward with an order to correct the position. ITV never seems to receive quite the same solicitousness from Ministers.
However, on the other point raised by my noble friend, one of the characteristics of the ITV regional companies is that they are companies making programmes outside the M25. With great respect, much of the "indie-industry" is also outside the M25. I hope that there is to he some parity of treatment between the attention given to the BBC's problems and that given to ITV and that the amendments will be regarded with sympathy.
Lord Davies of Oldham: My Lords, as has been indicated in several contributions, the amendments are similar to ones we discussed in Committee so I shall keep my response brief.
The amendments seem to be intended to ensure that producers with an ownership link to UK broadcasters can be considered independent subject to an economic dependency test. The ITC considered this very issue in its UK programme supply review, which examined the overall economic health of the TV programme supply market in the UK, and in particular the role of independent producers within it.
The ITC concluded that there was not a case at the moment for changes in qualification criteria to include producers who have ownership links to UK
828
broadcasters. It considered available evidence which showed that producers in this category were not being unduly affected by exclusion from the quota at present, and that a change of definition would most likely impact adversely on other, non-aligned, independent producers. The ITC therefore recommended that the current definitions should remain unchanged for the time being.
The situation, however, will be kept under review. Ofcom will be required to review the operation of the quota, including the various definitions, on an annual basis and report to the Secretary of State. Any further changes to the definitions can be made by secondary legislation, though the amendments we are now considering—this must be a signal and crippling disadvantage to them—would effectively take that flexibility away by defining the term "independent producer" on the face of the legislation.
What would be the point of Ofcom's review if there were no means of giving effect to its recommendations? Therefore, that argues very much in favour of our current approach of' defining in secondary legislation the terms "independent productions" and "qualifying programmes". It gives us that flexibility. We cannot know whether the definitions in place today will remain appropriate in 10, five or even two years' time. We need the flexibility of the order-making power to ensure that these definitions are right. To define in primary legislation the term "independent producer" would greatly restrict this flexibility.
I have heard what my noble friends have said in their eloquent pleas about the issues with regard to particular groups of independent producers. My noble friend the Minister is prepared to talk to them further to see whether we can make progress on what they have identified as a real issue. However, I am indicating this evening that we do not consider that the solution lies in changing the primary legislation.
Lord McNally: My Lords, does the Minister agree that the initiative, which was very welcome at the time, that emerged from the pre-legislative Select Committee was for the ITC to make a study? From that study came some very useful advances for the independent sector. Would it not be far better if the kind of proposals put forward by the noble Lords, Lord Crickhowell and Lord Bragg, for the smaller ITV companies could be dealt with in a similar pragmatic way once Ofcom was up and running? I did not indicate this earlier, but if the noble Lord is looking for support in that approach, he will have it from these Benches.
Lord Davies of Oldham: My Lords, uncharacteristically, the noble Lord, Lord McNally, is late to the party, but his contribution is very welcome. I see considerable merit in what he indicates. The noble Lord is, in his usual benign way, giving necessary

829
reinforcement to the Government as to why he thinks we should reject the rigidity implicit in the amendments.
Baroness Buscombe: My Lords, I thank the Minister for his response. Of course I would like to be early for a party. I think that was rather an unfair comment about the noble Lord, Lord McNally.
I am rather disappointed by the Minister's response. One of the reasons for tabling these amendments was to follow up the order to which the noble Lord, Lord Lipsey, referred, with which we were not happy. It seemed to be prejudiced against some of the smaller companies and to be a reaction to a particular situation—Endemol. We felt that was rather unfair. So we are reluctant to trust that the order route is satisfactory.
That said, if the Minister is suggesting to me that our amendments would remove future flexibility by defining the term "independent production", I am concerned I notice my noble friend Lord Crickhowell nodding at that remark. I defer to my noble friend on that issue. It is disappointing. We worked hard to try to table an amendment that would alleviate the clear concern in Committee that such tests as we were keen to apply could allow the quota to be attacked by the back door.
That said, I am pleased that the Minister has offered further discussion about the smaller regional TV companies, for example. The suggestion made by the noble Lord, Lord McNally, is a good one. Therefore, for now, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 141 had been withdrawn from the Marshalled List.]
[Amendment No. 141A not moved.]
Clause 276 [Appointed news providers for Channel 3]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 142:
Page 249, line 17, leave out paragraphs (a) and (b).
The noble Baroness said: My Lords, I shall speak to Amendments No. 142 and 143 in Clause 276, to Amendments Nos. 144 and 145 in Clause 277, to Amendment No. 146, after Clause 277, and to Amendment No. 244 in my name and that of the noble Lords, Lord McNally and Lord Gordon of Strathblane, and the noble Baroness, Lady Howe of Idlicote. I thank those noble Lords for adding their names to those important amendments.
Taken together, the effect of Amendments Nos. 142, 143, 145 and 146 would be to delete the requirement for Channel 3 to appoint a new supplier from among a list of companies that have secured nominated status from the regulator. De facto, that would also do away with current ownership restrictions placed on the so-called nominated news provider. However, it would retain the obligation on Channel 3 to supply a news service competitive with other national news services. It would also retain the new powers proposed by the Government that give Ofcom power to issue guidance
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on the terms that it believes will be necessary to secure the delivery by any news provider appointed by Channel 3 to meet its news obligations. As well as giving guidance on those terms, Ofcom will have the power under Clause 276(3)(d) to approve the terms agreed between Channel 3 and its news supplier.
Those are powerful provisions that will ensure that Channel 3 has a news supplier that is adequately resourced to discharge the obligations with regard to news on Channel 3 included in the Bill. Amendment 204 is a consequential amendment that deletes Clause 343, which would raise the current 20 per cent ownership limit to 40 per cent. Taken together, those amendments, which were also presented in Committee, would remove the proposed ITN ownership restrictions while retaining clear obligations on ITV to properly fund a news service that is capable of competing with that of Sky News and the BBC.
The issues in this debate have been well rehearsed both in another place and in Committee in this House. Whatever initial opposition there was at the start of the process has gradually evaporated to the point where, in Committee, the Minister faced the unenviable task of being the only Member of your Lordships' House out of 10 who spoke on the issue to defend the status quo.
The power and persuasion of the arguments deployed across the Chamber during our debate in Committee exposed the fact that the Government have no clear or logical reason for retaining ownership restrictions on ITN. Each argument that has been advanced by the Government has been comprehensively dismissed.
First, Ministers argued that the retention of the current rules is necessary to protect the editorial quality of news on ITV. But, as acknowledged by the Government elsewhere in the Bill, editorial quality is more appropriately safeguarded by content regulation than by ownership. The quality and impartiality of news on television is indeed a matter of great importance. That is why we, along with ITV and ITN, are happy to support those aspects of Clause 276 that strengthen the obligations on Channel 3 to provide a high quality news service and give Ofcom greater powers with regard to the terms agreed.
Secondly, it has been argued that it is important to keep the rules on ITN ownership because we do not know who might own ITV following the Government's relaxation of the media ownership rules, the implication being that ITN might fall into the hands of foreigners. This is perverse nonsense from a Government who are relaxing the rules to allow non-EEA owners of ITV. In addition, the current rules do not afford ITN any such protection. In the last bidding round for the ITV contract, the ITC approved a bid from a largely foreign-led consortium consisting of Sky, Bloomberg and CBS. ITV chose to stick with ITN, but there is nothing in the current Bill to prevent ITV awarding the contract to a company other than ITN next time around.
Finally the Government have argued that increasing the share that any individual company may hold in ITN from 20 per cent to 40 per cent will help to boost investment in the company by allowing it to move from a minimum of five to three shareholders. But if this relaxation is of such benefit, why is it that ITN has been the most vociferous opponent of the rules as currently framed in the Bill? Have the Government not begun to ask themselves why, if these rules are so good for ITN, it is ITN that has led the charge against them?
It is because they will have the opposite effect. They will condemn ITN to a fragmented shareholding structure and make it more difficult for its management team to secure investment, grow the business and keep the ITN brand strong. In Committee the Government indicated that Ofcom would be able to lift the ownership rules and that they did not object to Ofcom looking at this as an early priority. But the reality is that, on taking office, Ofcom will immediately have to deal with the obligatory review of the whole of public service broadcasting to inform the BBC's charter review process, the replacement of every Channel 3 analogue licence and the Channel 5 analogue licence with new digital licences, the establishment of a new co-regulatory body to regulate broadcast advertising, the setting of origination targets and quotas and the introduction of new programme codes, to name only a few of its tasks.
The reality is that if we leave this to Ofcom, it will slip to the middle or bottom of a very long list of priorities. That will leave ITN labouring under ownership restrictions not faced by any of its competitors, unable to secure the investment it badly needs now if it is to sustain its position as a market leader in news supply. There is clear support across the House and across the broadcasting industry for the removal of these rules. Their removal will help to strengthen ITN and the news supply market in the United Kingdom.
In Committee the Minister promised to bring forward amendments on Report that might meet us half way. These have not materialised and I take that as a positive sign that Ministers are prepared to meet us not just half way, but at the final destination. I hope that the Minister will be able to give us a clear assurance on this point so that we are not compelled to divide the House on an issue on which there is such wide agreement. I beg to move.
9.15 p.m.
Lord McIntosh of Haringey: My Lords, I wonder if I might intervene now because I have something positive to say, which may be helpful. I do not wish to curtail debate and I shall be glad to respond to any further points that are made, but what I have to say now may be helpful to noble Lords.
We have listened carefully to all the arguments and we have been persuaded that we should modify the arrangements for an appointed news provider for Channel 3. We shall bring forward amendments at Third Reading to do so. Let me outline what we propose.
832
We will remove the ownership restrictions on the appointed news provider, thus removing the legal obstacles preventing ITV or anyone else from taking a majority shareholding in the appointed news provider or owning it outright. For clarity, I should add that we shall retain the restriction on bodies disqualified from holding broadcasting licences by virtue of Part. II of Schedule 2 to the Broadcasting Act 1990, such as political parties, from having an interest in the appointed news provider. I would add in passing, since I must have some retaliation for the powerful speech just made by the noble Baroness, Lady Buscombe, that the amendments as tabled would have removed that restriction, which I am sure was not their intention.
We shall also introduce a new restriction. As the House is well aware, there are restrictions preventing newspaper owners with 20 per cent or more of the national newspaper market, or bodies controlled by such owners, from holding an ITV licence. However, there are no specific restrictions on such bodies from having an interest in the appointed news provider. Although, like everyone else, they are prevented from having more than a 20 per cent interest in the news provider, once we remove the ownership restrictions they could own the appointed news provider outright. It would be odd, to say the least, for such a body to be prevented from holding a Channel 3 licence and yet he able to provide it with its news—its most politically and democratically sensitive material. We will therefore amend the Bill so that a person who cannot hold a Channel 3 licence cannot have more than a 20 per cent share in the Channel 3 news provider.
This leaves these bodies in exactly the same position as they are under the current legislation. So they will not he prejudiced, but they will not benefit either from the ownership relaxation we are providing. We will retain all the other important quality aspects of the appointed news provider regime currently set out in the Bill which require Channel 3 to provide a news programme capable of competing effectively nationally and which is adequately funded.
We will also amend the Bill to ensure that Ofcom can obtain all the information it needs from ITV or the appointed news provider to assure itself that the necessary funding arrangements are in place and working properly. As a safeguard, we will retain a power in Clause 276 to reintroduce further ownership restrictions on an appointed news provider in the future. This could he done, for example, as the result of a recommendation from the reviews that Ofcom is required to conduct when Channel 3 or Channel 5 licences change hands, or when Ofcom carries out a review of the media ownership rules under Clause 384. We think this is a useful safeguard.
Clearly, any decision to reintroduce limits in the future would have to be reasonable and proportionate and comply in particular with our European Convention on Human Rights obligations. I hope that that is helpful to the debate.
Lord Bragg: My Lords, I was about to make an immensely long and repetitive speech on this subject.

833
Instead, I thank my noble friend the Minister for such a generous and helpful response to the concentrated views expressed across the House.
Lord Fowler: My Lords, I, too, was about to make a long and spirited speech on this subject. I, too, thank the Minister. I congratulate my noble friend Lady Buscombe on the persistence with which she has put the case and for the victory she has secured.
ITN has a proud history. "News at Ten" has been genuinely innovative over the years and reporting standards have been very high. In recent years some of us feared that ITN had lost its way—particularly in regard to its decision to move the main evening news programme around the schedules—but its coverage of the Iraq war, where one of its reporters was so tragically killed, showed that its old skill and flair are still present. That needs to be underlined.
The Minister, urged on by my noble friend, has taken away one of the restrictions on ITN. It did not seem to make any kind of sense to deter investment in the way it was deterred under the rules, even as modified, in the Government's first proposals. The BBC owns its own news service, Sky owns its own news service, and we can now have a situation where ITV can benefit from the same kind of freedom. I believe that, as a result of that, it will go forward from strength to strength and become a major force in British and international television, as it deserves to be.
Lord Crickhowell: My Lords, I was not going to make a long speech because I said what I wanted to say at the Committee stage. I thank the Minister for his wholly helpful statement. It needs to be said that the restrictions he suggested are also very reasonable. The balance he has produced is acceptable and greatly improves the Bill.
Like my noble friend Lord Fowler, I, too, congratulate my noble friend on the Front Bench on a notable victory. She has achieved a significant improvement to the Bill—a very satisfactory outcome. It shows that when the House works on a cross-Bench basis with support from all parts of the House we can improve legislation, as we have done on this occasion.
Baroness Howe of Idlicote: My Lords, I also congratulate both the Government and the noble Baroness, Lady Buscombe.
I admit that when we debated this in Committee the arguments were so convincing, made even more convincing now, that I could not believe that the Government would not give way. I also admit that I made a rather cross comment about the Government not giving way. I take that back unreservedly. I am delighted that the Government have given way, and I agree that the additional conditions make much sense for the future. So there is no need to say any more, just congratulations.
Lord McNally: My Lords, I am sure that I can help the noble Lord, Lord Lipsey. It is a matter of historical
834
record that two years ago the Liberal Democrat conference adopted a policy document that advocated this policy at a time when even ITN did not believe that that was achievable. That only goes to show that what the Liberal Democrats said two years ago, the Conservatives and the Labour Party pretty well catch up when they get going. Thank you very much, Minister.
Lord Lipsey: My Lords, I am tempted to say that I was about to make a short speech but will instead embark on a long one. All that I wish to say in response to this remarkable development is that this Report stage demonstrates this House working at its best. I contrast that with a less satisfactory Bill, such as the Licensing Bill.
There has been give and take on this Bill, a good atmosphere, genuine argument, and as a result—I do not like the words "concessions" or "victories"—we have made progress by consensus. I happily pay tribute to the role played by the noble Baroness, Lady Buscombe, and I also thank the Minister for the approach that he has injected into this Report stage. For once, we can be proud of our work.
Lord McIntosh of Haringey: My Lords, with the leave of the House, I have no response, except to say that I have been outnumbered 10 to one on more than one occasion, and I expect that to continue. It does not always mean that I am wrong. On this occasion I add my congratulations to those who have successfully argued the case.
Baroness Buscombe: My Lords, it gives me great pleasure to thank the Minister for his response. I also thank all noble Lords who have contributed to this important debate through the different stages of the Bill—my noble friends Lord Fowler and Lord Crickhowell, the noble Lords, Lord Bragg, Lord Lipsey and Lord McNally, and the noble Baroness, Lady Howe.
I thank those who have complemented me, but this is a victory for all noble Lords and for the Government, who are now making good law. It is an example of your Lordships' House working at its best, but I also thank the Secretary of State for offering me the opportunity to debate these issues with the Minister. That contributed greatly to the result that we have achieved. The Minister has given a clear assurance and was kind enough to give me advance notice of his comments. We have come a long way and we are enormously grateful. We shall consider the proposed amendments with care, to ensure that they fully reflect the Government's reassurances and the Minister's comments this evening. On that basis, it gives me great pleasure to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 143 not moved.]
Clause 277 [Power to repeal Channel 3 news provider provisions]:
[Amendments Nos. 144 and 145 not moved.]
[Amendment No. 146 not moved.]
9.30 p.m.
Clause 281 [Regional programme-making for channels 3 and 5]:
Lord Puttnam Lord Puttnam moved Amendment No. 146A:
Page 253, line 11, leave out "suitable" and insert substantial"
The noble Lord said: My Lords, I rise briefly to move—move again—the amendment. I read carefully the Hansard report of our discussion in Committee. It was a fairly sad occasion. I then went to the Oxford English Dictionary and looked up the definition of the words "substantial" and "suitable". According to the OED, "substantial" means,
"Having solid worth or value, of real significance; solid; weighty; important, worthwhile".
The dictionary adds "ample and nourishing". Under "suitable", we find:
"fitted for or appropriate to a purpose".
I suggest that there is no contest between the meaning of those two words. It is clear that what we are looking for, in the context of the clause, is "substantial". I would even be prepared happily to settle for "significant". In no way can the word "suitable" be applied. I beg to move.
Lord Crickhowell: My Lords, the Minister is basking in the glow of the approval of the whole House for the action that he took on the previous amendment. He can gain even greater approval if, on this occasion, he again accepts this utterly reasonable amendment, which will strengthen the Bill. The issue has been raised repeatedly by the noble Lord, Lord Puttnam, and the amendment deserves support.
I am optimistic that, with the Minister in such positive and constructive form, we can make another improvement to the Bill.
Baroness Buscombe: My Lords, we support the amendments.
Lord McIntosh of Haringey: My Lords, in Committee, the noble Lord, Lord Puttnam, said, I think, that we were losing a "slam-dunk" opportunity to be flexible. We debated the amendments in Committee, and I cannot accept the amendments before us today. I listened carefully to the views that were expressed in Committee, and I hope that, even if we cannot accept the exact wording proposed, there will be something that we can do to meet the concerns expressed.
The concerns expressed are difficult, and I am not sure that we got that across adequately in Committee. The problem is that, unlike the word "substantial", the current words "suitable" and "sufficient" have a wide meaning. I know that that is a cause of concern to some people, but the words give Ofcom essential flexibility to apply the targets for regional production, investment in regional production, and regional programming at a level appropriate to the service in question.
836
We need flexibility because this is not an area in which one size can fit all. There are considerable differences in the production capabilities of the different regional Channel 3 licensees. What is right for, say, Granada in Manchester, with a well established production base, may not be right for smaller licensees such as Channel or Ulster or for the London licensees. Similarly, what may be right for Channel 3 may not be right for Channel 5, which has no production base of its own and is, after all, a national service. I know that the amendments do not apply to Channel 4, but the same arguments would apply there.
Ofcom would have no flexibility, as it does at the moment, to take such factors into account when setting targets. For example, if it were to set a target for Channel 5 that appeared to them to be "substantial", that target would set a threshold because Ofcom would have deemed it to be "substantial". It would not have the flexibility to set targets significantly above that threshold to determine, for example, that a "substantial" amount in the case of a Channel 3 service should be much higher than for Channel 5. So, there is a danger that the targets would be set at the lowest common denominator. That is not what we want.
There is also a problem with regional programming. The current word—"sufficient"—gives Ofcom the flexibility to take individual circumstances into account but ensures that whatever targets are imposed must be enough, in its view. Clearly, the regional programming requirements in relation to the national Channel 3 service—currently GM TV—should be different from those of the regional licensees, but the amendments would take away any discretion for Ofcom to take that into account in setting targets.
But—I had to say that, because that is the view of parliamentary counsel expert in these drafting matters—
Lord Crickhowell: My Lords, can I encourage the Minister by saying that I agree with what he has been saying? I think there is a point that needs to be taken into account. Because we are on Report I can make the point only by intervention. If he can meet us at least half way while providing the flexibility that I agree is required, I for one will be satisfied.
Lord McIntosh of Haringey: My Lords, I had reached the word "but". We recognise the strength of feeling on the matter and we want to do what we can to address the concerns expressed. We must ensure that Ofcom has the flexibility to treat different services differently, but within that we will look at whether we can find some alternative wording that would be more satisfactory.
We hope that it will be possible to incorporate the word "significant"—which I believe was the fallback position of my noble friend Lord Puttnam—perhaps with a qualification to ensure that Ofcom's flexibility is preserved. We will come back with suggestions on Third Reading.
Lord Puttnam: My Lords, I thank the Minister for that generous offer. I agree entirely with the noble

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Lord, Lord Crickhowell, that the first part of the Minister's answer was accurate and absolutely fair. I would settle comfortably on the word "significant". I shall make one other point with respect to "suitable". We live in a world of downward pressure: on costs and on quality. I have always been concerned that the word "suitable" represented an escape clause for those who wished to press downwards. I think "significant" would serve nicely and I hope that it finds an ability to commend itself to the Government. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 146B and 146C not moved.]
Clause 282 [Regional programmes on Channel 3]:
[Amendments Nos. 146D to 146M not moved.]
Lord Crickhowell Lord Crickhowell moved Amendment No. 147:
After Clause 282, insert the following new clause—
"VARIATION OF PUBLIC SERVICE OBLIGATIONS OF CHANNEL 5
(1) In the event that the share of audience or share of revenue of Channel 5 for any twelve month period is in excess of 15 per cent, as measured by OFCOM in their review under section 351, the Secretary of State shall by order, require OFCOM to review the conditions placed upon Channel 5 under sections 274 and 281.
(2) Following such a review, OFCOM shall be required to increase the proportions of original and regional programmes required to be produced by Channel 5 to meet or exceed those most recently required of Channel 3.
(3) In the event that Channel 3, in the same period, had a share of audience or share of revenue below 15 per cent, the proportions of original and regional programmes required to be produced by Channel 5 should be no less than those levels produced by Channel 3 when its share of audience was last at or above 15 per cent."
The noble Lord said: My Lords, my noble friend Lord Renton of Mount Harry, who tabled the amendment, cannot be here tonight. I added my name to it because I have been an advocate of future-proofing. It seemed a good idea to provide for a situation where Channel 5 might grow and have a much larger share of business than it has at present.
That is all I need to say about the amendment. The object is to future-proof and provide for what might well happen in the future. Whether it is perfect in its present form I would not know; I suspect that, as usual on these occasions, Ministers will find technical faults. But the principle seems absolutely sound. It is right, even in the absence of my noble friend Lord Renton of Mount Harry, that we should have the opportunity for a brief debate on the principle and to hear what the Minister has to say. I beg to move.
Viscount Falkland: My Lords, we on these Benches agree with the amendment in the name of the noble Lord, Lord Renton of Mount Harry, and the explanation given by the noble Lord, Lord Crickhowell. We think it is a sensible approach. I spoke to the amendment last time; in fact I agreed with the noble Lord, Lord Renton of Mount Harry, to put my name to it. but something went wrong with a
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technicality in our procedures. I repeat that I agree with the sensible provision for the future contained in the amendment.
Lord Brooke of Sutton Mandeville: My Lords, I indicated in Committee a sympathy for my noble friend Lord Renton of Mount Harry's then-Amendment No. 233A. I rise again in his absence on Report to support his Amendment No. 147. Indeed, I go a little further than my noble friend Lord Crickhowell.
I appreciate that returning to the issue on Report might be regarded as an example of the self-indulgence to which the Leader of the House alluded the other day, but I hope that I shall be forgiven for using this opportunity to reflect a little further on what the noble Lord, Lord Davies, said about my noble friend's amendment in Committee. He first said that Ofcom's discretion would be circumscribed in setting targets by this amendment through its concentration on viewer numbers, and I acknowledge the logic of that.
Secondly, however, he went on to say that the then Amendment No. 200, which is not part of this package now, might,
"lead to decreases in the various requirements on public service channels in response to falling revenues and audience shares, rather than increases".—[Official Report, 3/6/02; col. 1216.]
This does not seem a fair charge tonight against the wording of my noble friend's Amendment No. 147.
Finally, the noble Lord said that my noble friend's then amendment, which is parallel to tonight's, would have represented a penalty for success and might have led a shrewd channel owner to curb the channel's growth in viewers when it was approaching the high jump bar which my noble friend's amendment represented. I appreciate that the noble Lord, Lord Davies, was not speaking to the issues of media ownership at col. 1216 for those issues then lay ahead of us, just as they do tonight. But they certainly underlay the motivation of my noble friend's amendments in Committee as well as on Report this evening.
A powerful plank in the Government's arguments for their media ownership proposals in the Bill is the desire to encourage investment. But any businessman, like the shrewd channel owner which the noble Lord, Lord Davies, mentioned in Committee and to whom I have just referred, prefers, when making an investment, to deal with known facts and with constants rather than with variables and uncertainties. We all know how much the independent channels have overpaid the Treasury for their licences in the past and thus foregone the capital they could have invested in their regional channels' programming because one cannot spend the same money twice.
The same observation, incidentally, applies to the Treasury's much larger recent auction for the telecommunications licences. The Treasury may smile in both instances but the massive, excessive expenditure in acquiring the licences—again, in both instances—cannot represent investment in the productive side of the two respective industries.

