Sitting of 4 June 2003

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

  PRIVATE BUSINESS
  NOTTINGHAM CITY COUNCIL [Lords]
  Read a Second time, and committed.
  TRANSAS GROUP BILL (By Order)
  Order for Second Reading read.
  To be read a Second time on Wednesday 11 June.

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

    Unemployment
    Mrs. Jackie Lawrence: What recent discussions he has had with the First Secretary about the number of unemployed people in Wales in (a) May 1997 and (b) May 2003. [116421]
    The Secretary of State for Wales (Peter Hain): Unemployment in Wales is down 45 per cent. since April 1997 and down at least 33 per cent. in every Welsh constituency. Youth unemployment in Wales is down 79 per cent. during the same period and long-term unemployment is down 84 per cent. The Welsh economy is on track for long-term sustainability and prosperity.
    Mrs. Lawrence: I thank my right hon. Friend for that reply. In Preseli Pembrokeshire, we exceed that figure, with a 46 per cent. fall in unemployment. Despite that, 75 jobs have recently been lost in Milford Haven in my constituency, primarily because of a lack of broadband facilities. Will he please hold discussions with BT and particularly the regulator, which seems to be the stumbling block in this instance, to see whether moves can be made to roll out broadband in Wales to avoid such unnecessary loss of jobs in future?
    Peter Hain: I shall certainly do that. My hon. Friend makes a good point. Broadband is being rolled out extensively across Wales, but more needs to be done, particularly for rural areas, including Pembrokeshire, and she makes her case very well.
    Mr. Elfyn Llwyd: Will the Secretary of State please tell the House what is being
    138
    done in Wales to increase employment opportunities for those between the ages of 50 and 65? When he replies, will he also tell the House what is happening with regard to the under-employed in the Wales Office?
    Peter Hain: I shall answer the serious part of the hon. Gentleman's question first. He asked what is being done for older workers. The Government have a strategy in place to assist older workers, including, in particular, those in valley communities who lost their jobs in the days of heavy industry and have found it difficult to get back into work. To that extent, I am delighted that levels of economic inactivity are falling and that there was a 54,000 cut in economic inactivity last year. That is the first time that that has happened for a very long time.
    In respect of the Wales Office, I say to the hon. Gentleman that he either wants a strong Wales Office or he does not. Of course, Plaid Cymru wants to abolish the Wales Office as it wants independence for Wales and does not want anybody representing it in the United Kingdom Government.
    Mrs. Betty Williams: Does my right hon. Friend agree that jobs in the manufacturing industry in Wales are crucial to the economy? I am sure that he is aware that a joint report by the Department for Work and Pensions and the Office of Fair Trading about the UK insurance market is about to be announced. Does he agree that some manufacturing companies in Wales will look keenly at the findings of that investigation, because their survival will be decided in relation to the heavy burden of insurance policies on such companies?
    Peter Hain: The Government are addressing the issue, but I am sure that my hon. Friend will want to join me in welcoming the 25,000 new manufacturing jobs that have been created in Wales in the past year and, in particular, the reports in recent days that new optimism and opportunity are opening up for Welsh exporters as a result of the strengthening of the euro against the pound. That has provided a big window for Wales, especially in Europe.
    Mr. Nigel Evans: On behalf of the Opposition, may I wish the Secretary of State best wishes for his happy event on 14 June?
    Since the Secretary of State came to his post, we have seen a massive decline in the manufacturing industry. The latest big name closure is that of LG in Newport, with the loss almost 1,000 jobs. Does he put that miserable record down to the fact that he has not been paying enough attention to Wales?
    Peter Hain: We have created 68,000 new jobs in Wales in the past year. Employment has increased to record levels from the miserable level under the Tories. Some 25,000 new manufacturing jobs have been created. Yes, the LG closure is a disappointment. The project involved about £247 million of public money and was supported by one of the hon. Gentleman's predecessors, the right hon. Member for Richmond, Yorks (Mr. Hague), then Secretary of State for Wales. It has shown that what we should do is disperse our investment support across a much wider base of economic activity

    139
    rather than concentrate it in one prestige project, which found that it could not continue its activity because of world demand.
    Mr. Evans: The Minister is not dispersing support, but dispersing manufacturing jobs in Wales—that is the problem. Order books have contracted for the past six months and exports are down for the past four months. Instead of swanning around Europe selling out British interests on the European Convention, should he not be spending more time listening to the voices of manufacturers talking about matters such as the climate change levy and the extra burdens of red tape and offer an apology for the 1 per cent. jobs tax that his Government introduced last April? Manufacturing is in meltdown in Wales, and the Government must act before more thousands of jobs are exported to his beloved Europe.
    Peter Hain: The hon. Gentleman obviously swotted very hard for that question, but we should stick to the facts. The reality is that for the seventh consecutive month business activity in Wales remains above the British average, that the latest export figures for Wales show a rise of 9 per cent. on the fourth quarter of last year compared with the same period a year ago, and that Welsh companies are doing better than other British companies. The hon. Gentleman wants to run down manufacturing in Wales. I recently visited the finest and largest manufacturing centre in Britain—Airbus in Broughton, which is an example of more manufacturing jobs being created in Wales. Some 25,000 new manufacturing jobs were created last year, compared with the dreadful record of the Tories, who massacred our manufacturing sector.

    Defence Aviation and Research Agency
    Mr. John Smith: When he last met the Secretary of State for Defence to discuss the progress of the Red Dragon Project at RAF St Athan; and if he will make a statement. [116422]
    The Parliamentary Under-Secretary of state for wales (Mr. Don Touhig): I welcome the fact that the construction of a new state-of-the-art repair and maintenance facility by the Defence and Aviation Repair Agency at its headquarters base in St. Athan is under way. The DARA development will also be the focus wider plans by the welsh Development Agency to develop a high-tech aerospace park at St. Athan. That leading-edge facility will secure and create around 4,000 new jobs.
    Mr. Smith: I thank my hon. Friend for his reply. I, too, am delighted to hear that the £80 million super-hangar that is being constructed in my constituency in the Vale of Glamorgan is well on schedule. However, when he next meets the Secretary of State for Defence, will he seek an assurance that during the construction of the hangar sufficient work is directed to DARA from the Ministry of Defence to maintain current manning
    140
    levels? I fear that if that assurance is not forthcoming, a large number of highly skilled, highly paid jobs could be at risk over the next 12 to 18 months.
    Mr. Touhig: I should pay tribute to my hon. Friend. No one has worked harder to secure that development in his constituency. He is a model constituency MP and deserves to be re-elected with a resounding majority at the next election.
    As for the matter that he raises, I am aware of his concerns, which he has discussed with several of my ministerial colleagues. I shall certainly bring his remarks to the attention of my right hon. Friend the Secretary of State for Defence. In saying that, I should also point out that Wales is currently doing very well out of defence industry contracts, including Oshkosh, General Dynamics and Cogent. The Red Dragon project in my hon. Friend's constituency is the icing on the cake.
    Lembit Öpik: Will the Minister actively support a strategy to make Wales a global aerospace centre of excellence, with projects such as Red Dragon in the south and related civil and military aerospace projects in north and mid-Wales, where our regional airport structure and manufacturing companies, such as the beleaguered KTH company, might be well suited?
    Mr. Touhig: The hon. Gentleman makes a good and important point. I re-emphasise what I said in response to my hon. Friend the Member for Vale of Glamorgan (Mr. Smith) about the Welsh Development Agency's development of the aerospace park project at St. Athan. That is central to what the hon. Gentleman wants to achieve. I am sure that, working together in partnership with the Government here in Westminster, a Labour Government in Cardiff and the WDA, we will achieve it.

    Local Government Elections
    Kevin Brennan: What consultations he has had with the First Minister on the date of the local government elections in Wales. [116423]
    The Secretary of State for Wales (Peter Hain): I have discussed with the First Minister my view that, although the date of local government elections is a matter for the National Assembly, it should be combined with the European elections a month later.
    Kevin Brennan: I thank my right hon. Friend for that answer. Would it not also make sense if, as well as having the Euro elections and the council elections on the same day, both elections took the form of an all-postal ballot? If European countries can have different systems for the European parliamentary elections, why cannot we in the United Kingdom opt to conduct ours via an all-postal ballot system, so as to increase the turnout and give greater to access to voters?
    Peter Hain: My hon. Friend makes a valid point. The Government are considering this matter and trying to encourage more postal voting. Indeed, many more postal votes were cast in Wales—there were four times

    141
    as many in my own borough—as there were in the last Assembly elections. That is an encouraging trend, but my hon. Friend raises a valid point.
    Mr. Roger Williams: A commission recently reported on electoral arrangements for local government in Wales and made recommendations about the introduction of voting at 16 and the use of a proportional system for voting. What discussions has the Secretary of State had with colleagues in the Assembly about introducing those recommendations?
    Peter Hain: None.
    Mr. Nigel Evans: I am horrified by the Secretary of State's first response. The local elections were moved by a full 12 months so that they would not be on the same day as the Welsh Assembly elections, and the turnout was a miserable 38 per cent. I know that the Secretary of State is not keen for the people of Wales to have a say in how they are governed, but will he please give an assurance that the local election date will not be moved by another month? Also, while we are at it, let us have a vote on the European Convention.
    Peter Hain: I shall come back to the question of Europe in a minute, if you will allow me to do so, Mr. Speaker. On the Welsh side of the hon. Gentleman's question, the turnout in the English local elections was only 30 per cent. The Government are planning to hold the European elections and the English local elections, including the Greater London elections, on the same day next June. There is a strong case for doing the same in Wales. On Europe, this Labour Government have held more referendums than any other Government. [Interruption.] The Conservatives have never held a referendum on anything. The treaty that will come out of the European Convention will be subject to exactly the same parliamentary procedures. [Interruption.]
    Mr. Speaker: Order.

    Agency Workers
    Mr. Henry Bellingham: When he next expects to meet representatives of employment agencies to discuss the use of agency workers in the small firm sector in Wales. [116425]
    The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): My right hon. Friend the Secretary of State and I have no plans to meet representatives of the Wales and south-west region of the Recruitment and Employment Confederation. However, we would be happy to meet them if asked.
    Mr. Bellingham: I am sorry that the Minister is not going to meet them in the near future, because has he had a chance to consider the possible impact of the agency workers directive on the recruitment of temporary staff in Wales? Is he aware that the CBI has estimated that the directive could cost more than 60,000
    142
    jobs in Wales alone? Surely, if he and the Secretary of State really want to help manufacturing, they will do all that they can to stop that job-destroying directive.
    Mr. Touhig: The hon. Gentleman has raised this matter about seven times in the House. He is certainly persistent and diligent in pursuing it, and I do not criticise him for that. Yesterday, at the Employment and Social Policy Council, my hon. Friend the Minister for Employment Relations, Industry and the Regions at the Department of Trade and Industry failed to reach agreement on the Commission's proposals. The British Government's position is that we will continue to work for a directive that gets the right balance between protecting agency workers and protecting their jobs.
    Julie Morgan: Does my hon. Friend welcome the opportunity for the small firms sector that will arise from the welcome news today that Celsa is to restart steelmaking on the ASW site in Cardiff? Will he do all that he can to ensure that the jobs that might be advertised by employment agencies go to redundant steelworkers from ASW?
    Mr. Touhig: I do indeed welcome the news that the project that Celsa is engaged in at the former ASW plant in Cardiff is to go ahead. I take note of my hon. Friend's point, and I would say that any agency recruiting workers for Celsa in Cardiff would certainly have to look in the first instance at the former employees of ASW. Their skills are in very high demand, and I have no doubt that the quality work force who were treated so badly by ASW will provide an excellent work force for Celsa.

    National Health Service
    Angela Watkinson: If he will make a statement on the national health service in Wales. [116426]
    The Secretary of State for Wales (Peter Hain): Under our Government the national health service in Wales has been receiving record investment, and record numbers of patients are being seen.
    Angela Watkinson: The Health and Social Care Bill says that foundation hospitals will provide goods and services from the NHS for people in England. Why is Wales excluded, given that 26,000 people from Wales seek treatment in England each year?
    Peter Hain: One of the Conservatives' problems is their inability to recognise that devolution was designed to allow different parts of the United Kingdom to do things differently. That is what is happening in Wales. The hon. Lady does not, of course, advertise the fact that the Conservatives believe in 20 per cent. cuts in health spending. [Interruption.] Oh yes, they do. Their leader has advocated those cuts. Moreover, the right hon. Member for Wokingham (Mr. Redwood), a former Secretary of State for Wales, says that 20 per

    143
    cent. is not enough. What does the hon. Lady believe in, and what does the hon. Member for Ribble Valley (Mr. Evans) believe in?
    Gareth Thomas: Despite what is said by the knockers in the Conservative party who presided over a long-term decline in the health service, is it not the case that under this Government a record number of new hospitals have been built, a record number of nurses have been recruited, and a new cancer centre has been built at Glan Clwyd hospital in my constituency?
    Peter Hain: My hon. Friend is absolutely right. Under the Conservatives, 100 hospitals were closed in Wales. Under Labour, 10 new hospitals are being built or have already opened. We are recruiting 3,500 more NHS staff, an extra 6,000 nurses, an extra 525 consultants and 175 more GPs. That is an excellent record, compared with the dreadful record of the Tories.
    Hywel Williams: What discussions has the Secretary of State had with colleagues here and in Cardiff about the impact of the establishment of foundation hospitals along the border with Wales? What has been the effect of recruitment of staff from Welsh hospitals, and the treatment of patients from Welsh hospitals in the English foundation hospitals?
    Peter Hain: Obviously patients have the right to cross the border in either direction, but we are keeping the matter under close review, and I have already discussed it with my right hon. Friend the Secretary of State for Health.

    Coal Miners' Compensation
    Mr. Win Griffiths: When the Welsh subgroup of the coal health claims monitoring Group last met; and what assessment was made of the effectiveness of the claims procedures. [116428]
    The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): The Welsh sub-group last met on 7 April, when I was delighted to welcome my hon. Friends the Members for Ogmore (Huw Irranca-Davies) and for Merthyr Tydfil and Rhymney (Mr. Havard) as members.
    The progress on payments under both the respiratory disease and the vibration white finger schemes in Wales speaks volumes for the valuable contribution made by the group.
    Mr. Griffiths: I thank my hon. Friend for his answer, but could he be a bit more precise and let me know what criteria—[Interruption.]
    Mr. Speaker: Order. There is far too much noise in the Chamber. It is unfair.
    Mr. Griffiths: Could my hon. Friend tell me what criteria are used to determine priorities when the miner's
    144
    estate is the beneficiary, and what is the current position relating to payments in Wales and specifically in my constituency?
    Mr. Touhig: I can tell my hon. Friend that £4.5 million has been paid for respiratory disease in his constituency, £1.3 million has been paid under the vibration white finger scheme, and £228 million has been paid for respiratory disease throughout Wales. We may not be able to see light at the end of the tunnel, but at least we can see the tunnel for the first time.
    The priorities are the oldest miners, the most ill, and the widows. As for estate claims, if there is any indication of a short life expectancy the process may be accelerated and the claim considered more urgently. We will, however, look at cases individually. I pay tribute to the Minister for Energy and Construction, who has been wonderfully supportive in especially difficult cases, helping to secure for our miners the justice that they so richly deserve.
    Adam Price: There is one group of former miners in Wales on which there has been absolutely no progress—not a single penny has been paid. I refer, of course, to those who worked in the private mines. Since those mines were licensed by the National Coal Board, which received a levy on every tonne of coal produced, do not the Government have a responsibility to those men, whose suffering is every bit as real as that of those who worked in the nationalised industry?
    Mr. Touhig: I recognise the justice of the hon. Gentleman's point. Our monitoring group has discussed that issue, which continues to be the subject of discussions between solicitors representing the claimants and the Department of Trade and Industry. We have done everything we possibly can to bring the matter to the top of the agenda.

    National Assembly Elections
    Sir Nicholas WintertonWhat assessment he has made of the level of voter turnout in the last elections for the National Assembly for Wales on 1 May. [116429]
    The Secretary of State for Wales (Peter Hain): The turnout in the recent Assembly elections was disappointing and the Government and the Electoral Commission are looking at ways of addressing that issue.
    Sir Nicholas Winterton: The Secretary of State is absolutely right. The actual turnout for the Assembly elections in Wales was extremely disappointing at 38 per cent. If that had been the turnout at a general election, the House would be bewailing the end of representative democracy. Does it not show that the people of Wales do not believe their Assembly is worth anything at all and that their local government and this House are where decisions are made? When will he understand that devolution is not always the answer to the problem?
    Peter Hain: Presumably, exactly the same logic applies to the borough of Macclesfield, where the

    145
    turnout was just 30 per cent.—[Interruption.] Does the hon. Gentleman suggest, therefore, that that item of representative democracy should disappear? Of course not.
    Sir Nicholas Winterton: It is very well represented.
    Peter Hain: The hon. Gentleman is a great patriot for Macclesfield—I will not take that from him—and an excellent Member of Parliament but the truth is that turnout in all elections at every level has been falling across the democratic world. It is a great concern and we should all address it seriously.
    Llew Smith: Does the Secretary of State accept that the reason for the low turnout in the Assembly elections is probably that voters did not believe that the Assembly was relevant to the problems in the communities? If we are to increase the turnout in the next Assembly election, can he advise the leadership of the Assembly to stop wasting money on projects such as the glorified opera house in Cardiff bay, which cost £100 million, and instead spend that money to create jobs in some of the most deprived valley communities?
    Peter Hain: It is important that we recognise that Cardiff and Wales should be going for world-class excellence in every area. The valley communities that my hon. Friend and I represent are part of that drive to make Wales a world-class nation. In respect of turnout, I do not think that one can draw the conclusion that he has reached. The turnout at the Scottish elections was much lower but the Scottish Parliament has greater powers. The turnout at the last general election was lower than at the previous one. We must address the issue across democratic politics on a non-party basis.

    Higher and Further Education
    Alan Howarth: What plans he has to encourage closer links between higher education and further education institutions in Wales. [116430]
    The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): My right hon. Friend the Secretary of State and I are very aware of the Assembly Cabinet's strategy for reconfiguration within the Welsh continuing education sector. We strongly welcome the progress that is being made towards greater collaboration between higher education and further education institutions in Wales.
    Alan Howarth: Will my hon. Friend continue to study the proposals from University of Wales college, Newport and Coleg Gwent for close integration of the work of the two institutions to enable students in south-east Wales to progress seamlessly to higher levels of skills and qualification, and will he commend that model elsewhere in Wales and the United Kingdom?
    Mr. Touhig: I join my right hon. Friend in welcoming the important work on closer links between Coleg Gwent and the University of Wales college, Newport. I know that he takes a keen interest in that issue. I also welcome the support being given by the Higher Education Funding Council for Wales for that
    146
    reconfiguration and closer collaboration. A total of £5.3 million is being made available across the principality. I will continue to take an interest in the progress on that work. Those close links are important to the development of education in Wales.

    Broadband
    John Robertson: What discussions he has had with National Assembly colleagues regarding implementation of the Broadband Wales programme. [116431]
    May I congratulate my right hon. Friend—
    Mr. Speaker: Order. The hon. Gentleman must first wait for the answer.
    The Secretary of State for Wales (Peter Hain): That is always wise, Mr. Speaker.
    I have regular bilateral meetings with National Assembly colleagues, and Broadband Wales is one of the many subject areas discussed.
    John Robertson: I apologise, Mr. Speaker—I was so excited about getting in on Wales questions. May I congratulate my right hon. Friend and his colleagues in the National Assembly on the roll-out of broadband in Wales, and on the £110 million that has been invested to ensure affordable broadband in the region? Does he agree that the roll-out of broadband is as important in Wales as it is in Scotland, that it is rapidly improving and that a celtic alliance between the two nations should be supported?
    Peter Hain: The answer is yes, and I welcome the highest talent from all parts of the House to Wales questions.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Ms Oona King: If he will list his official engagements for Wednesday 4 June.
    The Prime Minister (Mr. Tony Blair): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.
    Ms King: UN weapons inspectors said 12 weeks ago that it was their "strong presumption" that Saddam Hussein had not destroyed, among other things, 10,000 litres of anthrax, 80 tonnes of mustard gas and large quantities of VX nerve agent. Where are these weapons and what does the Prime Minister say to allegations that their threat has been exaggerated? Does he share my

    147
    hope that one day, every leader who gases, tortures and buries—dead and alive—hundreds and thousands of his own people will be removed by force?
    The Prime Minister: In relation to weapons of mass destruction, my hon. Friend is of course right to say that it was accepted by the entire international community, and not least by the UN Security Council, that Saddam Hussein did indeed have weapons of mass destruction and was a threat to the security of the world, which is why the resolution was passed last November. In respect of the search for weapons of mass destruction, I would point out to the House that the Iraq survey group, which is 1,300 to 1,400-strong, is literally now just beginning its work, because the priority after the conflict was to rebuild Iraq and to make sure that the humanitarian concerns of the Iraqi people were achieved. Perhaps I can take this opportunity to inform the House that the Intelligence and Security Committee actually contacted the Government in early May to conduct an inquiry into the role of intelligence in Iraq. I welcome this and I can assure the House that the Government will co-operate fully with it.
    As for my hon. Friend's other point, I hope that we all recognise that in addition to the weapons of mass destruction issue, as I saw for myself in Iraq, the people of Iraq, whatever the problems of rebuilding that country, are delighted that a brutal dictator who murdered hundreds of thousands of their people has gone. And the British Army and the British people should be proud of the role that this country played in removing him.
    Mr. Iain Duncan Smith: The Leader of the House has said that rogue elements within the intelligence services are undermining the Government and that their numbers are growing. Does the Prime Minister agree with him?
    The Prime Minister: It is obvious from what the "Today" programme has said—if that source is to be believed—that of course there was somebody from within the intelligence community who spoke to the media. But I want to say that the security services and intelligence services do a superb job on behalf of this country. Over the six years that I have been Prime Minister, they have been magnificent in the information that they have given, in their professionalism and in their integrity.
    Mr. Duncan Smith: The question is not the "Today" programme but that the Leader of the House made very serious allegations about the security services. I agree with the Prime Minister that the security services fulfil a monumental role on behalf of the Government, but the Leader of the House said that they are seeking deliberately to undermine the Prime Minister. The Prime Minister can clear this up right now. Can he tell us how senior he believes these people are and how many of them there are, and what he intends to do about these allegations?
    The Prime Minister: In fairness to the Leader of the House, he did not say that the security services were engaged in anything, but that somebody from the security services was talking—and it is pretty obvious
    148
    that that is the case. The right hon. Gentleman asks me who it is and how senior, but according to the BBC, the source is anonymous, so obviously I do not know. There is serious point in what the right hon. Gentleman says, but I do not believe that the person who is talking is a member of the Joint Intelligence Committee and I want to make it clear to the House—I have spoken and conferred with the chairman of the Joint Intelligence Committee—that there was no attempt, at any time, by any official, or Minister, or member of No. 10 Downing street staff, to override the intelligence judgments of the Joint Intelligence Committee. That includes the judgment about the so-called 45 minutes. It was a judgment made by the Joint Intelligence Committee and by that committee alone.
    Mr. Duncan Smith: But the Prime Minister is equivocating. [Interruption.]
    Mr. Speaker: Order. Let the Leader of the Opposition speak.
    Mr. Duncan Smith: The Leader of the House, in an interview with The Times and on the "Today" programme, did not talk about one person, but about a growing number of members of the security services. The Leader of the House made allegations about the security services—[HON. MEMBERS: "Oh!"]—and the Prime Minister is not supporting him. We are also hearing allegations from others in the security services that the Prime Minister misled Parliament and the country in the run-up to the war. Those are highly serious allegations. Surely the essential way to deal with the problem is for the Prime Minister to publish the dossier given to him by the JIC before the one that he published in September. Will he do that today?
    The Prime Minister: In relation to all those issues, the Intelligence and Security Committee is at full liberty to go through all the Joint Intelligence Committee assessments and produce a report on them. Because of the importance of the issue, it is only right that a report be published so that people can make a judgment on it. However, the claims that have been made are simply false. In particular, the claim that the readiness of Saddam to use weapons within 45 minutes of an order to use them was a point inserted in the dossier at the behest of No. 10 is completely and totally untrue. Furthermore, the allegation that the 45-minute claim provoked disquiet among the intelligence community, which disagreed with its inclusion in the dossier—I have discussed it, as I said, with the chairman of the Joint Intelligence Committee—is also completely and totally untrue. Instead of hearing from one or many anonymous sources, I suggest that if people have any evidence, they actually produce it.
    Mr. Duncan Smith: But the Leader of the House is not an anonymous source. The Prime Minister stands in his place saying that these allegations are wrong. If so, and if he did not add the 45-minute point to the dossier, why will he not publish the dossier given him by the JIC before he finally published the one in September? Surely that would clear up the point, because it was given to him as evidence that could be put in the public domain. He can do that now and clear the matter up. Of course

    149
    we welcome the fact that the Intelligence and Security Committee will look into it, but I remind the whole House that the Prime Minister will let that Committee see only the intelligence reports that he wants it to see. It reports directly to him and he can withhold any part of, or all of, its reports. However, the Committee is being asked to investigate the Prime Minister's role and that of his closest advisers. Given the allegations made by the Leader of the House today, surely the only way to clear up the problem is to have an independent inquiry?
    The Prime Minister: As far as I am aware, the Leader of the House was not making an allegation about the intelligence being wrong. On the contrary, he was rebutting the allegation that the intelligence was wrong. In relation to the Intelligence and Security Committee, it is not true that I will withhold from it the Joint Intelligence Committee assessments. I will give it all the JIC assessments. In addition, the Committee can, in accordance with its normal practice, interview those people in the security services who drew up the JIC reports. That is surely a fair way to proceed. I will then publish the report.
    If I may say so to the right hon. Gentleman, he had intelligence briefings as well. I suspect that the problem for him is that he has been wondering over the past few days whether to jump on this particular bandwagon or not, and he has made the wrong choice.
    Mr. Duncan Smith rose—
    Hon. Members: More!
    Mr. Speaker: Order.
    Mr. Duncan Smith: The allegations made by the Leader of the House today have changed everything. He is alleging that elements of the security services are actually seeking to undermine the Government. The Prime Minister cannot pretend that this is just a simple and small issue. The whole credibility of his Government rests on clearing up these charges. I simply say to the Prime Minister that these allegations are not going to go away. He has one former Cabinet Minister who says that he has duped the Cabinet; another says that he committed a monumental blunder; and, today, the Leader of the House has attacked members of the security services. Surely the reality is that the only way is to hold an independent judicial inquiry, if he will not produce the evidence, and to do it today.
    The Prime MinisterI have already said that we will produce all the evidence for the Intelligence and Security Committee. I really think that that is the sensible and right way to proceed. It can then come to a considered judgment and I will publish the report. I repeat that all the allegations that have been made are completely without any substance. Indeed, if the right hon. Gentleman wants me to, I shall go through a few more. For example, it was reported that there was a meeting in New York between the Foreign Secretary and Colin Powell in which they expressed their doubts about weapons of mass destruction. On the day concerned, the Foreign Secretary was in France. As for the allegation in The Mail on Sunday that the German Foreign Minister,
    150
    Joschka Fischer, ambushed me over weapons of mass destruction—lies. I have the following statement from the German embassy:
    "The German embassy rejects in the strongest possible terms your"—
    The Mail on Sunday's—
    "claims made on today' front page article … The content and the quotations attributed to Foreign Minister Joschka Fischer are pure fiction."
    That at least is consistent. It was alleged that the source for the 45 minute claim was an Iraqi defector of dubious reliability. He was not an Iraqi defector and he was an established and reliable source.
    Mr. Duncan Smith: The truth is that nobody believes a word that the Prime Minister is saying now. [Interruption.] That is the truth. We now have the unedifying sight of the Leader of the House being sent out to do the Prime Minister's bidding and to attack elements of the security services, which is disgraceful. Will the Prime Minister either publish that dossier right now, or hold an independent inquiry so that the public can judge for themselves?
    The Prime Minister: Again, let me point out to the right hon. Gentleman that what the Leader of the House was saying was what was clearly true, which is that there were people speaking anonymously to the media. I want to repeat, however, that in respect of Iraq and of every issue that I have handled over the past few years, our intelligence services have been absolutely magnificent.
    I say, with the greatest respect to the right hon. Gentleman, that the fact is that in the end there have been many claims made about the Iraq conflict. It was claimed that hundreds of thousands of people were going to die in it; that it would be my Vietnam; that the middle east would be in flames; and—the latest claim—that weapons of mass destruction were a complete invention by the British Government. The truth is that some people resent the fact that it was right to go to conflict. We won the conflict; thanks to the magnificent contribution of the British troops, Iraq is now free, and we should be proud of that.
    Hon. Members: Hear, hear.
    Mr. Speaker: Order
    Mr. Andrew Dismore: May I remind my right hon. Friend of the serious school funding problems in my constituency? While there are arguments about whether the Government provided enough money or whether the local authority has passed on all that it should have done, parents and teachers are not bothered about who is at fault. They look to us to sort out the problems, to make sure that there is enough money for this year, and that there is no repeat next year. Will my right hon. Friend do all that he can to get to the bottom of the story of what has gone wrong this year and guarantee that sufficient money will be made available next year to ensure that education in schools in my constituency is of the high standard that we have come to expect?
    The Prime Minister: Again, let me say that I totally understand the concerns that my hon. Friend raises.

    151
    They are the reason why Ministers have had several meetings with representatives of the Barnet authority. As my honourable Friend knows, Barnet received a 7 per cent. floor increase in education formula spending share per pupil. That was a significant uplift, but it is true that some schools still have problems. We are working hard to see exactly where those problems are located and how to deal with them. However, along with a significant uplift in pension contributions and extra teachers' pay, there has been real pressure on local education authority budgets. In some cases, the full amount of education spending has not been passed through. We need to make sure that it is passed through. That is what we are looking at, in respect of both this year and next year.
    Mr. Charles KennedyThe Prime Minister is saying that more time is needed and asking for public patience when it comes to finding categoric evidence of weapons of mass destruction, but does he not understand that many people, in this country and internationally, treat that with some scepticism? More time and a degree of patience with regard to the progress already being made were exactly what Dr. Hans Blix appealed to the UN for. The Prime Minister was unwilling to extend that courtesy to Dr. Blix, despite having voted for it. Why then does he expect people to extend that courtesy to him?
    The Prime Minister: For two reasons, the situation is completely different. First of all, what I said in relation to Hans Blix: I do not have the words in front of me now, but I think that what I said in this House, when asked many times, was that, if Saddam was co-operating fully, time was not the issue. The process could take as much time as Dr. Blix needed. However, if Saddam was not co-operating fully—and even Dr. B1ix found that he was not—that meant that Saddam was in breach of resolution 1441.
    The second point is that of course the situation is different now that Saddam has been removed from power. The first priority after the conflict—and this, quite rightly, is the reason for the pressure on us—is to take the humanitarian and reconstruction measures necessary to put Iraq back on its feet. The Iraq survey group is 1,300 or 1,400 strong, and it is the main group charged with going into Iraq, investigating all the sites and interviewing the scientists and witnesses. That group is starting its work now—literally now. The reason I ask people to be patient is that the group has just gone into Iraq: it should be allowed to get on with its job, investigate the sites, interview the witnesses and then report back to us.
    Mr. Kennedy: If the Prime Minister acknowledges that public scepticism exists, rightly or wrongly, will he acknowledge also that it is liable to be increased by the comments of the Leader of the House about the rogue elements in the security services? Who are the public to trust if the Government are letting it be known that they cannot wholeheartedly trust their own security services? Does not that underline the need for a fully independent judicial review of just what has gone on?
    The Prime Minister: The intelligence that formed the basis of the dossier that we put out last September was
    152
    based on Joint Intelligence Committee assessments. There was never any question of Ministers, officials or anyone else trying to override that. With the greatest respect to the right hon. Gentleman, the Intelligence and Security Committee will be able to go through all those intelligence assessments. If the Committee wants to refer to those assessments, it can. That will then be published in its report. Rather than having allegations made by anonymous sources that are completely untrue, is it not better that people with evidence should present it to the Intelligence and Security Committee and allow that Committee to make a judgment?
    The right hon. Gentleman says that there is scepticism about the matter, but perhaps he should go back and look at some of the words that he has used and the false allegations that he has made. Then he will see where the scepticism might have originated.

    Middle East
    Mr. Win Griffiths: What plans he has to visit Bethlehem before 25 December to discuss progress on a settlement of the conflict between Palestinians and Israelis.
    The Prime Minister: I have no current plans to do so.
    Mr. Griffiths: I am sorry to hear the Prime Minister say that. Christmas could not be celebrated last year in Bethlehem because of the fighting between Israelis and Palestinians. International voluntary workers, including Alistair Hillmans, a constituent of mine, were illegally arrested by the Israelis on territory that is not theirs. Given the new determination under the new middle east peace plan—the road map—would it not be good if the Prime Minister could say, "I will be in Bethlehem to celebrate Christmas this year."? Would it not be good if such towns as Jenin, Tulkarm, Ramallah, Bethlehem, Dura and Dhahiriya were all part of a consolidated Palestinian state?
    The Prime Minister: My hon. Friend's point is right. It is important to do all that we can to make sure that there is freedom of access to Bethlehem this year. As he rightly points out, as a result of the situation in the middle east, people were not able to celebrate Christmas in Bethlehem last year. However, it is worth pointing out that, for the first time in several years, we have the prospect of the peace process in the middle east moving forward. I very much welcome the initiative that President Bush has taken in that regard. If we can get some sort of normalisation under way, I have no doubt that it should include access to Bethlehem. I am sure that that will be one of the points that those who are trying to negotiate the first steps in reviving the peace process will take into account.
    Mr. Richard Shepherd: Why does the Prime Minister not grasp the nettle and reaffirm the probity and efficacy of his Government by holding a clear judicial inquiry into the matters that are of public concern?
    The Prime MinisterI have answered the allegations that people have put. I have answered them not only on my own behalf, but on behalf of the chairman of the Joint Intelligence Committee. There is a proper way of proceeding. The all-party Intelligence and Security Committee will look into these matters, as it has asked to do, and will make a report. The specific allegation made about the 45 minutes is one that the Committee is perfectly able to investigate and reach conclusions on. I hope that if it concludes that what I have said from the Dispatch Box is correct, our security services—never mind the Government—will receive an apology from those people who made that allegation.

    Engagements
    Julie Morgan: Will the Prime Minister join me in congratulating Liverpool on becoming the European capital of culture? Will he also congratulate Cardiff, which put in a great bid, and the other cities on the shortlist? What plans are there to build on the success and momentum created in Cardiff and the other shortlisted cities?
    The Prime Minister: I offer my warm congratulations to Liverpool on becoming the European capital of culture. For my own safety, I should point out that the decision was taken on a recommendation by an independent committee—
    Andrew Mackinlay: Publish the evidence!
    The Prime Minister: There is an established and reliable source for that, anyway.
    My commiserations go, of course, to those cities, not just Cardiff, that made fantastic efforts in their bids. Because they have done so well, the Government intend to invest a particular sum to ensure that those cities that did not win, because Liverpool did, will still be given a chance to develop as cities of culture.
    Mr. Mark Hoban: The governors at Neville Lovett community school in my constituency are likely to have to disband its learning support unit in order to balance the books. Does the Prime Minister think it right that those who need support in their education are likely to lose it because the Government have not got their sums right on school funding?
    The Prime Minister: Obviously, I do not know the situation in the hon. Gentleman's constituency. However, we have put in a huge increase in his area, Hampshire, over the past few years, and there was a particularly large increase this year. I cannot say for sure exactly how the money has been allocated by the local education authority, but I do say to Conservative Members who say that they want even more money to go into education that it is curious to demand that when their policy has been not to support extra investment, but to cut it by 20 per cent. across the board.
    Mr. Robin Cook: Does the Prime Minister recall saying in the September debate that we knew that Saddam had been trying to buy uranium from Africa? Has he been advised since then that it is accepted
    154
    that the documents on which that claim was based were forged? I have never questioned the good faith of my right hon. Friend, so could he not save the Intelligence and Security Committee a lot of time in its inquiry by correcting the record now on the alleged uranium from Africa, and on the alleged weapons ready in 45 minutes, and say that he regrets that, in all good faith, he gave the House information that has since turned out to be wrong?
    The Prime Minister: No, I am afraid that I have to say to my right hon. Friend that I will not do that, for this reason. There are two quite separate allegations. My right hon. Friend started with the allegation about uranium from Africa. There was intelligence to that effect. I shall not go into the details of the particular intelligence, but at the time it was judged by the Joint Intelligence Committee to be correct. Until we investigate properly, we are simply not in a position to say whether that is so. In respect of the 45 minutes, however, that is a wholly different allegation. I have to say to my right hon. Friend that the Joint Intelligence Committee made that assessment on its own behalf with no interference from anyone. I shall certainly not stand here and say that that assessment is wrong, as the committee's judgment is that it was right. The committee is in a better position to make that judgment than either me or, with respect, my right hon. Friend.
    Sue Doughty: Yet again, Greenpeace has today highlighted the use by the Government, in the Home Office, of timber from unsustainable sources. Will the Prime Minister accept that the use of unsustainable timber must be stopped—[Interruption.]
    Mr. Speaker: Order. The House must let the hon. Lady ask her question. [HON. MEMBERS: "Why?] Because her name is on the Order Paper and she is entitled to ask a question.
    Sue Doughty: There is evidence from Greenpeace. We should declare war on the illegal use of timber and end the mass destruction of forests once and for all.
    The Prime Minister: I am getting instructions from further along the Bench. Is this to do with a fence around Marsham street?
    Sue Doughty indicated assent.
    The Prime Minister: I regret to say that, along with everything else, I am not 100 per cent. up to speed about the fence around Marsham street. The Home Secretary seems to be disputing rather vigorously the claim that is being made.
    Bob Russell: Well, he would.
    The Prime Minister: Probably he would. I shall look into the matter and drop the hon. Member for Guildford (Sue Doughty) a line about it. It may be an issue to take up with the contractors rather than with the Government.