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So I support the efforts of my noble friend Lord Renton of Mount Harry to introduce certainty rather than uncertainty into genuine investment decisions, and I support my noble friend Lord Crickhowell in bringing this matter back for consideration in your Lordships' House at Report.
Lord McIntosh of Haringey: My Lords, the purpose of this amendment seems to be to allow Ofcom to ratchet up Channel 5's original production and regional programme-making requirements if its audience share or share of revenues exceed 15 per cent. We discussed this amendment in detail in Committee. It seems to be an attempt to deal with concerns about the future ownership of Channel 5. That is really what is behind it; we will be discussing it tomorrow and I shall leave my arguments on that major issue and on the related issues of plurality and public interest tests in merger legislation until we reach that point. In the meantime, I have some comments about this amendment which, if the noble Lord, Lord Crickhowell, will forgive me, I do not think will survive the major debates we have tomorrow.
I am not persuaded of the need for this amendment for two reasons. First, I am not convinced it will have the right effect. A 15 per cent target might appear an appropriate level for audience share or share of investment in the current climate, but we can only guess at how the broadcasting landscape could look in, say, five years' time. If there is really an expansion of successful channels, possibly nobody will get 15 per cent, in which case this does not seem very relevant. To have a rigid threshold based on 2003 audience share levels on the face of the Bill seems unhelpful.
Furthermore, the amendment only considers the relationship between Channel 5 and Channel 3. I do not think it is right to make a direct and inflexible comparison between these two public service channels, particularly when it is possible that both channels could in the future find themselves in a weaker market position as multi-channel viewing gains ground—which is another way of saying what I have just said in my own words.
Secondly, Ofcom already has a range of powers to ensure that targets for original and regional production are set and maintained at the right levels. These include the annual factual and statistical report on television and radio services in the United Kingdom, which will include consideration of the financial condition of the market and any trends appearing or operating in the size of the audience; regular reviews of the public service remit and the extent to which public service broadcasters have provided television services which, as a whole, fulfil the purposes of public service broadcasting in the United Kingdom; and the review of various public service obligations, including original and regional productions, on a change of control of a Channel 3 or Channel 5 licence, to ensure that standards do not fall.
As well as those specific powers, the Bill also preserves for Ofcom a general power under the Broadcasting Act 1990 to vary a licence having given the holder a reasonable opportunity to make
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representations. So Ofcom may at any time alter the original and regional production requirements following consultation with the licence holder.
I am confident that Ofcom will set the right targets, review them as appropriate and take action when necessary. I am therefore not persuaded that a further, very specific power of the nature proposed is needed.
9.45 p.m.
Lord Crickhowell: My Lords, the Minister has given a helpful response in the sense that he has spelt out the powers available. As on many occasions I have advocated that Ofcom is the right body to review such matters and to put forward subsequent advice or take decisions, I accept much of what he has said. The point has been made, and in the circumstances it is right for me to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 148 had been re-tabled as Amendment No. 152A.]
Clause 298 [Code relating to provision for the deaf and visually impaired]:
Lord Ashley of Stoke Lord Ashley of Stoke moved Amendment No. 149:
Page 264, line 42, leave out "from time to time" and insert "at least once every three years"
The noble Lord said: My Lords, it is no exaggeration to say that this group—Amendments Nos. 149 to 159A—will determine not only the future amount of television that can be enjoyed by disabled people with sensory impairment but the quality of their enjoyment. General technological advances have been made, and the potential for the future is immense, as we are all well aware. The adjustments that must be made for disabled people are very tiny by comparison. There is no doubt that companies could make them if they so chose. It is Parliament's responsibility to see that they do so.
Tonight I shall focus on four areas. First, I shall refer to Ofcom reviewing the code—Amendment No. 149. Secondly, I shall speak about the inclusion of deaf-blind people. Thirdly, I shall speak to Amendment No. 153 on the time scale for reaching targets. Fourthly, I shall talk about the power of Ofcom to exclude programmes from having to meet the requirements. I shall also comment briefly on the government amendments.
Amendment No. 149 will require Ofcom to review the code relating to the provisions for deaf and visually impaired people at least once every three years instead of "from time to time". We discussed the issue in Committee, and those who supported me agreed that the phrase is far too vague and far too loose. The noble Baroness, Lady Blackstone, rejected our views in Committee, arguing that we should trust Ofcom. She said that she would expect Ofcom to review and revise the code regularly, and that to require more would impose an unnecessary burden.
I disagree for three reasons. First, I am sure that those about to lead Ofcom—the noble Lord, Lord Currie, in particular—will take their

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responsibilities seriously. However, their successors may not do so. Secondly, Ofcom will be an extraordinarily busy regulator, and it may be inadequately funded for that task. Without a legal requirement to review the code, it will be pushed aside to make way for any other business legally required. The sheer volume of Ofcom's work could be decisive. Thirdly and significantly, placing a statutory requirement on the timing of a review signals Parliament's view that the code is a matter of importance.
It is not a question of trusting Ofcom, as intimated by the noble Baroness, Lady Blackstone. It is a matter of Parliament telling Ofcom that the code really matters to disabled people and must be kept updated because of the dynamism of the industry and the rising expectations of disabled people.
I turn to Amendment No. 150. In Committee the noble Baroness, Lady Blackstone, recognised the special problems of those who are deafblind, but she was content to leave the Bill as it was without any amendment referring to them. However, it is essential to recognise that without such reference in the Bill Ofcom will not have the authority to meet the special needs of those with a dual handicap. Provision for those who are deaf and provision for those who are blind are simply not enough because that assumes that those who are hearing impaired can see well and that those who are visually impaired can hear well. Clearly, that is not the case. There is a wide spectrum of impairment ranging across both disabilities and allowance has to be made for that.
It would be especially unfortunate to reject this amendment because it is quite easily possible to make simple changes that would be of great benefit to deafblind people. For example, increasing the size of lettering or changing the font can make all the difference for those who are deaf but have little sight. We do not know what benefits will emerge for the future, but for now we must ensure that Ofcom has the power to consider them. We hope that the Government will accept this amendment. Frankly, I think that it would be outrageous for the Bill to leave this House without a reference to deafblind people.
I turn to my Amendments Nos. 150B and 153. It really is ridiculous to allow television companies 10 years to reach the subtitling target set out in the Bill. For a dynamic industry 10 years must seem like a joke. In Committee my views received welcome support, even from the Minister. The noble Baroness, Lady Blackstone, accepted the thrust of the argument and said that challenging interim five-year targets would be set. As usual, my noble friend Lord McIntosh has kept faith and tabled new clauses which go some way towards relieving the deep anxieties of many disabled people. We are pleased that all sides of the House understandably expressed concerned at the incredible 10-year provision in the Bill.
I shall therefore not be moving my Amendments Nos. 150B and 153. However, I am very sorry that my noble friend's timescale does nothing about targets for signing and audio-description. I think that it is wrong
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to fail to do so. I hope that when he replies he will be able to make some provision on signing and audio-description, both of which are terribly important.
The new clauses will ensure that there are a number of developments which are very important to disabled people. Ofcom would have the responsibility to see that every television channel promotes the service they offer to disabled people. That is really splendid news on this important issue.
The figures for subtitles, signing and audio-description will now be averaged over 12 months rather than on a weekly basis. I appreciate that companies want some flexibility. However, to move from a weekly to an annual basis is far too big a jump. It is just not acceptable. I think that a monthly basis would be a reasonable compromise. It is not clear how that will affect disabled people, but I expect it to be less of an issue on subtitling than on signing and audio-description. Disabled people and Members on both sides of the House will appreciate any clarification from my noble friend on those two points—signing and audio-description.
The Bill's five-year interim target for subtitles is set at 60 per cent. Although that is less than my amendment provides for, it is a compromise and is none the worse for that, especially because of the important addendums that the target may be increased, the date may be brought forward by order of the Secretary of State, and Ofcom will have explicit power to set further interim targets after the 10-year anniversary. The significance of that is that subtitles may be extended beyond 80 per cent, moving us closer to the dream of 100 per cent subtitles, where all deaf people can watch all television in comfort and with comprehension. That would he one of the best, if not the best record, in the whole world.
I shall mention a final provision of the new clauses. Where the Secretary of State chooses to alter any of the 10-year targets by order, he can do so only by replacing them with a higher target. Again, that is good news. I express my appreciation to the Government and to my noble friend Lord McIntosh in particular for the constructive way in which they have tackled these problems.
In brief, the Bill clearly has good intentions that will give deaf and visually impaired people much greater access to television. It could and should enable them to share in the welcome expansion of programmes of all kinds. However, so much depends on its future implementation. In particular, the exemption of programmes should be minimal, or it could be massive. On that hinges the value of the Bill to people with hearing and visual disabilities. Ofcom will decide which programmes will be excluded and that is right and proper. The issues that it should consider in making its decision are a matter for Parliament and not for Ofcom. The current wording is so loose that it could lead to either minimal or massive exemptions. The issue should be debated in this House so that Ofcom can know our views and then get on with its job.
My own view and that of some Members of this House, as it is of the RNID and other organisations concerned with these problems, is that exemptions should be absolutely minimal and should be granted only for exceptional and pressing reasons. It would be very helpful if Ofcom were to give advance notice of applications and an opportunity for voluntary organisations to comment before any exemptions are made.
If my noble friend Lord McIntosh were to give an assurance that Ofcom would be expected to operate in an open and consultative manner on exemptions, as does the Federal Communications Commission in the United States, it would he tremendously important for deaf people and a very healthy development.
I have tabled Amendment No. 155 because in any discussion on disability, I have found that one striking fact emerges; that is, the effects of practically any disability are perceived very differently by the public from those experiencing the disability. That has very important implications for the Bill because Ofcom can assess the benefits of subtitling, signing and audio description in one way, but disabled people see them entirely differently. The public could regard subtitles, for example, with mild interest or possibly irritation, whereas to a deaf person they are crucial to watching and comprehending television. Without them, in a real sense, television is useless and irrelevant to profoundly deaf people because they cannot understand the dialogue—imagine that. Basically, that is the reason for my amendment, and I hope that my noble friend the Minister will he able to accept it.
Amendment No. 156 also relates to the need to have more than an official view before making a decision on exclusion or inclusion. Organisations for the disabled can effectively reflect the views of disabled people, and they need to have the right to do so. Consultation and transparency lead to a very different animal from protestations—which is all we have now—and the amendment would provide for them.
I know that my noble friend the Minister will do what he can, and I thank him very sincerely for the great advances that we are making for deaf and sight impaired people in the Bill. I greatly appreciate all that he has done. I beg to move.
10 p.m.
Lord McIntosh of Haringey: My Lords, I do not want to get into the habit of speaking twice on every group of amendments but it might be for the convenience of the House if I speak to the many government amendments in this group and then respond to the debate at the end as briefly as possible.
We have made clear throughout the passage of the Bill that we fully recognise the importance of access to television services for people with sensory impairments. The provisions in this Bill and other recent developments will lead to a very significant improvement on the current position. In July 2001 we increased the subtitling target for digital terrestrial broadcasters from 50 per cent to 80 per cent. In the
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Bill, we have extended this requirement, and requirements to provide signing and audio description. I know that the noble Lord, Lord Ashley, is not satisfied with what we are doing in that regard but we have made changes. That requirement will apply to all licensed broadcasters including. for the first time, digital cable and satellite broadcasters. Those changes should lead to a dramatic increase in the provision of services to help people with sensory impairments to enjoy television. We know that many people would like us to do more. The noble Lord, Lord Ashley, knows that whenever I offer him something, he wants more. I pay tribute to him for that; he is a doughty fighter and he is very difficult to resist. We indicated in Committee that we would bring forward amendments at Report to deal with two of the concerns that had been expressed. The government amendments in this group represent the outcome of that commitment and also make a further concession to address Amendment No. 157.
The first part of Amendment No. 150A deals with the concerns expressed that many sensorily impaired people are unaware of the existence of subtitling, signing and audio description, and are therefore unable to benefit. The amendment will place Ofcom under a duty to include in its code on access to television for people with sensory impairments a requirement that broadcasters make adequate information about those services available to those who are likely to want to make use of them.
The second part of Amendment No. 150A fulfils our commitment to introduce a fixed, five-year interim target for subtitling, to ensure that progress towards meeting the main target by the 10th anniversary is accelerated in the early years. That target will apply to all services for which the relevant date is after the passing of the Bill; that is, all television licensable content services and restricted television services, and those digital television programme services and licensed public service channels the provision of which begins after the passing of the Bill. There is certainly an incentive here to get the Bill passed.
The target will be 60 per cent. In determining that percentage, we have taken into account both the desire of people with hearing impairments to ensure more subtitling provision, and the understandable concerns of broadcasters about the additional costs that this will impose on them. We believe that a target of 60 per cent strikes the right balance. It is a tough but achievable figure for the broadcasters and will lead to the availability of much more subtitling than might have been expected on a linear progression to 80 per cent.
Amendment No. 156F allows the Secretary of State to set a higher target, or require the target to be met by a different anniversary, where it appears that the 60 per cent target is likely to be fulfilled before the fifth anniversary. That will ensure that there is flexibility to require more from those services for which the 60 per cent target would be less challenging. I hasten to add that that is an upward motion, not a downward one.
Finally, Amendment No. 156H deals with another point of concern which we did not specifically undertake to consider in Committee. That amendment

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will ensure that the provision of subtitling, signing and audio description is not cut back, by changing the existing order-making power in Clause 301(1)(b) to ensure that the percentage figure for the 10-year targets for all those services can only be increased in future, not decreased. As I said, we introduced the amendment specifically to address the intention underlying Amendment No. 157, which we may be debating very shortly.
I hope that the House will agree with me that these amendments show that the Government take these issues very seriously, that we have listened to the concerns expressed and that we are prepared to act where appropriate. We believe that we have gone as far as we can and that it would not be right to impose any further burdens on broadcasters in this area. I have not gone into the detail of all the other amendments but it is obvious that they are consequential on the major points to which I referred.
Lord Carter: My Lords, the only contribution I intend to make is on the government amendments. It is something of a culture shock for me to be questioning the Government on the quality of their amendments.
The amendments to which my noble friend referred were Amendments Nos. 150, 150D, 150E, 151A and 152B to leave out "in every week". We believe that this has been introduced without any consultation with the relevant organisations to increase flexibility for the broadcasters. In other words, they are allowed to concentrate their provision on certain weeks or months in the year so long as they reach the overall average year target. At the moment they are judged against a weekly output averaged over a year.
We are not quite clear what powers Ofcom has to prevent abuse. Let me give an example. There are dead periods of the year in television—the summer—when there are a great many repeats and very little origination of programmes. That could be the period that the broadcaster chose to use rather than the period when there were a lot of original programmes. We are not being suspicious here, but we are concerned about something introduced, as we understand it, at the behest of the broadcasters to increase their flexibility. We are not sure why.
I think that my noble friend will now have to reply at the end of the debate, but he has to deal with this concern. We do not quite understand why it has been done. Has Ofcom enough power to prevent the broadcaster using this change to vary the proportions that are subtitled, and so on, to suit themselves? At the moment there seems to be a system of weekly averaging over the year which works in favour of disabled people. It would be extremely helpful if my noble friend could specifically deal with that point.
Lord Addington: My Lords, I would like to become an echo to the noble Lord, Lord Carter, on that last point. The idea is to make sure that people are not cut off from the media of entertainment, news and cultural involvement that is provided with broadcasting. If you
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are getting programmes only every second week or for a period of time, you are cut off. It does not matter if there is that block of time, you are still cut off.
The noble Lord, Lord Carter, puts his finger on a very serious concern. If the Minister can explain why this concern is irrelevant, I would go away from here fairly happy—but only if we received that assurance. Without that a great hole will have been made in an otherwise very welcome government amendment.
The only other amendment I wish to speak to is Amendment No. 149. As the noble Lord, Lord Ashley, pointed out, the deafblind do not fall into the category of the hearing or visually impaired. They are a separate group who share some characteristics. They should appear on the face of the Bill. It is clear that they have not been brought into government thinking—certainly not into the main part of it. They are a small group and should have been included.
This is a very good opportunity to make sure that they are brought into the structure of government thinking. It is not a great crime on the part of the Government; it is just a case of adjusting your mind to a new set of problems. You may think that you have dealt with a disability issue hut, so long as you are naming individual disabilities, you will discover that there is something else. I am rather like a scratched record on the matter but until there is a more structured approach which includes disability rights as civil rights within the whole structure I have to persist.
This Bill does many good things, but its structure means that you are naming disability groups. The deafblind should certainly be here. For that matter. I would like to see the other disability groups who might be affected also named—but that is by the by. If we are here dealing with sensory impairment, the deafblind are certainly an important, if small, group. Having said that, provided that we are worrying about nothing when it comes to the weekly quotas, the noble Lord's amendment is very welcome and I thank him for putting it forward.
Baroness Darcy de Knayth: My Lords, as my name has been added to some of these amendments, I want to thank the Minister very much for his amendments and to endorse all that has been said thus far. I should like the target to be reached a little more quickly, hut I appreciate very much what the Minister has done. I echo the plea of the noble Lord. Lord Addington, for more focus to be placed on the deafblind because they run the risk of far more exclusion than anyone else.
Baroness Buscombe: My Lords, for all the reasons that the noble Lord, Lord Ashley of Stoke, has given, we have considerable sympathy with Amendment No. 149, which would give Ofcom the duty to draw up a code on provisions for the deaf and visually impaired at least once every three years rather than from time to time.
Although I am reluctant to place an unnecessary burden on Ofcom, the reality is that, with the rapid pace of change in technology, a report must be produced regularly to ensure that it is up to date and

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includes the latest developments and opportunities for disabled people in the communications industry. Perhaps the Minister would find a period of time other than three years a little more palatable, but we believe that the terminology "from time to time" somewhat reeks of deadlines being pushed further and further back.
Amendment No. 155 recognises that able-bodied people are often not the best judges of what benefits disabled people. We on these Benches support this amendment. It seems a sensible addition to the Bill in that it recognises that disabled people themselves are the best judges of what would and would not be of benefit.
Government Amendment No. 156F would empower the Secretary of State to alter either the percentage target or the date by which a target should be reached if it seemed that the original target would he met in advance of the deadline. The intention behind this amendment is sound. Some channels will find it easier than others to meet targets. Where rapid progress can be made, the Secretary of State should raise the bar for such channels. However, the amendment concerns us in that it provides an incentive for channels to do the minimum possible to meet the targets so that they do not give the Secretary of State a reason for revising their target upwards. Therefore, can the Minister assure us on this matter? I question what reasons the Government have for believing that this amendment will not act as a disincentive for channels to meet their targets.
Baroness Howe of Idlicote: My Lords, I rise merely to congratulate the Government on what they have done thus far. It is clearly a move in the right direction, although, as has been pointed out by the noble Baroness, Lady Buscombe, some clauses still cause considerable concern—not least, Clauses 149 and 150. While we all appreciate that there has been some movement on the part of the Government, I hope that the Minister will realise how strong the feeling is in this direction and that he will be able to do rather more by Third Reading.
10.15 p.m.
Lord McIntosh of Haringey: My Lords, with the leave of the House, I shall respond to non-government amendments and to points made in the debate. Amendment No. 149 would require Ofcom to review and revise its code relating to provision for the deaf and visually impaired,
"at least once every three years",
rather than "from time to time". That would be the case regardless of whether it was thought that any review or revision was necessary.
We fully expect Ofcom to review and revise its code regularly, but we believe that decisions on the frequency of the reviews should be left to Ofcom, which has the expertise and experience to judge when they might be necessary. The situation might be very different in five or 10 years' time from the current one. We may need to have such reviews far more frequently
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in the near future and far less frequently later, or, as technology develops, the other way round. Frankly, I do not believe that Amendment No. 149 would lead to a different end result.
Amendment No. 150 would require Ofcom's code relating to provision for the deaf and visually impaired to give guidance on the extent to which applicable services should promote the understanding and enjoyment of programmes by persons with a dual sensory impairment, as well as persons who are deaf or hard of hearing, and blind or partially sighted. We do not underestimate the problems faced by people with a dual sensory impairment. We certainly recognise that they have particular needs. But we do not believe that an amendment to the Bill is necessary.
Realistically, a person would need to have some form of hearing or visual ability in order to enjoy or understand television. In this case, the current duty to promote understanding and enjoyment for people who are deaf or hard of hearing and blind or partially sighted would seem to satisfy that need.
There is specialist equipment such as the talking teletext service, which is particularly useful for people with dual sensory impairment. The ITC's technology group believes that it is possible to design a digital version of the talking teletext equipment—I referred to that in debating an earlier amendment—and suggests that the equipment manufacturers work with broadcasters and set-top box manufacturers to try to find a commercial solution. I think that that is the right way to proceed and more likely to bring about the desired result than bringing forward an amendment to the Bill.
I remind the House that government Amendment No. 22, which we moved last week, introduced a duty on Ofcom that focuses on widening the availability of consumer equipment which is convenient for use by the widest practical range of users, including disabled people. That was in response to Amendment No. 39 tabled by the noble Lord, Lord Ashley, in Committee. Ofcom will be required to take those steps, and enter into such arrangements as will encourage others to secure that wide availability. It would not be appropriate for Ofcom to become involved in design, much less manufacture and marketing; so the focus is correct.
Amendment No. 152 is consequential to Amendment No. 151, which will be discussed in the following group.
The noble Lord, Lord Ashley, said that he will not move Amendment No. 150B, so I can move on from that, except to say that we still think that a 10-year period in which to satisfy those obligations is right. It gives those services with new obligations, such as digital, cable and satellite services, enough time to plan for the introduction of these new requirements. That is important, because there are substantial costs involved. Ten years is a long time, that is why we have agreed a fixed, five-year interim target, which is the purpose of government Amendment No. 150A. I know that the noble Lord, Lord Ashley, is not satisfied

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with that response. However, I know that it is also recognised around the House that that is a significant improvement.
Amendment No. 153 would require all channels to achieve at least 40 per cent of their 10-year targets for subtitling, signing and audio description by the first anniversary of the relevant date; and at least 90 per cent of their 10-year targets by the fifth anniversary of the relevant date.
Government Amendment No. 150A goes a considerable way towards meeting this amendment. After consideration, we thought that a fixed, five-year interim target should only apply to subtitling, which is a well-established technology. We concluded that a five-year target of 60 per cent struck the right balance between the objective of accelerating the provision of subtitling and the need to avoid imposing new burdens on broadcasters in an unreasonable time-scale. I know that some people would wish for higher than 60 per cent. I know that some people would wish it to include signing and audio description, which are less well developed than subtitling. But I hope that they will accept that we have listened to the concerns and acted on them.
On Amendment No. 154, Ofcom's code relating to provision for the deaf and visually impaired must set out the descriptions of programmes that should be excluded from the subtitling, signing and audio description obligations. The amendment would mean that Ofcom would have to consider the number of viewers per programme when considering which programmes should be excluded from these obligations.
In excluding programmes, or in special cases all programmes in a service, Ofcom must have regard to a number of factors set out in subsection (6)(a) to (f) of Clause 298. Those include the size of the intended audience for the programme. I am not clear how Amendment No. 154 would add to those requirements.
Amendment No. 155 aims to ensure that Ofcom would have to have regard to the extent of the benefit as perceived by the disabled person in setting out the descriptions of programmes which should be excluded programmes, rather than just the extent of the benefit for disabled people as now.
Amendment No. 156 would require Ofcom to have regard in the same context to the views of organisations representing persons who are hearing or visually impaired. Both amendments seem to be aimed at ensuring that Ofcom consults disabled people and their representatives on individual exclusions and that they decide which programmes it is appropriate to exclude from the perspective of the disabled person. Ofcom is already required to consult these people on its code relating to provision. That code will set out the overall policy on programme exclusions. So the RNID, the RNIB and others with an interest are already consulted on the policy regarding exclusions.
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In making decisions on individual exclusions, Ofcom will only be applying the code and we are not persuaded of the need for further consultations.
My noble friend Lord Ashley made a particular point on the need for targets for signing and audio-description, to which I have already referred. He referred to the need for Ofcom to act in an open and consultative manner. I entirely agree. I can give him an assurance that we would expect Ofcom to do just that.
My noble friend Lord Carter raised the issue of the targets on a weekly basis. There is not a change of policy, only a change in drafting. At present there is a tension between the requirement in Clause 298(2) for figures to be averaged over a 12-month period and the apparent requirement in Clause 298(3) for targets to be met every week. We have never intended that broadcasters should meet targets every week. That could be very difficult.
Therefore, we require some way to bring these two figures together. The answer is that the 12-month period continually rolls forward. For example, if the year starts on 1st January 2004, the target must be met over the period to 31st December 2004, but it must be met also over the period 8th January 2004 to 7th January 2005, 15th January 2004 to 14th January 2005 and so on. So although the target is calculated over a 12-month period, it is based on figures calculated on a weekly basis. That should make clustering of provisions in fallow periods harder to hide and so help to discourage it, which is the matter that concerned my noble friend Lord Carter.
I understand the point made by the noble Lord, Lord Addington, about deafblind being a different category. Although I recognise the tragic position of those people, I say only that their problems are wider than those of broadcasting. The whole issue of how they communicate with the outside world of course relates to broadcasting, but it also relates to other forms of communication. Of course broadcasting has an important role to play, but there are other developments that must impact to enable them to communicate at all with the outside world. It is important that we should recognise that, as well as broadcasters recognising their problems.
Lord Ashley of Stoke: My Lords, I thank all noble Lords who have taken part in the debate. We have not received all we asked for, but, being realistic, in politics one never does. It is my conviction that millions of disabled people will look back on tonight as a landmark. I shall certainly associate it with the name of my noble friend Lord McIntosh. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 150 not moved.]
The Chairman of Committees: I should point out that if Amendment No. 150A is agreed to, I cannot call Amendment No. 150B.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 150A:
Page 265, line 8, leave out subsection (2) and insert—
"(1A) The code must include provision for securing that every provider of a service to which this section applies ensures that adequate information about the assistance for disabled people that is provided in relation to that service is made available to those who are likely to want to make use of it.
(2) The code must also require that, from the fifth and tenth anniversaries of the relevant date, the obligations in subsections (2A) and (3), respectively, must be fulfilled by reference to averages computed over each of the following—

(a) the twelve month period beginning with the anniversary in question; and

(b) every twelve month period ending one week after the end of the previous period for which an average fell to be computed.

(2A) The obligation to be fulfilled from the fifth anniversary of the relevant date is that at least 60 per cent. of so much of every service which—

(a) is a service to which this section applies, and

(b) has a relevant date after the passing of this Act,

as consists of programmes that are not excluded programmes must be accompanied by subtitling."
On Question, amendment agreed to.
[Amendment No. 150B not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 150C to 150E:
Page 265, line 14, leave out "Those obligations" and insert "The obligations to be fulfilled from the tenth anniversary of the relevant date"
Page 265, line 15, leave out "in every week".
Page 265, line 18, leave out "in every week".
On Question, amendments agreed to.
Lord Addington Lord Addington moved Amendment No. 151:
Page 265. line 20, at end insert—
"() that at least 50 per cent in every week of so much of—

(i) a Channel 3 service,

(ii) Channel 4,

(iii) Channel 5, or

(iv) S4C Digital

as consists of programmes that are not excluded programmes must be accompanied by audio-description for the blind."
The noble Lord said: My Lords, this amendment will make much more sense if Amendment No. 152 is taken at the same time—it was a long list and there were bound to be one or two mistakes, but nothing fatal.
Those amendments concern targets for audio description. Taken together, they are designed to ensure that we get 50 per cent targets for audio description. That is now certainly achievable—we referred to this earlier. We have a network that may speed us on our way—it is called the Sky broadcasting system—if we are prepared to pump in enough money to allow us access, which is not that great. I refer the House to comments made earlier today.
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If we have that attitude, we will probably be able to achieve something similar to that which has just been achieved with subtitling. It has been said that the technology is not quite advanced as that in subtitling; but it is not far off; it is not much more expensive. It is about £200 an hour more expensive, on the figures that have been cited to me for about two years. In other words, we could accept that and do something, if we had the will. There are technical problems with getting the box and having it transferred to terrestrial digital, but that is achievable, if we have sufficient political will. However, it is best that we leave that matter there.
However, I hope that the Government will closely consider Amendment No. 152A. That would mean that repeats would not be considered twice. There would thus be a commitment to ensure that under the very modest target of 10 per cent of programmes to be audio described, they would be new programmes. That will have the huge advantage of a bank of audio described programmes. As we use viewer peaks, if a programme is a success, it is understandable—indeed, commendable—that it is repeated; but let us ensure that only new programmes are counted.
I believe that the noble Lord mentioned that Amendment No. 156H pre-empts Amendment No. 157. The aim was that targets could only be raised. I am slightly annoyed that the Government spotted that first and did not give me a chance to say so, but, hey, you cannot have everything.
Turning to Amendments Nos. 158 and 159, we have already discussed the principle of having a regular review written into legislation. I ask the Government to think again about that, because they should consider the concept. It is important to know that one can review things regularly and not wait for something to occur, especially when things change so quickly.
I turn to government Amendment No. 160. That is very interesting and I await to hear what the Minister has to say about it. I beg to move.
Lord Carter: My Lords, I shall speak briefly to Amendment No. 152A. It repeats a point that we raised in Committee under an amendment in my name, to which we have not received a satisfactory answer. It concerns the calculation of the percentage for audio description—the 10 per cent. From briefing that we received from the BBC and others, we discovered that repeats are included in that calculation. For example if "EastEnders" is audio described, if the omnibus edition on Sunday is also audio described, that is included in the percentage. On other channels, the same programme may be frequently repeated.
If it was required that all qualifying audio description was on new programming, even though the target remained at 10 per cent, that would quickly increase the amount of audio described material. It is as simple as that. I cannot quite see why either the broadcasters or the Government want to resist that, because that is an easy way to increase the amount of audio description without altering the percentage in the Bill. I hope that the Minister will be able to give a logical reason why repeats should be included.

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Turning to sub-paragraph (ii), I had thought that Ofcom would have the power to vary rather than to increase the percentage because, while I know that the Minister will be briefed to tell me that under Clause 301 the Government will have the power to alter the percentages by affirmative order, the sub-paragraph marks an attempt to probe whether a way could be found for Ofcom to deal with this problem. For certain major broadcasters the figure of 10 per cent will be too low, but for some of the smaller broadcasters, it is actually too high. Does Ofcom have the power to vary the percentage in order to meet the particular circumstances of each broadcaster?
However, the main point I wish to put is that contained in sub-paragraph (i). If we are to have a target of 10 per cent, then it is important to ensure that it is met on programmes that have not previously been audio described and that repeats should not be included.
10.30 p.m.
Lord McIntosh of Haringey: My Lords, we have had a full debate on the needs of people with sensory impairments so I shall try not to go over old ground. Let me start by introducing government Amendment No. 160 to Clause 304. It addresses the concerns expressed in Committee that the electronic programme guides should be as accessible as possible to people with disabilities, who might need them even more than ordinary viewers.
The amendment should help to ensure that electronic programme guides are easy to use and that solutions are developed to ensure, for instance, that blind people can have an audio electronic programme guide. It should deal with the need for the availability of aids to viewing such as subtitles, signing and audio description to be clearly indicated in and accessed through the guide. I hope that the House will agree that in this we have listened to the concerns expressed and have acted accordingly.
I shall respond to the other amendments in this group. Amendment No. 151 proposes setting a 50 per cent audio description target for the licensed public service broadcasters and S4C Digital. As we have made clear, the 10 per cent target for audio description represents the result of a thorough review and consultation by the Government in 2001. After due consideration we concluded that the 10 per cent target should be maintained in the light of the costs of providing the service and, in particular, the unresolved production and distribution difficulties with the audio description modules needed to receive the service.
I do not disagree with the noble Lord, Lord Addington, that in the future things could improve, perhaps even in the near future, but at present we are disappointed that the current problems with the module have not been solved. We shall continue to work with interested parties to identify possible solutions. In any case, the Secretary of State has the power to increase the 10 per cent target for audio
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description. So if there were significant advances in the current technology, the target could be increased. We shall keep this under review.
Amendment No. 152A, retabled from Amendment No. 148, proposes that the target for programmes that must be audio described should apply only to programmes which have not previously been audio described, the point made by my noble friend Lord Carter. This would mean that repeats of the same programme could not count towards the target percentage.
We do not think that it is necessary to do this. Programmes which have already been audio described could be discounted from the calculations if Ofcom were to conclude that such repeats should be excluded programmes. That is provided for in Clause 298(5). I suggest that representatives and organisations of those with visual impairments ought to discuss that with Ofcom.
Amendment No. 152A also seeks to give Ofcom the power to vary the 10 per cent audio description target for some broadcasters. Ofcom already has the flexibility to set different interim targets for different broadcasters, but we believe that it is right for the Secretary of State to set the 10-year target itself. This is a political rather than a broadcasting matter.
Clause 301, as my noble friend Lord Carter anticipated, allows the Secretary of State, following consultation with Ofcom, to increase by order the target percentage for audio description. So even though the target is currently 10 per cent, if significant technological advances were made leading to a more widespread take-up of the modules, the targets could be increased. I hope that that will happen. In any case, once the 10-year anniversary has passed, Ofcom can set further targets through the provision in government Amendment No. 156A, which we have just discussed. On my noble friend's question of whether there could be a lower percentage, I shall have to write to him.
As the noble Lord, Lord Addington, recognised, Amendment No. 157 is already covered by government Amendment No. 156H. Amendments Nos. 158 and 159 would require the Secretary of State to conduct a review before making an order to modify the 10-year targets for subtitling, signing and audio description.
I presume the review is intended to be on the same lines as that proposed in Amendment No. 159. This sets out a detailed procedure for the Secretary of State to review the targets after one and three years. Of course the targets should be kept under review, but the process set out in Amendment No. 158 is unnecessary and overly burdensome, particularly when the review is intended to take place so soon after these issues have been thoroughly consulted upon and debated in the context of the Bill.
I commend Amendment No. 160. I hope that the other amendments will not be pressed.
Lord Addington: My Lords, I shall welcome Amendment No. 160 when we come to it but first let

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me get the usual suspects out of the way first. The system for broadcasting audio description to those who wish to use it is in a mess. It is a cloud hanging over this part of the Bill. That is why we need to have proper provision for it on the face of the Bill. We should think twice about allowing broadcasters to go on for years producing audio described programmes that no one can receive.
As to Amendment No. 152A, we need firmer assurances in regard to specially produced programmes. We are trying to build up a bank of new programmes and we need something more solid. At the moment programmes are repeated over and over again. One wonders what percentage of an audio-described "Fawlty Towers" or "Porridge" the BBC would use. Forget about "EastEnders", which is repeated once a week. How many times have we seen these programmes? I suspect that most of us could reproduce the dialogue word for word. Indeed, the generation that discovered "Monty Python" five years after it was originally shown could do so in regard to certain episodes. We have to look at the matter of specialist services again.
Having said that, I thank the Government for meeting us at least part of the way. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 151A:
Page 265, line 21, leave out "in every week".
On Question, amendment agreed to.
[Amendments Nos. 152 and 152A not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 152B:
Page 265, line 25, leave out "in every week".
On Question, amendment agreed to.
[Amendment No. 153 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 153A to 153C:
Page 265, line 29, after "in" insert "subsection (2A) or in"
Page 265, line 31, after "that" insert "subsection or"
Page 265, line 33, after "to" insert "subsection (2A) and"
On Question, amendments agreed to.
[Amendment No. 154 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 154A:
Page 265, line 35, after "that" insert "subsection or"
On Question, amendment agreed to.
[Amendments Nos. 155 and 156 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 156A to 156C:
Page 266, line 8, leave out from "(9)," to "and" in line 9 and insert "from dates falling before an anniversary mentioned in subsection (2);
() requirements on persons providing such services to meet further targets from dates falling after the anniversary mentioned in subsection (3);"
Page 266, line 16, leave out from "(2)" to end of line 17.
Page 266, line 28, leave out paragraph (f).
On Question, amendments agreed to.
Clause 300 [Meaning of "relevant date" in s.298]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 156D and 156E:
Page 267, line 18, at end insert "or"
Page 267, line 19, leave out from "service" to end of line 21.
On Question, amendments agreed to.
Clause 301 [Power to modify targets in s.298]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 156F to 156J:
Page 267, line 34, at end insert—
"() Where it appears to the Secretary of State, in the case of services of a particular description, that the obligation specified in section 298(2A) has been or is likely to be fulfilled in their case before the anniversary so specified, he may by order modify section 298 so as to do one or both of the following—

(a) increase the percentage so specified in relation to services of that description;

(b) substitute a different anniversary for the anniversary by which that obligation must be fulfilled in the case of such services."

Page 267, line 37, leave out "specified in subsection (2) of that section" and insert "by which the obligations specified in subsection (3) of that section must be fulfilled"
Page 267, line 39, leave out "different" and insert "higher"
Page 267, line 40, leave out "subsection (3) of that section' and insert "that subsection"
On Question, amendments agreed to.
[Amendment No. 157 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 157A:
Page 267, line 41, leave out "virtue of subsection (1)" and insert "an order under this section"
On Question, amendment agreed to.
[Amendments Nos. 158 and 159 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 159A:
Page 268, line 4, leave out "subsection (1)" and insert "this section"
On Question, amendment agreed to.
Clause 304 [Code of practice for electronic programme guides]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 160:
Page 269, line 11, at end insert—
"() The practices required by the code must also include the incorporation of such features in electronic programme guides as OFCOM consider appropriate for securing that persons with disabilities affecting their sight or hearing or both—

(a) are able, so far as practicable, to make use of such guides for all the same purposes as persons without such disabilities; and

(b) are informed about, and are able to make use of, whatever assistance for disabled people is provided in relation to the programmes listed or promoted."

On Question, amendment agreed to.
[Amendments Nos. 161 to 163 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 164:
Page 269, line 28, leave out paragraph (a).
On Question, amendment agreed to.
Clause 306 [Character and coverage of sound broadcasting services]:
Baroness Buscombe Baroness Buscombe had given notice of her intention to move Amendment No. 165:
Page 270, leave out lines 13 to 16 and insert—
"(b) that the departure would not narrow the range of programmes (including in particular the diversity of music) available by way of relevant independent radio services to persons living in the area or locality for which the service is to be provided,"
The noble Baroness said: My Lords, in rising to speak to the next group of amendments, I shall not move our Amendments Nos. 165, 166, 167, 205, 206 and 207.
Instead, we commend the Government on responding to the amendments tabled by the Opposition in Committee. We welcome the Government's move to address our concerns regarding the inclusion of music in Clauses 306 and 348, rather than in Clause 307. Furthermore, we support the Government's shift towards making the burden on commercial radio, under Clause 307, less onerous and prescriptive. We are also pleased that the amendments to Clause 307, tabled by the Minister, reflect the policy advocated from these Benches, in both your Lordships' House and the other place, throughout the passage of the Bill.
[Amendment No. 165 not moved.]
Lord Davies of Oldham Lord Davies of Oldham moved Amendment No. 165A:
Page 270, line 23, at end insert—
"(1B) The matters to which OFCOM must have regard in determining for the purposes of this section the character of a service provided under a local licence include, in particular, the selection of spoken material and music in programmes included in the service.""
The noble Lord said: My Lords, I shall also speak to the remaining government amendments in this group. I am enormously grateful to the noble Baroness,
858
Lady Buscombe, for the position that she has adopted, and her recognition of the way we have responded to debates in Committee and tabled our amendments. However, I am not sure whether the whole House agrees with the noble Baroness that we have carried out the task that we embarked upon, in responding to the Committee debate, to create a new situation with our amendments, which we hope will be commended to the whole industry. I am aware that concerns have been expressed about aspects of the proposals prior to the tabling of our amendments. However, at this stage I shall curtail my contribution and listen to the debate from those who wish to express anxieties about our amendments, and then reply. I beg to move.
Lord Eatwell: My Lords, it is difficult not to take up the Minister's invitation. I declare an interest as chairman of the Commercial Radio Companies Association, and I shall speak to this bloc of government amendments.
On Second Reading I was highly critical of Clause 307, which was introduced without any consultation. That would have imposed a one-size-fits-all localness code on local radio stations from Capital Radio, London to Oban Radio on the west coast of Scotland. I argued that this was not only excessively onerous regulation, but also unnecessary, because all the requisite powers to enforce localness are available in flexible, licence-specific form in Clause 306. I thank the Minister for the consultation that has since taken place on these matters, and congratulate him on the amendments to Clause 307.
Instead of the extreme micro-management that characterised the old Clause 307, the new Clause 307 passes to Ofcom the responsibility of drawing up guidance on how localness should be achieved. Given that the Government have abandoned the previous definition of "localness", based on inputs—where employees live, what might be the proportion of local advertising, and so on—is it the Government's understanding that these input controls would not and could not be introduced by Ofcom in the form of guidance? To put the matter another way, can we now consider Clause 306 as embodying the rules on localness, and Clause 307 as containing the guidance?
Will the Minister confirm that it is not the Government's intention that the guidance referred to in Clause 307 should be the means of introducing new regulatory controls by the back door? I should like that confirmation.
I turn to Amendments Nos. 165 and 165A. I am glad that the noble Baroness did not press Amendment No. 165. I ask those who put forward these amendments regarding the music industry to consider two facts as regards Amendment No. 165A, which was moved: first, the UK music industry is 10 times larger than the commercial radio industry; secondly, the music industry is predominantly American owned, whereas the commercial radio industry is predominantly British. The Government must consider whether they have got their priorities right in that amendment.

859
I wish that I could be as complimentary about the new clause set out in government Amendment No. 66A as I have been about the amendments to Clause 307. Amendment No. 166A inserts yet another new clause introduced under cover of darkness, without consultation. Like many such clauses, the new clause, introduced with excessive haste, is totally at variance with the spirit of the rest of the Bill. When they published the Bill in draft form, my right honourable friends the Secretary of State for Culture, Media and Sport and the Secretary of State for Trade and Industry jointly declared:
"Unnecessary regulations need to be removed wherever possible … Red tape and the frictional cost of regulation will be reduced, allowing companies to grow and invest more freely".
Yet, this evening, the Minister wishes to impose new, extra regulation through Amendment No. 166A, governing consultation about change of local service formats. Why?
Ofcom already has the power to consult, if it sees fit. What is to be gained by removing its discretion and forcing it to consult in every case in which a format is to be changed? Have the Government no faith in the noble Lord, Lord Currie, and his team, that all discretion must be removed from him?
There are over 250 commercial radio stations in the UK. During 2002, the Radio Authority agreed to 35 changes in formats. Holding month-long consultations on those 35 changes such as the Government seek to impose would significantly increase the regulatory burden. Will the. Minister tell us what was the outcome of the Government's regulatory impact assessment of the new clause? What is the regulatory cost that the regulatory impact assessment tells us will be associated with the clause? Can the Minister say which decisions made in the past year by the Radio Authority to permit change of format he now believes to have been made in error? Exactly which of the Radio Authority's decisions would have benefited from the elaborate procedures set out in Amendment No. 166A? The Government say that they believe in evidence-based policy. Will the Minister gave us the evidence of the errors that the Radio Authority has made?
Amendment No. I 66A is about increased consultation. Yet the Government have failed to consult. Will the Minister at least do the decent thing and withdraw Amendment No. 166A, so that there can be a period of consultation prior to Third Reading?
10.45 p.m.
Lord McNally: My Lords, that was a robust defence of the interests of the Commercial Radio Companies Association by its chairman. I have no objection to that. I welcome the government amendments that recognise the importance of music in radio, and I am grateful for them.
It is interesting that the government amendments to Clause 307 represent a weakening of powers. The Commercial Radio Companies Association should take credit for some good lobbying in that direction. However, the noble Lord, Lord Eatwell, has to
860
understand that commercial radio is operating against a background of some deep public concern. The truth is that when we look abroad and see the future, it does not work in terms of diversity in local radio. We on these Benches do not want to see any further weakening and we certainly would not support the deletion of Clause 307. There are even concerns about Amendment No. 166. Amendment No. 166A seeks to introduce new Section 106ZA. Subsection (4) of the new section states:
"OFCOM—

(a) are not required to publish a notice under this section, and

(b) may specify a period of less than 28 days in such a notice as the period for representations,

if they consider that the publication of the notice, or allowing a longer period for representations, would result in a delay that would be likely prejudicially to affect the interests of the licence holder".
That could be quite a get-out.
All I am saying is that matching the indignant tone of the noble Lord, Lord Eatwell, is a counterbalancing concern that our local radio could go—and in some cases is already going—the way that deregulation has gone in other countries; namely. station after station being hoovered up by large conglomerates, which homogenise the product to the detriment of local voice, music and identity. In a way the Minister is caught between a rock and a hard place. There is more than one side to the argument, and I look forward to his response.
Lord Eatwell: My Lords, before the noble Lord sits down, since he mentioned me, will he acknowledge that in the other countries he is thinking of—probably the United States and Australia—format regulation does not exist? In Britain we have strict format regulation, which ensures that diversity in radio is maintained, and the homogenising process he described cannot occur?
Lord McNally: My Lords, I agree that we have format content, and by God we are determined to keep it.
Lord Davies of Oldham: My Lords, I am delighted that that little exchange helped to clarify some of the key issues involved with the amendments. As I have indicated, the amendments were tabled in the light of consultation and the discussion in Committee, where we promised to address these issues, which were forcefully addressed on that occasion.
The change to Clause 306, which deals with the requests for departures from the character of the service, makes it completely clear that the character of a service includes the music and spoken material selected for inclusion on that service. The same change is made to Clause 348, which deals with variations to licences following change of control. That ensures that Ofcom must consider the selection of music played on a station when considering the character of the station. That provision has general approval.
The new clause requires Ofcom to consult on requests to depart from the character of a service, except where there are considerations of commercial

861
confidentiality—so it is not the case that it happens on all occasions—or where the time taken would prejudice the interest of a licence holder. In circumstances where a radio station might be in severe difficulties, Ofcom has the capacity to reach a judgment on whether it needs to engage in those procedures.
There are also a number of changes to Clause 307, which deals with Ofcom's duty to secure that local material is included in local radio stations. The amendments we have tabled make it clear that not all services need include local material. We make it clear that a suitable proportion of local material must be locally made. We remove specific examples of what the guidance could cover and remove references to the need to secure "local connections". We remove references to a code to emphasise that the clause is concerned not with a code but with guidance; we define more clearly what is meant by local material, making it clear that it includes music; and we make it clear that local advertising is not to be included in that guidance.
Those were some of the issues raised in Committee and which have been raised with us through the industry on which we believe we have made a suitable response. The guidance only bites on the station on the conditions already included in licences. It is not a way of introducing regulation via the back door, which I think my noble friend Lord Eatwell indicated, and might be a justified suspicion. Because of the restrictions under which the guidance operates, we are ensuring that it is not additional regulation in those terms. I hope he will recognise the value of that point.
We do not accept the argument that the guidance is all about "one size fits all". We think there are clearly levels of flexibility which meet some of the points about which my noble friend indicated he was anxious. In our view, guidance is inherently less regulatory than changing licences. The guidance will have effect only in so far as there are already localness conditions in a licence. It will not place new requirements on the licence holder. Rather, it will merely interpret and explain existing requirements which are often loosely defined. For example, there may be requirements that a service includes,
"features of particular local relevance"
or be,
"a locally-oriented station for the area".
The guidance could set out the sort of things which a station could do to satisfy these requirements.
The notion of the guidance being "one size fits all" is misplaced. Guidance is only guidance, and it will remain the responsibility of the licence holder to decide how to meet whatever undertakings it has already given. Secondly, as I indicated, the guidance will just bite on existing commitments into which the licence holder has entered.
My noble friend expressed anxieties in other areas, particularly on Amendment No. 166A, in which, as he will appreciate, I see considerable merit. There could be many people who may wish to express their opinion
862
on any proposed change, from other stations in the area to the music industry and to those who would be most affected—the listeners to the station. This seems a good example of open and consultative regulation. We have built in safeguards for the industry. The minimum time period for consultation has been kept down to 28 days so as to avoid unnecessary delays in the process. Furthermore, Ofcom does not have to consult where that would involve publishing matters which are commercially confidential. It can choose to foreshorten the period of consultation or not consult at all if it is anxious about the viability of the station.
We are seeking to indicate, through these amendments, that, far from the guidance being an excessively tough regulatory mechanism, it is well suited to the needs of the industry. It takes into account what the noble Lord, Lord McNally, indicated—that we have to strike a balance between two perspectives on the achievements and value of local radio. We are seeking, through the amendments and as a result of the discussions we have had, to strike that balance. The noble Lord, Lord McNally, kindly referred to me being between a rock and a hard place. I do not know which is more comfortable, but I will try and find out. I beg to move.
On Question, amendment agreed to.
[Amendment No. 166 not moved.]
Lord Davies of Oldham Lord Davies of Oldham moved Amendment No. 166A:
After Clause 306, insert the following new clause—
"CONSULTATION ABOUT CHANGE OF CHARACTER OF LOCAL SERVICES
After section 106 of the 1990 Act there shall be inserted—
"106ZA CONSULTATION ABOUT CHANGE OF CHARACTER OF LOCAL SERVICES
(1) Before deciding for the purposes of a condition imposed under section 106(1 A) whether to consent to a departure from the character of a service provided under a local licence, OFCOM must publish a notice specifying—

(a) the proposed departure; and

(b) the period in which representations may be made to OFCOM about the proposal.

(2) That period must end not less than 28 days after the date of publication of the notice.
(3) The notice must be published in such manner as appears to OFCOM to be appropriate for bringing it to the attention of the persons who, in OFCOM's opinion, are likely to be affected by the departure.
(4) OFCOM—

(a) are not required to publish a notice under this section, and

(b) may specify a period of less than 28 days in such a notice as the period for representations,

if they consider that the publication of the notice, or allowing a longer period for representations, would result in a delay that would be likely prejudicially to affect the interests of the licence holder.
(5) OFCOM are not required under this section—

(a) to publish any matter that is confidential in accordance with subsection (5) or (6); or

(b) to publish anything that it would not be reasonably practicable to publish without disclosing such a matter.

(6) A matter is confidential under this subsection if—

(a) it relates specifically to the affairs of a particular body; and

(b) its publication would or might, in OFCOM's opinion, seriously and prejudicially affect the interests of that body.

(7) A matter is confidential under this subsection if—

(a) it relates specifically to the private affairs of an individual; and

(b) its publication would or might, in OFCOM's opinion, seriously and prejudicially affect the interests of that individual.""

On Question, amendment agreed to.
Clause 307 [Local content and character of local sound broadcasting services]:
Lord Davies of Oldham Lord Davies of Oldham moved Amendments Nos. 166B to 166Q:
Page 271, line 6, after "services" insert -but, in the case of each such service, only if and to the extent (if any) that OFCOM consider appropriate in that case"
Page 271, line 7, leave out from "that" to end of line 8 and insert ", where such Programmes are included in such a service, what appears to OFCOM to be a suitable Pro Portion of them consists of locally-made Programmes."
Page 271, line 10, leave out "a code giving"
Page 271, line 12, leave out "code" and insert "guidance"
Page 271, line 14, leave out subsections (3) and (4).
Page 271, line 31, leave out "code may make different provision" and insert "guidance may be different"
Page 271, line 32, leave out "code" and insert "guidance"
Page 271, line 33, leave out "code" and insert "guidance"
Page 271, line 39, leave out "code and every revision of the code" and insert "guidance and every revision of it"
Page 271, line 42, leave out from beginning to end of line 2 on Page 272.
Page 272, line 4, leave out "(including news)"
Page 272, line 10, at end insert "or a Part of it"
Page 272, line 13, at end insert—
""material" includes news, information and others Poken material and music; and
"Programme" does not include an advertisement,"
Page 272, line 14, leave out second "in" and insert "within"
On Question, amendments agreed to.
[Amendment No. 167 not moved.]
11 p.m.
Baroness Buscombe Baroness Buscombe moved Amendment No. 168:
Page 273, line 32, leave out "and"
The noble Baroness said: My Lords, I shall also speak to Amendments Nos. 168 to 171 and 173 to 181. I regret that the debate on the amendments in Committee failed to take us much further, so I have decided to return once again to this extremely important issue.
I shall first review the issue to hand. At present it appears that the Bill contains no restriction on Ofcom's ability to undertake the economic regulation of broadcasting using its Broadcasting Act powers through broadcasters' licences, as opposed to its Competition Act powers or its sector specific competition powers.
In the latter two instances, economic regulation is by definition a matter of competition, and decisions taken through these routes by Ofcom are subject to full rights of appeal to the competition appeals tribunal. In the former instance, regulation of broadcasters through their licences for a competition purpose is also subject to full rights of appeal to the CAT where that is the only or main reason for the decision. However, economic regulation may not always be a matter of competition. It may, for example, be a matter of promoting consumers' interests with little or no competition element. For example, Ofcom could impose conditions on broadcasting licensees relating to the packaging and pricing of channels and services pursuant to its Clause 3 duties to further the interests of consumers in relevant markets or to secure the availability of a wide range of TV and radio services.
In such instances, where economic regulation is applied through broadcasters' licences for reasons not wholly or mainly for a competition purpose, there is no right of appeal to the CAT. Instead, broadcasters may only take the more limited route of judicial review, which looks at the decision-making process only, not the merits of the decision. That stands in stark contrast to the economic regulation of, for example, telephony providers and providers of other electronic communications networks and services under Part 2 of the Bill where all decisions are subject to appeal to the CAT.
With one very significant exception, Amendments Nos. 173 and 174 would address this problem by ensuring that any person affected by a decision of Ofcom to exercise any of its Broadcasting Act powers in fulfilment of general duties under Section 3 may appeal to the CAT. The exception is that Amendment No. 175 would amend Clause 310(8) to ensure that the right of appeal to the CAT is disapplied in relation to all Ofcom's content functions unless any such decision were made for a competition purpose as reflected in Amendment No. 176.
Amendments Nos. 178 to 191 are consequential to these amendments and widen the scope of any future Ofcom review of its codes, guidance, directions and, as proposed in Amendment No. 179, conditions.
In Committee the Minister drew a distinction between Part 2 and Part 3 of the Bill. In Part 3, he explained, Ofcom is required to make "subjective content judgments" that are subject to appeal by judicial review only, while in Part 2 there are no subjective content judgments, and all decisions are subject to appeal to the CAT.
I agree with that analysis in relation to "content judgments". As I have made clear all along, my amendments do not seek to introduce a right of appeal to the CAT on all Ofcom decisions under its Broadcasting Act powers. I recognise that most content decisions will have some economic impact. however small, and accept that they should attract no more than a right of judicial review. That is why my amendments disapply the CAT appeals route to Ofcom's content functions.
Rather, as I said, my amendments seek to bring within the CAT appeals process those decisions taken and imposed in Broadcasting Act licences under Part 3 that are not wholly or mainly for a competition purpose but nevertheless are unambiguously economic regulation. That is the extent of their ambition.
I regret to say that I was confused by some of what the Minister had to say in response to the amendments in Committee. At one point he appeared to agree with me that a CAT appeal would be appropriate where economic regulation was applied to broadcasters for reasons other than a competition purpose. The Minister said:
"Intervention, such as economic regulation in pricing and in the packaging of channels made in the interests of consumers should be treated in the same way in terms of route of appeal as a competition intervention. For example, Ofcom may wish to intervene in Sky's packaging of channels so that consumers could have more choice of packages without having to buy a lot of unwanted channels as a minimum".
However, the Minister went on to say:
"But the purpose of the intervention would be a subjective question of what represented an acceptable amount of consumer choice".
Given the Minister's previous statement that subjective decisions under Part 3 are subject only to judicial review, this would appear to confirm that a CAT appeal would not be possible for economic regulation in pricing and packaging of channels made in the interests of consumers. I should be grateful for some clarification from the Minister.
In rejecting these amendments in Committee the Minister also argued:
"Ofcom's duty to further the interests of consumers is qualified by the parameter, where appropriate, of promoting competition".—[Official Report, 3/6/03; 1293.]
The Minister suggested in this regard that an intervention in the packaging of channels in the consumer interest would not be possible unless Ofcom could show that it was not appropriate to achieve the same result through the use of general or sectoral competition powers, and that such a decision could be challenged through judicial review.
This explanation, I regret to say, provides no assurances and completely misses the point of the amendments. The fact is that even if Ofcom were able to show that it was inappropriate to achieve the desired level of channel unpackaging through general or sectoral competition powers, the regulation pursuant to the duty to further the interests of consumers would still be a purely economic one. This should be subject to a right of appeal to the CAT. To suggest that Broadcasting Act licensees could challenge the process through judicial review is a wholly inadequate substitute for a right of appeal to the CAT.
It is also important to point out that there are Clause 3 duties other than the furthering of consumer interests which OFCOM could use to impose economic regulation through broadcasters' licences. The duty to secure a wide range of television and radio services, for
866
example, could equally be used by Ofcom to require the unpackaging of channels, without any identified competition purpose.
I also raised in Committee the inequity that cable operators, who are retailers of pay television, will escape regulation of their pay TV retail activities, as they may not hold TLCS licences unless they themselves provide channels whereas identical retail activities of satellite operators will be regulated simply because the satellite operator happens to hold TLCS licences for channels which he himself provides. The Minister said in response simply that no unfair treatment exists because a cable operator who owned a channel would be in the same position as the satellite operator.
Here, again, the point has been missed. Clearly, where cable companies do not have their own channels, they do not require a licence for these. I am not arguing that that is an unfair position. What I am saying is that because such licences are not owned by cable operators they do not find themselves exposed to the same potential for economic regulation of, say, pricing and packaging television services. That is the inequality that I wish the Government to address, or at least against which to provide additional safeguards for broadcasters through an appeal to the CAT.
In conclusion, therefore, I am disappointed that the Government have yet again failed to address our core concerns on this issue. Let me say again that I am not talking about a CAT appeal for subjective content regulation, as I think the Government by now understand. Yet they seek in their answers to present a simplistic divide between content regulation on the one hand, with an appeal through judicial review, and economic regulation for a competition purpose on the other, with an appeal to the CAT. It is difficult to understand why the Government refuse to acknowledge that economic regulation for reasons other than a wholly or mainly competition purpose may take place under Part 3 and a right of appeal to the CAT should be provided.
I now turn briefly to my other amendments. Amendments Nos. 168 and 169 seek to extend Clause 310(1) to cover Ofcom's powers to issue codes of practice or guidance to holders of licences. In spite of the Minister's view that such a provision is already provided for under subsection (1)(d), I continue to believe that it would be helpful for that to be more clearly indicated on the face of the Bill.
Amendments Nos. 170 and 171 would require Ofcom not to use its Broadcasting Act powers on any matter where that matter is capable of being dealt with under the Competition Act. The amendments would replace the current wording which simply provides that, before exercising any of its Broadcasting Act powers for a competition purpose, Ofcom should consider whether a more appropriate way to proceed would be under the Competition Act. The Minister in Committee opposed these amendments, on the basis that where conduct breaches both the competition and broadcasting Acts, it might still be more appropriate to act under the Broadcasting Act. Yet the Minister