    Iraq
    Mr. Tam Dalyell: What action he has taken since 14 May to gather documentation in relation to weapons of mass destruction in Iraq.
    The Prime Minister: We believe that documents relating to Iraq's WMD programmes have been carefully concealed, including at the homes of scientists and other personnel connected with those programmes. As I informed the House a moment or two ago, a new organisation, the Iraq survey group, has been set up to take charge of the search for Iraqi weapons of mass destruction, among other things. The group will harness intelligence resources and the investigatory skills of about 1,300 to 1,400 staff from the US, the UK and Australia. It will subsume the existing smaller operations and investigations being carried out by the US military. It will also include former United Nations arms inspectors, and it represents a significant expansion of effort in the coalition hunt for weapons of mass destruction.
    Mr. Dalyell: Tonight at 7 o'clock, Mr. Speaker has given me an Adjournment debate on the situation in detention of Tariq Aziz. Could the Prime Minister ask the junior Minister at the Foreign Office who will be replying to the debate to enlarge on the processes by which the documentation that is found may relate to trials, not only of Tariq Aziz but of some others? Do we not have to be rather careful, whatever our views, about victors' justice? Surely those people have to be brought to trial one way or another?
    The Prime Minister: I agree with my hon. Friend: they have to be brought to trial in a proper way. That is something that we are discussing at present both with our allies and with the United Nations. I shall certainly pass on to my hon. Friend, the Foreign Office Minister who will reply to the debate, the points that my hon. Friend the Member for Linlithgow (Mr. Dalyell) has made. I hope, however, that he will recognise and support us in one thing. Sometimes over the past few days, it has been almost as if the whole issue of Saddam and weapons of mass destruction were a curious invention. The weapons of mass destruction issue and Saddam have been around for 12 years in the UN, as have Saddam's efforts at concealment.
    156
    When I was replying to my right hon. Friend the Member for Livingston (Mr. Cook), I forgot one point. It is sometimes said that it is very curious that, if those weapons were ready to fire, they were not found immediately. The answer to that lies in the very point we made in the dossier, which is that once Saddam started to realise that United Nations inspectors were coming back in, as I think I said continually at the Dispatch Box, there was then a concerted campaign of concealment of the weapons. Indeed, I think I also Said—if not at this Dispatch Box, then elsewhere Publicly—that one benefit of that, although there were obviously a lot of problems with it, was that it would make it more difficult to reassemble those weapons; but that does not in any shape or form dispute the original intelligence.
    As for the other point that my hon. Friend the Member for Linlithgow makes, about the tribunal and how these people are tried, I can assure him that if they are tried they should be tried according to proper and due process.
    Mr. Elfyn Llwyd: Those of us who argued that the conflict in Iraq was illegal continually had the whole issue of weapons of mass destruction thrown at us by the right hon. Gentleman and others. Is it not high time to have a full public inquiry? It is not good enough for the Prime Minister to rely on a report by the Joint Intelligence Committee, because he can be selective as to what he produces, and when all is said and done, the Committee is answerable to him.
    The Prime Minister: I suspect that whatever we did would not be good enough for the hon. Gentleman. The fact is that he and his colleagues were opposed to this from the very beginning, and from the moment the conflict ended and all their predictions of disaster turned out to be untrue, they have been looking for a way of getting back into the argument, saying it was all a terrible mistake.
    Let me tell the hon. Gentleman one thing. I have been to Iraq and spoken to those Iraqi people; yes, it is true that there is an enormous job of reconstruction to be done in that country, but seeing the literally tens of thousands of bodies in mass graves uncovered in Iraq, and realising that these people had been deprived of freedom for decade upon decade, let us be thankful that someone who was a threat with his weapons of mass destruction and also a brutal tyrant has been removed once and for all.

G8 Summit
12.32 pm
The Prime Minister (Mr. Tony Blair): With your permission, Mr. Speaker, I will make a statement about the G8 summit in France.
I pay tribute to President Chirac's very skilful chairmanship in guiding our deliberations. We reached significant conclusions on the middle east, on weapons of mass destruction and terrorism, and on Africa and sustainable development. In addition, we committed ourselves to strengthening the conditions for growth in the world economy. In all, 16 action plans and statements were released at the summit, copies of which have been placed in the House Libraries.
First, on the middle east, we all recognised that a solution to the Israel-Palestinian problem is not only vital for stability across the middle east but would deprive terrorists of an issue that they exploit for their own inhuman ends. I need hardly remind the House of the bleak pattern of mistrust, hatred and violence that has blighted the lives of generations of Israelis and Palestinians. Children have been growing up in an area with seemingly no prospect of peace. From the beginning of the intifada in September 2000 until the end of March this year, 2,300 Palestinians and more than 600 Israelis have been killed. There have been too many dashed hopes to be anything other than cautious in assessing the current situation, but since I last reported to the House, the road map for peace has been published, the Israeli Cabinet has accepted it and there has today been the historic meeting between President Bush and the Palestinian and Israeli Prime Ministers in Jordan.
The whole G8 summit united behind the initiative that President Bush is taking, and fully endorsed what is now agreed on all sides as the only ultimate answer to this problem: two states, Israel and Palestine, living side by side in peace. That is an objective of historic significance both for the middle east and indeed for the whole world community, and we in the United Kingdom will continue to support it with every means at our disposal.
Secondly, on terrorism and weapons of mass destruction, there was a striking unanimity of purpose that we must urgently strengthen our co-operation in the fight against those two closely related threats. On weapons of mass destruction, we underlined that North Korea's uranium enrichment and plutonium production programmes and its failure to comply with International Atomic Energy Agency safeguards were a clear breach of its international obligations. We called on it to dismantle its nuclear weapons programmes. We emphasised the proliferation implications of Iran's advanced nuclear programme and called on Iran to sign and implement an IAEA additional protocol without delay or conditions. President Putin made it clear that in the meantime Russia would suspend its exports of nuclear fuel to Iran. Those are important steps to halt the proliferation of nuclear weapons, and I welcome them.
In addition, we took stock of progress on the $20 billion programme launched last year to prevent terrorists from acquiring nuclear, biological or chemical materials left over from the former Soviet Union, to
158
which Britain has made a commitment of up to $750 million. We put in place mechanisms to improve the prioritisation and co-ordination of technical assistance for countries seeking to assist in the war against terrorism. We launched new initiatives to tackle man-portable surface-to-air missiles and to tighten security controls on radioactive sources, and we agreed on measures that represent a new drive to cut off terrorist financing.
Thirdly, on Africa and development, the summit brought about the welcome participation of many African and developing nations. We all agreed that a successful outcome to the World Trade Organisation ministerial meeting in Mexico in September and the successful completion of the development round by 2005 are of central importance. The wealthy nations of the world simply cannot any longer ask the developing world to stand on its own two feet but shut out the very access to our markets that is necessary for it to do so. Reform of the European common agricultural policy will be vital in that regard.
In addition, we agreed to resolve all other outstanding WTO issues including the compulsory licensing of drugs—the so-called trade-related aspects of intellectual property rights, or TRIPS, question—which is important for poorer countries to access drugs for their people, and also essential for progress in the Doha round.
We had extensive discussions about the problem of HIV/AIDS, which now afflicts 42 million people around the world. All of us welcomed President Bush's recent announcement of a $15 billion US initiative to combat it, and I hope that at the European summit in Greece, the European Union will agree to match the US commitment to the global health fund—potentially up to $1 billion a year. We remain on course, too, to eradicate polio from the face of the globe by 2005.
I also set out in some detail my right hon. Friend the Chancellor's proposal to establish a new international finance facility, which could deliver a doubling of current aid flows for recipient countries committed to economic reforms and good governance. Finance Ministers have been asked to report back to leaders on the proposal by September. It is important that we now sustain the momentum behind the initiative.
G8 leaders also took the opportunity to discuss with President Mbeki and other African leaders the good progress that we have made in partnership with the NEPAD—New Partnership for Africa's Development—leaders over the past year in implementing the Africa action plan that was launched at Kananaskis. Over the past year, we have seen the largest ever US commitment to aid for Africa, and many European Union countries, including our own, are increasing aid and development programmes substantially. Consistent with the African-led initiative, we discussed the steps that are being taken to resolve the appalling crisis in Zimbabwe. We condemned the action taken by the Zimbabwean authorities on Monday against their own people and called on the Zimbabwean Government to accept their citizens' rights to demonstrate against the regime peacefully.
I was also pleased that we endorsed the initiative that I launched last year to reduce corruption by getting companies in the extractive industries to make public

159
the tax and royalty payments that they make to Governments, and for those Governments to publicise their receipts. I believe that this simple idea could have a powerful impact. Transparency and increased accountability are the best defences against corruption.
Leaders also had a full discussion on the world economy and agreed on the central importance of fostering macro-economic stability and intensifying structural reform as the essential preconditions for strengthening growth. Chancellor Schröder also briefed us on the steps that Germany is now taking to modernise its health and pensions systems and to increase the flexibility of the labour market, and President Bush expressed confidence in the strength of the US economic recovery, based on rising productivity and a pick-up in domestic demand.
Finally, G8 Heads agreed to step up our collaboration on science and technology to help combat the long-term problem of climate change. It is crucial that we tackle this, but in ways that encourage sustainable growth and development. The G8 must lead the way, working in partnership with developing countries. We will focus on renewable energy, the hydrogen economy for transport, fuel cells and biodiversity.
After the sharp disagreements in the world community over Iraq, the summit represented an important coming together of leading nations. In the past few weeks, we have seen the restoration of unity in the UN with resolution 1483. As important as anything else, on the very issue of weapons of mass destruction and terrorism, there was a renewed sense of urgency and purpose. Of great significance, we have seen the middle east peace process, despite all the cynicism, moving forward again. Whatever the differences of the past few months, the summit showed common purpose on these key issues. It is now the task of the whole world community to build on the objectives that have been reached which are of such fundamental importance to us all and to the wider world.
Mr. Lain Duncan Smith: I thank the Prime Minister for his statement.
The G8 meeting in Evian came at a time of rapid change in world events. Renewed optimism characterises the middle east peace process, as the right hon. Gentleman said, and we face a massive obligation to rebuild Iraq and to equip it to be governed at last by its own people. International institutions and relations between countries are still under strain, and the continent of Africa is threatened by widespread famine, the blight of HIV/AIDS and the disastrous political collapse in far too many countries.
I begin by expressing the hopes of Conservative Members for the success of today's potentially historic meeting in Aqaba between President Bush, Ariel Sharon and Mahmoud Abbas. We support the creation of a Palestinian state living alongside a secure and respected Israel, as the Prime Minister said. We therefore join him in warmly welcoming President Bush's commitment to the great prize of peace in the middle east and realise that great perseverance will be 'required from all sides if that peace is to be achieved. Continuous reciprocal steps are essential for the success of the road map.
160
The G8 summit talked of a comprehensive peace settlement involving Lebanon and Syria. As the Prime Minister knows, for the road map to work it must be more than just a bilateral agreement between Israel and Palestine, so how will the Lebanese and Syrian tracks, as referred to in the discussion, be integrated into that road map process? What admission in Evian did the Prime Minister receive from the Russians, Germans or French that the removal of Saddam Hussein has assisted rather than retarded the momentum towards the middle east peace settlement?
The G8 summit represented an important opportunity for divisions between world leaders over the war in Iraq to be addressed. Some nations, such as Russia, with its willingness to halt nuclear exports to Iran, appeared more willing to address those divisions than others. We should welcome that, and I agree with the Prime Minister that that was a significant step. However, while I welcome the unanimous adoption of United Nations Security Council resolution 1483 and the more positive signs of co-operation between the G8 member states in building sustainable peace in Iraq, may I ask what is the Prime Minister's latest assessment of the timetable under which Iraq will be equipped to govern itself? Are there any hospitals that, even now, weeks after the military action has ceased, still require basic medicines and supplies? If there are, what plans are in place to ensure that that is resolved?
On Africa, last week Bob Geldof powerfully warned that famine and disease are once again stalking that continent, and Ethiopia is running out of food. Some 8,000 people a day are dying of HIV/AIDS across the continent, and Zimbabwe has been brought to its knees by the contemptible conduct of a dictator, Robert Mugabe. I welcome the fact that the G8 at last discussed Zimbabwe. That is vital. I also welcome its condemnation of Mugabe's brutal actions and his continuing activities. What action is being taken in response to the emergency in Zimbabwe? What future action does the Prime Minister believe we can take, and what do his Government believe they will do alongside other Governments to resolve that? What action is being taken in response to the emergency in Ethiopia?
We welcome the expressed intention of the EU heads of state to support President Bush's commendable initiative to fight HIV/AIDS in Africa and the Caribbean. We hope that the next EU summit will at last turn those words into firm action. Does the Prime Minister think that that will be the case?
We are surprised and disappointed that the Prime Minister's statement makes no mention of the Congo. The country is on the precipice of the most bloody ethnic genocide. The French were the first to refer to the issue of troops, and were even critical about British troop deployments, which I find a bit rich. Is it not right that France and Belgium should take the lead in ensuring that, if necessary, security forces go to the region, where historically they had such an influence, or would that in itself cause a major problem? Will the Prime Minister tell us what sort of troop deployments he believes Britain is capable of committing, and whether he considers such a commitment necessary?
While every effort must be made to alleviate the suffering of so many Africans, we must also lay the basis for self-government in Iraq. The search for WMD must continue urgently, without let-up. I do not believe that

161
the issues raised in this country in the past few days were about weapons of mass destruction. I believe that Saddam Hussein had them, and I hope and believe that we will find them. It is right for Britain to have liberated Iraq; the Prime Minister was right to do so. However, the reconstruction of Iraq requires that there should be a foundation of trust in the Government's actions at the time and subsequently. There is the risk of jeopardising that trust. I hope that over the past half hour, the Prime Minister has had time to reflect on the need to re-establish that trust, and that he will now review his position and grant an independent judicial inquiry.
The Prime Minister: On that last point, I have said all that I need to say, except that it is a bit much that when a series of allegations are made, all of which are untrue, people say what a terrible thing it is that trust in the Government has been damaged. It is important that if people have evidence to justify allegations, they give that evidence, and so far they have not done so.
In relation to the right hon. Gentleman's comments on the G8, the Jordan meeting is extremely important. I agree that the road map must be amplified to include the Lebanese and Syrian tracks, and it will be. That must be another dimension of moving the middle east peace process forward. It is important to recognise that America always said, and President Bush made it clear, that once the issue of Iraq was dealt with, he would move on to the middle east peace process. There is no doubt that it is much easier to make progress on that now, with the regime in Iraq changed.
In relation to Iraq and resolution 1483, because the UN is now involved in the process again, we are better able to access support for the hospitals and the infrastructure, medicines, supplies and so on. My assessment, although obviously my visit was only brief, is that real efforts are being made by our troops and by the authorities on the ground to improve the situation as rapidly as possible, but it is a massive undertaking. One of the things that I was told by our military out in Iraq is that, for example, when the Iraqi special republican guard were retreating, they sabotaged much of the machinery, which must be replaced. As we know, looting and problems of security were experienced at some of the hospitals, but I am informed that the situation is improving. It is not improving as fast as we would like, but it is improving. However, we must be clear that the job of reconstruction is massive. That is why it is important that we redouble our efforts, and ensure that we show the same vigour in prosecuting the peace in Iraq as we did in prosecuting the war.
As for the weapons of mass destruction, I point out again that the Iraq survey group is the body that will be able to go and interview the scientists and experts and visit the sites. There are literally thousands of sites. As I was told in Iraq, information is coming in the entire time, but it is only now that the Iraq survey group has been put together that a dedicated team of people, which includes former UN inspectors, scientists and experts, will be able to go in and do the job properly. As I have said throughout, I have no doubt that they will find the clearest possible evidence of Saddam's weapons of mass destruction.
The alternative thesis is that, having for years obstructed the UN, having had 12 years of sanctions, having kicked out the inspectors in 1998, and having
162
invited an invasion by defying the UN, Saddam decided to get rid of the weapons of mass destruction anyway. That is an odd thesis to accept. [Interruption.] Someone is shouting out "Rumsfeld". I have read carefully what the Secretary of State for Defence in the US said, and the comments of Paul Wolfowitz. It should come as no surprise that their comments have been taken completely out of context. If people read the full transcript of both interviews, they will see that what they are arguing is that it will be difficult to say exactly what has happened to the weapons until we collect the evidence through the Iraq survey group. That is precisely what we would expect. I repeat that it has always been the Government's case that there was a systematic campaign of concealment once Saddam knew that the inspectors were going back in.
On Africa, the right hon. Gentleman made some important points. We recognise the urgency of the crisis in Ethiopia. We have raised with the European Commission the importance of Europe stepping up its efforts to get its own money through. We have already allocated £48 million of emergency aid, and we will see what more we can do.
On HIV/AIDS, I believe that the European Union will match whatever commitment to the Global Health Fund the United States has given. It is important to realise that the $15 billion commitment of the US is not just to the Global Health Fund but to bilateral projects between the US and recipient countries. The situation is the same with us. We put hundreds of millions of dollars a year into HIV/AIDS programmes all over Africa and elsewhere, but we are also increasing our commitment to the Global Health Fund. There is recognition that this pandemic scourge—thousands of people die every year—has to be tackled. What is more, if it is not tackled, many African countries will not have the human resources to rebuild themselves.
It is important that the summit made the statement on Zimbabwe. Measures can be taken, such as sanctions, but we must recognise the limitations on what they can achieve in Zimbabwe. The most important thing is that we work closely with the surrounding countries in Africa to get them to realise and understand that we must deal with the problem in Zimbabwe, because it threatens to blight and destroy the lives of many people, not only in that country but all over the south of Africa. We must work with the countries in the region on that.
In respect of the Congo, we will make a UK commitment in so far as we can, but that will be for logistics and support. The French and others are willing to take the lead in the force around Bunia. The UN MONUC force is also there. I have to be frank about the fact that I do not think that these plans are in a sufficient state of readiness. We are seeing what more we can do with others to ensure that we can make a better and swifter response. I am convinced—this was also discussed at the summit—that the ultimate solution to this problem is for Africa to take on these peacekeeping tasks. That is why the UN plan that we agreed to back is so important. It will mean that in the next few years there will be properly equipped and properly trained regional peacekeeping forces all over Africa, with which the developed world can help and which can move swiftly into any conflict. The number of troops required in these situations is not great, as we found in Sierra

163
Leone, but if they are not properly trained and equipped they cannot do the job. In the end, this is something that we have to help Africa to do for itself.
Mr. Charles Kennedy: Although there are obviously some disappointments about the summit, welcome progress has been made on a number of key fronts, not least nuclear non-proliferation, the new practical assistance for Africa in the field of peacekeeping, and the big tantalising prize of the further advancement of the middle east peace process. Let us hope that the steps under way as we speak will eventually lead to the emergence of two stable and secure states, living side by side in peace and security.
We very much welcome the announcements on Iran and North Korea, urging them to cease their nuclear developments and to verify their progress. There is no doubt that the non-proliferation treaty must be upheld, and there is an obvious need for the International Atomic Energy Agency to inspect Iran's facilities. Will the Prime Minister acknowledge that the United Kingdom must continue to preserve its balanced and sensible policy on Iran? It is distinct from the stance adopted by the United States, as he knows only too well. Will he spell out what mechanisms he would consider if the Iranians did not respond to the call issued in the past few days by the G8 membership? Will he rule out taking military action against Iran? Does he see further potential for the development of a common European front on this issue?
It is correct to welcome the movement, such as there was, towards rapprochement among the nations that were in disagreement with our country and, primarily, with the United States over what has taken place in Iraq, although there is a great deal further to go. Does the Prime Minister acknowledge that the Germans and, perhaps to a lesser extent, the French bridle somewhat at the sight and sound of the American President arriving in continental Europe and remonstrating with those who, in a candid and upfront international way, chose to take a different view from his own and that of his Administration of what took place in Iraq?
Does the Prime Minister share the sense of disappointment at the lack of progress on debt relief? The statements on water, sustainability and NEPAD were full of worthy sentiments but rather empty of content. Does not that pose a longer-term danger to the G8, which is losing credibility, especially in the eyes of the developing world?
Given the aid that is being provided to Africa, which is welcome, does the Prime Minister acknowledge that those countries would benefit from a big improvement if they had the capacity to produce their own generic drugs? Does he see scope for further progress on that? What contributions are the British Government making towards such an end?
Does the Prime Minister see scope for the cutting of farm subsidies and export credits? What is his view of the proposals from the European Union and the United 'States currently before the World Trade Organisation?
Did the Prime Minister have an opportunity at the summit to raise again the position of the nine British citizens held at Camp Delta? They are in a legal no man's
164
land. In response to the Father of the House in a different context, he referred to the need for trials. No charges have even been brought against those British citizens. That is contrary to all the principles of international justice to which our country subscribes. If the boot were on the other foot, and we were holding American citizens in a similar fashion, all hell would have broken lose on Capitol hill and we would not have heard the end of it. Did the Prime Minister have any opportunity to raise that fundamental concern about our own passport holders with the President and representatives of the United States?
The Prime Minister: That last issue did not come up at the summit, but we have raised it with the US Government. I have said what I have said about it already. Obviously, that situation cannot continue indefinitely, although it is complicated by the fact that information is still coming from the people detained there. I cannot say any more than that. That information is important.
On the middle east peace process, I think we are agreed that what is happening is an important step forward.
It is important that Iran realises the seriousness of the international community's intent on this issue. The IAEA must be able to carry out its work without any conditions. No one is threatening military action in respect of Iran, but it must understand that the whole of the world community—there was complete unanimity on this at the G8—does not find it acceptable that this nuclear weapons programme continues to be developed in Iran. Both on that issue and in relation to the issue of terrorism and its support for terrorists, it has to understand that we are very serious about the unacceptability of these activities. We have worked very long and hard to have a proper dialogue with the Iranian Government. I welcome that and I think that it is good to do so, but it has to happen on the basis of being absolutely upfront with them about the concerns that we and the whole international community have.
In relation to President Bush's speech in Europe, I thought that, far from being a remonstration with the Europeans, it was a reaching out to Europe. I think that he did that very effectively, and he made it very clear that there were issues such as the middle east, tackling global poverty and HIV/AIDS, on which he wanted a good and robust partnership with the European Union. Of course, he defended his position in respect of Iraq, as we would expect him to do. What is more, he was in Poland, where I had been the day before, which had fully supported our action in Iraq.
On debt relief, we are making progress. There are certain issues to do with exactly how the heavily indebted countries programme works and the issue of topping up. We are trying to resolve those issues, but I point out to the right hon. Gentleman that, in terms of debt relief, as a result of the measure that was driven forward by my right hon. Friend the Chancellor, we have now seen $62 billion worth of debt forgiven. That is very important indeed.
On generic drugs, we have given tax relief for research on the development of those drugs by our countries in respect of diseases that are the particular problem of developing countries. We have to resolve the issue of the