867
provides no examples of where that might in fact be the case. Perhaps he can take the opportunity tonight to provide some examples to justify his position.
Finally, my Amendment No. 177 would introduce additional procedural safeguards into Part 3 of the Bill along similar lines to the set of tests for setting or modifying conditions in Clause 44 in Part 2 of the Bill.
I am pleased that the Minister agreed with the principle behind the amendments, but am surprised by his view that the Bill,
"contains sufficient provisions to ensure that that is delivered".—[Official Report, 3/6/03; col. 1295.]
Where in the Bill are these provisions to be found? If they are there, why have the Government also seen the need to introduce specific conditions into Part 2? Further clarification on this matter would be welcome. I beg to move.
Lord McNally: My Lords, I shall be extremely succinct. These Benches do not share the concerns voiced by the noble Baroness, Lady Buscombe, about Clause 310. We think that the indiscretions and powers contained therein are about right.
Lord Davies of Oldham: My Lords, at this late hour I am glad to see that normal relations between the Front Benches have been resumed. We are in the critical relationship again after a period of amity that lasted all of one hour, but for which I am duly grateful.
The noble Baroness, Lady Buscombe. did lay one charge. I will not repeat all the arguments we heard in Committee. She quoted from the Committee proceedings that I had said that:
"intervention, such as economic regulation in pricing and in the packaging of channels made in the interests of consumers, should be treated in the same way in terms of route of appeal as a competition intervention".—[Official Report, 3/6/03; col. 1293.]
She is right; that is what I said. However, I fear that she is taking my remarks somewhat out of context. We were discussing in Committee whether Ofcom could use its general duty to further the interests of consumers to intervene in the packaging and pricing of channels. I made it quite clear that it would be difficult to see how Ofcom could justify intervening in the packaging of channels in the consumer interest without being able to show that it was not appropriate via the competition powers that Ofcom will have.
It is hard to imagine, therefore, a situation where any intervention in pricing and packaging of channels, which is the nub of the issue, would not be undertaken using Ofcom's competition powers. It therefore follows that the noble Baroness gets the result that she desires. Such an intervention would have a route of appeal to the CAT, which is the point that we were trying to establish.
I should like to be clear about what the principal effect of the amendment tabled by the noble Baroness would be and why we do not intend to accept it. The amendment stems obviously from her concern, clearly
868
expressed in her speech this evening as it was in Committee, on the part of one broadcaster in particular, that if Ofcom undertakes economic regulation other than for a competition purpose—as defined in Clause 310(7) for example—under its duty in Clause 3 to promote the interests of consumers, that broadcaster would not have a route of appeal to the Competition Appeal Tribunal.
The main difference of view between that broadcaster and the Government derives from the broadcaster's understanding of economic regulation. It considers all interventions in the economic arrangements of broadcasters—for example, the packaging of channels—to be purely economic issues, whereas we consider that such issues can contain significant elements of consumer interest.
In our view, therefore, regard should be paid, when considering appeal mechanisms, to the purpose of the regulator's intervention, as well as to its effect. That is why we have made sure that interventions for a competition purpose should have a route of appeal to the CAT. The broadcaster's specific concern is that Ofcom will use its general duty,
"to further the interests of consumers".
and to intervene in the packaging of its channels. I tried to make it clear in Committee, and I shall make another attempt this evening, that Ofcom's duty to further the interests of consumers is limited by the parameter where appropriate by promoting competition. That means that contrary to what the broadcaster fears, Ofcom cannot simply intervene in the packaging of its channels in the consumer's interests without being able to show that it was not appropriate to resolve the issue by encouraging more competition. As I said earlier, I fear that Ofcom's efforts to evaluate properly those options could result in challenge under judicial review. The noble Baroness will recognise the strength of that sanction.
I hope that I have reassured the noble Baroness sufficiently for her to consider withdrawing her amendments. I also want briefly to mention Amendment No. 172, which she graciously mentioned. I shall move it in due course. We agreed to consider an opposition amendment that sought to require Ofcom to inform any person affected of the use of the Broadcasting Act powers for a competition purpose and also to inform those affected that they may appeal to the Competition Appeal Tribunal against the intervention. We agree with the principle. That is why the amendment will be a requirement on Ofcom in that respect.
Baroness Buscombe: My Lords, I thank the Minister for his response. The hour is very late and I do not want to detain the House. I am rather disappointed

869
that he did not move further in the direction that I sought on the amendments. I shall take away his response and think about it, but for now I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 169 to 171 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 172:
Page 273, line 42, at end insert—
"(3A) If OFCOM have decided to exercise any of their Broadcasting Act powers for a competition purpose, they must, on or before doing so, give a notification of their decision.
(3B) A notification under subsection (3A) must—

(a) be given to such persons, or published in such manner, as appears to OFCOM to be appropriate for bringing it to the attention of the persons who, in OFCOM's opinion, are likely to be affected by their decision; and

(b) must describe the rights conferred by subsection (4) on the persons affected by that decision."

On Question, amendment agreed to.
[Amendments Nos. 173 to 176 not moved.]
[Amendment No. 177 not moved.]
Clause 311 [Review of powers exercised for competition purposes]:
[Amendments Nos. 178 to 181 not moved.]
Lord Grocott: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

Finance Bill
Brought from the Commons; read a first time, and ordered to be printed.
House adjourned at nineteen minutes past eleven o'clock.

Official Report of the Grand Committee on the Extradition Bill
(Sixth Day)
Tuesday, 1st July 2003.
The Committee met at half past three of the clock.
[The Deputy Chairman of Committees (Viscount Allenby of Megiddo) in the Chair.]
The Deputy Chairman of Committees (Viscount Allenby of Megiddo): It may be helpful to remind your Lordships of the procedure for today's Committee stage. Except in one important aspect, our proceeding will be exactly as in a normal Committee of the Whole House. We shall go through the Bill clause by clause; noble Lords will speak standing; all noble Lords are free to attend and participate; and the proceedings will be recorded in Hansard. The one difference is that the House has agreed that there shall be no Divisions in the Grand Committee. Any issue on which agreement cannot be reached should be considered again at the Report stage when, if necessary, a Division may be called. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.
I should explain what will happen if there is a Division in the Chamber while we are sitting. The Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.
Clause 40 [Withdrawal of warrant before extradition]:
Baroness Anelay of St Johnsmoved Amendment No. 93:
Page 20. line 26, at end insert "by a recorded delivery letter"
The noble Baroness said: The amendment refers to Clause 40 which deals with the withdrawal of warrants before extradition has taken place. Subsection (4) states:
"If the person is not before the judge at the time the judge orders his discharge, the judge must inform him of the order".
That is practical and straightforward. We want to qualify that by inserting at the end the words,
"by a recorded delivery letter".
This is a most straightforward tool. It is not intended to go on the face of the Bill. We are simply using this amendment as a way of asking what means will be used by the judge to make the notification to the person that he or she has been discharged. It is important to have on record the procedure by which such notification is
GC174
to take place. We have seen problems in practical terms in some neighbouring European countries where notification has gone astray, or at least has been alleged to have gone astray. We would be grateful if the Minister could put on record the intended process. I beg to move.
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Lord Filkin): I thank the noble Baroness, Lady Anelay, for clarifying why the amendment has been deposited in those terms—to draw out a general response to the matter. As she inferred, we would be resistant on principle and in practice to the specific wording of the amendment. The principle is that it is generally a sound approach to specify the outcome that has to be achieved rat her than to specify the mechanisms by which the outcome is to be achieved, both in legislation and in other walks of life. That enables one to have a variety of mechanisms that are legitimate to achieve the objective.
The practical reason, as the noble Baroness partially hinted, is that we know from personal experience that a recorded delivery letter can be signed for by anyone in the house; it does not mean that the person for whom the letter is intended will receive it. Some Members of the Committee will have experienced that recorded delivery is usually the slowest way to send a letter, as the postman invariably finds no one in and it is at least a week before one goes to the Post Office to retrieve it. I am not being flippant, but that illustrates why a specific formulation may not be the most effective one.
Therefore, in the legislation we sought to put the onus and the responsibility clearly on the district judge. The district judge has, with his support, to discharge that responsibility. He or she will not have discharged that responsibility necessarily by sending the item by recorded delivery for the reasons that I have given, but a variety of mechanisms could be used. There could be a telephone call to the office of the solicitor acting for the person, no doubt confirmed by a fax or a written letter afterwards. In many cases I envisage that that would be the fastest and securest way. I would not want to second guess the judge or to specify the range of options open to him or her. It would relate only to circumstances when the person was not in court at the time that the judge made the decision.
Nevertheless, the question is a good one. For those reasons of principle and practice, we believe that the legislation goes as far as it sensibly can by saying that the responsibility is on the judge to discharge that obligation to ensure that the person has been informed. We cannot think of a better way of doing that than making it clear that that burden rests with the judge rather than by specifying the means.
Lord Mayhew of Twysden: I wonder whether the Committee would think that I am in order if, as we are not going to debate clause stand part, I were to raise a

GC175
drafting question on subsection (3) of Clause 40 at line 24. If one takes the eye back to subsection (1), one reads:
"This section applies if at any time in the relevant period the appropriate judge is informed"
and so forth. Then the relevant period is defined. Then we read in subsection (3) the very bald statement:
"The judge must order the person's discharge".
I suggest it would be more elegant and appropriate if those words were to be preceded by the words "where this section applies". I do not expect an answer straight away but I should like to put that matter on the record so that the Minister's officials may inform him whether there is anything in the point. I think that there is.
Lord Filkin: I am always slightly hesitant to imply that it is possible that parliamentary draftsmen's work could ever be improved. Nevertheless, we shall give the suggestion the consideration it merits and reflect on it over the summer.
Baroness Anelay of St Johns: I am grateful to the Minister for his response and for making it clear that the burden of ensuring that notification is given must be placed on the judge. I am also grateful to the Minister for taking on board my noble and learned friend's suggestion with regard to improved drafting. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johnsmoved Amendment No. 94:
Page 20, line 26, at end insert "as soon as is practicable"
The noble Baroness said: Amendments Nos. 94, 95 and 96 are grouped together. I move Amendment No. 94 and speak to Amendments Nos. 95 and 96. The point at issue is the timescale within which the person should be notified of the withdrawal of the warrant for his extradition. This should be a straightforward matter. When the judge has made a decision to discharge the person, he or she must be informed as soon as possible and subsequently discharged. At the moment there is no reference to a timescale on the face of the Bill. We consider that that should be remedied.
Last week I made it clear that I very much appreciated that putting strict time limits in different pieces of legislation in terms of a certain number of days or hours might make it very difficult for the courts to schedule their business. I do not seek to do that here but I have tried to retain a degree of urgency in the wording of the amendment by stating that the notification should be given,
"as soon as is practicable".
I hope that that is an acceptable and pragmatic way of setting a kind of time limit. I beg to move.
Viscount Bledisloe: On behalf of the Committee I take the opportunity to wish the noble Lord. Lord Filkin, a happy birthday.
Noble Lords: Hear, hear!
Viscount Bledisloe: I do not see the point of the amendment. It is reasonable to expect someone who is doing something positive to do it as soon as is reasonably practical. If the prosecution does not do something as soon as is reasonably practical, it may lose the proceedings. But what would happen if the judge forgot he had to carry out the measure as soon as is reasonably practical? The judge tells the good man that he is going to be let out. If the judge does not do so as soon as is reasonably practical, that may be disappointing for the man but he will still be let out when he is told about that. The measure involves no sanction. Would the judge be sacked for being late in carrying out the measure? It seems to me mistrustful of the judge to think that he would deliberately delay the matter and pointless and remedyless to insert the provision.
Baroness Anelay of St Johns: Perhaps I should respond briefly. I purposely did not insert the word "reasonably" because I thought that that could lead to some reviews later on. I tried to create a balance between giving assurance to people who may be extradited as opposed to not putting too heavy handed guidance upon the judge who will be very mindful of the proper steps that need to be taken.
Viscount Bledisloe: That does not deal with the question of exactly what the judge does.
Lord Mayhew of Twysden: I hesitate to inflict an argument between lawyers on the Committee. I respectfully suggest that it is a helpful steer. It is saying, "Get on with it". It does not have to be an immediate sanction to back up a failure to comply with a steer. I should have thought it helpful rather than otherwise.
Lord Filkin: Because it is rumoured to be my birthday, I thought that I was under an obligation to be as positive and helpful as possible. Therefore, as a point of public policy, we agree that the thrust should be that the district judge informs the person as soon as possible. We therefore saw no particular demerit in making that explicit on the face of the Bill. We were minded to go away and reflect on that and to determine whether we could bring forward an amendment to that effect. I do not wish that to in any way imply that all future amendments will be treated in the same positive spirit.
Baroness Anelay of St Johns: Although it is the Minister's birthday, I am glad that he has given me his birthday present. I accept the offer that he will go away and seek to determine whether something can be drafted that meets my point.
Amendment, by leave, withdrawn.
Clause 40 agreed to.
Clause 41 [Withdrawal of warrant while appeal to High Court pending]:
[Amendment No. 95 not moved.]
Clause 41 agreed to.
Clause 42 [Withdrawal of warrant while appeal to House of Lords pending]:
[Amendment No. 96 not moved.]
Clause 42 agreed to.
Clause 43 [Competing Part 1 warrants]:
[Amendment No. 96A had been withdrawn from the Marshalled List.]
On Question, Whether Clause 43 shall stand part of the Bill?
Lord Mayhew of Twysden: I do not know whether I am in order to raise this point—I think that I am, but I shall be told if I am not. I should like to make the same point as I made originally about Clause 43(4). It would be more appropriate to insert the words, "Where this section applies" before the words, "The judge may". It is the same point.
The Minister of State, Home Office (Baroness Scotland of Asthal): I can certainly indicate that this, too, will he brought to the draftsman's attention. I think that he will have a very close relationship with the noble and learned Lord, Lord Mayhew.
Clause 43 agreed to.
Clause 44 [Consent to extradition]:
[Amendment No. 97 not moved.]
Clause 44 agreed to.
Clause 45 agreed to.
Clause 46 agreed to.
Clause 47 agreed to.
Clause 48 agreed to.
Clause 49 agreed to.
Clause 50 [Extradition request following consent]:
Baroness Scotland of Asthalmoved Amendment No. 97A:
Page 25, line 15, leave out paragraph (c).
The noble Baroness said: I hope that the noble Baroness, Lady Anelay, will think that this is yet another gift. This group of amendments probably wins the prize for length and I shall endeavour to ensure that I do not, as a consequence, make a speech of commensurate length to reflect that.
All these amendments are concerned with the possibility of "re-extradition"—that is, sending a person from the United Kingdom to serve a sentence imposed by a foreign court after a trial to which he was temporarily surrendered. In the context of these amendments, the term "re-extradition" means extradition from the United Kingdom to the same place for a second time in the particular circumstances which I shall describe. For the first time, this Bill allows for the temporary extradition of serving UK prisoners. If we receive an extradition request in respect of a serving UK prisoner, it will be open to the
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district judge to proceed with the case with a view to the temporary surrender of the person to stand trial abroad. All the normal procedures will apply and all the bars to extradition will be properly considered. At the end of the foreign trial, the person will be immediately returned to the United Kingdom to serve the rest of his sentence here.
I shall say a hit more about the procedure and implications for the United Kingdom's sentencing calculations when we come to discuss the amendments standing in the name of the noble and learned Lord, Lord Donaldson of Lymington. As I have explained, the provisions ensure that a person can be temporarily extradited. I could go into greater depth, but the issue may not prove to be contentious. I shall be happy to deal with any issue that arises. I beg to move.
3.45 p.m.
Baroness Anelay of St Johns: We welcome the amendments, but I have a couple of minor questions. If the Minister is not in a position to answer them today, I shall be happy for her to write to me. I merely want her to flesh out the background to the amendments.
Have the Government any statistics on how often this sort of re-extradition occurs and whether any problem has arisen with existing legislation? At what stage can a defendant appeal against the decision to impose a custodial sentence arrived at by the requesting country during the trial? Does it happen before his return to serve the remainder of his UK sentence, or after that, when he has served his UK sentence and has a re-extradition hearing as set out in Amendment No. 249B? That is not something that I expect to be answered today, but I want to put it on the record. If the Minister is able to answer today, that is fine. If not, I shall have to wait.
Baroness Scotland of Asthal: I am able to answer some of the questions.
In relation to statistics, we have never done this before—this will be the first time that we are able to extradite someone who has a prison sentence. Dependent on the nature of the sentence, it would be very onerous indeed if we had to wait for a significant period before the person was sent back to the other country, tried for another offence and then sent back here. This is an innovative step; we have never done it before, so we are really in new water.
The noble Baroness asked at what stage there could be an appeal. The system is that the person would be returned. The agreement inherent in the provisions is that, at the conclusion of the proceedings—the trial and so on—the person would be returned to serve the remainder of his time here. I cannot say definitively, although I will check for the noble Baroness, whether there is any distinction between the trial and the appeal or whether there would be any difficulty in concluding the foreign proceedings, however long they may continue, before extraditing. I shall seek to clarify that point, but I do not believe that there would be any problem.

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The last question related to what happens after the sentence. After the trial has concluded, the person will return to the United Kingdom to continue to serve his sentence. For the purposes of information, the noble Baroness may know that we have memorandums of understanding with some of our partners in relation to transfer of prisoners, and there would be nothing to prevent a prisoner who had been convicted and sentenced in another country from making a request that whatever sentence imposed on that person in the other country could be served at the end of the other sentence or on the basis of another agreement.
The measure will helpfully allow us to work much more creatively and positively with our partners in terms of ensuring that proper trials are conducted speedily and in a timely way, without having to wait too long. I shall make further inquiries in relation to the response to the appeal.
Baroness Anelay of St Johns: That was very helpful, especially in the light of the discussions we will have later.
On Question, amendment agreed to.
Clause 50, as amended, agreed to.
Clauses 51 and 52 agreed to.
Clause 53 [Request for consent to other offence being dealt with]:
Baroness Scotland of Asthalmoved Amendment No. 97B:
Page 26, line 40, leave out "an" and insert "a judicial"
The noble Baroness said: I hope that I shall be able to deal with these amendments very briefly. As Members of the Committee know, we amended the Bill in another place to provide that all incoming judicial warrants must come from a judicial authority. If the warrant is not certified as coming from a judicial source, no action can be taken upon it.
Since we moved the first amendment in another place, we have been scouring Part 1 of the Bill for other provisions where the "judicial" stipulation needs to be inserted. The Committee knows about the change in Clause 5 for that purpose. However, we have been able to identify three additional places where we need to specify that the request must come from a judicial authority.
I am sorry that we did not pick up those additional matters previously, but the amendments would cure the position. I hope that Members of the Committee will be able to find favour with it. I beg to move.
Baroness Anelay of St Johns: My noble friend Lord Hodgson has brought to my attention an apparent grouping error. I raise the matter now only because it will make life easier later. Included in the groupings on the Government's list of amendments is Amendment No. 7268A, which plainly does not exist. I hope that it does not; otherwise, we will be debating the Bill for a few months to come. If the amendment listed is
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supposed to be Amendment No. 268A, it is tabled in my name and will not be dealt with until we consider a much later grouping.
Baroness Scotland of Asthal: I think that it is a typographical error.
Baroness Anelay of St Johns: I am grateful to the noble Baroness.
On Question, amendment agreed to.
Baroness Anelay of St Johnsmoved Amendment No. 98:
Page 27, line 13, at end insert—
"( ) The judge must satisfy himself that the suspect has been notified of the second request and has an opportunity to make meaningful representations at the consent hearing, either in person or through his legal representatives."
The noble Baroness said: With the leave of the Committee, I shall speak also to Amendments Nos. 100, 101, 103, 221, 224 and 226, which are tabled in my name. They were tabled as a result of a briefing from the Law Society. They focus on notification, representation and legal advice in instances where there is a second or further extradition request.
Clauses 53 to 57 and the corresponding Part 2 provisions—Clauses 127 to 129—deal with the difficult—certainly difficult to me—area of a second request for extradition and the consent to he given by the appropriate judge that the person may be extradited to face prosecution for other offences alleged to have taken place. Although the provisions set out what is to be considered, there is no provision to require that a defendant has been informed and given the opportunity to make representation, whether in writing or through legal representatives.
The provisions, we are advised, risk a second request being an administrative matter rather than a fresh set of proceedings. They appear to be founded on the premise that the arguments that apply in relation to one request as regards distinct offences will be identical to those that would apply to a completely different set of offences and a different requesting state.
Of course we are all trying to achieve transparency at all stages of the extradition proceedings. I therefore see no reason why it should not be stated in the Bill that the judge has a duty to inform the defendant of a second request.
I note that the Liberal Democrats have gone one step further. Their amendment not only specifies the notification of the second request, the chance to make legal representation and that access to legal aid should be available to the defendant, but it also emphasises that if those matters are not provided, the Secretary of State must refuse consent altogether. The Liberal Democrats are trying to introduce the same principle to which we adhere. I beg to move.
Lord Goodhart: In this group of amendments, Amendments Nos. 99, 102, 105, 222, 225 and 227 are in my name. Those amendments have exactly the same purpose as those tabled by the noble Baroness, Lady