165
so-called TRIPS by the time of the WTO meeting. I hope that it will be resolved, because it is very important that, when we have the drugs that can help developing countries, we make them available to them.
Finally, in relation to the WTO, a change has happened in the sense that the French proposals on agriculture in respect of Africa are a step forward, because they recognise in principle that export subsidies are unacceptable and should go. It was not possible to reach full agreement in respect of all the aspects of the French proposals, but they are a significant step forward. Again, I hope that there will be a coming together between all members of the European Union and the United States on the other hand so that we all make it clear that there should be a programme for phasing out the agricultural subsidies. If that does not happen, the developing world will be left in the position of being able to produce crops and carry out agricultural production, but not to gain access to our markets on a fair and equitable basis. After the G8 meeting, I am more hopeful that we will be able to resolve the matter, but it will be difficult.
Tony Worthington: I very much welcome the statement in the report that the G8 has endorsed the initiative taken by this country to ensure transparency in the oil industry and other extractive industries and the recognition that there should be publication of accounts, as corrupt leaders and companies have taken billions of pounds out of Africa. Can the Prime Minister confirm that absolutely every country will now take the legislative measures necessary to force its companies to make their accounts transparent? Can he let us know how that is to be brought into effect?
The Prime Minister: On the issues to do with governance and corruption, the peer review group mechanism has been set up under NEPAD—the New Partnership for Africa's Development—and I think that about 15 or 16 countries have already agreed to submit themselves to that process, which will judge how far they have come in tackling the problems of corruption. In respect of the extractive industries, what we have agreed is that the proposal should be taken forward. The detail has got to be worked out, but it will not work, in my view, unless it is a clear requirement across the board. Obviously, there are companies that want to participate in principle, but if they have to be transparent and accountable while other companies do not, it will be very difficult for them to compete. We are now looking at how to ensure that, both in the countries of origin of the companies and in the developing countries, we introduce mutually acceptable and binding legislation. That is what we are doing now.
Mr. Kenneth Clarke: When the Prime Minister was discussing Iraq with his fellow G8 leaders, he presumably recalled that they all supported the unanimous Security Council resolution 1441 saying that military force, if necessary, would be justified to disarm Saddam. Did he remind President Bush that the case for war against Iraq without a second resolution and in the face of the opposition of the majority of the Security Council was that those weapons posed such an imminent threat that an immediate military invasion
166
was justified without giving any more time to Mr. Blix and his inspectors? Do I understand the Prime Minister's position today to be that he still believes that, and is telling the House that he thinks that that assertion was factually accurate, is factually accurate and will be proved factually accurate? If he is still standing by that, does he realise how serious it will be if it turns out that it was not true at all and the consequences that that will have for our confidence that the problems of Iran and Korea will be dealt with on a truly internationalist and legal basis?
The Prime Minister: The right hon. and learned Gentleman and I agree on some things, but I am afraid that we disagree on this matter completely. First, let me point out to him that the basis on which we went to conflict was that in resolution 1441, Iraq was given a final chance to comply fully and unconditionally with the UN inspectors, and the conclusion that we drew six months later was that it was not doing so. The problem in the UN Security Council is that we could not get an agreement even to the fact that, if it carried on not complying fully and unconditionally with the UN inspectors, we could take action. That was obviously an unacceptable situation.
That is the first point to make. The second is that I stand entirely by the dossier that we issued and the intelligence contained in it. I have also pointed out in the statement and on other occasions both at the Dispatch Box and elsewhere that, of course, Iraq undertook a sustained campaign of concealment of the weapons. The Iraq survey group is the group that is going in now and which will interview the scientists and experts and examine the sites, and it has the expertise, including former UN inspectors, to do so. When we get a proper and fully documented account of what it has found, we will present it to people, because it is right that they know the outcome. I suspect that both the right hon. and learned Gentleman and I would be sensible to suspend our judgment until that time, but I stand fully by what our intelligence agencies put out. I say to him—he will have some experience of this—that I have dealt with those involved for six years and I have not only found them to be people of total professionalism and integrity, but found the quality of what they produce to be among the finest anywhere in the world.
Clare Short: In trying to heal the divisions in the world that have appeared with regard to the difference of view about how to handle the crisis in Iraq, did the Prime Minister apologise to President Chirac for misleading all of us about the position of France on the second resolution? I think that he told the House, and many of us, that France had said that it would veto any second resolution. It is now absolutely clear that President Chirac said on 10 March that the inspectors needed longer, but if they failed to disarm Iraq, the Security Council would have to mandate military action. Does that not mean that he misled us and should apologise to us as well?
The Prime Minister: I am sorry, but again, we have a complete disagreement on this issue. First, the remarks that President Chirac made are now on the record and are history, and were about France saying no whatever the circumstances. Actually, there is an even more

167
important point. What I said to my right hon. Friend and to the House was that France made it clear that it would not accept any resolution that involved the automatic use of force in the absence of compliance by Saddam or an ultimatum. That was what I said to her and to the House, and it is true. That is what he said. Therefore, we would have been back in a situation in which we would have had to come back to the Security Council once again and come to another resolution, but without any threat to use force if Saddam did not comply. In the end, that was the problem, and it is the problem as I explained it to the House, to her and to the country at the time.
Mr. Robert Jackson: We know that the spread of scientific knowledge will facilitate the spread of weapons of mass destruction. We know that serious terrorist threats exist. Does the Prime Minister agree that no amount of media barracking or political potstirring about Iraq will change either of those grim realities?
The Prime Minister: I entirely agree with the hon. Gentleman; he is absolutely right. That is why we were entirely justified in taking the action that we did.
Barbara Follett: On weapons of mass destruction, can my right hon. Friend say what will be the composition of the Iraq survey group, to whom it will report, and how it will relate to the United Nations?
The Prime Minister: We have been putting together the Iraq survey group for a significant period since the end of the conflict. It will comprise roughly 1,300 to 1,400 people. In addition to weapons of mass destruction, it will consider evidence to do with mass graves and so forth. I think I am right in saying that there will be more than 100 British personnel. It is headed by an American, but the deputy is a British brigadier. It will include experts and scientists who have expertise in this area, as well as some former UN inspectors.
As for the future involvement of the UN in the process, we accept, for obvious reasons, that there will have to be some independent verification at the end of it—that is what the world community will expect and it is what we should do. In resolution 1483, which we passed in the UN a short time ago, we agreed that we would have a discussion about how the UN could be put back into the process. The Foreign Secretary is continuing that discussion with his counterparts, and when it is concluded we will state its outcome. The process must be carried out only on a considered and deliberate basis over a period of time.
It is no surprise to me that the issue is as difficult to deal with as it is proving to be, because I have to keep pointing out to people that our case—precisely the case that I constantly made standing here—was that after Saddam realised that action was under way, an instruction went out to have a concerted campaign of concealment of these weapons. That is why there is no doubt at all that it will require a concerted effort to find out from the scientists, Iraqi experts and others exactly what happened to these facilities. The alternative thesis
168
is that Saddam voluntarily decided—in an extraordinary act of perversity, when he knew that he was going to be invaded through refusing to comply with the UN inspectors—to get rid of the weapons anyway. I think that that is highly unlikely.
Sir Peter Tapsell: Did the Prime Minister explain to the European leaders at Evian how he persuaded the House of Commons to vote for war on the basis of assumptions and claims about weapons of mass destruction that remain unproven? That is the essential parliamentary point that he is always seeking to blur. When he made his great speech to the House, was he deliberately seeking to mislead us or was it a blunder based on unsound intelligence reaching him? Can he not understand that an authoritative answer to that question can be given only by an independent, sovereign inquiry headed by a distinguished judge?
The Prime Minister: I do not think that I ever persuaded the hon. Gentleman of the case for action in any event. What I find remarkable about him and others who talk like that about the issue of weapons of mass destruction is that Saddam and weapons of mass destruction is a well-documented historical fact. As I say, the Iraq survey group will examine exactly what has happened in the past few months.
As for the idea that Saddam and weapons of mass destruction was some sort of whim or hunch of the security services, he was the person who used weapons of mass destruction against his own people: he gassed and killed thousands of them. He then engaged in a four, five or six-year programme of concealment. He said that he never had a biological weapons programme, and was shown to have one; he said that he never had a nuclear weapons programme, and was shown to have one; he said that he destroyed all the material back in the early 1990s, yet even Dr. Blix put out a 173-page document in March this year detailing exactly what was unaccounted for, including 10,000 litres of anthrax. So, with the greatest of respect, whatever happens now, let us please not have this ridiculous assertion that Saddam and weapons of mass destruction was an invention by the Americans, the British or our intelligence services.
Mr. Clive Soley: The agenda at the G8 summit that the Prime Minister described also affects the United Nations. Was there any discussion about the need to reform the United Nations—an organisation that was established in the rather different circumstances of 1945—particularly with a view to dealing with states that are collapsing or collapsed and with psychopathic killers who take over nation states, brutalise their own populations, and destabilise regions? That is the challenge for the United Nations, and the G8 should have discussed it. If it did not, could it be on the agenda for the next occasion?
The Prime Minister: My hon. Friend is right. In fact, that was part of the discussions we had. There is a clear acceptance that we need to take seriously our responsibilities for states that are dictatorial, abusive and repressive. One of the discussions we had on the last evening of the G8 was an interesting and frank discussion between leaders about what we do about

169
states that are repressive and dictatorial. It is self-evidently the fact that we cannot take military action against everyone. What is happening in Zimbabwe is absolutely appalling, but I do not think that anyone is suggesting that we take military action there. [HON. MEMBERS: "Why not?"] Perhaps some people are.
What is increasingly clear is that unless we deal with these problems to do with freedom, human rights and democracy, the world is a less stable place. That is why I have noticed that since Saddam has gone in Iraq there is a real opportunity for change across the whole middle east. States are undertaking programmes of democratic reform that were not doing so before, the middle east peace process is under way, and at long last there is at least the prospect of getting a stable and democratic Iraq. That is why the points that my hon. Friend makes are absolutely right. The question of what we do about each and every one of these states is a different matter, but he is absolutely right that it is a serious issue upon which the United Nations and the international community should unite.
Mr. Alex Salmond: If the Prime Minister and the whole G8 are prepared to rely on the International Atomic Energy Agency and its protocols to prevent the proliferation of nuclear weapons to North Korea and Iran, why, even today, can he not bring himself to admit that that self-same agency's analysis demonstrated that the intelligence reports of African imports of uranium into Iraq were based on fabricated documents?
The Prime Minister: I do not accept what the hon. Gentleman says. In relation to the IAEA, and indeed to any such international bodies, I would simply say that they cannot carry out their work unless they get the full support and compliance of the country concerned. That is why the G8 called on Iran to stop putting conditions on the work that the IAEA does.
Mr. Brian H. Donohoe: In connection with weapons of mass destruction and the inquiry by the Intelligence and Security Committee that the Prime Minister has sanctioned, would he extend that to allow the Foreign Affairs Committee likewise to be given access to that evidence and those witnesses? That would meet the problem of the independence that might perhaps be lacking in relation to the Intelligence and Security Committee.
The Prime Minister: We will proceed in the normal way in respect of the Foreign Affairs Committee, the Intelligence and Security Committee and so on. I do not think there is any cause to change the normal rules that we apply to those Committees. I would simply point out, though, that it is not a question of my agreeing to inquiries—the Intelligence and Security Committee has the right to oversee the way in which the intelligence services and security services work. That is what it is charged with, so it is the appropriate body to do so. Of course, the Foreign Affairs Committee is entirely entitled to carry out its inquiry, too.
I hope that my hon. Friend realises that it would not be sensible to have two inquiries competing in exactly the same way. Having said that, there will be every opportunity for the Foreign Affairs Committee and the
170
Intelligence and Security Committee to carry out their work, but it will be carried out in accordance with the normal conventions and traditions.
Sir Nicholas Winterton: I welcome most warmly the Prime Minister's statement this afternoon; I accept that conflict in Iraq was necessary with or without weapons of mass destruction. Does he agree that the situation in Zimbabwe continues to deteriorate, and that that is affecting the security and economic position not only of that country but of the countries that surround it? Does he acknowledge that the only way of achieving a pluralist democracy and a sense of stability there will involve the removal of Mr. Mugabe? Without that, no progress will be made. What is the Prime Minister prepared to advocate should be done?
The Prime Minister: First, what the hon. Gentleman says about Zimbabwe is absolutely right. This is a very serious situation indeed; that is clear. It is difficult to see how there can be any proper security and prosperity for people in Zimbabwe while the country continues to be run in the way it is. I entirely agree with all that. The question is, what do we do about it? In the conversations that I had with the African leaders at the G8 summit, I impressed upon them—and I believe that they understand this—that this is now affecting the whole region of southern Africa. In the end, they will be the people who are best placed to take this forward, if indeed they are committed to ensuring that the changes in Zimbabwe happen. There is a limit to what we can do, but within that limit, we will do everything that we possibly can. That is why we put the matter on the agenda at the G8 summit. We had a discussion, and we discussed it with the African leaders, too. In the end, however, I believe that the most powerful force for change in Zimbabwe will come from those surrounding countries.
Mrs. Alice Mahon: On the discussions on the reconstruction of Iraq, may I draw the Prime Minister's attention to the report just published by Human Rights Watch, "Basra: Crime and Insecurity under British Occupation"? It concludes:
"Basra citizens remain fearful for their lives and properties …Basra's hospitals reported …five gunshot homicides daily, with another five to seven cases of injuries attributed to gunshots."
It goes on to state that the massive stocks of unexploded ordnance are a real threat to the children in Basra. Was that breakdown in civil society discussed at the G8 summit, and what urgent proposals were made to stop Iraq sliding further and further into chaos?
The Prime Minister: There are undoubtedly real security problems in Basra and elsewhere, and they are being tackled by the British troops and the authorities. The British troops are doing a fantastic job in improving the situation there. Of course it is going to be difficult, although I think it is sometimes possible to exaggerate the difficulties. In relation to Basra in particular, they have made huge steps forward. On the human rights front, my hon. Friend should not be in any doubt. This is not a case of a country—Iraq—whose human rights record was superb and which has now been pushed into chaos by the British and American forces. The very

171
human rights bodies that are now able to put out information about what is happening in Basra and elsewhere were the bodies that were kept out when literally hundreds of thousands of people were dying in Iraq as a result of Saddam's regime.
Dr. Jenny Tonge: I am delighted that the Prime Minister and the French President are chums again, but may I ask why that did not extend to the Prime Minister strongly supporting President Chirac's proposal for the European Union to suspend subsidies on farm exports to Africa, provided that the US did the same? Is the right hon. Gentleman just afraid of the other President across the pond?
The Prime Minister: I thought I had said that I supported the French proposal on this issue. With the greatest of respect, however, we have to go further than either the US or France is going at the moment. We have to get rid of export subsidies in relation to agriculture altogether. The French proposal is an important step in that direction, but the hon. Lady should not be naive about it. We still need to go much further. That is also true in respect of America; it has the same obligations. Our position, therefore, is that we need to push further than both of those countries are doing.
Denzil Davies: My right hon. Friend has made much of the survey teams that will look for weapons of mass destruction in Iraq, but is he not concerned that the failure of the coalition to look for those weapons as a matter of the highest priority in the immediate aftermath of the war could well have provided the opportunity for many of the weapons—if they are there—to find their way into the hands of the various terrorist groups that are operating in and around the middle east?
The Prime Minister: What the survey group will do is conduct a thorough investigation over a significant period of time, because these weapons have been concealed. After Saddam was got rid of, the first priority for the troops had to be the humanitarian situation and the reconstruction of the country. It is obviously a different situation from when Saddam was in charge of Iraq and had weapons of mass destruction—now that he has gone from Iraq, the weapons of mass destruction are concealed. I am not saying that this is not a crucial issue—it is, which is why a team of 1,300 or 1,400 will go in to investigate it. But I do not think that it is wrong for the coalition to have said that our first priority at the end of the conflict—which, after all, ended only six or seven weeks ago—had to be reconstruction and the humanitarian position of the Iraqi people. Indeed, we would have been criticised roundly if we had not done so.
Mr. Patrick McLoughlin: During the run-up to the conflict in Iraq, I, like many of my colleagues, wrote to my constituents saying that if the American President and the British Prime Minister were telling us that there was a serious national danger, I was inclined to believe them. I am inclined to believe the Prime Minister, but he must realise that great questions
172
have now been asked by members of his own Cabinet at the time he was telling us those things. He talked in his statement about transparency and increased accountability. Why then will the American Congress be holding its investigations into this matter in public, while the Committee that the Prime Minister wants to deal with the issue does so in private? Why has he become so averse to inquiries over the past six years? He seemed very happy to order inquiries into the actions of the last Conservative Government when he became Prime Minister, but I do not think that he has ordered one into the actions of his own Government.
The Prime Minister: First, the position that we set out is the correct position. The reason why we took the action that we did was for the reasons stated. As I said earlier, I stand entirely by the dossier that was put out by the Government based on the intelligence that was authorised by the Joint Intelligence Committee. It was not made up by the Government; it was not overridden by the Government in any shape or form at all. In relation to what is happening in America, that is the normal way in which the Americans deal with congressional oversight of the Government there. I think that they would be quite surprised at how much prominence has been given to this issue by our media here, when in America it is simply seen as part of the normal way in which congressional hearings work. In relation to us, we have a particular way of dealing with these issues, and that involves the Intelligence and Security Committee. It was voted for by both sides of the House of Commons. It can look at all the Joint Intelligence Committee reports, it can interview the intelligence people concerned, and it can give a judgment. I have said that that judgment will be published for the House. Frankly, if it looks into those Joint Intelligence Committee reports and interviews the intelligence people, it will get to the truth about the 45 minutes, and so forth. The reason I am speaking so confidently about this from the Dispatch Box today is that. I am quite sure of what it will find.
Mr. Stuart Bell: Since President Chirac has been mentioned today in relation to overseas trade and development, will the Prime Minister reiterate his welcome for the fact that the President has altered his position on the common agricultural policy in relation to export subsidies to Africa? Will he confirm again that an agreement on the so-called TRIPS question will be signed—or that there is a commitment to a signature—before the Cancun conference in September? Does he agree that the opening up of world trade would be of the utmost interest to the developing world—the third world—so that it might avail itself of the prosperity to which we have become accustomed?
The Prime Minister: My hon. Friend is absolutely right. There are two really big outstanding issues for the WTO round in Cancun in September. One is the issue relating to pharmaceuticals and TRIPS; the other is to do with agriculture. We did not reach agreement at the G8, but I think that the atmospherics—if I can put it like that—are now much more positive towards reaching agreement. My hon. Friend is quite right; we should welcome the fact that France has taken a step forward on the issue of export subsidies, but we have to go further, and that then has to be echoed by other

173
countries. There is, however, a better prospect of getting movement on this issue now than there has been for some time. That is vitally important, for the reason that my hon. Friend has just given; the developing world really needs this to work.
Mr. A. J. Beith: The Prime Minister has referred to the question of what we do about other brutal regimes. Did he discuss with the international leaders the much-needed development of international principles—the sort that we have tried to develop in regard to genocide—to establish when it is right for states to intervene militarily to remove brutal regimes? After all, we intervened in Sierra Leone to restore an elected Government, the Americans intervened in Grenada, and—much more controversially—the Prime Minister now rests much of his case relating to Iraq on the removal of that ghastly regime.
Is it not very difficult to see what separates those suffering under brutal regimes in Zimbabwe, Burma and North Korea from those suffering in the other countries that I have mentioned?
The Prime Minister: The right hon. Gentleman raises a good point. It is at the heart of the dilemma. If the international community cannot reach agreement on an issue, in what circumstances should military action be authorised? We supported it in Iraq, in the end, because last November I felt that we had reached an effective agreement in the international community that Saddam was to be given a last chance, and that if he did not fully comply he was to be dealt with by military action. He did not fully comply.
The history of UN resolutions speaking of a specific security threat in relation to Saddam was well known, but the right hon. Gentleman's point is valid, and there is no easy answer to it. We know of the appalling way in which the Burmese authorities have once again treated the opposition leader in Burma. These are difficult issues. I have been met by a chorus of, "We should take military action in Zimbabwe," on the Opposition Benches, but if people actually think about that they will realise that it is quite a difficult thing to do.
The point is that there is a need, at the very least, for the international community to come together and exert concerted pressure on those brutal and repressive regimes. History teaches us that if we do not deal with those regimes, in the end they become worse and worse, and finally their impact affects us all.
Mr. Nigel Beard: Did the G8 consider the worrying signs that the world economy might be moving towards deflation? In particular, did the group consider what concerted steps might be taken to counteract deflation if the threat proved more definite?
The Prime Minister: There was a discussion about the world economy, obviously. Most people, in fact all people, indicated their belief that the world economy would pick up. I think that the two most necessary things are a sense of confidence in both the United States and the eurozone—there are at least some signs that that is happening—and, obviously, an improvement in the
174
security and terrorism situation in the world as a whole. Part of the downturn in confidence has resulted from the security and terrorism threat.
I would say that the consensus around the table was that the prospects of the world economy, and those of the American economy in particular, are rather better than they were.
Mr. Francis Maude: I supported the coalition action in Iraq without reservation. I believed what the Prime Minister said then, and I believe what he says now about intelligence information on weapons of mass destruction. I have little doubt that the inquiries being held by the various committees will find nothing other than that the Prime Minister dealt with that information properly. Does he understand, however, that there would not be such widespread scepticism about what he is saying today had not he and his colleagues for the past six years subordinated the instruments of the state to the narrow partisan interests of his Government?
The Prime Minister: I thank the right hon. Gentleman for the first part of what he said. As for the second part, I recall exactly the same allegations being made about a previous Government in the 1980s.
Mr. Crispin Blunt: By you!
The Prime Minister: Probably by us, yes. That is absolutely true.
There is often a very great gulf between what is actually the position and the exaggeration that is sometimes simply part of the business of politics.
Mr. Tom Harris: Given the positive signs emerging from both the Israeli and the Palestinian negotiating teams, we seem to see a real prospect of the establishment of a viable Palestinian state within the next three years. Does the Prime Minister agree, however, that a viable state alone is not enough? Such a state must also have the economic means to lift its people out of the grinding poverty that they have endured for more than 30 years. What economic aid will the United Kingdom Government give the nascent Palestinian state, and will it be reflected in aid from the other G8 countries?
The Prime Minister: My hon. Friend makes an important point. We will do what we can in the United Kingdom, and also in the European Union. There is an important role for Europe, which often wishes to play a bigger part in the middle east peace process. We can help the Palestinians with their living standards, infrastructure, investment and development of the country. That will not work, however, unless we ensure that the peace and security situation is better stabilised. The truth is that if we did manage to secure greater

175
security normalisation, the lifting of restrictions accompanying that would of itself have a huge and beneficial impact on the Palestinian people.
Rev. Martin Smyth: We welcome what the Prime Minister said about tackling AIDS and HIV, and look forward to a more positive outcome at the meeting of the World Trade Organisation in Mexico.
In answer to a question, the Prime Minister spoke of people being naïve. Does he not accept that some of the countries at the summit were naïve in not recognising the possibility of evil regimes? Can we trust North Korea and Iran, which have been brutalising their own people in different ways, subsiding terrorism with Hezbollah, and threatening South Korea and Japan, to act on the guidance given by the G8?
The Prime Minister: The hon. Gentleman's point is worthy of consideration. That is why the G8 agreed that we must call on both countries to co-operate with the international authorities in respect of their nuclear weapons programmes.
The hon. Gentleman has put his finger on the central point. The weapons of mass destruction programmes of some countries allow them to divert enormous amounts of energy and resources, and to justify the repression of their people. That is why it is important to deal with them. The thought of either North Korea or Iran having a serious nuclear weapons capability is a thought that should trouble everyone.
Jeremy Corbyn: Can the Prime Minister explain why he and President Bush blocked the
176
UN weapons inspectors' return to Iraq earlier this year, just before the bombardment started? Can he also explain why the current weapons inspection in Iraq is being undertaken not by the UN, but by an American and British operation? Does he not think that if people are to believe his assertion that weapons of mass destruction exist, there must be an independent inquiry in Iraq and an independent, open and public inquiry in this country? Many people simply do not believe that the cause of the war had anything to do with weapons of mass destruction. They think that it had everything to do with American military power and with handing out contracts to American companies—which is now happening.
The Prime Minister: Let me try to disentangle the various conspiracy theories from what my hon. Friend is actually saying.
We did not continue weapons inspections because back in November we said that Saddam Hussein would have a last chance to co-operate fully and unconditionally. He did not do that. Indeed, we believe—and our belief is based on what we know and the information that we have received—that instead he embarked on a systematic campaign of concealment. That is precisely what he did last time. It is not as if Saddam had no track record on weapons of mass destruction; he has always had a track record. We took the action for the reasons stated.
I want to make this absolutely clear. We agreed on the basis of that resolution last year that Saddam should have a final chance to comply fully. If he had complied fully, there would have been no conflict; but he did not, and that is why there was a conflict.

Fishery Limits (United Kingdom) Amendment
1.39 pm
Mr. Austin Mitchell: I beg to move,
That leave be given to bring in a Bill to provide that the Fishery Limits Act 1976 shall have effect regardless of the provisions of the European Communities Act 1972; that Part II of the Merchant Shipping Act 1988 shall have effect as though it had not been repealed by the Merchant Shipping (Registration etc) Act 1993; to confer upon the Secretary of State powers to license fishing vessels to fish within United Kingdom waters; to exclude vessels of specified nations or specified vessels from fishing United Kingdom waters; to negotiate common policies with other countries to preserve fish stocks; to invalidate any provisions of the Common Fisheries Policy of the European Community; and for connected purposes.
This is a simple, sensible, even innocuous measure to provide that the European Communities Act 1972, which made European Union law superior to British law, shall not apply to the Fishery Limits Act 1976, by which Britain followed the worldwide trend that had been pioneered by Iceland, which placed fishery limits at 200 miles; in our case, the limits were at the median line. However, we were not able to benefit to the same extent as everyone else because European Union members were exempted from the Fishery Limits Act.
The world took that step to ensure proper conservation, to build stocks and to develop domestic fishing industries. The national waters of most of the world's fishing nations experienced benefits. After a certain amount of trial and error—there were errors in Canada with cod—nations placing 200-mile fishing limits were able to control foreign access, to rebuild or to replace stocks that were over-fished, to develop fishing sustainably and to build and to develop domestic fishing industries.
For all those purposes, control of national waters is surely essential. It is only the nation state that has an interest in building and handing on a flourishing, sustainable fishing industry with sustainable stocks for future generations of its fishermen. Alone among the great fishing nations, Britain was not able to do that because, in 1972, the then Prime Minister, Sir Edward Heath, in his desperate rush to get into what was then called the common market, accepted a common fisheries policy of equal access to a common resource. That policy was of doubtful legality. It was cobbled together just before the start of negotiations with Britain and Norway, two major fishing nations, deliberately to get access to our stocks. The policy kept Norway out then and has kept Norway out since.
We have attempted to live with the common fisheries policy for 30 years. We have attempted for 30 years to modify the policy, especially in the direction of greater national management powers. No one has attempted that more energetically than the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Scunthorpe (Mr. Morley), but we failed.
The common fisheries policy itself has failed. Indeed, it was bound to fail because it is not a conservation policy. It is essentially a political policy to dole out shares of fish to European nations. Most of the fish—70 per cent. at least—that are being doled out are in British waters. Therefore, it has led inevitably to over-
178
fishing; to illegality—any policy that means that fishermen are on the verge of bankruptcy drives them into illegality to survive; to deep damage to stocks, particularly cod, 'which in certain areas is near extinction, to a shrinking United Kingdom fleet; and to a damaging crisis where sacrifices have been required of this country. Industrial fishing, which has a massive by-catch of immature and edible species, goes on. Spanish vessels are admitted to our waters. They may be restricted in what they can catch but there are inevitably by-catches—fish we want to conserve.
My Bill gives powers to Government to say, as the industry is saying, "Enough is enough." They will decide when it is appropriate to use it. I do not conceal the fact that it will take will to use it, but it is about time that national will was exercised for the benefit of the fishing industry instead of fishing being continuously sacrificed to other purposes, whether it is the common agricultural policy, the rebate or whatever.
The Bill gives the Government power to stop over-fishing and, when they care to invoke and to use it, to control our waters. It gives them power to come to agreement with other fishing nations such as Iceland for reciprocal swap arrangements and for exchange of catches: our catches in their waters, their catches in ours. It allows anything like that to happen on a reciprocal basis.
The Bill gives the United Kingdom power to rebuild what have been described as the world's most perfect—they were certainly once among the world's best—fishing waters. It gives Her Majesty's Government power to keep out not only Spanish vessels but that long queue of other nations, the new entrants, many of which have big fishing fleets, which will inherit from membership the right of equal access to a common resource—again, I emphasise, our resource.
The Bill gives Ministers power to stop proposals that are currently in the draft European Union constitution to give the European Union exclusive competence—I think the only exclusive competence in the constitution; it is difficult to see why competence over fishing is in a constitution—over the marine products of the sea, whatever those may be, which could take that competence up to the beaches by eliminating the six and 12-mile limits. Just as important, the Bill gives Ministers a new weapon in those endless common fisheries policy negotiations, in which we always start at a disadvantage because we have the richest fishing grounds and everyone else wants sustained rights to those fishing grounds.
The Under-Secretary—it is marvellous to see him here today—is a big man. He has a big mission and he has a big problem, which is to save Britain's fish. I hope that, when the House tumultuously passes my humble Bill into law, my Bill will give him the one thing he needs to add to those characteristics: the big stick that he deserves.
Question put and agreed to.
Bill ordered to be brought in by Mr. Austin Mitchell, David Burnside, John Cryer, Mr. Frank Field, Mr. Kelvin Hopkins, Lawrie Quinn, Mr. Alex Salmond, Sir Teddy Taylor, Ann Winterton and Mrs. Iris Robinson.

Fishery Limits (United Kingdom) Amendment
  FISHERY LIMITS (UNITED KINGDOM) AMENDMENT
  Mr. Austin Mitchell accordingly presented a Bill to provide that the Fishery Limits Act 1976 shall have effect regardless of the provisions of the European Communities Act 1972; that Part II of the Merchant Shipping Act 1988 shall have effect as though it had not been repealed by the Merchant Shipping (Registration etc) Act 1993; to confer upon the Secretary of State powers to license fishing vessels to fish within United Kingdom waters; to exclude vessels of specified nations or specified vessels from fishing United Kingdom waters; to negotiate common policies with other countries to preserve fish stocks; to invalidate any provisions of the Common Fisheries Policy of the European Community; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 11 July, and to be printed [Bill 117].
Opposition Day
  7TH ALLOTTED DAY

    Iraq
    Madam Deputy Speaker (Sylvia Heal): I must inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
    1.48 pm
    Mr. Menzies Campbell: I beg to move,
    That this House recalls the Prime Minister's assertion that Iraq possessed weapons of mass destruction capable of being used at 45 minutes' notice; further recalls the Government's contention that these weapons posed an imminent danger to the United Kingdom and its forces; notes that to date no such weapons have been found; and calls for an independent inquiry into the handling of the intelligence received, its assessment and the decisions made by ministers based upon it.
    I begin by expressing a warm welcome to the Foreign Secretary. I think that it is the first time that we have seen him at a Liberal Democrat Opposition day. We hope that it will be the first of many such happy occasions.
    The Prime Minister has rightly said that there is no more solemn decision for him than to commit British forces to military action. The decision of 18 March this year in relation to Iraq was, possibly uniquely, shared with the House of Commons. It was no less solemn by being shared in that way.
    It was a decision that was taken against the background of unparalleled public anxiety, which brought more than 1 million people on to the streets of London. We know that a swift and professional victory has been won, and that United Kingdom forces played a distinguished role in it, although one cannot help observing that it would have been surprising if the most powerful military nation in the world—in coalition with others, including the United Kingdom—had been unable to defeat what had become virtually a third-world army, with ageing equipment, poor morale and inadequate leadership.
    Mike Gapes: In view of the wording of the Liberal Democrat motion before us, can the right hon. and learned Gentleman tell us exactly when the Prime Minister said that there was an imminent threat from Saddam Hussein to the United Kingdom?
    Mr. Campbell: I shall come to that point in due course, if I may.
    I know of no current principle of international law that legitimates military action because it is successful or produces a benevolent outcome. The Government repeatedly expressed their determination—one would have expected no less—to act in accordance with international law. It is no secret that there was a dispute—some would say a continuing dispute—as to whether military action in this particular case was legitimate.
    Since this is a matter of some controversy, it is right that I say what my own view is. Resolutions 678, 687 and 1441 undoubtedly authorised military action, but

    181
    resolutions of the UN Security Council are not the only source of international law. Such military action has to be seen against the principles of international law. It would have been legitimate only if it were truly a last resort, when all other diplomatic and political alternatives had been exhausted, and, indeed, if the action proposed was proportionate, involving no more force than was necessary to achieve the objectives of the resolutions. I did not believe then, and I do not believe now, that those requirements were or have been satisfied. There was still mileage—to put it colloquially—in the inspection regime, and the proposed use of force was by no means proportionate, in that it was designed to bring an end to the regime of Saddam Hussein.
    If members of the United States Administration are to be believed, regime change was always their objective. Not so the United Kingdom Government. At a press conference on 25 March—a week after the House took its historic decision—the Prime Minister said:
    "Our aim has not been regime change. Our aim has been the elimination of weapons of mass destruction."
    Indeed, he said—and implied as much again today—that if Saddam Hussein had disarmed, both Saddam and his regime could have survived.
    So it is clear from that analysis and from what we recall, that Iraq's weapons of mass destruction were at the very heart of the Government's position, as was the ability to use them within 45 minutes. The Government's case was that the United Kingdom and its forces in particular were at risk from the continued possession of those weapons. If my memory serves me right, Ministers said that, for example, British forces in Cyprus would be at risk if Scud missiles with a suitable range were armed with chemical or biological warheads.
    The Government also advanced the case—sometimes, not always—of anticipatory self-defence under article 51 of the UN charter. That could be supported only by a belief that the threat was imminent, to the extent that an anticipatory right of self-defence arose.
    Mike Gapes: I am interested in the exact wording that the right hon. and learned Gentleman is using. Is he saying that the Prime Minister, on behalf of the Government, said that there was an imminent threat, or that his interpretation of what was said is that there was an imminent threat?
    Mr. Campbell: I am saying that it was a clear part of the case made by the Government that there was an imminent threat that weapons could be launched at 45 minutes' notice, and that British forces in Cyprus, for example, were at risk from such weapons. If that does not amount to an assertion that the use of such weapons was imminent, I cannot imagine what it would take to satisfy the hon. Gentleman in that regard.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)rose—
    Clare Short rose—
    Mr. Campbell: I give way to the right hon. Lady.
    Clare Short: The question of the imminent threat is very important. It is now clear that President Chirac had said that if the weapons inspectors failed to disarm Iraq, it would be necessary for the Security Council to approve military action. The only reason not to go through the UN, via the capacity of the Security Council, to secure agreement must have been that the matter was urgent and that there was an imminent threat; otherwise, we could have had unity in the international community and the Security Council.
    Mr. Campbell: Indeed. As I recall, when this point was made on the last occasion on which Dr. Blix appeared before the Security Council, he said that it would not be a matter of years or a matter of weeks before he and his team could complete their inspections, but that it could be a matter of months. That view was rejected, and as the right hon. Lady says, that can only have been on the understanding that the threat was so acute that Dr. Blix should not be allowed the time that he thought appropriate to complete the inspections.
    Mr. Barry Gardiner: Will the right hon. and learned Gentleman give way?
    Mr. Campbell: I will not, if the hon. Gentleman will forgive me.
    Much turned on the opinion of the learned Attorney-General, who ultimately—and unusually—made it known that he had expressed the view that military action was legal. It is axiomatic that on getting counsel's opinion, one should always be aware of the factual basis on which it was given. It is a reasonable inference that the Attorney-General proceeded on the factual basis then outlined by the Government. We are entitled to consider these questions. If the Attorney-General had known then that the immediate nature of the threat depended on the uncorroborated testimony of one witness, it is arguable that he might have changed his opinion. If he had known that Mr. Rumsfeld was likely to say that the weapons might have been destroyed before the war, it is arguable that he might have changed his opinion. If he had known that Mr. Wolfowitz would imply that weapons of mass destruction were not important in the decision to take military action, it is arguable that he would have changed his opinion. If he had known all three of those things, it is indisputable that he would have changed his opinion.
    When the case for continuing with the policy of containment and deterrence was being made, the Government's response was that it had failed. The imminence and acuteness of the threat was the Government's answer to the continuation of that policy.
    Mr. Tam Dalyell: Does the right hon. and learned Gentleman not also think that this adds up to the totally unsatisfactory position whereby an Attorney-General is in the other place and not in the House of Commons? Some of us—the right hon. and learned Gentleman would have been among them—would have put these very direct questions to him. There are certainly two possibilities, if not more, in terms of distinguished lawyers on the Labour Benches who could have been appointed Attorney-General.
    Mr. Campbell: It is not for me to select those who should become Law Officers and sit on the Treasury