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Anelay. There are two differences between our amendments and hers. Amendment No. 98—her amendment—refers to,
"an opportunity to make meaningful representations",
whereas my amendment, Amendment No. 99, refers only to,
"an opportunity to make representations".
That does not mean that the purpose of my amendment is specifically to allow people to make meaningless representations. On the contrary, it is simply a drafting point, because the opportunity to make representations must include meaningful representations. It would be absurd to construe a power to make representations as meaning that one can make representations only so long as they are meaningless. Therefore, "meaningful" is surplus to requirements.
The second point is technical, but a little more serious. In cases where it is the Secretary of State who must be satisfied that the opportunity existed, 1 have added a requirement that, if the Secretary of State is not satisfied,
"that the suspect … has an opportunity to make representations",
he must refuse consent to extradition. I have not made any similar addition in Amendments Nos. 99 and 102, which refer to cases where it is the judge who is required to satisfy himself that there has been an opportunity to make representations.
The difference between the two cases is that if, during the course of a hearing, the judge who conducts it becomes satisfied that an opportunity has not been given, he can adjourn the hearing to enable the opportunity to be given and representations to be made. There is no need in that case to provide for an automatic termination to the proceedings and the discharge of the person who is the subject of the order. When the judicial hearing is over, there is then no way—as the Bill stands, at any rate—in which that defect can be cured. The Secretary of State would have to send a case back to the judge in order to enable proper representations to be made. He would have to send it back for a second hearing. The Bill does not provide for that.
In those circumstances, it seems necessary to specify the consequences if the Secretary of State is not satisfied that there has been an opportunity. I have therefore added in Amendments Nos. 105, 222, 225 and 227 that the Secretary of State should be required to direct the discharge. Of course, an alternative, if the Government preferred it, would be to authorise the Secretary of State to send a case back for a re-hearing but, as I have drafted it, the obligation is on the Secretary of State to discharge. Clearly, I believe that something ought to be done.
4 p.m
Baroness Scotland of Asthal: I hope that the noble Baroness, and indeed the noble Lord, Lord Goodhart, will not be overcome by the number of bouquets I seem to have with me today. I should say straight away that
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we are grateful to them for tabling the amendments, which gives the Committee a welcome opportunity to consider what happens after extradition.
The Government fully accept the need for proper notification for the fugitive of post-extradition matters. We are happy to consider making that explicit in the Bill. Although the amendments are many in number, it is fair to say, as the noble Baroness and the noble Lord have already indicated, that they all have the same purpose, so I can safely deal with them as a job lot. I was tempted to deal with the issues as quickly as I had dealt with the other amendments. However, I appreciate that there may be an interest in how we see the matter, why it has been brought up, and perhaps in a little background. For that reason, it might help if I set some of that out.
As Members of the Committee will know, both Part 1 and Part 2 contain clauses to deal with the situation where a person has already been extradited from the UK to either a category 1 or category 2 territory, and the state to which he has been sent asks our permission either to bring additional charges or to extradite him to a third country. Two types of post-extradition issues are highlighted in that situation. The true speciality or specialty provides that an individual, once surrendered, cannot be proceeded against for offences committed prior to surrender for which they were not extradited, unless the consent of the requested state is obtained or the person has had an opportunity to leave the country to which he was extradited.
I should say in passing that there is no fiercer argument among extradition practitioners than that over whether the correct term is "specialty" or "speciality". Parliamentary Counsel has decided that the Bill should use the latter term. For my part, I shall not trespass further.
The Bill contains provisions to enable us to deal with the situation where the UK receives a valid request from the original requesting state for the person to be dealt with for an offence other than the offence for which he was extradited. Similarly, the Bill enables us to deal with requests for further extradition—that is, cases where we extradite a person to a country that then approaches us to seek our permission to extradite him to a third country, following a request from that third country.
The post-extradition provisions are an important safeguard to ensure that the extradition system is not abused by, for example, a country extraditing for an offence with the intention of proceeding with another, or a country extraditing with the intention of releasing to another country. The provisions ensure that the extradited fugitive continues to be subject to some of the protections of UK laws on extradition, even though the person has left our shores.
If we receive a post-extradition request, it will be for the district judge or the Secretary of State, depending on whether the person was originally extradited to a Part 1 or a Part 2 country, to decide how to respond to it. The district judge must hold a proper hearing—the noble Lord, Lord Goodhart, touched on that—so that he can consider whether any of the bars to extradition

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apply to the new request. The person may, of course, make representations in the United Kingdom hearing or to the Secretary of State against the waiver of speciality or further extradition.
All the amendments seek to provide that no decision can be taken on a post-extradition request unless the person has been notified of the new request and allowed to make representations in respect of it, either in person or through his legal representatives. I note in passing that it seems fairly unlikely, if I may respectfully say so, that a person serving a prison sentence abroad would be able to make his representations in person, for fairly obvious reasons, but that is hardly an argument against the amendments.
What may be rather more pertinent is the fact that we have no equivalent provisions in our existing legislation, even though we have the capability to cater for post-extradition requests. However, there has been no suggestion that any unfairness has arisen. I should say at this point, for the sake of completeness, that post-extradition requests are very much a rarity. The fugitive would always be aware of the post-extradition request and therefore have the opportunity to make such representations as he wished.
Having said all that, I can see that there might be no difficulty in making that point absolutely crystal clear in the Bill. Therefore, I am very happy to offer Members of the Committee the commitment that I will take the point away to consider. If we can come up with some suitable form of words that could be introduced by means of a government amendment at a later stage, I shall undertake to do that. We take the point seriously. If both the noble Baroness and the noble Lord say that there is a lack of clarity, we should probably take that into account.
Baroness Anelay of St Johns: I am grateful to the Minister for her offer to take the matter away and to consider the drafting. I was not being flippant when I said that I find it difficult to understand. As a non-lawyer I certainly find it difficult. I was advised by those who are experts in extradition law, but they too found a lack of clarity. I welcome her offer to see whether the clarity can be improved. The Minister made the point that post-extradition requests are rare, but although they may be rare, as ever it is important that the procedure is right. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 99 not moved.]
Clause 53, as amended, agreed to.
Clause 54 [Questions for decision at consent hearing]:
[Amendment No. 100 not moved.]
Clause 54 agreed to.
Clause 55 [Request for consent to further extradition to category 1 territory]:
Baroness Scotland of Asthalmoved Amendment No. 100A:
Page 27, line 41, leave out "an" and insert "a judicial"
On Question, amendment agreed to.
[Amendments Nos. 101 and 102 not moved.]
Clause 55, as amended, agreed to.
Clause 56 [Questions for decision at consent hearing]:
[Amendment No. 103 not moved.]
Clause 56 agreed to.
Clause 57 [Consent to further extradition to category 2 territory]:
Baroness Scotland of Asthalmoved Amendment No. 103A:
Page 29, line 6, leave out "an" and insert "a judicial"
On Question, amendment agreed to.
[Amendments Nos. 104 and 105 not moved.]
Clause 57, as amended, agreed to.
Clause 58 [Return of person to serve remainder of sentence]:
Viscount Bledisloemoved Amendment No. 106:
Page 30, line 3, leave out "does not" and insert "shall"
The noble Viscount said: With the leave of the Committee I shall move the amendment, although my name is not attached to it. I have not spoken to the noble and learned Lord, Lord Donaldson of Lymington, in whose name the amendment stands, but I believe I understand what it is about. It seems to make a good point.
I hope that the noble Baroness will tell me if I have understood the matter incorrectly, but it seems that the noble and learned Lord is saying: "I am in prison in England; I am extradited to a foreign country during my sentence to stand trial for some offences; I am kept in custody in that foreign country; the charges are dropped or I am acquitted completely and I return after having spent nine unpleasant months in a Greek prison only to find that those nine months do not count towards my sentence and I have to spend nine months longer in prison". I accept that it is not the fault of the British Government that such a person has served those nine extra months, but it seems hard that effectively he has had nine months added to his sentence.
The noble and learned Lord appears to have been modest as he does not refer to someone not being sentenced in the foreign country or only being fined instead. In fining a person, the foreign country may take into account the fact that he has been in custody. If someone never proceeds to trial or is acquitted completely, why can that not be taken into account in the sentence that they serve in this country? It would probably be more unpleasant to be in prison in a foreign country so the double counting seems especially hard. I beg to move.
Baroness Anelay of St Johns: It seems that the noble and learned Lord, Lord Donaldson, has raised an issue in point. He raised it at Second Reading, when there was some misunderstanding among us as to the precise point that he was trying to raise. The amendment crystallises it.
I am not aware of the kind of conditions in which people are held within all the jurisdictions that will be covered by Part 1. However, they will vary

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considerably: some will be more allied to remand conditions, which, although extremely unpleasant, are certainly not the same as being held in prison on a sentence. As I understand it, in other jurisdictions conditions will be far more allied to those that we have here when serving a sentence. The noble and learned Lord, Lord Donaldson, has tabled a very interesting point.
Lord Goodhart: I, too, think that there is some substance in the points made by the noble and learned Lord, Lord Donaldson. I am not sure that the drafting covers all possible situations. For instance, it does not cover the situation referred to by the noble Viscount, Lord Bledisloe, of charges being dropped with the result that there is no acquittal. It also seems doubtful whether the noble and learned Lord's proposal should apply in any event where someone is on bail in the country to which he has been extradited, as is possible.
Baroness Scotland of Asthal: The noble Viscount, Lord Bledisloe, has done full justice to the point raised by the noble and learned Lord, Lord Donaldson. He has put it precisely and quite succinctly.
We have difficulty with the point because of the problems that we will have in differentiating between individuals who are transferred, dealt with, convicted and sentenced and those transferred, dealt with and acquitted. There is a problem with parity and how we deal with that.
I shall be absolutely frank. Having considered the point and listened to the remarks of the noble Viscount, Lord Bledisloe, and the noble and learned Lord. Lord Donaldson. this may be a point where the administrative and other difficulties presented as insurmountable in many pages—I shall not delight the Committee by reading them—could prove surmountable. I cannot say that that is so, but I would like to tease out the matter to see whether there is any merit in it. I say that because the noble Viscount, Lord Bledisloe, referred to the division of the length of time.
Although I have never been at Her Majesty's pleasure for any significant time other than to visit residents, I am given to understand that some other jurisdictions are much more to the liking of those incarcerated there. So it is not all doom and gloom. Some people may be very happy to stay in another jurisdiction's more generous accommodation for nine months or longer.
There may be something in the point, so I shall look at it and return at a later stage. Although I cannot guarantee that the response will be favourable, it is worth considering the matter.
Viscount Bledisloe: I am extremely grateful and express gratitude on behalf of the noble and learned Lord for that very co-operative approach. I accept that conditions may be nicer in some countries, but one would have to accept swings and roundabouts. If the prison to which an extradited person went was nastier than in England, it would create some legislative difficulty.
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I accept—albeit with some nervousness, given that I am speaking on behalf of the former Master of the Rolls—that the drafting is somewhat defective. He is, fortunately, former, so I cannot suffer for it! The drafting does not deal with the situation where a man is on bail in a foreign country. However, I imagine that if he were released on bail abroad, we would rapidly put him back in prison here.
The noble Baroness has said that she will deal with the substance of the matter. I am extremely grateful to her. I shall convey her intention to the noble and learned Lord.
Baroness Scotland of Asthal: I should explain that, when a prisoner is extradited while serving a prison term here, one of the conditions upon which we agree extradition is that he will not be granted bail but kept in custody and then safely returned to serve the remainder of his period of imprisonment. I wish to tease out such factors. The situation may be insurmountable; we may have to leave the Bill as it stands, but there is a chance that we can do something about it.
Lord Goodhart: Surely the fact that there is a condition strengthens the argument for taking it into account.
Baroness Scotland of Asthal: That is why I shall look at it.
Amendment, by leave, withdrawn.
4.15 p.m.
[Amendment No. 107 not moved.]
Clause 58 agreed to.
Clause 59 agreed to.
Clause 60 [Costs where discharge ordered]:
Baroness Anelay of St Johnsmoved Amendment No. 108:
Page 31, line 22, at end insert—
"( ) In determining an amount under subsections (6) and (7), the judge or court making the order shall give his or its reasons for calculating the amount of compensation."
The noble Baroness said: In moving Amendment No. 108, I shall speak also to Amendment No. 230. They are based in Clause 60 which provides for an order to be given for payment of an amount of money provided by Parliament for a person who falls into one of the categories under subsection (1) of those discharged. Subsection (6) explains that the amount payable should be decided by the relevant judge or court as the amount which they think is reasonably sufficient to compensate the person for any expenses incurred as a result of extradition proceedings under this part of the Bill. Subsection (7) allows the relevant judge or court to come to a different decision where he or it considers it inappropriate for the person to recover the full amount under subsection (6).
Our amendments attempt to introduce transparency into the process. They propose that when the judge or the court makes the order, they should explain how they have calculated that amount of compensation. I beg to move.
Lord Bassam of Brighton: We are grateful for the amendments being tabled. We do not believe that they are necessary because they would represent a departure from domestic procedure and may be confusing compensation and the issue of costs. Clauses 60 and 132 refer to the important area of awarding costs where the discharge of a person who has been the subject of extradition proceedings in the UK has been ordered under Parts 1 and 2 of the Bill.
Amendments Nos. 198 and 230 seek to make the judge or court making the order reveal their reasons for calculating the amount of compensation awarded. The award of costs is different from the award of compensation. Compensation is an amount given to make amends for loss or injury or disadvantage and is normally sought through civil action. Here, we are dealing only with expenses or costs incurred as a result of extradition proceedings, such as lawyers' fees or perhaps a hotel bill where a fugitive has been granted bail but is not a resident of this country.
As currently drafted, the Bill makes provision for the relevant judge or court to have the power to make an order for costs in the discharged person's favour. The amount is what they reasonably consider to be sufficient to compensate the person in question for any expenses incurred. It also allows for the relevant judge or court to reach a different decision if they consider it inappropriate for the person to recover the full amount of costs incurred and specify that amount in the order as that appropriate amount.
The amendment seems unnecessary as all costs awarded must be determined in accordance with the provisions of Part 2, Sections 16 to 21 of the Prosecution of Offences Act 1985 and regulations made thereunder by the Lord Chancellor. General guidance on costs in criminal proceedings is provided by the Lord Chief Justice's practice direction Crime: Costs in Criminal Proceedings (No. 2), published in 1999. This practice direction does not suggest that any judge is required to give detailed calculations for any decisions he makes with regard to costs awarded in criminal proceedings. It appears to be a matter for the discretion of the individual judge.
This is how costs are awarded in normal criminal proceedings and we see no reason for extradition proceedings to be dealt with any differently. I therefore hope that with that clarification the noble Baroness will feel able to withdraw her amendment.
Baroness Carnegy of Lour: The noble Lord spoke to the fact that the judge can reach a different decision and I have just looked at the Explanatory Notes. Is he saying that the explanation of how the judge does this is the same as in all costs arrangements? It seems unjust that the judge should come to a different decision and not say why. It is based on the cost of the case but he
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does not charge the whole of that cost or he charges more. Is that normally the procedure? It seems so strange.
Lord Bassam of Brighton: It is the same. Ultimately, it will be for the discretion of the individual judge. However, he must have regard to the practice direction, which sets out how the calculation is made.
Baroness Anelay of St Johns: I am grateful to the Minister for his answer. He has based his argument on the fact that this would be a departure from existing domestic procedure. I accept that point but the full-on issue that we will examine in a future amendment is that we are dealing with specialist cases where specialist district judges, in particular at Bow Street, deal with it. Calculating the costs and having regard to the practice direction required a certain amount of expertise. Although legal costs can be high for good reasons, in extradition cases they can be even higher for equally good reasons. I refer to the expertise and rarity value of the people involved and the huge personal costs involved in travel and accommodation. I accept the Minister's point that the practice direction procedure exists and that my amendments would take that practice away. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 60 agreed to.
On Question, Whether Clause 61 shall stand part of the Bill?
Baroness Carnegy of Lour: Clause 61 mentions England and Wales and Northern Ireland, but there is no mention of Scotland. The Minister seems to be receiving advice that there is a reason for that and I shall be interested to hear it.
Lord Bassam of Brighton: The advice is that there is no equivalent Scottish legislation to apply here, because these provisions are for England and Wales and Northern Ireland. We cannot apply what does not exist.
Baroness Carnegy of Lour: So what happens to poor Scotland?
Lord Bassam of Brighton: Presumably the Scottish Executive has its own way of dealing with the issue. That is probably the answer to the question. As my noble friend is telling me, the Scottish legal system is different and the noble Baroness, Lady Carnegy, is good at pointing that out to us.
Clause 61 agreed to.
Clause 62 [Documents sent by facsimile]:
Lord Bassam of Brightonmoved Amendment No. 108A:
Page 31, line 36, leave out subsections (1) and (2) and insert—

"(1) This section applies if a document to be sent in connection with proceedings under this Part is sent by facsimile transmission.

(2) This Act has effect as if the document received by facsimile transmission were the document used to make the transmission.

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(3) The document received by facsimile transmission may be received in evidence accordingly."

The noble Lord said: In moving Amendment No. 108A, I shall speak also to government Amendments Nos. 109A and 230A. I want also to address Amendments Nos. 109 and 231, tabled by Members of the Committee opposite. All of these amendments are concerned with how documents can be sent from the requesting state to the United Kingdom.
Perhaps I should begin with Amendments Nos. 108A and 230A. These two amendments replace the existing provisions in the Bill on fax transmissions in their entirety. Let me explain why we have done so.
On closer examination, we concluded that the provisions in the Bill as currently drafted concentrated rather too much on the document transmitted, whereas the focus more properly should have been on the document received. We also believe it is unnecessary to say, as the existing wording does, that a document "may be sent" by facsimile. Clearly, there is nothing ever to prevent anyone from sending a fax, but what we need to be concerned about is the status of a document received by fax. These amendments accordingly allow for a document sent by fax to be received in evidence.
Of course, the district judge may refuse to admit it where there are doubts about its provenance and the fugitive will be able to challenge documents on those grounds. In case of doubt, it will always be possible for the original to be obtained and produced.
Let me turn to the new clause in Amendment No. 109A, which we seek to introduce into the Bill. This clause will allow Part 1 warrants, though not supporting material, to be sent by electronic means other than by fax. This clause is needed because, as has been previously explained, we anticipate that in future the vast majority of Part 1 requests will be transmitted by the secure Schengen computer system. This is a closed computer system to which only law enforcement agencies in each country will have access—in the UK's case it will be NCIS which will house our Schengen terminal.
I hope that Members of the Committee will welcome this. Quite apart from all the practical benefits, we believe that a secure computer link is probably a safer way to transmit documents than by post or fax and certainly allows for much less possibility of fraud or rogue documents than any other system of transmission.
I turn to the amendments standing in the name of the Official Opposition. They seek to provide that the Secretary of State should make regulations concerning the security of documents sent by fax. I appreciate that we need to guard against documents that are not genuine. However, I believe that this is a little over the top. The Bill already requires NCIS in Part 1, and the Secretary of State in Part 2, to certify that all incoming warrants have come from a bona fide source. As I have already indicated, any documents can be challenged by the fugitive, so the mere fact that it can be sent by fax does not put him at a disadvantage.
Accordingly, I hope that on reflection Members of the Committee opposite will accept that this provision is unnecessary. I trust that the Committee will find favour with the Government's amendments. I beg to move.
Baroness Anelay of St Johns: My name appears on two of the amendments in the group. We tabled them in order to obtain a debate on the security of fax transmissions. I welcome the government amendments and make it clear that I shall not move mine when we reach them. The Minister will recall that during the passage of the Crime (International Co-operation) Bill we discussed the Schengen information system. We made it clear that we were content with the provisions within that Bill.
Lord Lamont of Lerwick: Perhaps I may ask the Minister a question on which he may wish to seek advice. Can he explain the background to the provision, saying why it has been made, what it has replaced, and whether in previous cases facsimiles have been refused and challenged in courts? What has given risen to this?
4.30 p.m.
Lord Bassam of Brighton: The answer to the point made by the noble Lord, Lord Lamont, is really very simple. There is nothing in previous legislation because that legislation dates from 1870. I know that the fax machine has a longer history than it is often given credit for, but we felt that the step was useful and modernising. As I explained in promoting the amendment, we have a secure system, as was referred to by the noble Baroness, Lady Anelay. I am advised that we are not aware of any challenges to faxes being accepted. However, I have made it plain that they can be open to objection by a fugitive. That is for the district judge to consider.
Baroness Carnegy of Lour: I may be quite wrong in asking this and should know, but will all the countries involved in Part 1 be part of Schengen? The secure system is a Schengen system, and will the countries necessarily have access to it?
Lord Bassam of Brighton: All EU countries will be party to Schengen, but there is the possibility that non-EU countries will be part of the scheme. That probably does not entirely satisfy the noble Baroness, but that is the situation.
Baroness Carnegy of Lour: It does not satisfy me. The whole argument deployed by the noble Lord was that the system was secure and closed. If there were an open system, the provisions would not be safe.
Lord Bassam of Brighton: The noble Baroness is right. Other countries can use an open system to transmit documents, and nothing can necessarily be drawn from that as wrong in any way. Within Schengen and the EU countries, a secure system is being set up. That adds a great deal more in terms of

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integrity, but it should not be seen as taking anything away from documents sent through the post and by other means all the time.
Baroness Carnegy of Lour: I am wondering whether my noble friend's amendment has a use in the case of, say, Norway.
Lord Bassam of Brighton: Norway is part of Schengen in any event. That is my understanding.
Lord Stoddart of Swindon: I am a little concerned. I have heard of all sorts of systems being secure, and then we find that they are not so secure as we had been led to believe. Will the noble Lord explain how the security is achieved and maintained? How can people be prevented from gaining access?
Lord Bassam of Brighton: The Schengen computer system is closed. It is discrete to those countries party to Schengen. As I described in my notes, the UK end of it is housed within NCIS. My assumption would be that, in each country, there would be something similar or parallel to NCIS that would be the receiving and sending organisation, and that those organisations will be party to a closed and secure computer system. I am sorry if that does not entirely satisfy the noble Lord. If he and other Members of the Committee wish it, we can set out in more detail more of the background to that closed system than we can describe in Committee this afternoon. However, the system is based on those principles.
Lord Lamont of Lerwick: When the Minister says "any document", does that include the warrant?
Lord Bassam of Brighton: Yes, it does.
Lord Lamont of Lerwick: The procedure followed for transmission of a lot of legal documents is that the original would have to follow. Would the original have to follow in the case of the warrant, or would a fax be acceptable?
Lord Bassam of Brighton: My understanding is that a fax would be acceptable.
Baroness Carnegy of Lour: As a completely lay person, and not having had any involvement at all in extradition proceedings, I have to say that it does not sound as though the matter has been properly thought out. Can a warrant arrive by fax? That seems extraordinary. Can a country that is put on the list of Part 1 countries but that does not have access to the secure Schengen system send documents in an open way? We need some more detail, do we not?
Lord Bassam of Brighton: With respect to the noble Baroness, it is common that legal documents are sent by facsimile. What we are describing is a secure system. It works well. We are simply clarifying the matter in legislation. I am really puzzled as to why Opposition Members of the Committee think it somehow odd and
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strange. It is not. It is common practice. We are trying to ensure absolute security, and the Schengen secure system will achieve that.
Perhaps for the record, I ought to add—the issue of non-Schengen countries was raised—that non-Schengen countries can send documents by means other than fax. In every case, NCIS has to check and certify that the warrant has come from a bona fide source. In a sense, there is a double check in that event. I continue to be slightly puzzled by the questioning of a system that seems to the Government not only valid, but secure, and that attempts to ensure that we have a very high standard in the transmission of documentation.
On Question, amendment agreed to.
[Amendment No. 109 not moved.]
Clause 62, as amended, agreed to.
Lord Bassam of Brightonmoved Amendment No.109A:
After Clause 62, insert the following new clause—
"PART 1 WARRANT: TRANSMISSION BY OTHER ELECTRONIC MEANS
(1) This section applies if a Part 1 warrant is issued and the information contained in the warrant—

(a) is transmitted to the designated authority by electronic means (other than by facsimile transmission), and

(b) is received by the designated authority in a form in which it is intelligible and which is capable of being used for subsequent reference.

(2) This Act has effect as if the information received by the designated authority were the Part 1 warrant.
(3) A copy of the information received by the designated authority may be received in evidence as if it were the Part 1 warrant."
On Question, amendment agreed to.
Lord Bassam of Brightonmoved Amendment No.109B:
After Clause 62, insert the following new clause—
"PERSONS SERVING SENTENCES OUTSIDE TERRITORY WHERE CONVICTED
(1) This section applies if an arrest warrant is issued in respect of a person by an authority of a category 1 territory and the warrant contains the statement referred to in subsection (2).
(2) The statement is one that—

(a) the person is alleged to be unlawfully at large from a prison in one territory (the imprisoning territory) in which he was serving a sentence after conviction of an offence specified in the warrant by a court in another territory (the convicting territory), and

(b) the person was serving the sentence in pursuance of international arrangements for prisoners sentenced in one territory to be repatriated to another territory in order to serve their sentence, and

(c) the warrant is issued with a view to his arrest and extradition to the category 1 territory for the purpose of serving a sentence or another form of detention imposed in respect of the offence.

(3) If the category 1 territory is either the imprisoning territory or the convicting territory, section 2(2)(b) has effect as if the reference to the statement referred to in subsection (5) of that section were a reference to the statement referred to in subsection (2) of this section.
(4) If the category 1 territory is the imprisoning territory—

(a) section 2(6)(e) has effect as if "the category 1 territory" read "the convicting territory";

(b) section 10(2) has effect as if "an extradition offence" read "an extradition offence in relation to the convicting territory";

(c) section 20 has effect as if, in subsections (1)(c), (2)(c) and (3)(c), after "entitled" there were inserted "in the convicting territory";

(d) section 37(5) has effect as if "a category 1 territory" read "the convicting territory" and as if "the category 1 territory" in both places read "the convicting territory";

(e) section 51(4) has effect as if "a category 1 territory" read "the convicting territory" and as if "the category 1 territory" in both places read "the convicting territory";

(f) section 64(1) has effect as if "a category 1 territory" read "the convicting territory";

(g) section 64(2) has effect as if "the category 1 territory" in the opening words and paragraphs (a) and (c) read "the convicting territory" and as if "the category 1 territory" in paragraph (h) read "the imprisoning territory";

(h) in section 64, subsections (3), (4), (5), (6) and (8) have effect as if "the category 1 territory" in each place read "the convicting territory"."

The noble Lord said: I am sure that I shall be hanged for saying this, but although these amendments may appear complicated, we shall endeavour to demonstrate that they are really quite simple and uncontentious. I am aware that statements of that kind are probably the wrong thing to say and may set alarm bells ringing in the minds of some Members of the Committee on the Benches opposite. However, I hope that they will bear with me and take what I say at face value.
The amendments are concerned with the extradition of escaped prisoners who have been the subject of a repatriation of prisoners agreement. It might be helpful if I briefly explain the background. As noble Lords may know, repatriation of prisoner agreements are very common and exist between all major countries. Essentially, they enable a person who has been convicted to a long period of imprisonment in a foreign country to be sent back to his native country to serve out his period of imprisonment there.
Apart from the obvious practical benefits that it is likely to be easier for the prisoner to communicate with prison officers and other prisoners in his home country, repatriation also makes it easier for the prisoner to receive visits from, and maintain contact with, his family. Family contact is generally an important ingredient in eventual rehabilitation and something to be encouraged. So repatriation of prisoners is something to be welcomed and is something that all of our major extradition partners engage in. However, the fact that repatriation is not unknown or uncommon means that our extradition procedures need to be able to cope with it. We need to ensure that if a person is repatriated from one country to another and then escapes from prison we can still send them back if they are traced to Britain.
That requires some adaptation to the Bill. Let us imagine that a person has been convicted in Austria and repatriated to France. If noble Lords look at Clause 2(5), they will see what the statement
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accompanying an extradition request in a conviction case has to contain. In the example that I have just cited, France could not furnish the necessary statement, since it could not say that the person had been convicted in France. Equally, Austria would be unable to provide the statement because it could not say that the person was sought for the purpose of serving a sentence of imprisonment in Austria. So, as I indicated, some minor adaptations are required to ensure that the our extradition procedures can operate in circumstances where the person has escaped from a prison in a country other than the one in which he was convicted.
Clause 136 already achieves that in cases where the person was repatriated between two Part 2 countries. It enables either the convicting or the imprisoning territory to request extradition, and there is a very similar provision in our current extradition legislation. However, Clause 136 applies only to Part 2 countries. Due to an oversight, for which I apologise, the Bill does not include an equivalent provision for Part 1.
Amendment No. 109B, standing in the name of the noble Lord, Lord Filkin, rectifies that omission. We are also tweaking Clause 136 to ensure that we are able to cope where a person has been repatriated between a Part I country and a Part 2 country—for example, where a person has been repatriated from Canada to France or vice versa.
I apologise for having spoken at some length, but I hope that I have been able to reassure Members of the Committee that the amendments do nothing more than ensure that those people who have been repatriated and then escaped from prison do not slip through the extradition net. I trust that I have persuaded noble Lords that these are desirable amendments and that they should be agreed to. I beg to move.
On Question, amendment agreed to.
Clause 63 [Extradition offences: person not sentenced for offence]:
Lord Goodhartmoved Amendment No. 110:
Page 32, line 10, at end insert—
"( ) the category 1 territory is a party to the European framework decision;"
The noble Lord said: In moving Amendment No. 110, I shall also speak to Amendment No. 127.
The amendments were tabled because of the possibility that countries that are not party to the European framework decision may be added to the category 1 list. The effect of the amendments is that he dual criminality rule is excluded in relation to the European framework list, only as between parties to the framework decision. The dual criminality rule would remain in force between the United Kingdom and other category 1 states. Amendment No. 110 would apply the principle to extradition to stand trial. Amendment No. 127 applies the principle to extradition to further sentence.
I see no reason why in an extradition agreement between the United Kingdom and New Zealand, for example, it would be appropriate or necessary to

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exclude dual criminality for all offences on the list but no others. New Zealand is not after all a party to the list. It might be willing to negotiate for category 1 status without any exclusion of dual criminality. It might agree to the exclusion of dual criminality for some but not all the offences on the list. It might, indeed, wish to add other offences to the list.
Amendment No. 110 may be the more attractive, because it can be passed without breaching any treaty obligations involved in the European framework decision, which applies only to the key member states to that decision.
I would not object to a further amendment giving the Government power to exclude the dual criminality rule under a new agreement with a state that was not a party to the European framework decision, but only if that power were subject to parliamentary approval. That could be done by means of a separate treaty or agreement. It seems plain that we should not require acceptance of the European framework list in full, in part or at all, as the condition of admission to category 1 status of states that are not members to the framework decision. I beg to move.
Baroness Anelay of St Johns: I support the amendments. I shall not repeat the arguments, as I subscribe entirely to the comments of the noble Lord, Lord Goodhart.
4.45 p.m.
Baroness Scotland of Asthal: I am slightly puzzled by the approach that has been taken in the amendment, and I hope that I will be able to explain why we believe that the Bill as drafted is the most appropriate way forward.
We are concerned here with the benefits available to different countries, once designated as category 1 extradition partners. Frankly, we see little point in designating countries as Part 1 extradition partners if we then seek to deny them some of the benefits that go with that. The amendments would provide that, whatever countries might be in Part 1, the partial abolition of dual criminality would apply only to those that were signatories to the framework decision. I really cannot see any case for seeking to limit flexibility in that way, nor can I see any intellectual argument that says it is acceptable to limit the dual criminality requirement with a trusted EU partner but not acceptable to do so for a trusted Commonwealth partner, for example, with which we may have many things in common.
As I previously indicated, the Government have no plans to designate as Part 1 countries anyone other than the member states of the EU and, possibly, Norway and Iceland. Having said that, it does not seem impossible that there might one day in the future be a case for putting countries such as Australia, New Zealand or Canada into Part 1 Those countries are all established democracies where the rule of law is respected. What is more, they are all commonlaw countries, so the fears that some noble Lords have
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expressed about investigating magistrates—which may be said to be groundless but which I hear none the less—would not apply.
I hasten to stress again that we have no plans to move those three countries, or any other non-European ones, into Part 1. But equally, it does not strike me as impossible that there may be a strong case for doing so at some point in the future. If that point does arise, we cannot see that there could be very strong objections. There would have to be an objective decision as to whether the rule should change so as to enable the country, which we would have established that we have trust and confidence in, to operate the system. We therefore believe that the Bill needs to retain the flexibility to cope with this situation.
As I have already indicated when we discussed previous amendments, we will introduce a government amendment to provide that designation of Part 1 countries will be by the affirmative resolution procedure, so both Houses will have an opportunity to have their say. Therefore, Parliament will have the fullest opportunity to consider whether designation of any country as a Part 1 country is justified. That is a very important safeguard.
Bearing all that in mind, I have to confess that we were a little surprised and puzzled by the noble Lord's approach. If Parliament takes the view that a non-European country should be in Part 1, what is the point of then denying that country one of the benefits that go with being a category 1 country? Either we have sufficient trust in a country and its legal system to put it in Part 1 or we do not, in which case we should not he going down that road. But if we do think a country warrants being in Part 1, we cannot see why we should do so on a half-hearted basis and not accord it the full treatment and status that goes with being a Part 1 country.
I understand what the noble Lord says in relation to the nature of the framework agreement, the reciprocity and the signatories in relation to ECHR. I hear what he says about all those beneficial aspects that allow us to be in comity with our EU partners. However, we are also in comity, often in almost the same intimate way, with a number of other counties that we may want to allow into the Part 1 fold if it appears appropriate to Parliament in due course. On that basis, we do not believe that the amendments are necessary, and we invite him to reconsider his position and to withdraw them.
Baroness Carnegy of Lour: The Minister has given us some good news, which I do not believe that we have had before; that the Government have paid attention to the comments of the Delegated Powers Committee about making additions to the list of Part 1 countries under affirmative procedure. As the Bill was originally drafted, the Minister could not have argued that, because Parliament would not have had the chance properly to decide—it would have been "Yes" or "No", with no discussion.
The Minister also said that the Government did not have it in mind that any additional countries would be brought into Part 1, except for possibly Australia, New

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Zealand and Canada. I took part in that discussion in the Delegated Powers Committee, so I am very interested in it. However, that is not how the Bill is drafted—any country could come in, so the argument is not 100 per cent strong.
Baroness Scotland of Asthal: We were referring not to the three countries mentioned by the noble Baroness, but to the possible inclusion of Norway and Iceland. However, it is not beyond question that those three countries might be included at some stage in the future.
Let us consider the historical links that we share with Australia, New Zealand and Canada. They share with us a position in relation to capital punishment—they do not have it—and an adherence to all the human rights provisions and agenda. They have a very similar commonlaw approach to law enforcement and also provide legal assistance for individual persons who find themselves in difficulty. Therefore, there are strong similarities between those countries and ourselves, but we do not say that at this stage we are minded to consider including them. We are simply saying that we do not rule it out for all time.
There may come a time when changes are made and similarities become closer, when it is thought necessary that those countries are brought into the closer partnership available under Part 1. If we have the necessary trust and understanding and a working relationship, we may well feel confident enough to say that we are minded to make available to them all the benefits of Part 1. If we are not so minded, they should properly remain in Part 2, and they should not make the transition unless and until we are satisfied that the change should be undertaken. That does not imply any degree of compulsion on our part; we can make the choice to leave them where they are or to change them, and Parliament can decide whether it is content or not content.
Baroness Carnegy of Lour: I am grateful to the Minister for clarifying the argument about the three countries, and 1 appreciate what she says about Iceland and Norway. However, my argument is really that the Bill does not limit the countries that can be included; it could be any country at all. The Government's argument is somewhat weak when one considers that we may be dealing with a country that is as yet unnamed. Parliament will have the opportunity for very limited discussion under the affirmative procedure, which it would not have had if the Government had not changed their mind on the matter, but my point related to the lack of a limit. I understand the argument about the three countries, which we had under Clause 1.
Baroness Scotland of Asthal: I hope that I can reassure the noble Baroness. The whole point is that the Part 1 countries are the countries about which we feel the greatest degree of confidence. I can reassure the noble Baroness that, while this Government are in being, there will be no suggestion of introducing into Part 1 any country that does not meet the criteria that enables us to have confidence in the operation of their
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justice systems similar to that which we have for the Part 1 countries. That is why the Bill differentiates between the Part 1 and Part 2 frameworks.
I hear what is being said about EU countries. In essence, if I may paraphrase the noble Lord, Lord Goodhart, we have only one family. If you are in the EU family, you can be in Part 1 but, even if you have the same relationship and closeness with us, if you are not in the EU family, you cannot be in Part 1. We do not actually agree with that. We can have close relations with our partners in Europe—that is right and proper—but in time we may also develop with other countries sufficient nexus, comfort and trust, that we may decide that they deserve a closer relationship with us and to be included in Part 1. However, as long as any country does not meet those criteria, they will remain firmly in Part 2.
Lord Lamont of Lerwick: I find what the Minister says quite persuasive, although I am struck by the way in which she uses the term "flexibility". One could stand that on its head arid say that what the noble Lord, Lord Goodhart, was advocating was more flexibility in the application of the extradition procedure. The Minister is all on the side—as is this Bill—of extraditing people willy-nilly. As we keep saying, there is very little in the Bill to safeguard people's rights.
The amendment tabled by the noble Lord, Lord Goodhart, would introduce more procedural flexibility. As he has said, it would enable for certain categories of country the partial removal of dual criminality not to apply. I accept the Minister's comments about countries such as Australia and Canada, but that leaves one more than ever puzzled by the distinction between Parts 1 and 2. It is not a distinction that I find very easy to understand. In some ways, I cannot see why America cannot be a Part 1 country, leaving out the question of capital offences and capital punishment. The noble Baroness smiles, but I should like to smile when she says that Greece is among the countries in which the Government have most confidence.
The issue is very tricky, and even I am a little hesitant about naming countries and making points about them. However, I do not have as much confidence in certain European countries' systems of justice as I would have in the Australian or Canadian systems. Many people would dissent from the view expressed by the Minister, that those are the groups of countries in which we have the most confidence. Ministers always side-step whenever it is raised the terrible case in Greece of the plane spotters. They never explain how we can have confidence in a system of justice that required the Foreign Secretary to intervene before the matter was finally resolved. I accept the Minister's logic, but it was possible to disagree with the remarks with which she accompanied it.
The Minister referred to Norway and Iceland, but could she explain why Switzerland is not a country being considered for category 1?
5 p.m.
Baroness Scotland of Asthal: It is really because Norway and Iceland have signed the framework decision and the Swiss have not. That is the way in which we would consider the matter. It very much takes on board the import of what the noble Lord, Lord Goodhart, said. He is really saying, "I only want those countries to be in Part 1 which are bound by the framework decision".
As regards Part 1, all our partners in the EU—we shall soon be 27 in number—are part of the European Union family. I know that the noble Lord will say that one does not always share the same intimacy with all the members of one's family. That may be so but they are all members of the same family and we have agreed to behave in comity with our EU partners. The framework agreement was negotiated with skill, diligence and energy by all those in the group who signed it. We have to acknowledge that that is the reality of where we are today.
Lord Goodhart: I have to say on this occasion that I am somewhat disappointed with the Minister's response. First, she asked what was the point of having category 1 if you could not get rid of dual criminality. There are very significant advantages in category 1 status that have nothing to do with dual criminality, in particular the greatly increased speed with which one can obtain extradition as a result of not having to provide evidence or information of a prima facie case and of not having to go through the Home Secretary, which gives rise to problems of judicial review. As I say, there are considerable advantages in category 1 status without the relaxation of the dual criminality rule.
It may be my fault for not having explained more clearly what I was after in this case. My amendments in the group we are discussing propose that no state which is not a signatory to the European framework decision shall get the benefit of the relaxation of the dual criminality rule. However, that is not my final or unconditional conclusion. I also said—perhaps not fully enough—when I moved the amendment that I would be perfectly content if the Government were to come back with an amendment which made it possible for new states to be added to the category 1 list with a relaxation of the dual criminality rule which was different from the European framework decision. That plainly gives more flexibility.
What I really object to is the idea of one-size-fits-all and the suggestion that any country which is admitted to category 1 status must accept the European framework decision as it stands even if it is not a party to that decision and even if the United Kingdom and the other state concerned would prefer either not to relax the dual criminality rule at all or to relax it in some way which differed from the way in which it is relaxed by the European framework decision. Far from being rigid, my intention is to give increased flexibility. I am reluctant to undertake the task of drafting a measure for the Government to put forward. That is why I have tabled the amendment in a very simple form which proposes that there can be no
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relaxation of dual criminality as between states which are not parties to the European framework decision. However, the principle behind my amendment has not been met. It is certainly a matter which I may well consider bringing forward again at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johnsmoved Amendment No. 111:
Page 32, line 11, after "territory" insert "that issued the request"
The noble Baroness said: In moving Amendment No. 111,1 wish to speak also to Amendment No. 116. The amendments were tabled in order to probe the drafting of subsections (2) and (3) of Clause 63. In great measure they foreshadow the debate we shall have shortly on the Government's Amendments Nos. 112 and 126. Therefore, I shall speak briefly. The debate concerns the territorial point raised on Second Reading and on which the noble and learned Lord, Lord Falconer, gave evidence to the Select Committee.
We find Clause 63 somewhat ambiguous in places and we believe that our amendments would add clarity. Clause 63(2) begins thus:
"The conduct constitutes an extradition offence in relation to the category 1 territory if these conditions are satisfied—
(a) the conduct occurs in the category 1 territory".
Which of the category 1 territories does that refer to? We would simply add the words "that issued the request" at the end of paragraph (a) in order to identify which category 1 territory is referred to. We feel that that would emphasise the fact that the criminal activity must have occurred in the category 1 territory of the requesting state. That should help to avoid doubts about territoriality. I beg to move.
The Deputy Chairman of Committees (Lord Elton): Amendment proposed, on page 32, line 11, after "territory" insert "and no part of it occurs in the United Kingdom".
Baroness Scotland of Asthal: I thank the noble Baroness for moving the amendment in the way that she did. I accept that it is a probing amendment.
Baroness Anelay of St Johns: I understand that the noble Lord the Deputy Chairman of Committees may have read out the text of the wrong amendment. I was not listening properly. I apologise.
The Deputy Chairman of Committees: I apologise as I read out the text of Amendment No. 112, not that of Amendment No. Ill. After the noble Baroness, Lady Anelay, moved the amendment, I should have said "Amendment proposed, page 32, line 11, after `territory' insert 'that issued the request"'.
Baroness Scotland of Asthal: I must confess that I was concentrating on what the noble Baroness said and I did not notice that the wrong text was read out. I thank the noble Lord the Deputy Chairman of Committees for his acuity on this occasion.

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As I say, I thank the noble Baroness for moving the amendment in the way that she did. She made it clear that it was a probing amendment. I hope that I shall be able to explain why we think that it is not necessary and why the way in which Clause 63 as currently drafted suffices.
As the Committee will know, Clause 63 is an interpretation clause which defines what constitutes an extradition offence; that is, an offence for which the UK can extradite. It applies where the person has been accused of, or convicted but sentenced for, an offence in a category 1 territory. It sets out what conduct can constitute an extradition offence. It does this by reference to the penalty that the conduct can attract and the location of the conduct.
The amendments seek to add unnecessary language into an already clear passage. Subsection (1) of Clause 63 requires the conduct to be an offence in a category 1 territory. Subsections (2) and (3) require the offence to have taken place in the category 1 territory. That is the important point. The conduct must have taken place in the category 1 territory, not a category 1 territory.
So, the Bill already makes it clear that where a person is accused of a crime in a category 1 territory, the provisions of Clause 63(2) and (3) apply only where the conduct took place in that country. I notice that the noble Baroness nods so I think that she is with me. The provisions cannot apply if the conduct took place in any other category 1 territory or, for that matter, in a category 2 territory. I respectfully suggest that it is unnecessary to add the words "that issued the request" as that is implicit in the phrasing of the clause. We believe that the amendments are not necessary. To our mind, the wording in the Bill is clear. I think that the parliamentary draftsman, who has already been given a number of shocks today, would have a particularly big one if we did not appreciate the clarity and precision of the drafting in this instance.
Further evidence is provided by the remaining parts of Clause 63. Subsections (4), (5) and (6) are very clearly designed to cater for cases where the conduct has occurred outside the requesting state.
These provisions would obviously not be necessary if there were any way in which subsections (2) and (3) could apply to conduct outside the requesting state. But since subsections (2) and (3) cannot be interpreted in that way, we do need the rest of Clause 63.
I do not believe that there is any room for ambiguity or any need to amend the Bill. I hope that the noble Baroness will be content with that explanation.
I believe that we have discussed on previous occasions the difference between "a" and "the". I hope that I have clarified the matter.
Baroness Anelay of St Johns: The explanation of the noble Baroness certainly has satisfied me. As she mentioned this concerns the difference between "a" and "the" and the importance of "the" being the distinguishing factor in this respect. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees: I call the noble Baroness, Lady Amos, on Amendment No. 112.
Baroness Scotland of Asthalmoved Amendment No. 112:
Page 32, line 11, after "territory" insert "and no part fit occurs in the United Kingdom"
The noble Baroness said: I am most grateful for the elevation. I believe I shall remain a Minister of State for some considerable time. I hope that I can he brief in moving this group of amendments as they have been extensively trailed.
These amendments are concerned with conduct that may have taken place in the United Kingdom and with ensuring that where such conduct is regarded as lawful here extradition cannot take place. The Government believe that those who go to another EU country and break the laws there should expect to face justice and should, therefore, be extradited even if the UK happens not to have an exact equivalent offence.
Our position is very different from that which appears to be taken by noble Lords opposite. As we have made clear in other debates, the Opposition appear to believe that people who break the law of another EU country should be safe from prosecution so long as they can cross a border into a country where the conduct is not considered criminal prior to arrest. That remains a fundamental difference between us and, I suspect that it will continue to divide us, although I have hopes for the noble Baroness. Lady Anelay, in this regard.
However, one thing we are all agreed on is that it would be quite unjust and improper for anyone to be extradited for conduct which took place in the United Kingdom which was quite lawful here. It has been the Government's firm view all along that the Bill, in its present form, would prevent that happening. Nevertheless, we recognise that very real concerns have been expressed in that regard and that we should address them if we possibly can. Accordingly, my noble friend, Lord Filkin, announced when he appeared before the European Scrutiny Committee chaired by the noble and learned Lord, Lord Scott of Foscote, on 30th April that we would be bringing forward amendments on this point. My noble friend re-iterated the point in a letter to the noble Baroness, Lady Anelay, of 12th May which was copied to a number of your Lordships and which may well now be in the Library.
The amendments that we are now discussing give effect to the commitments that we have made. Their effect is to put beyond any possible doubt that the provisions in Part 1 of the Bill allowing for extradition without dual criminality cannot apply if any part of the conduct that forms the extradition request has occurred in the United Kingdom.
The noble Baroness, Lady Anelay, in her usual courteous manner very kindly indicated that there was a special point with which she has some concern. I hope that I shall be able to set her mind at rest about that. Doubtless the noble Baroness will correct me if I

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inadvertently misrepresent her. I believe that the point at issue concerns an employee of a UK company who commits a crime abroad, whether through negligence or sabotage, or some other method, which results in a death. What would be the position of the board of directors of the company by whom he was employed, based in the United Kingdom, if the requesting country wanted also to put the directors on trial?
The position is straightforward. The individual employee whose action had resulted in the unfortunate consequence would be extraditable, as he or she would be under current law, and I do not think that any noble Lords would quibble with that. The basis on which the company directors were being sought would presumably be because they had set the direction and corporate culture of the company which had caused the individual to be negligent or to cut corners and led to the resulting death. If the company were based in Britain, then the corporate ethos and indeed any specific directives will have been issued from here. So it is quite clear that in such a case, part of the conduct that constitutes what the requesting state believes to be an offence will have occurred in the UK.
These amendments, as I have indicated, put it beyond any doubt that where any part of the conduct has occurred in the UK, we can extradite only if the dual criminality requirement has been satisfied. At the moment the UK does not have an offence of corporate manslaughter so in the circumstances that I have just described, the dual criminality requirement would not be satisfied and the board of directors could not be extradited.
I hope that reassures the noble Baroness and those who have approached her with concerns on this point. I hope too that the Committee will welcome these amendments. I beg to move.
5.15 p.m.
Viscount Bledisloe: I very much welcome the intent behind the amendment. It is intended to meet points which I made on Second Reading. I am, however, worried as to whether, technically, it achieves that which the noble Baroness set out.
Let us suppose that a publication in this country contains an article which constitutes in Germany Holocaust denial and a few copies are sold in Germany. The offence with which the magazine publishers would be confronted would be that of selling in the main streets of Berlin a copy of the Spectator magazine containing the article in question—that act took place wholly in Germany. The article was written in England and was largely circulated in England but the indictment would concern the offence of selling in W H Smith Belinstrasse, if such a thing exists, copies of the magazine containing the offending article. Is there not a risk that in those circumstances this highly well intentioned amendment would not fully succeed in achieving the end for which it is so desirably designed?
Baroness Scotland of Asthal: One has to unpick a large number of the premises upon which the noble
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Viscount has just constructed his argument. First, we would have to consider whether the Holocaust denial offence was committed in publishing the article, where the article was published, and whether distribution was included in the offence.
The hypothetical magazine mentioned by the noble Viscount was published in this country but some copies were distributed in Germany. The physical act of selling those copies of the magazine occurred in Germany. The argument would arise as to whether the German authorities could deal with the German supplier, or the German seller or purveyor of the magazine, as those people knowingly supplied or sold the magazine within Germany, and what access there would be to those who were responsible for editing and publishing the article in this country.
As the relevant article was published in the United Kingdom, we would say that the offence was in part committed here and we would not be able to extradite the people concerned. One could construct a number of interesting and delicate arguments around the alleged offences but in order to obtain a clear view of the matter one would have to look at the precise nature of each and every alleged offence.
The noble Viscount alights upon Holocaust denial because he has probably found that it is the only offence that is outwith those which are caught by our legislation. That is the only such offence that I have discovered; namely, Holocaust denial. It is a very particular offence. We would say that those engaging in that endeavour in part in this country would not be capable of being extradited as the offence would in part have allegedly been committed in this country, and in this country it is not an offence. So we would not extradite those involved in it.
Viscount Bledisloe: I ask the noble Baroness to take the matter away and reconsider it. If one draws the analogy with the law of libel, each separate magazine that is sold constitutes the publication of the libel contained in it. Publication does not have in that sense the common meaning that it has in this country of the act of printing the magazine and running it off. I am not saying that the noble Baroness is not right but I do not think the matter is necessarily as straightforward as she thinks. I should be grateful if she would ask her officials to consider the matter further and then write to me.
Baroness Scotland of Asthal: I am very happy to write to the noble Viscount. Of course I shall reconsider the matter but I believe that Clause 63 is clear as it refers to the case where no part of the relevant conduct occurs in the United Kingdom.
As regards the hypothetical case that the noble Viscount mentioned, the production and publication of the magazine occurred in this country but some copies were distributed elsewhere. Therefore, it would be caught by Clause 63 because clearly part of the hypothetical offence occurred in this country. Dual criminality would apply. Those responsible for the acts in question would be capable of being extradited only if Holocaust denial were also an offence in this

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country, which it is not. I think that I am right but, as any lawyer knows, that is always an interesting position to hold until another lawyer tells you that you are not right.
Lord Stoddart of Swindon: I listened to what the noble Baroness said. I should like to be reassured by what she said but I am afraid that I am not. She mentioned Holocaust denial as the only instance that she can find of the offence that we are discussing. However, that is the only instance that she can find at the moment. The great problem is that once the legislation is enacted, all sorts of instances which one cannot think of at this time suddenly appear. It is that which worries so many of us. I believe, perhaps wrongly, that freedom of speech is absolute in this country. That is not necessarily the case in other countries. Other countries may have a law which criminalises anyone for criticising the head of state. I should like to know—perhaps we cannot say at this point in time—whether anyone in this country who criticises and insults President Chirac may be liable for extradition. All kinds of things may occur.
Indeed, perhaps there is another question I should ask on the point which was raised earlier, by, I believe, the noble Baroness, Lady Anelay, regarding the question of corporate responsibility. Could the employers in this country of an employee who, through his or her negligence, causes the death of a person abroad be extradited on criminal charges of manslaughter?
Under present circumstances I understand that that would not be possible. But in the offing, as I understand it, there is possible legislation on corporate criminality which may well enable managing directors to be prosecuted for the death or injury of their employees through the negligence of another of their employees. That is already in the wings, is it not? Perhaps I am wrong and perhaps I have misinterpreted the Government's intention in that regard and how it would impinge upon the Bill if they intend, as I believe, to introduce a crime of corporate criminality.
Although, like other Members of the Committee, I understand what the Minister is saying and, indeed, believe that she believes what she is saying is the correct response, events have a nasty habit of turning out contrary to what we believe is the position at this particular time.
Baroness Anelay of St Johns: The amendment that the Minister introduced goes a long way to satisfy our concerns. My only disappointment is that she perpetuated the rather stuff and nonsense accusation put forward in another place that somehow we are keen to see people who have committed crimes abroad skip the country and get away with it. If that were the case, we would not want Part 2 of the Bill. We are trying to obtain a fair and equitable system of ensuring that there is swift extradition where it is right and proper. We are certainly trying to co-operate on that basis.
The amendment is intended to solve the problem but, like the noble Viscount, I think that there is still some way to go. I was interested to hear the noble
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Baroness's comment on where publication occurred as regards the offence we are discussing. She certainly satisfied some of my concerns.
One issue that I should like to consider over the summer concerns broadsheets such as the Daily Mail and the Daily' Express which I have enjoyed reading on holiday in Spain. As Members of the Commit tee who have read those newspapers when abroad will know, the newsprint is extremely fuzzy as they are printed on site in the Canary Islands, Spain or wherever. They are printed from copy that is partly sent by electronic communication from this country. There is some input from this country but there is also editorial input overseas. I should be grateful if the noble Baroness and her officials would also consider whether or not we are adequately protecting those broadsheets from any action that might be taken against them. I hope that the response would be that the part of the copy that is sent from this country by electronic means would provide that part of any alleged offence had been committed in this country.
The noble Lord, Lord Stoddart, was right to raise the issue of corporate manslaughter. As we know from debates in another place at Third Reading, the Home Secretary said that the Government would be considering corporate manslaughter as an offence, but he would not specify—quite rightly—when it would come in. I noticed that last week there was a Written Answer in another place with regard to the nature of corporate liability that might be introduced and where the loophole in current law exists. That is an issue which we still have to resolve.
There is one remaining issue to which I shall return when we reach my amendments about the Olympics and sports events in general. It is an issue which equally affects the editors of our newspapers. If, in this country, an editor commits an offence of xenophobia—Holocaust denial is the only one we can think of at the moment; God forbid that they should ever do that—what would happen if he went on holiday overseas? Is he subject to arrest in that country? The offence was committed here hut, as other Members of the Committee suggested, newspapers were circulated abroad, published—a word I should perhaps not use because I am asking for trouble—abroad and sold abroad. If the editor of the Sun were to go to Germany, for example, having done something it judges to be Holocaust denial, could he be arrested for that offence? Can the Minister answer that?
The Government have given us a great deal to think about to ensure that as we progress through this stage of the Bill and, ultimately, Report, we have closed off any avenues by which people could be, in our view, improperly extradited.
5.30 p.m.
Baroness Scotland of Asthal: Perhaps I should respond to the last matter first because the noble Baroness made the clear distinction between those who commit an offence in another country and those about whom a request is made for extradition. They