    183
    Bench. The Law Officers are represented by the Solicitor-General, who is extremely able and competent, so there is no reason why these points could not have been made.
    Mr. Calum MacDonald: Can the right hon. and learned Gentleman say exactly where in the Attorney-General's opinion the word "imminent" is used or the concept of an imminent threat is mentioned? That is not the Attorney-General's opinion; that view is based entirely on resolution 1441.
    Mr. Campbell: We never saw the Attorney-General's opinion; what we saw was an abstract of it. As I said earlier, if ever one is sent counsel's opinion, one should ensure that the factual statement on which that opinion is based is also supplied.
    I want to pick up on a point that the Prime Minister made with some robustness during his answers today. He said that there has been a concentration on humanitarian efforts that has inevitably had an effect on efforts to seek out any weapons of mass destruction.
    I am bound to say that the primary task of the coalition forces was to secure any such weapons—or, indeed, the facilities for their manufacture—so as to prevent them from falling into the hands of the very terrorists who formed such an important part of the G8's conclusions during the past two or three days. I do not believe that the legitimate humanitarian objectives were in any way mutually inconsistent with the overwhelming and primary responsibility to lay hold of and secure any such weapons.
    On the question of the existence of such weapons, the right hon. Member for Livingston (Mr. Cook) provided something of a searchlight into the position in his forensic and most dignified resignation speech of 17 March. He said:
    "Iraq probably has no weapons of mass destruction in the commonly understood sense of the term—namely a credible device capable of being delivered against a strategic city target."—[Official Report, 17 March 2003; Vol. 401, c. 727.]
    The right hon. Gentleman was suitably coy about the sources of information on which he based that conclusion, but I am willing to infer that during his time in the Foreign and Commonwealth Office, he had access to information and material of the utmost sensitivity, and that he would not have expressed his conclusion in those terms unless he was satisfied that there was a sound factual basis for doing so.
    I shall now deal with the question of the form of the inquiry. The Prime Minister has made it clear that he expects an inquiry to be mounted by the Intelligence and Security Committee and that he will co-operate in every respect and make all materials available to it. I am not sure how far he went in respect of making all witnesses available, but it is certainly the case that any inquiry—whether by the ISC or an independent inquiry—will not be effective unless it can see everything and question everyone.
    David Winnick: I understand the purpose of the motion before us on weapons of mass destruction. However, can the right hon. and learned
    184
    Gentleman, unlike critics on the Government Benches, bring himself to welcome the fact that one of the most murderous and barbaric dictatorships has been destroyed, and that the people of Iraq are free from Saddam? I have not heard that sentiment expressed by critics today, and I wonder why.
    Mr. Campbell: Let us be clear. I have said clearly in the House that Saddam Hussein was steeped in the blood of his own countrymen and women, but we cannot make assertions such as the hon. Gentleman's without taking some moral responsibility—collectively, if not on a party-political basis—for what happened. It was after Halabja, where 5,000 people were killed, that the British Government of the day extended further credit facilities to the Saddam Hussein regime. It was after the end of the Iran-Iraq war that the British Government of the day continued to extend such credit facilities. There was a time when, because of his opposition to Iran, Saddam Hussein received the support of the United Kingdom and the United States. The hon. Member for Walsall, North (David Winnick) may like to distance himself in a party-political sense from what I said, but it is not something easily understood on the streets of Arab capitals in the middle east.
    The Intelligence and Security Committee is composed of people of independent judgment and senior Members of the House. I could not say otherwise, sitting in front of my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) in the presence of the right hon. Member for Dewsbury (Ann Taylor) who chairs the Committee, the hon. Member for East Hampshire (Mr. Mates) and the right hon. Member for Gateshead, East and Washington, West (Joyce Quin) who was present a few moments ago. My comments are no reflection on their independence or their judgment. The ISC's recent report on Bali demonstrated its willingness to be critical of the Government. However, I do not believe that an inquiry by the ISC is the best form of inquiry for the specific circumstances of this case.
    I refer back to the depth and extent of public anxiety evidenced by the number of people who turned out on the streets of London and elsewhere to demonstrate and by the postbags of every Member of Parliament. Clearly, we need an investigation that is answerable not just to the Prime Minister or the House, but to the public who came on to the streets in such numbers to express their anxiety.
    Initially, I took the view that there might be scope for a special Select Committee of the House, but I have subsequently changed my view and I shall explain why. The Leader of the House made an important intervention this morning both in The Times newspaper and in an interview with Mr. John Humphrys. I have no doubt that that interview will become part of the learning process of young BBC interrogators and, perhaps, of budding Leaders of the House for a long time to come. I fear that anyone attending a BBC Christmas party is likely to hear that tape many times.
    To be serious, that intervention raised the stakes on any interpretation. A senior member of the Government says that he believes that someone in the intelligence services undermined the Government. Those of us with long political memories will recall that that intervention echoes some of the events of the Wilson era. It raises the

    185
    stakes in a highly significant way, which cannot be denied. Secondly, I have become more persuaded that the substance of any inquiry must inevitably be what passed between the Prime Minister's office and the intelligence services, which requires a unique scrutiny. I do not believe that a Committee of the House or Parliament can provide such scrutiny.
    Sir Patrick Cormack: The right hon. and learned Gentleman says that the intervention of the Leader of the House upped the stakes, but he tabled the Liberal Democrat motion before that intervention was made.
    Mr. Campbell: Indeed. I would have argued what. I am arguing in my speech in any case. One cannot alter the fact of these events. I do not know whether the hon. Gentleman is a student of John Maynard Keynes, but it was he who aptly said, "When the facts change, I change my opinion".
    Andrew Mackinlay: Does the right hon. and learned Gentleman lack ambition for the House and for parliamentary Select Committees? Should we not all be saying that those are the right forums for an inquiry, in preference to a Franks inquiry behind closed doors or a Scott inquiry that will take us to 2004–05 before it reports? The House of Commons is the right place and the Select Committee on Foreign Affairs should be buttressed in its campaign to prosecute this matter and gain access to security and intelligence documents.
    Mr. Campbell: I hope that I lack no ambition for the House and I can deal with the hon. Gentleman's criticisms in what I am about to say. I have already said that for any inquiry to be effective, it must have access to everything and to everyone—at all levels of Government, politicians and officials alike. When national security is not involved, there is no reason why an inquiry should not sit in public.
    On the question of the time limit for production of a report, the right hon. Member for Livingston and myself formed an ever-lasting bond on the rain-spattered pavements outside the mews of Buckingham Palace, waiting to gain entry to the Scott inquiry, which went on for a considerable period—or, as some would argue, for too long. There is no reason why an inquiry of the sort that I seek could not be given a time limit within which to report. The inquiry should be headed by a judicial figure with experience of weighing evidence and attaching significance to it.
    Mr. Jim Cunningham: We have argued in the past that Select Committees should be given greater investigatory powers. What therefore is the right hon. and learned Gentleman's difficulty with the Select Committee on Foreign Affairs investigating this matter?
    Mr. Campbell: It must be obvious to the hon. Gentleman that the Foreign Affairs Committee has a certain level of security clearance, but it is not a level of clearance that is apt in the circumstances with which we are concerned. [Interruption.] I am not talking to the hon. Member for Thurrock (Andrew Mackinlay), but to the hon. Member for Coventry,
    186
    South (Mr. Cunningham). I know that he wishes I was talking to him, but I am talking to his hon. Friend. I was saying that the particular level of clearance given to members of the Foreign Affairs Committee might not be appropriate. Whoever is charged with the responsibility to investigate must have the ability to see everything and to talk to everyone. I am not convinced that that will be allowed.
    I am a survivor of the Trade and Industry Committee's inquiry into the Iraqi supergun affair, and I can tell the hon. Gentleman that the record of those proceedings shows clear evidence of the fact that that Committee's efforts to get Ministers and officials to appear before it and tell it what they knew—indeed, to get a Member of the House to appear before it and tell it what he knew—were thwarted time after time. I confess that my experience does not lead me to be overly confident in the notion that a Select Committee inquiry would be the best way to deal with the matter.
    The inquiry to be established will have several significant questions to consider. The Prime Minister used the word "overriding" on several occasions today, and he no doubt did so precisely and deliberately. The question that the inquiry must consider is whether Downing street sought changes to last September's dossier, as is now alleged, although such seeking may have fallen far short of overriding. The inquiry should consider who was responsible for the final contents and form of the so-called dodgy dossier. Who was responsible for the allegation that Iraq was trying to obtain uranium from Niger? That allegation was comprehensively destroyed by Dr. el-Baradei of the International Atomic Energy Agency in the course of the Security Council's proceedings, when he pointed out that the exchanges of correspondence appeared to be false. As later investigation proved, one item bore the name of a Minister who had not been in office for some seven or eight years.
    In the light of what the Leader of the House has said, the inquiry must also consider whether there is any evidence of efforts by one or more persons in the intelligence services to undermine the Government. That would be a grave constitutional outrage if it were true, and it is therefore worthy of investigation. The inquiry should also consider to what extent the Government relied on Iraqi sources who may have been motivated by an understandable desire to overthrow the regime, and whose objectivity may have suffered as a result. In the light of what the Minister of State, Ministry of Defence, frankly told the "Today" programme last week, the inquiry should also consider the extent to which our Government relied on uncorroborated information from a single source.
    I hope that the whole House will vote for the motion. I apprehend from the interventions from the leader of the Conservative party that we may be able to look to him and his colleagues for support. Those who supported the Government have a stronger reason for voting for the motion than those who did not, because the supporters did so on the basis of statements of fact, some of which are now subject to question. Had they known so at the time of the historic vote on 17 March 2003, it is reasonable to infer that more of them would have found themselves unable to support the Government. I do not wish to speculate how many would have changed their minds, but it is not

    187
    unreasonable to infer that had the facts and information now before us been available then, some who were persuaded to support the Government would have been unable to do so.
    We owe it to ourselves to have a thorough investigation by an independent inquiry, but—much more than that—we also owe it to the whole country.
    2.13 pm
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
    "believes that the Intelligence and Security Committee established by Parliament is the appropriate body to carry out any inquiry into intelligence relating to Iraq; and notes in relation to Iraq's disarmament obligations the terms of United Nations Security Council Resolution 1483."
    Andrew Mackinlay: Will my right hon. Friend give way?
    Mr. Straw: I know that my hon. Friend seeks to set records, but it is a record to be intervened on while moving an amendment. I give way.
    Andrew Mackinlay: My right hon. Friend read out the amendment—unfortunately, I shall have to support it tonight, because I am subject to the Whips—which states that the Intelligence and Security Committee was set up by Parliament. It is not a matter of semantics to say that that Committee was not set up by Parliament. It is appointed by the Prime Minister and is answerable to him. It is not a creature of Parliament. The Foreign Affairs Committee is the only appropriate body, because it was set up by Parliament. The ISC might have been set up under statute, but the Committee is constituted by the Prime Minister, and is fatally flawed for that reason.
    Mr. Straw: I shall deal with that issue immediately. The Committee was indeed established by Parliament and, for the avoidance of any doubt, I have in front of me a report of the Second Reading of the Bill that established it, from 22 February 1994. The Intelligence Services Act 1994, which contained provision for the establishment of the Committee, was approved, without Division, by all parties in the House. Although my hon. Friend would have been right to say that some of us, including myself, had some reservations at the time about whether that was the best mechanism for holding the intelligence and security agencies properly to account—there was an argument about whether a Special Select Committee was appropriate—nobody who has served on the Committee, or has had to give evidence to it, as I have regularly in each of the past six years, has anything but the highest regard for its independence, professionalism and integrity. Report after report from the Committee testifies to the fact that it is well capable of forensic examination of the issues and independence of judgment.
    As for the appointment of the Committee by the Prime Minister, I shall lift the veil on a debate that has been going on for some time. One of the arguments—I
    188
    am sorry, I shall rephrase that, because we do not have arguments in the Government: one of the differences of emphasis that I have had with some of my colleagues is that I think that it would be better to bite the bullet and establish a Select Committee. We could make similar arrangements for the security clearance of its members and the special security of all the evidence.
    Andrew Mackinlay: You were not cleared as president of the National Union of Students.
    Mr. Straw: With great respect, I was cleared, but I do not want to go into that issue because it would take too long. Given my past, I can tell the House that my clearance under the old positive vetting procedure was not just a matter of a tick in a box. I had at least three successive grillings by officers of the security services, but in the end I received a tick. Years later, when the fact that the security services held files on me—which I already knew—became public, I refused to abuse my position as Home Secretary to see the files.
    In practice, the membership list of the Intelligence and Security Committee is drawn up in the same way as the membership list of an ordinary Select Committee. It is drawn up by debate between the Whips across the Houses. The idea that somehow the Prime Minister can stop the publication of the judgments of the Committee is simply untrue.
    Mr. A. J. Beith indicated assent.
    Mr. Straw: I am glad to see that the right hon. Gentleman agrees with that, because he is a distinguished member of the ISC. What actually happens is that every time the Committee reports, it does so—under statute approved by Parliament—to the Prime Minister. The purpose of that is to allow for redactions, or deletions—and it is always indicated where they occur—in the report, to protect highly sensitive information. To my knowledge, no Prime Minister in this or any previous Administration has ever desired or sought to amend any judgment made by the ISC. Were any Prime Minister—or Foreign Secretary or Home Secretary, as those responsible for the day-to-day running of the agencies—to try to amend such a judgment, the Chairman and the members would be the first to tell the House about it, and in my opinion, it would be a matter for resignation. It would be preposterous to try to amend the Committee's judgment, and no one would try. I hope that that answers the point about the integrity of the Committee.
    Mr. Brian H. Donohoe: On that point, will my right hon. Friend give a cast-iron assurance that no amendments will be made to the report by the Prime Minister, or anyone else in 10 Downing street?
    Mr. Straw: May I explain to my hon. Friend that amendments are never made to the report? I have just gone through the forthcoming draft report and I was asked for my agreement on a number of what are called redactions. As it happens, I told my right hon. Friend the Member for Dewsbury (Ann Taylor), the Chairman of the ISC, that I refused to agree one deletion, on the

    189
    grounds that I could see no good reason for it. As a result, I think that that item is now going to surface. What my right hon. Friends the Prime Minister and the Home Secretary and I are asked to approve is, for example, that very sensitive source information or financial information be taken out. However, we never ever seek to amend the report, and still less to suppress its judgment. My hon. Friend asks for an undertaking that there will be no attempt to amend the report., apart from any deletions of the sort that I have described, and I give him that categorical and cast-iron undertaking.
    Dr. Jenny Tonge rose—
    Mr. Straw: I turn now to the overall context in respect of Iraq. My right hon. Friend the Prime Minister dealt briefly with that earlier, but only eight weeks have passed since Saddam Hussein's brutal regime fell. In that time, we and our coalition partners have set about the task of helping the people of Iraq to build a more secure, prosperous and democratic nation. Enormous challenges remain in what will be a long-term commitment, but we believe that the situation in the north and the south is slowly improving. However, as I told the House on 12 May—I am sorry to have to repeat it today—the situation in Baghdad and the surrounding region remains unsatisfactory. The establishment of a secure environment in Baghdad, and the provision of services there, are a top priority for the coalition. That was one of the main items of discussion between my right hon. Friend the Prime Minister and President Bush last week.
    When I made my last report to the House on 12 May, I informed hon. Members of the progress that we were seeking to make to obtain a Security Council resolution establishing the "vital role" for the UN to which my right hon. Friend the Prime Minister and President Bush had committed themselves at Hillsborough on 8 April. On the first day of our recent recess, United Nations Security Council resolution 1483 was passed. Copies have been placed in the Library, but I am pleased to tell the House that this resolution more than delivers on the Hillsborough undertaking.
    Clare Short: Obviously, we all know that that is a Security Council resolution, and I am sure that my right hon. Friend will agree that it is a compromise, in that the UN is being given only a parallel role with the coalition, rather than the primary role in bringing an Iraqi interim authority into being. However, I read in the press that the American representative in Iraq has said that the idea of holding a conference to bring forward an Iraqi Government has been cancelled, and that a smaller group is to be selected for that purpose. What is the UN's role in that?
    Mr. Straw: I was about to come to those matters, and I shall deal directly with my right hon. Friend's second point. Of course, the resolution was indeed a compromise. That is an inevitable and inherent—indeed, an admirable—part of the process by which 15 different member states of the Security Council come together to debate, negotiate and—we hope—agree Security Council resolutions.
    190
    Paragraph 11 of resolution 1483 reaffirms that Iraq
    "must meet its disarmament obligations",
    and also recalls Security Council resolutions 687, 1284 and 1441, the key disarmament resolutions passed since the Gulf war.
    Resolution 1483 was passed unanimously, after much negotiation and after Britain, the US and Spain—the countries that moved the resolution—had first tabled the original draft. I always made it clear—in private to my right hon. Friend the Member for Birmingham, Ladywood (Clare Short), and publicly—that the draft was a draft and that if we wanted the unanimous agreement that we got in the end there would have to be compromises.
    However, my right hon. Friend the Member for Birmingham, Ladywood, among others, has sometimes suggested that it is possible to secure votes by some kind of additional pressure. I think that "bullying" was the word that she used, but the experience of the past nine months shows clearly that members of the Security Council make up their own minds on the issues before them. That is simply a matter of fact. Sadly, they did not agree to the so-called "second resolution" in March. We tried very hard, but the Security Council decided not to agree to that resolution, and we did not put it to a vote. However, it did agree last November to resolution 1441—again after a good process of negotiation and compromise, and it agreed to resolution 1483 on 22 May.
    I ask the House this question: would France, China, Russia and Germany have called just two weeks ago for Iraq to meet its disarmament obligations if they had believed that those obligations had already been met? Of course they would not. Yet the Security Council—which is made up of grown-up countries perfectly able to decline to vote in favour of a US-UK resolution when they wish—repeated at the beginning of operational paragraph 11 that Iraq must meet its "disarmament obligations".
    I shall deal directly with the other point made by my right hon. Friend the Member for Birmingham, Ladywood. It is true that Mr. Bremer has proposed that the Baghdad conference should be delayed and that, pro tem, there should be an arrangement of the kind that my right hon. Friend has described, to assist the coalition authority. We are in active discussion with the US about that, but we also believe that what the US and the coalition provisional authority—effectively, the US and the UK—are doing is fully consistent with resolution 1483.
    I have two other things to say on this matter. First, I shall write with more details to my right hon. Friend the Member for Birmingham, Ladywood, and I shall place that reply in the Library. Secondly, one of the good things achieved by the process of negotiation on resolution 1483 was a significantly strengthened role for what was originally to be a special co-ordinator from the UN. That post is now that of a special representative, who has powers with which I believe the Secretary-General is very happy. In turn, the Secretary-General has appointed Mr. de Mello, who I think is well known to my right hon. Friend; he is a man of the highest reputation and integrity in the international community. He has undertaken to report regularly to

    191
    the Security Council. If he feels at any stage that what we are doing is unsatisfactory, he will make his own report to the Security Council.
    I should add that under resolution 1483, the US and the UK—the coalition provisional authority—are required to make very regular reports to the Security Council. I am absolutely with my right hon. Friend the Member for Birmingham, Ladywood—I am sure that the whole House is—in wanting to ensure that the words used by my right hon. Friend the Prime Minister and President Bush about a vital role for the UN are translated into real action. I believe that they have been, in resolution 1483.
    Jeremy Corbyn rose—
    Mr. Roy Beggs rose—
    Mr. Straw: I shall give way first to my hon. Friend the Member for Islington, North (Jeremy Corbyn).
    Jeremy Corbyn: Will my right hon. Friend explain why the Iraqi assistance fund is under the control not of the UN, but of Britain and the US? The fund has access to all the Iraqi foreign reserves frozen during the Saddam regime. It is busy handing out contracts for reconstruction, mainly to American companies, and it also has access to all the oil revenues that are coming in. Is my right hon. Friend surprised that there is growing opposition in Iraq to the US presence there?
    Mr. Straw: I suggest that my hon. Friend read the terms of the resolution. It is true that operational paragraph 12 establishes the fund, to be held by the central bank of Iraq and subject to the directions of the coalition provisional authority, for the time being. However, the fund is to be audited by independent public accountants approved by an independent monitoring and advisory board. That board includes representatives of the UN Secretary-General, the International Monetary Fund, the World Bank and certain regional bodies. Moreover, the money can be used only for the benefit of the people of Iraq. That, too, will be audited.
    It is therefore simply wrong of my hon. Friend the Member for Islington, North to suggest that there is any possibility that the funds could somehow be siphoned off for the benefit of the members of the coalition. The coalition has power over the funds because of its obligations as the occupying power.
    One of the things that I insisted should be included in the initial draft of the resolution—and there was some reticence about this—was an acknowledgement that we were the occupying power, as defined under the fourth Geneva convention and the Hague regulations. That acknowledgement imposed very significant obligations, and it was not a role that the UN wanted at that stage, especially given the controversial history of the occupation.
    Mr. Beggs: I have no doubt that the concealed evidence will, in time, be exposed. However, intelligence gathering in Iraq remains up to date. The disabled
    192
    special Olympics team there has been identified. We have had commitments in the House that resources will be available to enable that team to participate in the games. Can the Foreign Secretary give me an assurance—
    Madam Deputy Speaker: Order. The hon. Gentleman's intervention is going rather wide of the motion.
    Mr. Straw: I have discussed that matter with my right hon. Friend the Secretary of State for Defence. There are difficulties about pursuing the hon. Gentleman's suggestion, but I will take it up again with my right hon. Friend, and I will write to the hon. Gentleman.
    Dr. Tonge: Will the Foreign Secretary explain under which international law an occupying power can be responsible for humanitarian aid and reconstruction of the occupied country?
    Mr. Straw: The fourth Geneva convention and the protocol, and the Hague regulations. A good abstract exists of both those sets of international instruments, and I shall make a copy available to the hon. Lady.
    My right hon. Friend the Prime Minister set out in detail, both at Prime Minister's questions and in his statement about the G8 summit, the arrangements that the coalition forces are making to step up their efforts to investigate sites, documentation and individuals concerned with Iraq's weapons of mass destruction programmes. There is no need for me to repeat what he said.
    The motion focuses, as the right hon. and learned Member for North-East Fife (Mr. Campbell) said, on the claim that weapons of mass destruction were capable of being used at 45 minutes' notice. It further recalls the Government's contention that those weapons posed
    "an imminent danger to the United Kingdom and its forces".
    It is not the main point of the debate, but I was struck by the fact that the right hon. and learned Gentleman did not use his customary forensic skills to choose words that the Government had actually used. We talked about a threat to international peace and security, as had the United Nations. So far as I am aware, however, we have never talked about the weapons posing an "imminent danger" to the territory of the United Kingdom or its forces. I was struck, too, by the fact that in the course of questioning, the right hon. and learned Gentleman was unable to come up with a single source for a central claim in his motion.
    Mr. John Bercow rose—
    Mr. Straw: I will give way later, but I want to make some progress.
    Let me make it clear why Ministers and the Joint Intelligence Committee regarded the information in our dossier as reliable, including the claim—far more carefully worded in the dossier than in newspaper rewordings of it—that Saddam's military planning allowed for some of the weapons of mass destruction to be readied within 45 minutes of an order to use them. That seems to me to be an unremarkable claim, since most materiel can be made available within 45 minutes