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are two separate matters. What is clear in this legislation is that if part of the offence is committed in this country and the activity is not criminal in this country, or prohibited, no extradition will flow. If the individual goes to another country and makes a statement or commits acts which contravene the law in that country, he would be subject to the law of that country. Similarly, if someone came from another country to the UK and while here committed an offence against our law, he would be dealt with.
Lord Lamont of Lerwick: Perhaps the noble Baroness will give way. Let me take the example of Holocaust denial or xenophobia. If the editor of a newspaper was in a third country and none of the offence was committed in that country but the extraditing country—let us say France or Germany—presumably one could extradite the person from, let us say, Greece to Germany on the grounds that while the British might say that part of the offence was committed in Britain, Germany was wanting to extradite a Briton from Greece. That presumably is something which cannot be prevented by the amendment—which I agree is good and generous—that the noble Baroness is suggesting. That danger would still remain, would it not?
Baroness Scotland of Asthal: One of the issues that would need to be clarified is whether the country concerned takes extra-territorial jurisdiction. I am not sure whether this scenario is correct or not but let us say, for example, that if Germany were to take extraterritorial jurisdiction over Holocaust denial and a person who is guilty of that offence in terms of the German construction of its law goes to Germany, of course that person would be liable to arrest. But, it would depend on what Germany's rules are in relation to extra-territoriality; we cannot determine that in any given country because it depends upon what it does.
Therefore, I do not know the precise answer of the example given by the noble Lord. I would have to know whether Greece accepted extra-territoriality as a basis. I would then have to know whether Germany had extra-territoriality. If neither did, they could not do it. I think that I would need to know the precise details of what the position of each country was before I could assist Members of the Committee in saying whether a person would be extradited in those circumstances. What we can do is have control over what happens in this country, who we extradite and who we refuse to extradite.
Lord Lamont of Lerwick: I have put it very badly. As was previously argued, supposing copies of the Sun had been sold in Germany, Germany would not need to claim extra-territoriality in order to extradite someone from Greece to Germany, would it? I accept that that may be the position now, but, presumably, that could happen.
Baroness Scotland of Asthal: That would be according to the law because in our country, we deal with offences which are committed here as opposed to
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offences committed elsewhere. I do not know the extra-territorial position in relation to other countries. They may be able to do that, or, in accordance with their laws, they may not be able to do that. I am unable to assist Members of the Committee in relation to those examples.
In relation to that over which we have control, we would not extradite in those circumstances because, in part, the offence will have been committed here and unless the dual-criminality criterion has been satisfied, we would not extradite someone. That is very clear. The way in which another country deals with issues that it deems an offence contrary to its law is outwith that over which I have control. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 113 and 114 not moved.]
Lord Goodhartmoved Amendment No. 115:
Page 32, line 17, leave out "12 months" and insert "3 years"
The noble Lord said: In speaking to Amendment No. 115, I shall speak also to Amendment No. 129. These amendments are of great importance. Indeed, they are the most important amendments that we have yet reached today. Under present law, extradition orders may be made for an offence punishable by at least 12 months imprisonment in the requesting state. That existing rule is repeated for parties to the European framework decision by Article 2.1 of the decision. Article 2.2 excludes dual criminality for offences on the famous list, but only if the maximum sentence is three years or more.
However, under Article 31.2 of the decision, member states can enter into bilateral or group agreements, reducing the three-year threshold for Article 2.2. In exercise of that power, the United Kingdom Government propose to set the threshold for removing the requirement of dual criminality for offences under the list that carry a maximum sentence of not less than 12 months. That is plainly gold-plating. Why are the Government doing that?
The proposal has been criticised by Justice, by Liberty and, perhaps most notably, by the Home Affairs Select Committee in the Commons. The Home Affairs Select Committee stated at paragraph 51 of its first report for the current Session:
"We can see no justification for eroding the basic level of protection provided by the framework decision and we are dismayed that the Home Office is seeking to do so".
I agree that removal of the dual-criminality rule will lead to some simplification of procedure. In so far as it goes, that is an advantage.
The dual criminality rule is not pointless. The original idea was probably because some countries impose harsh and repressive laws—for example, laws which prohibit freedom of speech or assembly or, perhaps, freedom for trade unions to operate. Plainly, we would not wish to extradite for that, but it should not cause a problem with the European arrest warrant because all member states accept the European Convention of Human Rights and, broadly—although not entirely—comply with it.
A secondary reason for the dual-criminality rule is that a stranger to a country may not realise that what is lawful at home may not be lawful abroad. Not only do I accept but 1 also support the principle that visitors to other countries should observe the laws of that country. It is obvious that strangers are not necessarily familiar with the laws of the country they visit. If they are not familiar, a good working rule is that if something is illegal at home, it is best to assume that it is also illegal abroad. But what if it is not illegal at home? There is undoubtedly a risk that visitors may not realise that what they are doing is illegal abroad.
The problem is that that risk is clearly greater with relatively minor offences where practices may vary a great deal. Something recognised as legitimate in one country, or at most subject to an action for civil damages, may be a criminal offence leading to prison in another. I am told in the briefing by Justice that Article 405 of the Italian criminal code imposes a maximum sentence of 16 months for,
"disturbing the religious function of a Catholic cult".
For more serious offences, it is much more likely to be clear to sensible people that they are activities which might be regarded as a crime in another country. The fact therefore that we are prepared to accept exclusion of dual criminality for serious crimes does not mean that we should exclude it for lesser crimes falling within the same category. Some offences on the list can cover a wide spectrum. For example, offence No. 12 is environmental crime, which could include the breach of a tree preservation order—although I should point out that that is not an offence which is subject to imprisonment in the United Kingdom; it is subject only to a fine.
Offence No. 13 is facilitation of unauthorised entry and residence. I am not quite sure what it means but I suspect that it covers the act of squatting which, in this country in an unoccupied building, is not in itself an offence. Therefore, we should not gold-plate the European arrest warrant; we should stick to the basic requirement that the dual-criminality rule is excluded only if the maximum sentence is not less than three years. Lesser crimes will still be subject to extradition if the dual-criminality rule applies. That is the purpose of Amendment No. 115.
Amendment No. 129 applies the same principle to cases where extradition is sought for the return of a person who has already been convicted for the purpose of serving their sentence. Under Article 2.1, the general power of extradition is given where sentences are imposed for a term of not less than four months.
Article 2.2 does not differentiate between extradition for trial and extradition to serve a sentence. In both cases, the dual criminality is eliminated only if the maximum penalty—not the sentence—is not less than three years. I have some concerns that Clause 64(2)(c) may be defective in that it excludes the dual-criminality rule by reference to the length of the actual sentence, not to the length of the maximum sentence, which seems to be what is required under Article 31.2.
Even if what the Government propose is valid, we should retain the same 3:1 proportion as in cases where dual criminality applies. Let us suppose that the
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general law states that the requirement for extradition for trial requires a maximum sentence of not less than 12 months and extradition for sentence requires an actual sentence of four months. Let us suppose further that we apply that principle to the relaxation of the dual-criminality rule. In those circumstances, if extradition without dual criminality at trial requires a maximum sentence of not less than three years, extradition without dual criminality for sentence should require an actual, as opposed to a maximum, sentence of not less than 12 months. Otherwise, there is a danger of extradition after conviction and sentence for an offence which is not a crime in the United Kingdom and which is not serious enough to merit an actual sentence of 12 months.
This raises very serious issues and while the dual-criminality rule, as such, can be legitimately relaxed in relation to dealings with other countries where we have trust, the framework decision in this case actually got it right in Article 2.2. I do riot think that we should seek to reduce that in agreements between ourselves and other member states which take the same view to a period of 12 months. I would apply the same principle to extradition for sentence. There should be no extradition for sentence for an offence which does not carry dual criminality unless the sentence is at least 12 months. I beg to move.
5.45 p.m.
Baroness Anelay of St Johns: I have added my name to these amendments which I strongly support. The noble Lord, Lord Goodhart, encapsulated the issue well when he said that Article 2.2 of the framework decision does the job properly and that we ought not to gold-plate beyond that. I hope that the Minister has not been advised to respond with the riposte which we have had in the past from the Government—namely, that the three-year threshold has never previously featured in extradition law.
The noble Lord, Lord Goodhart, stated exactly why it would be improper to go for the three years to 12 months reduction in this case. The Home Affairs Select Committee was very concerned about this measure. At one point, it stated that,
"the Home Office's response fails to deal with the obvious point that, although a 12-month threshold may ensure that the offence is a matter of 'some seriousness', the framework decision clearly envisages that only offences serious enough to warrant a three year maximum penalty should be exempt from the dual criminality requirement".
Can the Minister tell the Committee whether any other EU member state has lowered its threshold or are we alone in doing this?
Viscount Bledisloe: I found the case made by the noble Lord, Lord Goodhart, compelling, particularly that the lesser the maximum sentence, the less likelihood the tourist will realise that something is criminal in that country. But there is another point. Those who have promoted the desirability of this whole system have done so on the basis that, "Well, you must not think only of our people being taken there, you must think of the desirability of us getting

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people back here". Surely, in that case, we should go below the three years but only for countries that have done the same for us.
There is an argument for saying that the three years could be reduced to a lesser period by Order in Council where the requesting state in question had also reduced similarly. It would be very wrong if we sent people back to a country for 12-month offences when that country would not return people to us except for three-year offences.
Baroness Scotland of Asthal: I thank all noble Lords who have spoken. On this occasion, I shall beg to differ in relation to the way in which these issues have been put. But I should like to thank and acknowledge some of the comments made by the noble Lord, Lord Goodhart, in relation to appreciating that the provisions in relation to dual criminality and relaxation thereof will lead to simplification of the procedure. The noble Lord and the noble Baroness, Lady Anelay, acknowledged that we wish people to comply with the laws of other countries. Those two issues are our starting point.
We do not think that our alteration amounts to gold-plating. We think it appropriate in this instance. We are rather surprised to see the way in which this matter has been addressed with such vigour by our Liberal Democrat colleagues who have said on a number of occasions, as indeed the noble Lord, Lord Goodhart, said today, that they are generally in favour of the European arrest warrant and understand that it has value.
The Government remain of the view that there is no reason why in implementing the European measures the United Kingdom should always do the bare minimum and only that. Our positive approach to implementing the European arrest warrant will, we hope, set an example to other member states to take a similarly constructive attitude. In turn, that will enhance the benefits of the European arrest warrant for the United Kingdom.
It is right—as the noble Viscount, Lord Bledisloe, mentioned—that we bear in mind the real difficulties we have had historically in successfully persuading many of our European partners to extradite nationals to our country to stand trial for offences that we believe should be dealt with here. Historically, that has been a huge difficulty. It will inure to our advantage if, on a proper basis, we are able, through this system, to encourage and enable other European partners who have in the past been resistant to become compliant now.
We must be clear what we are talking about. The Bill provides that where conduct falls under one of the categories of serious offences under the Article 2.2 list—referred to by the noble Lord, Lord Goodhart—dual criminality will not apply where the offences attract a punishment of one year or more in prison, which we believe is a significant sentence.
Looking at the elements in turn, first, the conduct must amount to an offence falling under the list, which, as the noble Lord, Lord Goodhart, indicated,
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it is clear concerns serious crime and not minor matters. He said. "Well, we can deal with serious crime, but we are really looking at the lower end". For those who become victims of the offences included in the list, it is very serious and important to them. If one were to place oneself in the position of such a victim. a period of imprisonment of 12 months or more is a significant period. The second element required for dual criminality to be lifted is for the offence to attract a sentence of imprisonment of one year or more. Again, we say that that is not to view these offences as trivial but emphasises that these are significant offences.
It is therefore disheartening to hear the offences so described. The noble Lord is really saying that we have two tiers. If a person commits a trivial offence and may not know that it contravenes the laws of another country, he should be forgiven and dealt with differently. I do not mean forgiven in terms of avoiding punishment entirely, but there must be the dual criminality. It is only when it is outwith that that it will change. On looking at the list of offences, none is trivial.
I think it has been explained in earlier debate—as I say, I was pleased that the noble Lord re-emphasised this point—that compliance—
Lord Goodhart: Does the noble Baroness not agree that at least some of these offences, while at one extreme are undoubtedly very serious, could also include—for example, environmental crime—relatively minor offences?
Baroness Scotland of Asthal: I obviously accept that it could include relatively minor offences. That is why one must double-lock. It is not only a question of whether the nature of the offence is serious, but the sentence imposed must be a significant sentence. If someone has been charged, convicted and sentenced to a term of imprisonment of one year or more in relation to such an offence, it was not a trivial offence. It was a significant and serious offence.
Taking the example of theft, one could say that theft could constitute stealing a lollipop from Woolworth's. It is not a serious offence and is unlikely to attract a very serious sentence. It may be a serious nature of offence, but it can be dealt with more leniently. In the same bracket of offences is the theft of £1 million, which is a serious offence in terms of our legislation. That is the disparity. How is the difference judged? One looks at the nature of the sentence imposed.
Viscount Bledisloe: The argument about the sentence can apply only to extradition after conviction, except in an Alice in Wonderland situation where, when extraditing for trial, the sentence will not yet have been decided. The point made by the noble Lord, Lord Goodhart, is that an offence can, as a maximum, incur 14 months' imprisonment. But it may be very trivial and it may be something that a person did not realise was contrary to the law of that country. One cannot judge when extraditing for trial what the sentence will be.
6 p.m.
Baroness Scotland of Asthal: There will be a combination of cases: those where you extradite for trial; those where an individual has been convicted of certain offences and a sentence is imposed when he skips hail, or a combination of both. In the cases with which we have dealt, the individual has not always "skipped"—if I may put it colloquially—before being charged or dealt with. In many of those cases, the individual has been sentenced for these significant offences. The requesting state will indicate whether the offence attracts a sentence of imprisonment for one year or more. We still say that an offence that will, or could, attract a prison sentence of one year or more is a significant one.
In another place, the list has caused the sort of discussion that we are having here, where one likes to pick and mix which offences will be "serious". But the list is proper, and noble Lords should be able to rely on it.
Furthermore, it is important to look at the non-list offences under Part 1 on which we will operate a 12-month threshold. The dividing line between the two categories of offences could he as follows: a sentence of more than three years might be necessary for the "serious" list while a 12-month sentence would be needed for those Part 2 offences that are less serious. That would be a very perverse situation.
The noble Baroness says that we should not put forward this argument again, hut, historically, we have taken the benchmark as 12 months. The introduction of a different threshold risks causing confusion, not least for the person whose extradition is requested. The universal application of a 12-month threshold in accusation cases would undoubtedly be much easier to follow than a sliding rule. We know from the "taste, eat and see" approach that the threshold works and has not caused us difficulty, so why is it feared that that which did not cause difficulty in the past is likely to cause additional difficulty now?
The amendment would change the wording of the Bill to mean that the dual criminality test would be lifted only if the offence were punishable by three years' imprisonment. I accept the noble Lord's point that the relaxation of dual criminality is legitimate in relation to the framework. He says that the framework got the balance right and that we should not alter it.
As is always the case, we have had to make objective assessments of where the proper benchmark should be in relation to the countries with which we deal, and what will inure to our advantage in sending people out of the country to be dealt with by other countries. In speaking to an earlier amendment, I have already dealt with the basis on which we send people to other countries. Part 1 countries are trusted colleagues who we can be confident will deal with extradited people fairly, properly and in accordance with the law, upholding their rights under the ECHR, other human rights, and international conditions that we would expect them to meet. On Part 2 cases we have other arrangements.
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I seek to explain, since the Bill was introduced last year, and even before its introduction, that the European arrest warrant was intended to streamline extradition, not simply to replace one method of delay for another. I see what the framework position says and acknowledge that we have gone further than that. But we make no apology for so doing because we think that it is right to do so.
Our aim is to get the maximum benefit from the European arrest warrant in the interests of justice throughout the EU. There is no reason why, when we consider it appropriate, the United Kingdom should not go further than the European arrest warrant and enhance the benefit that it brings.
I would have thought that many Members of the Committee, particularly those on the Liberal Democrat Benches, but also those who sit on one part of Her Majesty's Opposition, would be of a mind on this issue. We wish to lead on this initiative in Europe; we do not want simply to follow the letter of the framework, doing the bare minimum necessary to comply with the agreement. That is where we would be if we felt objectively that it was the best that we could do. We do not want to be party to the lowest common denominator. Within the framework we want to look at what meets the needs of our country and settle our position at that point.
By enhancing the benefits of the European arrest warrant, we think that we will set an example to other member states. The right to free movement within the EU is being abused by serious criminals. When they commit crimes, they do not consider whether dual criminality would apply, the maximum possible sentence and the effect on their victims. We cannot, and will not, let the fight against that abuse be hampered by diluting the ability to pursue those people and to bring them to justice. That is the least that we owe the victims of crime in this country and throughout the EU.
It would be an entirely different scenario if we sought to extradite citizens of, or visitors to, this country to states where we had a genuine fear that the rule of law did not prevail, that those extradited would be in some way subject to abuse, that their human rights would not be upheld, that the process of law would not be robust, where there were no appeals and where there were no systems on which we could rely. In those circumstances, the anxiety about whether it should be one, two or three years would be much more understandable. We think that we have pitched it about right.
Baroness Anelay of St Johns: I did not hear, in the Minister's peroration, whether she answered my straightforward question whether we are the only country that says 12 months rather than three years. Most other EU states have not yet published detailed legislation. However, of those who have, none has sought to go beyond the framework decision on this point. It is right to tell the Committee that we have been in the advance in working out how the arrangements will work.

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Members of the Committee will know that one of the projects in which we participated involved working very closely with our Spanish colleagues to work out a process in which the European arrest warrant would work, using judicial co-operation very creatively, video conferencing and other such approaches. Many of our partners are not as far advanced in this area as we are. I do not know of any other country in our position. We have made our decision objectively on the basis of what we believe to be right for us.
Viscount Bledisloe: The noble Baroness did not deal with my suggestion that we reduce the period only when we get reciprocity from another country to deal with it. I wish to question one point that she made. I think that she suggested that, if the amendment tabled by the noble Lord, Lord Goodhart, were agreed, you could only extradite for an offence on the list that attracted a sentence of at least three years. I do not think that that is right. Surely subsection (3) could be applied, provided that the offence satisfied the conditions for dual criminality, saying, "I agree that the offence does not within subsection (2), but I can extradite you under subsection (3) and show dual criminality".
The only difference would be that you could not extradite for non-dual criminal offences attracting a sentence of fewer than three years. In such instances, you might not know. It would be a ridiculous anomaly if someone would escape completely if the offence was on the list and fell within the 12-month and three-year brackets.
Baroness Scotland of Asthal: The noble Viscount is right. We were talking about cases where dual criminality would have to be satisfied and where it would not. You could still extradite where there is dual criminality.
On reciprocity, we have made an objective assessment as to whether we are minded to permit extradition where offences attract a sentence of one year or more, irrespective of the position that may appertain in relation to the other country. Members of the Committee will remember that we have taken the same stance in respect of the United States of America and other issues. We have taken an objective decision of whether we are willing to do it. We must come back to the words,
"to thine own self be true … Thou canst not then be false to any man".
We work by what we think is right as opposed to saying, "I will only do what my partner will do. If my partner will do nothing, I will be content to remain with them". We part company. We objectively assess what is right, what is proper and what inures to the benefit of Britain. If others wish to join us, we will welcome them with open arms.
Lord Lamont of Lerwick: The Minister is being extremely firm. But I wonder whether in September, when the House returns, she will be quite so pleased that she was firm. I prophesise that the provision will
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cause considerable controversy on the Floor of the House. I speak in these debates with great hesitation, as a non-lawyer. I know that I frequently make incorrect points, but I am deeply interested in the subject and deeply concerned about the Bill.
The Minister ended her first speech with a phrase that is often used in Committees: "You say one thing, someone else says another, but we think that we have pitched it about right". The Minister said that she thought the Government had pitched it about right at one year. I do not know how you could get much lower than one year; it is the most hard-line approach that could have been taken.
As one anticipated, the Minister seems to have based her argument on the fact that the threshold was one year under the system applied in this country historically and that it would be wrong to change it now. But we are in a new system in which the whole point is to speed up extradition and to reduce certain legal processes and safeguards that have been there for the individual facing a request for extradition. If we want a speedier system, it would be logical not to take for granted the one-year threshold but to consider whether it might be higher.
I misunderstood the amendment tabled by the noble Lord, Lord Goodhart, when I first read it. I thought that its purpose was to apply one year to all offences, not just to those where there was no dual criminality. I would go further than he would. But this seems a very modest request that corresponds with the requirements of justice. As the noble Lord said, the whole concept of dual criminality is not without rationale; there is a reason for its existence.
As the Minister gave way just before the noble Viscount, Lord Bledisloe, intervened, she looks at the issue in a very utilitarian way—the trade in people who face extradition requests. That is how some terrible injustices can occur. I have heard sometimes of deals being done between the prosecuting authorities in different countries, with the police in one country saying to those in another, "You give us 'x' and we will give you 'y'". It is not in accordance with the demands of justice that a prosecuting authority should make such a deal. Each case must be looked at on its merits. The Minister is giving a version of that argument, saying that more people will be extradited to this country and we will extradite more people to other countries.
I apologise for repeating myself, but that approach ignores a point that lies at the heart of my concern about the Bill, and, to some extent, at the heart of the concern expressed by the noble Lord, Lord Goodhart. People who stand trial in another jurisdiction are often at a very considerable disadvantage for the reasons that we explained: the absence of legal aid and translation facilities, the fact that bail is refused and that bail is very important to people when preparing their own defence.
There has been no satisfactory reply to those concerns. But the risk of an injustice occurring is a fundamental point that must be addressed when considering speeding up the extradition process. We

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hear all the time about the number of criminals who will be locked up, but we do not hear a word expressed about people being wrongly convicted, placed at a disadvantage or not understanding what is happening.
We hear continually about reliance on the European Convention on Human Rights. That convention does not provide redress for an individual if he faces a wrong, as it would take years for such a case to be heard. As the noble Lord, Lord Goodhart, puts it so well, the European Convention on Human Rights may be generally observed but not in detail in every country. I know quite a lot about the justice systems of certain countries in Eastern Europe, which I do not wish to name, and that they do not conform with the European Convention on Human Rights.
I know exactly what will happen in a few years' time when we have the order late at night. Even though we will have the affirmative procedure, we will be told that things are all changed and everything is different. I very much doubt whether matters will have moved far forward.
This very modest amendment should be accepted because of the risk of a person being at a disadvantage when standing trial in a foreign jurisdiction. The noble Baroness has not responded to the following question: if it is so unreasonable for the noble Lord, Lord Goodhart, to table this amendment, why has every other country in the European Union chosen to stick with three years? Perhaps they have their heads screwed on more than we do and realise that there are risks in speeding up extradition in this way.
6.15 p.m.
Baroness Scotland of Asthal: In response to the issue raised previously, we do not know the stance that some of our European colleagues will take because we are all working now to get ready for the implementation of the European arrest warrant. Each of us may well have to decide what position we should take in the interests of our jurisdiction. We have made that decision for ourselves, as is proper. Others may come to a similar conclusion, but they may not.
I shall deal with some of the other very valuable points that the noble Lord made on the interests of justice. We give way to nobody in our adherence to, and concentration on, the interests of justice. The risks to justice in relation to how this procedure will operate are very clear. But we have taken all necessary steps to limit those risks. We have debated them in part already and will continue to do so. But the scheme that we have put in place to ensure that the district judge has all the information that he or she needs to make an informed choice as to whether an arrest warrant should be acted upon is contained in the Bill.
Each case, therefore, will be looked at on its individual merits. This is definitely not a trade in people. But there is an interest in justice to deal with those who have committed an offence in another European country and those who have committed an offence here. As we see in our everyday dealings, the reality of life within the European family is that there is free movement of people. It is one of the huge
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benefits that we have gained from the European Union. That brings with it a multiplicity of benefits but also dangers and disadvantages. As I said earlier, unfortunately, those who wish deliberately to flout the laws of all our countries feel that they can do so now with far greater frequency and facility than ever before. Collectively, European countries must address that. That is what we seek to do.
The noble Lord, Lord Lamont, says that some of our EU partners are at different stages along the path. That is true, but dramatic changes have resulted from those countries, particularly applicant states, which, to meet the acquis communautaire, have had to revise their laws and to modernise. They are still seeking assistance in implementation from the United Kingdom and many other countries.
The noble Lord said that I was putting the case very robustly. But this debate is an opportunity for me to explain why we are taking this stance. I make plain what I explained at the previous Committee session: we will consider very carefully everything that Members of the Committee say. If there is cause to reflect further on the matter, we will do so. We must reflect further if we hear points that make us pause.
Members of the Committee have recognised that we have listened carefully on many issues and have come back to say that we are minded to change. At present, we think that we have got this issue right. We will look at what other countries do and continue to think about the matter. But, with the greatest respect, we do not think that we are wrong; we think that we have got the balance about right.
Baroness Carnegy of Lour: I wish to make one point. Does the noble Baroness realise that, among the limited number of members of the public who understand the European arrest warrant—we hope that more people will do so by the time the Bill leaves this House—the single point that frightens them most is that, if someone from this country goes to Greece, Hungary or wherever and commits a crime by mistake they might be extradited? In arguing about the levels of crime, the Minister said that only trivial crimes would be committed by mistake. But, over the summer, could she look at the situation in the countries that will be part of the system to see whether, above the threshold that the Government want, it would be impossible for someone to commit an offence by mistake?
That will be the political point that the Government must beat in the longer run. People will understand the advantages to this country of being able to get people back. The Minister states that we must not lose the advantages, but it is the disadvantages that will frighten people. It is in the political interests of the Government and of everyone that they look at those crimes to see whether they have got the approach right. A number of legal people do not seem to think so.
Baroness Scotland of Asthal: I reassure the noble Baroness that I understand people's worries about committing an offence that they had no idea existed. It is a very real issue. If I can use anecdotally the