    193
    of an order to use it; indeed, the order to use it is often not given until it is known that the materiel is available for use.
    Mr. Michael Portillo: When the Prime Minister made the decision to include the 45-minute point in the foreword, did any security official remonstrate with him to say that that point, reliant as it was on a single source of information, did not bear sufficient weight to be included over the Prime Minister's signature?
    Mr. Straw: I am grateful to the right hon. Gentleman for his question. Let me deal with the provenance of the dossier. The 45 days—[HON. MEMBERS: "Forty-five minutes."] I am sorry.
    Mr. Patrick McLoughlin: The truth is coming out now.
    Mr. Straw: The intelligence on 45 minutes came, as my right hon. Friend the Prime Minister said, from an established and reliable source, not a defector, who has been reporting to us secretly for some years. The intelligence became available at the end of August. It was discussed by the Joint Intelligence Committee in the first week of September. It was included straight away in classified JIC documents. The fact that it had already been included in JIC assessments before its appearance in the public dossier puts in perspective the wilder accusations in the media.
    Let me deal with the point made by the right hon. Member for Kensington and Chelsea (Mr. Portillo)—
    Mr. Bercow rose—
    Mr. Crispin Blunt rose—
    Mr. Straw: No, I shall deal first with the point made by the right hon. Member for Kensington and Chelsea, and I will then give way to the hon. Member for Buckingham (Mr. Bercow).
    A dossier was prepared. It was in draft, and it was discussed in the normal way. Then it went back to the head of the JIC and his colleagues for final approval. I saw the draft; I cannot remember exactly what comments I made on it, but they will be among the evidence given to the Intelligence and Security Committee. A draft of the foreword was then prepared. That, too, was subject to discussion with and agreement from the head of the JIC to ensure, plainly, that what was in the foreword was entirely consistent with what was in the body of the document.
    Mr. Portillo: I am awfully sorry, but I do not think that the right hon. Gentleman has answered my point. Of course it is axiomatic that what was in the foreword was consistent with the body of the report. What I asked was whether, when the reference was moved from the body of the report to the foreword, to stand above the Prime Minister's signature and be given the extra emphasis of having the Prime Minister's signature below it, intelligence officers made any representation to the Prime Minister, or any other Minister, that, given
    194
    the provenance of the information, it did not bear sufficient weight to stand above the Prime Minister's signature.
    Mr. Straw: I do not accept what the right hon. Gentleman is saying. If he has a copy—[HON. MEMBERS: "Answer."] The right hon. Member for Kensington and Chelsea is saying that he does not believe that the point about 45 minutes deserved the prominence that the Prime Minister gave it in the report.
    Mr. Portillo: I am awfully sorry, but perhaps I am not speaking loudly enough. I am asking the Foreign Secretary a question. When the Prime Minister submitted a draft of the foreword, including the 45-minute point within it, did any intelligence officers remonstrate with the Prime Minister, or any other Minister, to say that they did not believe it should stand in the foreword because it was based on only a single source? If the answer is no, we can all move on.
    Mr. Straw: The answer is no, and we can all move on.
    Mr. Bercow: Given that the Prime Minister displayed such admirable statesmanship in the run-up to and conduct of the war against Saddam Hussein, and given that the people responsible for weapons detection are different from those responsible for national reconstruction in Iraq, why is it only now, as we learned at Prime Minister's Questions, that a new body is being established to intensify the search for weapons of mass destruction? In broad terms, within what time scale can we expect that work to be completed and reported?
    Mr. Straw: The establishment of the Iraq survey group was agreed a little while ago. In truth, after a conflict of this kind, eight weeks is a relatively short period. The immediate requirement was to establish security. That still has not been done. A body such as the Iraq survey group plainly cannot operate effectively until there is good security across the country. Having established security, the need alongside that is to meet the immediate and longer-term humanitarian needs of the people. I believe that that is being done as speedily as possible. I acknowledge the impatience that the hon. Gentleman is expressing. We are all impatient for further evidence about Iraq's weapons of mass destruction, even though I am entirely satisfied about the basis on which we made our decision on 18 March.
    Mr. Kenneth Clarke rose—
    Mr. Blunt rose—
    Mr. Straw: No, I am sorry. I must make some progress.
    Mr. Robin Cook: May I return for a moment to the question of the 45-minute readiness of weapons of mass destruction? For me, the central question is not whether there was one source or two, or whether it was in the first or the second draft. The central point, as we can plainly see now that we are in Iraq, is that that statement was wrong. Has the Foreign Secretary noticed that General Conway, commander of the US Marine Corps in Iraq, has said, after inspecting

    195
    every ammunition dump and having failed to find a single chemical shell, that we simply were wrong. If the US Marine Corps can say we were wrong, why cannot we?
    Mr. Straw: I simply do not accept what my right hon. Friend says. As he has raised that point, I can tell him that, when I initially took on my current job, one of the reasons that I became convinced of the strength of the case against Iraq, even before 11 September, was because of the number of times that I had heard him, when he held my high office, making statements and speeches about Iraq's holdings of weapons of mass destruction. I have in front of me an article that my right hon. Friend, then Foreign Secretary, wrote in The Daily Telegraph on 20 February 2001 under the headline "Why it is in the interests of the Iraqi people to bomb Saddam".
    The article stated:
    "UN measures remain in place because of Saddam's determination to retain and rebuild his weapons of mass destruction and threaten the region … We believe"—
    that is, my right hon. Friend—
    "that Saddam is still hiding these weapons in a range of locations in Iraq, and that Iraq is taking advantage of the absence of weapons inspectors to rebuild weapons of mass destruction … We must not be deceived. He still threatens his neighbours. Unchecked, Iraq could develop offensive chemical and biological capabilities, and develop a crude nuclear device in about five years."
    Mr. Kenneth Clarke rose—
    Mr. Blunt rose
    Mr. Straw: I want to make some progress. The simple fact is—
    Mr. Robin Cook: My right hon. Friend really must give way on that point. Saddam was not allowed to go unchecked. We pursued a vigorous policy of containment and everything that we discovered when we went to Iraq showed that that policy of containment worked. What my right hon. Friend read out was interesting and, if I may say so, very well written, but it does not answer the question that I put to him. Would he please condescend to address his mind to that question? The central issue is that we have not found any weapons ready for use within 45 minutes. That information was wrong, wherever it came from.
    Mr. Straw: I do not accept that, because we have not yet been able to find physical evidence of the possession of such weapons, those weapons therefore did not exist. That flies in the face of all the other evidence. My right hon. Friend is too skilled to suggest that Saddam did not have weapons of mass destruction; that he did not use them against his own people in Halabja, as well as against the Iranians; that he did not have a biological weapons programme that he concealed from the world for four years despite the best efforts of inspectors, as my right hon. Friend so eloquently often spelt out; or that biological weapons capability became known not as a result of any work of the inspectors but because of
    196
    defections. My right hon. Friend seems to brush aside any suggestion that the effective dismissal of the inspectors at the end of 1998, about which he protested strongly, could have had anything to do with the fact that Saddam was still trying to hide his weapons programmes, yet that was the whole basis of his article in The Daily Telegraph at the beginning of 2001.
    It is certainly the case that the argument between my right hon. Friend and me, and the reason why he resigned from the Government, was about whether the containment policy was working and inspections would continue to work or whether, on 18 March, it was appropriate to take military action. Everybody knows that. However, it was understood on both sides of the House, with very few exceptions, that Saddam Hussein needed to be disarmed. That was exactly the assertion made on 16 March by the leader of the Liberal Democrats in a speech to the spring conference of his party at Torquay.
    Clare Short: Will my right hon. Friend give way?
    Mr. Straw: I will give way in a second.
    In that speech, the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) said that Saddam had to be disarmed.
    Mr. Kenneth Clarke: Will the right hon. Gentleman give way?
    Mr. Straw: I will in a second, but I want to make some progress.
    The motion before the House implies that the intelligence dossier, with the point about the 45 minutes, was a key factor in the decision to go to war. It was not. The dossier was published on 24 September. Six months passed before the House was invited to agree to the United Kingdom's participation in military action, and did so. In that period, as the House and the country know, we moved heaven and earth to avoid military action, to have resolution 1441 passed and to get the inspectors in.
    The right hon. and learned Member for North-East Fife failed properly to answer a question from my hon. Friend the Member for Western Isles (Mr. MacDonald). The right hon. and learned Gentleman was parodying and traducing the legal basis for the military action that we decided to take on 18 March. The basis for that action was not an intelligence dossier that had been put before the House six months before; it was to do with Saddam Hussein's repeated defiance of the UN over 12 years. It was not that we had said that Saddam Hussein and the Iraqi regime posed a threat to international peace and security, but that every member of the Security Council had said that Saddam Hussein posed such a threat. Because he posed that threat, the international community had passed 1441, giving inspectors upgraded powers. Week after week after week, it was palpable from the reports in the Security Council and from the conduct of Saddam, going back over 11 years and after 8 November, when 1441 was passed, that he was not willing to comply immediately

    197
    and completely, as required by 1441, with the terms of that resolution and that, therefore, the clear warning given to Saddam by operational paragraph 13, of serious consequences if he were to become in further material breach, should apply. That was the issue before the House. That was the issue before the Attorney-General and it was on that basis that he authorised and approved military action subject to the approval of the House, and on that basis that we went to war.
    It is nonsense to suggest that the issue before the House on 18 March was whether a particular phrase in the dossier happened to be accurate. It was accurate—exactly in the terms used. However, I have been unable to find any speeches made on 17 or 18 March that even mention that 45-minute intelligence reference. Not one person mentioned it, so for the Liberal Democrats, having made their judgments for their own good reasons, to imply that the whole basis for our decision on 18 March to take military action was the 45 minutes is utter and complete nonsense.
    Mr. Charles Kennedy: If we go back to 24 September, when the Prime Minister was speaking in the House, he said that Saddam's
    "weapons of mass destruction programme is active,"—
    The House should note that word "active"—"detailed and growing." Referring to the recently published report, the Prime Minister said:
    "It concludes that Iraq has chemical and biological weapons, that Saddam has continued to produce them, that he has existing and active military plans for the use of chemical and biological weapons, which could be activated within 45 minutes."—[Official Report, 24 September 2002; Vol. 390, c. 3.]
    If that was not a direct causal link being implanted in the mind of the House, at that point, I do not know what is.
    Mr. Straw: That was indeed the belief not only of the Prime Minister and the House but also of the international community. France, Russia, China and other members of the Security Council, including Syria, were perfectly capable of making their judgments. They came to the judgment that Iraq posed a threat to international peace and security. I come back to this point: it is impossible to explain Saddam's behaviour unless he had weapons of mass destruction.
    Dr. Blix is just about to publish a further report; there is a reference to it in the Financial Times today. The chief weapons inspector said that Baghdad had supplied his team with increasingly detailed information but that:
    "even at the end, Iraq failed to allay suspicions that it had something to hide",
    and its
    "trend of withholding pertinent information"
    meant that the suspicions mounted and mounted.
    That was true for Dr. Blix and it was also true for the Security Council. Those Members, especially my right hon. Friend the Member for Livingston (Mr. Cook), who had doubts about the military action and about whether Saddam had a capability should read the reports of the weapons inspectors. They should read the last report of UNSCOM. I have put those reports before the House and everyone can read them, including the 173 pages of the final report. It is impossible to read those reports and to set them against the evidence of
    198
    Saddam's behaviour without coming to the conclusion that, in Dr. Blix's words, there was a strong presumption for the holding of those weapons.
    Mr. Kenneth Clarke: With the greatest respect, the Foreign Secretary is doing what the Prime Minister and the Leader of the House have been doing for the last two days: answering different questions from the ones that are being put to him. The Governments of France, Germany and China and the vast majority of the Government's critics in this House never denied Saddam Hussein's history of weapons of mass destruction. They never denied the need to disarm him. They never denied that it might eventually prove necessary to use military force to disarm him. That was never an issue at any time. On 18 March, the Government came to this place, saying, "The case is for war now," and critics said that more time should be given for inspection and containment to see whether that route might be successful. Does the Foreign Secretary think that if he had come here on 18 March and said, "We do not actually know whether Saddam has any weapons of this kind ready for immediate deployment; we are not sure whether we shall ever find any; and we are going to set up a whole new inspection system of our own to start looking for them eight weeks after the war is over," he would have got the House to give authority for the invasion that took place?
    Mr. Straw: That was the speech that the right hon. and learned Gentleman wished to make. The speech that I made was a different one, and the speech I would make now, knowing what I now know, would have been the same speech as I made on 18 March. What the House was invited to agree was a resolution that we recognised that
    "Iraq's weapons of mass destruction and long range missiles, and its continuing non-compliance with Security Council resolutions"—
    a direct quotation from Security Council Resolution 1441—posed a
    "threat to international peace and security".—[Official Report, 18 March 2003; Vol. 401, c. 760.]
    We noted that in 130 days since resolution 1441 was adopted, Iraq had not co-operated actively, unconditionally and immediately with the weapons inspectors and had rejected the final opportunity to comply and was in further material breach of its obligations. We said that, given that, we decided to approve military action. That was the basis on which we came to that decision.
    Mr. Blunt rose—
    Mr. Straw: No, I will not give way. I must make progress.
    I am glad that the right hon. and learned Member for Rushcliffe (Mr. Clarke) made that concession, because one could be forgiven today for thinking that there are many people who opposed the war on one basis two months ago—that they thought more time should be given to the inspectors, and are now saying that they opposed it on a different basis, namely that Saddam did

    199
    not have any weapons of mass destruction or did not pose a threat to international peace and security after all.—[Interruption.]
    Madam Deputy Speaker: Order.
    Mr. Straw: People should be absolutely clear about this. The whole issue and argument was whether it was appropriate to take military action at that stage or whether it would have been better to allow Saddam more time. I had come to the view, reluctantly, that we should support military action. I notice, by the way, since there have been some questions about the position of the French people, that Mrs. Therese Delpeche, who is the French UNMOVIC commissioner, appointed by the agreement of the French Government, said that having pondered the documents produced by Hans Blix's team on the unresolved issues—in particular, the 173-page report put before the Security Council on 7 March—she had come to the conclusion that an ultimatum with a 17 March deadline was
    "the only possible course of action now".
    Thus it was not only people in the United Kingdom or the United States who were supporting the position that we were proposing and that I put before the Security Council; it was people including the French commissioner of UNMOVIC, with all her experience. Her patience, too, had run out.
    David Winnick rose—
    Llew Smithrose—Llew Smith (Blaenau Gwent) rose—
    Mr. Straw: Let me respond to the right hon. and learned Member for North-East Fife and then I will give way. At the beginning of my remarks, which I shall conclude shortly, I dealt with the question of my hon. Friend the Member for Thurrock (Andrew Mackinlay) as to why I felt that the ISC was the appropriate body to undertake this inquiry. There cannot be any question about the independence, integrity or skill of the ISC, nor indeed any real objection—
    Dr. Tonge: Will the right hon. Gentleman give way?
    Mr. Straw: No. Nor can there be any real objection to the fact that the Committee would have to meet in secret. In a debate in 1998, my right hon. Friend the Member for Livingston spelled out eloquently, as he will recall, why it was necessary for the ISC to meet in secret, and the fact that it has to meet in secret, as he said on that occasion, makes its examination, particularly of Ministers, all the more testing.
    Llew Smith: Will my right hon. Friend give way?
    David Winnick: Will my right hon. Friend give way?
    Mr. Straw: In one second.
    Andrew Mackinlay: Will my right hon. Friend cooperate with the Foreign Affairs Committee inquiry?
    Mr. Straw: The truth is that any other inquiry, whether a judicial inquiry or even a congressional
    200
    inquiry, would have to hold a large part of its proceedings in private. That is the reality. Alongside the narrow inquiry of the ISC, I also welcome the Foreign Affairs Committee's inquiry, and that will hold its proceedings mainly in public.
    However, I say to the right hon. and learned Member for North-East Fife, as a member too of a fine and learned profession, although not as skilled or experienced as he, that we sometimes make a mistake in investing quite the faith that we do in appointing a judicial figure to chair an inquiry of this kind. I have been responsible for establishing some judicial inquiries. I think of one that was satisfactory and did the job pretty quickly: the Lawrence committee inquiry. However, others often take a very long time. Because of the Salmon rules—witnesses, lawyers and so on—large amounts of money can disappear. The Bloody Sunday inquiry is now costing scores and scores of millions of pounds—
    Mr. William Cash: You set it up.
    Mr. Straw: Yes, we did. I have been partly responsible for establishing such inquiries, so I can say with some confidence that I do not believe they are necessarily a satisfactory basis on which to proceed.
    Mr. Winnick: Instead of the apologies that are expected today, would it not be more relevant if the international community apologised for the fact that it allowed Saddam and his thugs to rule and murder for years without taking any action until very recently? Is not something very wrong indeed with democracies if they could allow Saddam to murder thousands of people over the years?
    Mr. Straw: I entirely agree with my hon. Friend on that point.
    Mr. Menzies Campbell: I confess that I do not remember the Foreign Secretary objecting to the form of the Scott inquiry when the right hon. Member for Livingston (Mr. Cook) was making such coruscating speeches in the House of Commons against the Government of the day.
    The advantage of a judicial inquiry is that it brings total impartiality and a confidence in the public that political influence will not be brought to bear. That is why it seems, in the particular circumstances of this case, when 1 million people came out on the streets of London, that such an inquiry should be instituted.
    Mr. Straw: I simply do not accept what the right hon. and learned Gentleman is saying. There are on the ISC representatives of his party, representatives of the Conservative party and representatives from the other place—as well as very independent-minded Labour Members. The idea that those senior Members of the House will be suborned, subject to influence, is absolutely wrong. The right hon. and learned Gentleman did not say such things when I asked for acceptance of the case for the ISC to look into the Bali intelligence. Its report, which criticised the Government quite roundly, was widely acknowledged as being entirely independent.
    Llew Smith: Will my right hon. Friend give way?
    Mr. Straw: In the time available I will not accept any more interventions, but I ask my right hon. and hon. Friends this question. The Government believe that the decision that we took in March was entirely justified, and I have spelled out the reasons why. The reasons why we took that decision are not the reasons now being suggested. People need to look at the record. But I ask those supporting this resolution and our critics whether they seriously believe that when Saddam Hussein chose confrontation rather than co-operation, he possessed no weapons of mass destruction, following our decision on 18 March? Do they seriously argue that Saddam had disposed of all his poisons and toxins and missiles, and then deliberately chose not to prove their destruction but to go down a path that led to his downfall? Is that the proposition? If it is, people need to say that.
    Even if we make the most extreme allowances for the warped mentality of a murderous dictator, how can we possibly believe that he cheated and deceived the international community year after year, until we had no option but military action, and yet that he possessed no weapons of mass destruction?
    The set of propositions that lies behind the charges against the Government is frankly fanciful. Is it not more likely that Saddam, knowing that the game was up and realising that we meant what we said, went to extraordinary lengths to dismantle, conceal and disperse the weapons and any evidence of their existence? We warned about exactly that in the dossier on 24 September. Saddam had spent years perfecting the art of concealment and carried that out so completely that it will take us some time to search hundreds of sites, interview thousands of scientists and locate and evaluate what remains of the documentary and physical evidence.
    I have made it clear that the ISC is composed of senior Members of all parties from both Houses. The Committee's report will be subject to its independent judgment and subject to debate in both Houses. There is no basis whatever for the Liberal Democrat motion. On the wider issue, I am wholly satisfied that the decision that the House took on 18 March, with a majority of 263, was correct and justified and that it remains as correct and justified today. I urge hon. Members to support the amendment and reject the motion.
    3.1 pm
    Mr. Michael Ancram: This is an important debate. I listened with interest to the right hon. and learned Member for North-East Fife (Mr. Campbell) and to my surprise, and occasional alarm, I agreed with him on several of the matters that he raised. However, I was surprised by some of his remarks. He seemed to question the legality of the action that was taken in Iraq but I seem to recall that in the debate on 24 September 2002 to which the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) referred, the right hon. and learned Gentleman said that a resolution— debate was held before resolution 1441 was passed— not legally required before taking military action, although he believed that it was politically essential. At that time, he seemed to think that action even without resolution 1441 would have been all right.
    Menzies Campbell rose—
    Mr. Ancram: May I make my second point and then the right hon. and learned Gentleman can deal with them both together?
    The right hon. and learned Gentlemen also cast doubt on the existence of weapons of mass destruction, yet I recall that on "Breakfast with Frost" last August, he said:
    "it is a valid assumption that"
    Saddam
    "has continued with the biological and chemical weapons programme and I think it's also a reasonable assumption that he's trying for a nuclear capability".
    That was a slightly different tune to the one that he is singing today, but the popular wind was probably blowing in a different direction then.
    Mr. Campbell: It just so happens that I brought a copy of Hansard with me. On 24 September 2002, I said:
    "It may well be true that, legally, no new Security Council resolutions are required for the resumption of inspections. It may well be true that, legally, no new resolution is required for the use of force to implement resolution 687. Indeed, the existence of that authority was the only possible legal foundation for the actions taken in December 1998. However, I have no doubt that, from a political and a diplomatic point of view, a new United Nations resolution is essential."—[Official Report, 24 September 2002; Vol. 390, c. 43–44.]
    If the right hon. Gentleman had listened to the analysis that I gave a moment or two ago, he would know that I said that any military action must be a last resort. United Nations Security Council resolutions are not the only fountain of international law and action taken must be proportionate. It did not seem to me that regime change was proportionate action.
    Mr. Ancram: I think that I can rely on the right hon. and learned Gentleman's words from last year. As we said when we practised together in the Scottish courts, I rest my case.
    I also listened with particular care to the Foreign Secretary. As he and hon. Members know, we supported the Government's action on Iraq and their reasons for it. We believe that the Prime Minister and Government acted in the national interest and we backed them. We do not resile from that position in any way, nor do we modify our view that the campaign in Iraq was well conducted and effective. I must say that we are less happy with the Government's failure to prepare properly for the peace and we shall have to return to that vital issue on another occasion.
    Our main concern stems from allegations about the Government's handling of intelligence material and evidence on the existence of weapons of mass destruction that proliferated last week while the House was in recess and we were unable to raise the matter. The intensity and nature of the allegations was designed to undermine the credibility not only of the Government, but of our intelligence services. Allowing such allegations to go unanswered could be nothing other than damaging to our national interest. They need to be answered not only comprehensively and fully, but urgently. It is not enough to dismiss them as absurd,