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Information that I acquired from being a Minister in the Foreign Office responsible for consular affairs, regrettably, many of our citizens who go abroad think that the law stops at Dover. They think that any act committed outside this country does not count and is not an offence, and that behaviours change. So we have a cultural requirement to try to make people understand that they must obey the law regardless of whether they are in this country or another.
The only dual criminality issue that we have identified is the point made by the noble Viscount, Lord Bledisloe, about Holocaust denial. The noble Lord, Lord Lamont, says that that is the way it is now but we do not know about other offences. In the main, all the offences identified in other countries are reflected in our own law. Perhaps they are called something different, but the kernel of the offence is the same. I take on board what the noble Baroness, Lady Carnegy, says.
Lord Stoddart of Swindon: I do not wish to contribute to the debate, as there have been so many well-made contributions. But there is a question that puzzles me. Presumably, the framework agreement was reached under the inter-governmental pillar. If so, there must have been unanimity. If there was unanimity on all the clauses, why are the Government now trying to do something different?
Baroness Scotland of Asthal: The whole point of having a framework document is that it is not a straitjacket. It sets the parameters within which we agree to work. But it enables us, within that, to fashion and craft arrangements that best fit our own needs or those in dealing with others. It is a broad framework; that is why it is called a framework decision. It is not as prescriptive as the other forms that we could have agreed on. It gives us a level of flexibility. If I might say so, I would have anticipated that the noble Lord, Lord Stoddart, would rather approve of framework documents.
Lord Stoddart of Swindon: Yes, indeed. Did our representatives attempt to persuade those of other countries that three years was better than one in this case?
Baroness Scotland of Asthal: I really cannot say. I did not have the privilege of representing us in those negotiations, although I have done so for others. If the noble Lord so wishes, I shall make enquiries. He indicates that he does not. The framework is open to us to choose another benchmark, as we would have known when we negotiated it. We have chosen another benchmark. Of course I hear all that is said about it. We will continue to reflect, but, at present, we have rested at this point and we think it fits our system.
Lord Goodhart: I shall try to be brief in making my winding-up speech. It is clear that there is a fundamental difference between the supporters of the amendment and the Government. There is little point in discussing the differences at any length.
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The Minister suggested that the changes that we propose to make through this amendment would help serious criminals and deprive victims of crime, on occasion, of the chance of seeing criminals brought to justice. I do not believe that either of those is true. So far as serious crime is concerned, the kind of crimes for which serious professional criminals go in—major fraud, large-scale drug dealing and so on—are almost inevitably crimes in both the requesting country and the requested country. The requirement of the abolition of dual criminality will be of no assistance to them.
So far as victims of crime are concerned, one has to say that the kind of crime that causes cumulatively the most distress—local street-based crime—is by and large wholly outside the list of 32 crimes. For example, that list does not include theft, sex offences short of rape or paedophilia, or personal violence short of grievous bodily injury. The number of cases in which victims will lose the ability to see offenders brought to justice for such crimes as a result of the amendment is absolutely nil.
The cases where there is no dual criminality are, by the nature of the event, matters on the borders of criminality. They are something thought to be a crime in one country but reasonably thought in other countries not to be a crime. That is not the kind of offence likely either to be widely exploited by serious criminals—sometimes in the past they may have used tax exemptions for that—or to be particularly upsetting to individuals. I do not see any problem with that.
The noble Baroness criticised my party for on the one hand supporting the principle behind the Bill, but on the other hand tabling such amendments. I do not accept that. As I said, we accept the principle behind the European arrest warrant, but the fact that we do so does not reduce the need for us to scrutinise with great care the details of how the Government will bring that warrant in. If we find some of those proposals objectionable, we shall object to them, as we do in this case. The noble Baroness can rest assured that this amendment will come back but, for today, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.30 p.m.
[Amendments Nos. 116 and 117 not moved.]
Baroness Anelay of St Johnsmoved Amendment No. 117A:
Page 32, line 22, after "Kingdom" insert "punishable with imprisonment or another form of detention for a term of 12 months or a greater punishment"
The noble Baroness said: We now turn to Clause 63(3). Some of what I am going to say has been foreshadowed by remarks made by the noble Viscount, Lord Bledisloe, in the previous debate. I want to look at changes to our current dual criminality rules. Although of course the clause is complicated in itself, we think that there may be an unintended loophole in subsection (3) which our amendment is designed to eliminate.
I was alerted to the matter by one of the most distinguished practitioners in the extradition world, Mr Clive Nicholls QC. He advises me that, having looked further at the Bill, he notices what he considers to be an omission. As we know, Clause 63 deals with the whole definition of extradition offences. Subsection (3) covers offences for which there is dual criminality. We are leaving subsection (2) and its list behind. Subsection (3) covers cases where the conduct is an offence in both the category 1 territory that has issued the warrant and in the UK. However, Mr Nicholls says,
"whereas existing extradition arrangements define double criminality as conduct which carries a penalty of more than 12 months imprisonment in both countries (section 2 1989 Act), clause 63(3) merely requires that … the conduct occurs in the category I territory … would constitute an offence under the law of the relevant part of the UK if it occurred in that part of the UK",
and,
"is punishable under the law of the category 1 territory with imprisonment or another form of detention for a term of 12 months or a greater punishment".
Under that third condition, it is only in the category 1 territory that the 12 months apply.
Mr Nicholls states:
"This provision is of grave concern since it would allow a person to be extradited pursuant to the simplified procedures of Part 1 where, although the conduct which took place in the category 1 territory amounts to an offence in both countries"—
that is fine—
"it need only be punishable by 12 months imprisonment (or more) in the foreign state (i.e. not in the UK). This will not restrict extradition to the most serious of offences from the UK viewpoint and will amount to a fundamental change to",
our current dual criminality rule in the UK. We wonder whether that is the Government's intention. I beg to move.
Baroness Scotland of Asthal: The noble Baroness is right in that we went over much of the background in relation to the amendment on the previous debate, and I shall not repeat all that I said. The positions of the Government and Her Majesty's Opposition seem different. I can understand their position, even if we do not agree with it. I suspect that there will be those who say that there is real difficulty in putting forward a position different from that which I have already advocated.
I want to be clear about Clause 63(3), as that is what we are really dealing with. We are talking about offences that occur in the requesting state, so there are no issues about extra territoriality or the conduct that might have occurred in the United Kingdom. We are also talking about conduct that, as the noble Baroness said, is regarded as criminal in both the United Kingdom and the requesting state, so there is no question of the person being unaware that he was engaging in illegal activity.
In those circumstances, I am not sure whether the noble Baroness is saying that a person should not be extradited, not because the conduct is legal in this
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country, but because it is not capable of resulting in at least a year's imprisonment in the other country. That is what I think I understood.
Baroness Anelay of St Johns: I am simply trying to ask the Government whether they are making an intentional change to existing law. From the nods behind the noble Baroness, that is the case. The Government's argument so far has been that the changes that they are making are allied to the fact that they need to have the framework list and all the extradited procedures in relation to the European arrest warrant. However, in these provisions, they seem to be making extradition easier even in cases where dual criminality is required.
I wanted confirmation as to whether the Government are trying to change from what has been the ECE existing 12-month level. In the past, the Government said, "Don't go for three years. We have always had 12 months". Now they are saying, "We've always had 12 months, but we're still going to change the 12 months and the way it applies".
Baroness Scotland of Asthal: Members of the Committee will see that the way in which we have structured the arrangement complies with the requirements of the framework decision. The new position—that there has to be a criminal offence in both countries punishable by at least one year's imprisonment in the requesting state—is what the framework decision provides. That is why the arrangements are expressed as they are in the Bill. It differs from how provisions were framed before, but reflects the agreed position among all our EU partners. That is why it is expressed as it is in relation to Part 1.
Viscount Bledisloe: I find the amendment unattractive. What the noble Baroness, Lady Anelay, is suggesting is that I can stand up in the extradition court and say, "Yes, I knew this conduct was an offence, and I did it over there. But I knew that I could get only nine months for it if I did it over here. Therefore there was no harm in me doing it in the other country although it gives 18 months for it". It seems rather unattractive to be able to say, "Oh well, I'll go round misbehaving in foreign countries provided the offence wouldn't attract quite as much as 12 months over here". Is that really the policy of the Conservative Party?
Baroness Anelay of St Johns: It may be an appropriate time for me to finish the debate, but I should say that it is not our policy to encourage people to commit crime. I am trying to elicit from the Government why their arguments have not been logical in their own way. They have attacked us in the past for our amendments, saying, "You don't need to worry about going down to 12 months. So far as we're concerned, we've always operated 12 months". I am pointing out that the Government are inconsistent, because in Clause 63(3) they are moving away from what has been the ECE position.
I was using the amendment in a way that I thought was right, the matter having being brought to my attention by a practitioner. The Government want to

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be able to adopt the broader thrust of what is in the framework decision. That is their position. We will consider over the summer whether it is right in respect of the subsection. In regard to subsection (2), they are plainly wrong, and I support what the noble Lord, Lord Goodhart, said on that.
I suspect that we shall come back to the clause in great detail. Perhaps we shall not do so in September, as the noble Lord, Lord Goodhart, optimistically thought. From the views put to me by government business managers in this place, we may not do so until quite late in October, so we will have much time for good and fertile thought. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johnsmoved Amendment No. 118:
Page 32, line 26, leave out "(however it is described in that law)"
The noble Baroness said: In moving Amendment No. 118, I shall speak also to Amendments Nos. 120, 122 and 134, which are probing in nature, and would have been on the Floor of the House, too.
Clauses 63, 64 and 65 offer us the interpretation of what constitutes an "extradition offence". On that basis, I thought it would be right to ask the Minister for some more details about a phrase used in the clauses, which is,
"(however it is described in that law)".
The phrase may well be used widely in extradition law and, as I do not know about it, may simply be new to me. The Minister may turn round and say, "This is used in the whole raft of legislation. Everyone knows what it means", and then tell us. I hope that he does. It sounds very loose, as though anything would do. I am sure that it cannot possibly mean that. I beg to move.
Lord Bassam of Brighton: I am grateful to the noble Baroness for having tabled the amendment, and I shall explain a little later why that gratitude is rather more generous than usual. We think that the Bill must retain the flexibility to cope with other countries that may use different legal terminology from our own. The amendments refer to the important area of interpreting an extradition offence and, more specifically, to the description in other EU member states of the concept of imprisonment or detention.
Clause 63 gives the definition of an extradition offence in Part 1 accusation cases—that is, cases where the fugitive is sought for prosecution and has not yet been convicted. Clause 64 gives the definition of an extradition offence in Part 1 conviction cases—that is, cases where the fugitive has already been convicted and is being sought for the execution of the sentence imposed. In each case in Clause 63 where the dual criminality requirement is applied, the conduct has to warrant a penalty of imprisonment or another form of detention of 12 months or more, however it is described in that law.
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As the noble Baroness explained, the amendments are probing and have highlighted the relevant words in each case. We believe that those words are necessary. They enable us to deal with cases where our extradition partners use different language or terminology to describe the concept of imprisonment or detention. It would be most unfortunate if we ever found ourselves in a position where we were unable to extradite simply because another country, although clearly recognising and operating the notion of imprisonment, described it in a different way in its law.
That is not about allowing people to be extradited to face indefinite detention or imprisonment that has not been properly sanctioned by a court. Members of the Committee would be right to ask how I can say that with such confidence. The answer is very simple. The words that the amendments seek to remove are not new, as I think that the noble Baroness had twigged. They have been copied almost exactly from the Extradition Act 1989. No doubt she is very familiar with that piece of legislation. If Members of the Committee care to look at Section 2(1)(a) of that Act, they will see that it refers to an offence punishable with imprisonment for a term of 12 months or any greater punishment, and which, however described in the law of the foreign state, Commonwealth country or colony, or of the Hong Kong special administrative region, is so punishable under that law.
In the middle of that section is the phrase,
"however described in the law",
which seems very similar to and to serve the same purpose as the phrase in Clause 63 that the amendment seeks to remove. The phrase has not given rise to any difficulties, and we cannot see why the Opposition should take against it now when they were obviously happy with it while in office.
I have dealt with the amendment to Clause 63, but it would be remiss of me if I did not say something further about Clause 64, which deals with conviction cases, as I explained. However—this is where we own up to something—owing to an unfortunate error, the drafting of Clause 64(6) deals with accusation cases. An amendment to rectify that will be required, so I shall bring one forward. I want to put on record my apologies to the Committee for the error. In our defence, numerous people who have studied the Bill, including Members of another place, failed to spot it.
Doubtless the error would have remained but for the noble Baroness and the amendments that she tabled, which caused us to look at Clause 64(6) with what my notes tell me was renewed vigour. We are grateful, first, for the tabling of the amendment—it enabled me to make an explanation that I hope was clear—and, secondly, because we shall be able to correct an error before it has been writ large in statute.
6.45 p.m.
Baroness Anelay of St Johns: 1 am grateful to the Minister for his helpful explanation. It is always useful to know that Opposition amendments cause the Government to look with renewed vigour at their own

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Bills. We look forward to even more vigorous action from him in the future. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 119 to 124 not moved.]
Baroness Anelay of St Johnsmoved Amendment No. 125:
Page 33, line 24, leave out subsection (8).
The noble Baroness said: In moving Amendment No. 125, I shall speak also to Amendment No. 136. Again, these are probing amendments. I wanted to ask the Minister to give reasons for the distinction made in Clauses 63(8) and 64(8) to matters relating to tax and duty. Earlier in our consideration of the Bill, I spoke in the stand-part debates on the clauses, but they were to do with completely different matters. I did not then have the opportunity to ask these questions, as I otherwise would at clause stand part. Hence the need for the amendments.
The Explanatory Notes state:
"Subsection (8) applies where equivalent circumstances in the United Kingdom are mentioned under subsections (3)(b), (4)(c) and (5)(b). Where the applicable conduct relates to a tax, duty, customs or exchange, subsection (8) explains that it is immaterial that United Kingdom law does not contain rules of the same kind as those of the category 1 territory".
Will the Minister expand on that explanation? The Explanatory Notes are intended to be helpful, and it is excellent that they are now printed so early. However, so often as a member of the Opposition one looks at the Explanatory Notes and finds that they are simply a repeat of what is in the Bill. That is not always as helpful as it might be.
Will the Minister tell us why the tax issues merit special and alternative arrangements in relation to the paragraphs to which I referred? I find nothing in the framework decision to suggest that the exception stems from that document. I can only assume that there is some other provenance. I may have missed it in the framework document, but I looked through it to check and could see nothing that was directly related. I beg to move.
Lord Bassam of Brighton: I am grateful to the noble Baroness for tabling the amendments, as it enables me to say something about fiscal offences. I am sure that noble Lords are aware that some European countries have traditionally been unwilling to extradite people for fiscal offences. Our tax and duty evaders have not been slow in the past to exploit that, as the perusal of popular newspaper headlines referring to the "Costa del Crime" demonstrates rather graphically.
One great advantage of the European arrest warrant is that in future no EU country will be able to refuse extradition for fiscal offences. No longer will those who commit VAT or income tax fraud and who cost this country millions of pounds be able to live the life of Riley in another part of the EU. Instead, they will be held to account for their crimes. I am sure that all noble Lords will agree that that is a good thing, and
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bear in mind that the European arrest warrant offers real benefits to this country, not least in terms of tax revenues.
I turn to the specifics of the amendments. We are not talking about people being extradited for conduct that is not criminal here in the UK. Far from it—evasion of taxes and duties are offences under UK law. Indeed. it is hard to think of offences that have been on the statute book for longer. Clauses 63(8) and 64(8) provide that, if a person evades tax or duty of another country while in that country, he can be extradited for that crime, even if the UK does not happen to have an exact equivalent tax or duty. That is the purpose of the clauses.
I can see no real objection to that. Tax evasion, in whatever manifestation, is a crime in this country, and those who evade the relevant taxes or duties in this country or abroad should in our view face justice. If Belgium has a tax on savings and a person in Belgium deliberately evades it, why should such a person not be extradited to Britain, just because we happen not to have an identical tax? To turn the point round, if a Belgian came here and failed to tax his car, would we excuse him on the grounds that Belgium raises revenue on vehicles in a different way? Of course we would not—that plainly would not make much sense.
Our approach is that everyone has to pay the taxes and duties of the countries they are in, and the provisions that these amendments seek to remove reflect that. We are not referring to dual criminality here, as tax and duty evasion are clearly a crime here and in every European country. We are simply saying that we should not create a loophole by which a person can escape extradition because the tax or duty that he or she has evaded happens not to have a direct equivalent in the UK. I am sure that, having heard that explanation, the noble Baroness will feel confident in withdrawing her amendment.
I should add that it is Article 4·1 of the framework decision that reflects the approach of the provisions in the Bill.
Baroness Anelay of St Johns: I am grateful to the Minister for his response. It occurred to me during his explanation that no one would wish people who evade taxation to evade prosecution. Those of us who are honest want others to cough up too, whoever they are. However, the measure might come as a surprise to so many of our friends and colleagues—and in the population of this country as a whole—who own holiday homes abroad, given the range of property taxes that exist in other countries and do not exist here, and which are so often evaded. My husband and I owned a Spanish holiday home and, although we were always punctilious in everything that we paid, we found that we were among the few in our urbanisation who did pay up. Many sold on and moved off without paying up, so the provision may hit a few people rather hard—we will have to see. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 63, as amended, shall stand part of the Bill?
Lord Lamont of Lerwick: It would be strange to let the clause go by without some comments on how the Bill affects sovereign and state immunity. We had a debate on Amendment No. 111 that centred on the issue of a crime being committed in the UK. How does the Bill change the law, if at all, in relation to crimes under the torture convention and against humanity? Does it modify in any way state or sovereign immunity?
As the Minister will know, the law after the case of General Pinochet was left rather unresolved and in an ambiguous state. An original motivation for the Bill was the prolonged legal process in that case. Of course, there have been one or two judgments since in the International Court of Justice relating to Belgium that have rather put into reverse the findings of the House of Lords, but that is perhaps by the way.
Does the clause change the law relating to state and sovereign immunity and the interaction with the torture convention—which, at a quick reading, I cannot see mentioned? As the Minister will know, Belgian magistrates have claimed universal jurisdiction and have sought to indict General Sharon, President Bush, both senior and junior, and, indeed, General Tommy Franks. That has led to some reaction within Belgium, as the Belgians are trying to modify the law so that it applies only to acts involving citizens of Belgium. I am not entirely sure how they can do that, in view of the obligations that countries have incurred under legislation such as the torture convention. What will be the position if a Belgian magistrate makes a request for extradition of someone in this country—perhaps the Prime Minister? Is the law in the same position as it was after the case of General Pinochet? Is it ambiguous, or has it been changed in some way?
Equally, I would be interested if the Minister would comment on subsection (7) relating to the International Criminal Court. The other day I read in the Herald Tribune that the Government have done a deal with the Government of Afghanistan—Afghanistan is not a category 1 territory—whereby British soldiers are not subject to the jurisdiction and will not be handed over for any acts committed in Afghanistan. The Government have sought a deal vis-à-vis the actions of British troops in Afghanistan.
Presumably that cannot be fireproof against the action of the magistrates in certain countries like Belgium and Spain. Spanish judges have continued to claim universal jurisdiction. As the Minister may be aware, last week an Argentinean was extradited from Mexico to Spain for actions in Argentina. What is the position? Will people who visit this country be subject to the threats of Spanish and Belgian magistrates even for activities committed perhaps in another continent? Perhaps the Minister could comment on what the clause means in that regard.
7 p.m.
Baroness Scotland of Asthal: I hope that I shall be able to assist the noble Lord. The position in relation to immunity of heads of state, former heads of state, diplomats and others similarly entitled to immunity, will not be affected by the introduction of the European arrest warrant.
As the noble Lord knows, international law has established that certain people, such as a head of state, a head of government and a foreign minister, have immunity from prosecution and, therefore, extradition. However, that immunity does not extend to acts such as torture and genocide. That is why, as I am sure the noble Lord remembers more graphically than any of the Committee, the House of Lords ruled that Pinochet should be extradited for acts that took place after the United Kingdom ratified the UN torture convention, but not for those that took place before that point.
The key to this is that nothing in the Bill changes the position on state and diplomatic immunity as it is not, as the Committee will understand, within the UK's gift or power to change the nature of international law unilaterally. Anyone who currently has immunity will continue to benefit from that immunity.
On the questions that the noble Lord raised with regard to subsection (7), which relates to the International Criminal Court, I am not aware of any deal that has been made in relation to British soldiers not being handed over, as mentioned in the Herald Tribune. I do not know the position in relation to that; I would have to write to the noble Lord on that point.
Generally, the noble Lord knows that the provisions in the ICC will work. If an offence is allegedly committed by a British national, a request would have to be made to this country. Only if this country failed and/or refused properly to deal with that request could there be a reference to us. Under the rules set out in the International Criminal Court we would have to deal with our national. Only if we failed and/or refused to deal with the national would the International Criminal Court be in a position to act. We would have to give a response and the Committee will remember the way in which that would go. The request would come to us, we would say that we were dealing with it and everything would stop until we had dealt with it. We would then notify the ICC what we had done. That is the system that is therein contained. I would be happy to write to the noble Lord on any other issues that he raised.
Lord Goodhart: I do not know what my view would be on a point raised by the noble Lord, Lord Lamont, but I would like to know the position on it. Leaving aside any question of state immunity on such matters, assume that someone is accused of a serious offence in, let us say, Rwanda; and the Belgian courts claim to have universal jurisdiction over that person who is in the UK. If the extradition were claimed by Rwanda, there would be no defence to it, but if extradition is

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claimed by Belgium—I believe that there was an actual case along those lines —would there be any change in the position as a result of the Bill?
Baroness Scotland of Asthal: I do not believe that there would be. I believe that the international law on this point remains the same. The European arrest warrant, as dealt with in the Bill, is separate and apart from that. If I am wrong about that, I shall certainly write to Members of the Committee and alert them to that. I shall also see if I can identify the specific case to which the noble Lord referred. It may be covered by Clause 63(5), which allows us to extradite, so there is no change in the position. Clause 63(5) states:
"The conduct also constitutes an extradition offence in relation to the category 1 territory if these conditions are satisfied—

(a) the conduct occurs outside the category 1 territory and no part of it occurs in the United Kingdom;

(b) the conduct would constitute an offence under the law of the relevant part of the United Kingdom punishable with imprisonment

(c) the conduct is so punishable under the law of the category I territory (however it is described in that law)".

I do not believe that we are changing the position at all. If I am wrong about that—I believe that the noble Lord and I are correct—I shall certainly ensure that the Committee is made aware of that.
Lord Lamont of Lerwick: I am grateful to the Minister for taking this point seriously as it is a serious matter. I do not simply seek to make a point. There has been a series of attempted indictments in Belgium, one of which, I read in a newspaper—I have no idea whether it was correct—concerned the Prime Minister among others and related to the recent action in Iraq. The Minister says that the position has not been changed post the General Pinochet case, which was what I thought was the case. But are the Government in no way concerned about the attempts by Belgian magistrates to claim universal jurisdiction in that way? It interacts with the Bill and could give rise to an extradition case. It seems to be a serious issue. The Belgian Government appear to be concerned about it, but I am not sure to what extent they have been able to take action against their own judiciary.
Lord Goodhart: I believe that this matter is covered by Clause 63(4).
Baroness Scotland of Asthal: The noble Lord is probably right. I believe that the noble Lord, Lord Lamont, has identified one of the problems. As I said earlier, we do not control international law, neither do we control what happens within another state and the way in which its judiciary behaves. It is interesting to note that the noble Lord says that the Belgian Government are seeking to address the issue so as to prevent Belgian magistrates from acting inappropriately. Of course, we shall continue to keep these matters under review, but I certainly cannot say that the British Government can do anything.
Lord Lamont of Lerwick: With great respect, I assume that the Government do not have a view on it. This matter has led the Israelis to withdraw their
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ambassador from Belgium and it has caused Mr Rumsfeld to say that the NATO headquarters should be moved out of Brussels. Their governments are engaging, their governments are expressing a view, so why have the British Government no view on this matter?
Baroness Scotland of Asthal: The Belgians' attempt to extradite the Prime Minister would fail because he enjoys immunity under international law. In any event, we understand that Belgium is changing the law. I understand why the noble Lord may believe that it is good sport to harry us on this matter, but I can assure the Committee that in our relations with our Belgian colleagues and other colleagues in Europe we seek to ensure that we take a proportionate and an appropriate response. That will continue. I am sure that if the Belgian Government seek to change the law, that will be to the benefit of their citizens and indeed many others.
Clause 63, as amended, agreed to.
Clause 64 [Extradition offences: person sentenced Jar offence]:
Baroness Scotland of Asthalmoved Amendment No. 126:
Page 33, line 40, after "territory" insert "and no part of it occurs in the United Kingdom"
On Question, amendment agreed to.
[Amendments Nos. 127 to 136 not moved.]
Clause 64, as amended, agreed to.
Clause 65 [Extradition offences: supplementary]:
Lord Goodhartmoved Amendment No. 137:
Page 35, line 17, leave out "the appropriate judge believes"
The noble Lord said: Clause 65(2) states:
"An appropriate authority of a category I territory is an authority of the territory which the appropriate judge believes has the function of issuing arrest warrants in that territory".
The purpose of the amendment is to leave out the words, "the appropriate judge believes", which will make the matter of whether the authority in the requesting territory has the function of issuing arrest warrants an objective, rather than a subjective, test. I can see no justification for making the test subjective. It should be an easy fact to ascertain in relation to other member states as to whether any particular judicial authority has the function of issuing arrest warrants. If the test is subjective, the judge must still have evidence before him or her that will enable a reasonable judge to conclude that the authority had the function of issuing warrants, and in practice that evidence would be almost certainly sufficient to satisfy the objective test as well. If, in exceptional circumstances, there is any doubt whether a particular authority has that function, it seems to me that it should be proved as a matter of fact, and not as a matter of reasonable belief. I beg to move.
Lord Monson: The amendment is short and simple, but a most important one. The noble Lord, Lord Goodhart, has made an unanswerable case.
Lord Bassam of Brighton: I always tremble when someone says that an amendment provides an unanswerable case. We have covered this territory in the past in some detail. The Committee may recall my noble friend Lord Wedderburn's amendment to remove the words "it believes" from Clause 2(7). That was in connection with the UK's designated authority's ability to certify a warrant if it has come from a judicial authority in the requesting state.
This amendment, which would remove the words "the appropriate judge believes", raises a very similar issue. The noble Lord, Lord Goodhart, has phrased part of his argument similarly. When I responded to the arguments made by my noble friend Lord Wedderburn, I said that we understood the arguments on this issue. I recall that we undertook to consider the matter afresh to see whether there was any scope for improving the drafting of the Bill, without adding too many words, which is always to be avoided. If we do that in respect of Clause 2(7), it would be remiss of us not to do so for Clause 65(2). I am unsure whether that makes it an unanswerable case, but I am happy to
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undertake to reconsider the matter. I am sure that the noble Lord will withdraw his amendment while we do that.
Lord Goodhart: In those circumstances I shall do so. In a way, I have no alternative. I hope that the Government will find a solution that will mean removing words rather than adding them.
Amendment, by leave, withdrawn.
[Amendment No. 137 A had been withdrawn from the Marshalled List.]
Lord Bassam of Brightonmoved Amendment No. 138:
Page 35, line 17, after "believes" insert "—

(a) is a judicial authority of that territory, and

(b)"

On Question, amendment agreed to.
[Amendment No. 139 not moved.]
Lord Bassam of Brighton: This may be a convenient moment for the Committee to adjourn until Tuesday at 3.30 p.m.
Committee adjourned at a quarter past seven o'clock.

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