    203
    which the Prime Minister seemed to do in certain press conferences last week. The allegations, were detailed and the response to them also needed to be detailed.
    The Government constantly claimed that they had answers to all the questions and we hoped that the Prime Minister would come to the House and clear the air, thereby ending the damage that the doubts and suspicions created by the allegations were causing. That is why a letter that my right hon. Friend the Leader of the Opposition sent to the Prime Minister yesterday set out five key questions and why I listened to the Prime Minister today with particular interest. He gave us answers but they did not answer the questions that we raised and neither were they full or comprehensive. They did not dispel the doubts and suspicions, and I regret that the right hon. Gentleman did not take the opportunity to lay the matters firmly and conclusively to rest today. I therefore listened especially carefully to the long speech made by the Foreign Secretary. He dealt with the contents of various documents in detail, as he always does, but I do not believe that he gave satisfactory answers to the five key questions that we posed yesterday.
    Let me remind the Foreign Secretary and hon. Members of the questions. First, we still need to hear the truth behind the allegations that the dossier's original conclusion was deleted and a new preamble, reportedly written by the Prime Minister, was inserted. I am sure that the Foreign Secretary read the report in The Sunday Times on Sunday suggesting:
    "after extensive consultation between … the JIC chairman"
    and others in Downing street, various changes were made. The article also says that in a memo to Alastair Campbell, the chairman of the Joint Intelligence Committee said that the foreword, written by the Prime Minister,
    "had been incorporated within the overall document 'but the conclusion had been dropped'."
    In order to try to establish the precise nature of the original JIC report, we have called for the document, including the conclusion, to be published so that we would know whether there was any real truth behind the allegations in the article. We have received no satisfaction so far.
    Secondly, we have not been satisfied on the question of the 45 minutes. It is all very well' to say—I do not disbelieve it—that the piece of intelligence was vetted and passed by the JIC and included in the report. However, the suggestion that the information was not significant flies in the face of the evidence. The information appears three times in the report: in the preamble, the executive summary and the body of the report. As the leader of the Liberal Democrats pointed out, the Prime Minister referred to it in his speech at the time. If the Prime Minister had not regarded the information as highly significant, it would not have been treated in such a high-profile way. Was the intelligence single-sourced or, as several reports yesterday suggested, was it double-sourced—or corroborated, as we say in Scotland? When significant intelligence information is used, how often is single-sourced intelligence accepted as opposed to corroborated intelligence? My right hon. Friend the Member for
    204
    Kensington and Chelsea (Mr. Portillo) asked a question in which I think there was a barbed hook. I heard the Foreign Secretary's reply but we should be told whether single-sourced or double-sourced intelligence is usually used on such occasions.
    Mr. Dalyell rose—
    Mr. MacDonald rose—
    Mr. Ancram: I shall give way to the hon. Member for Linlithgow (Mr. Dalyell) but I shall not give way after that because the three Front-Bench speeches have taken up quite a lot of the time that we have for the debate.
    Mr. Dalyell: Had there been weapons of mass destruction with a 45-minute capability, someone in Iraq would have come forward after the war to ingratiate themselves or to get money by giving us all the details. Perhaps in tonight's Adjournment debate on the detention of Tariq Aziz, the question can be addressed as to why one of the many who are now in the hands of the coalition has not corroborated the information that the House wants.
    Mr. Ancram: The hon. Gentleman and I approach the issue from a different angle. I believe that the Prime Minister accepted that intelligence information as genuine and that is why he spoke about it in the House. I am trying to clear the air by getting the Government to say why the information was regarded as so important that it was mentioned so often and why a single-sourced piece of information was used in that way. I see Government Front-Bench spokesmen shaking their heads, but until they deal with those questions the suspicions and doubts will continue, and it will be because of their reactions.
    Thirdly, we asked for a categorical assurance that there was no disagreement between Downing street and the intelligence services on the handling of intelligence information. A number of allegations have been made about that which go to the heart of the relationship between our intelligence services and the Government. In the light of this morning's developments, the question is more urgent and relevant. We need clear and categorical reassurances. We have not received them.
    Fourthly, Secretary Rumsfeld said last week—I have taken some trouble to establish precisely what it is that he said—that "it is possible" that at the time we invaded Iraq we were not sure whether Saddam had biological and chemical weapons and was prepared to use them. Secretary Rumsfeld also said:
    "it is possible that the Saddam regime decided that they would destroy them prior to the conflict".
    We need to know whether the Government agree with that assessment because it was made by a very senior member of the American Administration. If they do, we need to know how that squares with the Government's reiterated assertions, which I do not disbelieve, that weapons of mass destruction exist and will be found. Again, on that we have not received a satisfactory answer.

    205
    Lastly, the Prime Minister told us on television on Sunday that there was new information to back up his previous statements about weapons of mass destruction which had not yet been published. In the light of the allegations now being made, not least by the right hon. and learned Member for North-East Fife, we need to know what that information is. If it confirms the Prime Minister's position, surely this is the moment when it should be published. In the light of current speculation, it should be published immediately.
    In St. Petersburg, the Prime Minister said:
    "What we are going to do is assemble that evidence and present it properly to people".
    Surely it cannot take long to assemble evidence that is, according to the Prime Minister, already available and is now urgent. Again, we have received no satisfactory response to that request. We are therefore left with the situation in which, after Prime Minister's questions, a Prime Ministerial statement and a long speech from the Foreign Secretary, the doubts and the suspicions remain. The air has not been cleared and the damage continues.
    There is also another element. In an extraordinary outburst, the Leader of the House today launched an attack on growing rogue elements in the intelligence services.
    Mike Gapes: He is right.
    Mr. Ancram: The Leader of the House made the most serious accusations against those elements. He was not able to name them. There is no indication that disciplinary action is being taken against them. In short, in his ill-considered and ill-advised outburst, he has done more to undermine confidence in our intelligence services than all the allegations to which I have previously referred. So serious is his attack that it cannot possibly just be allowed to rest. He has single-handedly made the case for an inquiry. We had hoped that clear answers might have pre-empted that, but they were not forthcoming. The serious charges levelled by a very senior member of the Government at the intelligence services compounds that situation. We now believe that an inquiry is necessary.
    We have considered the various forms that such an inquiry might take. It will have to be independent and open if it is to dispel suspicions and doubts not just in the House but among members of the public. Although we have the greatest respect for the Intelligence and Security Committee and welcome the inquiry that it will undertake, it does not fit those two criteria simply because of the way in which it is set up and the way in which it takes evidence.
    Sir Patrick Cormack: I am disturbed by my right hon. Friend's comments. He undermines the integrity of Parliament. There is no reason why the ISC should not conduct a rigorous, honest and open inquiry and report when it has done so.
    Mr. Ancram: I am not suggesting that it should not. In fact, I told the House that I welcome the fact that it is undertaking the inquiry. What I am saying is that it
    206
    cannot by definition be called an open inquiry because it hears its evidence in private. To dispel the doubts on this occasion, the inquiry needs to be open.
    Mr. Straw: What exactly does the right hon. Gentleman mean by an open inquiry? Surely he is not seriously suggesting that all the evidence for his model of inquiry should be taken in public in the open.
    Mr. Ancram: The point about the ISC is that none of the evidence will be taken in public. I shall deal with how that could be done in a moment.
    We also respect and welcome the decision of the Foreign Affairs Committee to conduct a similar inquiry. It is right that Parliament, through that Committee, is able to have such an inquiry, but I do not believe that it can satisfy the criterion of independence which I believe public opinion now requires, especially in the light of the outburst from the Leader of the House this morning.
    If further damage is to be mitigated, the inquiry must be certain and clear. Our proposal is for a resolution in both Houses of Parliament under the Tribunals of Inquiry (Evidence) Act 1921. That is the most powerful form of inquiry and is appropriate for an issue of this gravity. The tribunal would be chaired by a senior judge with judicial powers to force witnesses to attend on oath and require the production of documents. It would be a contempt of court to refuse any of those requirements.
    Under the Act, the tribunal is not allowed to refuse the public, including the press, to be present at any proceedings unless n the sole opinion of the tribunal it decides that it is in the public interest to refuse public access, probably because the subject matter is sensitive. In that case, the nature of the evidence would be to do with national security. On those specific points, the tribunal might decide to exclude the public for the time when those particular issues are considered.
    The problem is not one of security, but of the Government's handing of security information. I was amazed by the Foreign Secretary's reaction to the idea of judge-led inquiries. I hope that in the privacy of his room tonight he will blush when he recalls the words that he used. It is interesting that all those inquiries into our conduct when we were in government that were set up by this Government were judge led. There is no problem with judge-led inquiries that deal with the previous Government, but if they are into this Government they do not want them.
    The allegations are not about the justification for action in Iraq; nor are they about the conduct of that action. Those were clear and evident and are not affected by the allegations with which we are dealing today. The allegations are concerned with the way in which the Government handled intelligence material and whether, in doing so, they were always totally open and honest with the House. That is what an inquiry must establish, as well as dealing with the serious assertions made by the Leader of the House this morning.
    Conservative Members are not in the habit of supporting Liberal Democrat motions, not least because they are rarely sufficiently clear to support. This motion does, however, call for
    "an independent inquiry into the handling of the intelligence received".

    207
    That principle accords with the type of inquiry that my right hon. Friend the Leader of the Opposition called for today. We will therefore support the motion in the Division Lobby. The Government had the chance to clear the air. They fumbled it. They now must live with the consequences.
    Several hon. Members rose—
    Madam Deputy Speaker: Order. I remind hon. Members that Mr. Speaker has imposed a 10-minute limit on Back-Bench speeches.
    3.19 pm
    Clare Short: The conclusions that I have reached about the way in which the Prime Minister misled us in order to rush to war in Iraq are serious indeed. I am well aware of that. I wish that I had not reached those conclusions, but I fear that they reflect my opinion and I need to put my case. Obviously, loyalty to one's Government is an important quality, but loyalty to the truth is a higher imperative.
    If I am right in my conclusions, it is a very serious matter indeed. The truth must be found and lessons must be learned by the Government and by our system of government, so that such things can never happen again.
    The Christian teaching on just war, to which the Liberal Democrat spokesman referred—and I understand that the Muslim teaching is very similar, unsurprisingly—says that the cause must be just, the remedy proportionate, the war winnable, and that there must be no other way of putting right the wrong. The problem with the war in Iraq is that the possibility of resolving the problem in another way was not exhausted. It was therefore not a just war. That is why the Churches all over the world, including all the American Churches apart from the Southern Baptists, opposed the war at that time.
    As the right hon. and learned Member for Rushcliffe (Mr. Clarke) said, most of us thought that we had to adhere to the possibility of military action to uphold the authority of the UN, but we wanted to exhaust the possibility of disarming Saddam Hussein and, if possible, displacing him without going to war and inflicting more hurt and suffering on the people of Iraq. We did not exhaust all the possibilities of achieving that.
    I am not one of those who believe that we could ignore the problem of Saddam Hussein and continue with the policy of containment. On that, I agree with the United States neo-conservatives, now the hawks in the Bush Administration. Saddam Hussein was a vicious tyrant, guilty of grave crimes against humanity, he was defying the UN, and sanctions were causing enormous suffering to the people of Iraq. But Saddam Hussein was the problem, not the people of Iraq. We therefore needed to try to find a way to resolve the problem without inflicting on the people of Iraq further suffering, war and the chaos that has come after war.
    The US Churches put forward such a plan. It came late, but it was well thought through. It included a proposal for coercive disarmament backed up by a UN-
    208
    mandated force, the indictment of Saddam Hussein in order to bring him down and then a UN mandate in order to bring Iraq to democracy. There were other proposals that we should have tried, but I was always of the view that we had to be willing to contemplate the use of military force ultimately, and that we could not leave the situation as it was for a further 12 years.
    On weapons of mass destruction, there has been a great deal of discussion today and my time is limited. I saw all the written intelligence for a number of months and had a number of personal briefings from the security services. We are all agreed that the regime was determined to experiment with chemical and biological weapons. It had previously tried to have nuclear weapons, which had been dismantled by the previous weapons inspectors. That is why Saddam Hussein continued to defy the UN and why sanctions continued. That is not in dispute among us. The question is how weaponised were the materials, how imminent was the threat, and why could we not wait for the Blix process to be exhausted.
    The only reason not to allow Blix to go on, and thereby to throw away the unanimity that had been achieved in the Security Council on resolution 1441, was if there was some kind of urgency. I believe that the security services briefing was that there was a threat, as I have briefly tried to summarise, but then there was an exaggeration of the imminence of that danger. That is the importance of the 45 minutes and the suggestion of the potential link to al-Qaeda. There was an attempt to suggest an imminent threat that did not, in fact, exist.
    Mrs. Angela Browning: Will the right hon. Lady give way?
    Clare Short: If I give way, Madam Deputy Speaker, does the time come off my 10 minutes?
    Madam Deputy Speaker: No. The right hon. Lady will get an additional one minute.
    Clare Short: I give way, then.
    Mrs. Browning: I am grateful to the right hon. Lady. As somebody who could not support the Prime Minister in the Lobby that night, I have some sympathy with what she is saying. On 3 February, in relation to the al-Qaeda threat and the possibility that Saddam Hussein would make his weapons available to al-Qaeda so a third party would be the direct threat to us, not necessarily Saddam Hussein, the Prime Minister said:
    "I repeat my warning: unless we take a decisive stand now as an international community, it is only a matter of time before these threats come together.—[Official Report, 3 February 2003; Vol. 399, c. 23.]
    The Prime Minister was boxed in because he had troops deployed in Kuwait and war became the only option. That was so regrettable. It sounds to me as though the right hon. Lady would agree.
    Clare Short: I shall deal with the points that the hon. Lady has made. The extraordinary thing about the al-Qaeda point is that al-Qaeda members must have gone to Iraq before the war. They must be there now. If there really was a risk from chemical and biological weapons,

    209
    and indeed the International Atomic Energy Agency has said that the looting of the atomic plant has created the danger of the equipment for a dirty bomb becoming available, then why for heaven's sake was there not much more rapid action to make secure whatever material was in Iraq? That was extraordinary, and contradicts the claim that there was an al-Qaeda link. There will be more discussion of that and there will be inquiries, but I wish to make a number of other points, because I fear that there were other deceits on the way to war.
    Three very senior figures in Whitehall said to me that the Prime Minister had agreed in the summer to the date of 15 February for military action, and that that was later extended to mid-March. At the time, the Prime Minister was telling us that he was committed to a second resolution, and I preferred at that time to believe the Prime Minister. From reflecting, reading and examining everything that was done, I now believe that the evidence is overwhelming that there was a date. That is why the Blix process was not allowed to be completed. We acted according to a date, not to deal with the fundamental problem. If we were trying to deal with the fundamental problem, we could have allowed a bit more time for the Blix process. That is my view.
    The Foreign Secretary said at the time that we had to threaten force to avoid the use of force, and I agreed with that. That was his paradox. I agree that that is how we got 1441, but then came the contradiction. We were told that we had to go to war because we had troops in the desert, but we had deployed them in order to try to avoid war. That is explained only if there was a date to which we were working.
    The Prime Minister told us that we could not get a second resolution because the French had said that they would veto any second resolution. A member of the public sent me the transcript of the Chirac interview, and it is plain that he said clearly on 10 March that the Blix process needed to be completed and we had to see whether that could succeed in achieving disarmament, but if not, we would have to go back to the Security Council and the Security Council would have to authorise military action. We were misled about the French position, and the French have been vilified disgracefully, when it was not their position to rule out all military action. We will never know—
    The Minister for Europe (Mr. Denis MacShane): Will my right hon. Friend give way on that point?
    Clare Short: Do I get another minute?
    Madam Deputy Speaker: Order. May I explain to the right hon. Lady that she is allowed up to two minutes?
    Clare Short: In that case, I give way.
    Mr. MacShane: I have the French transcript of the exact words that President Chirac said. Nowhere did he say that he was ready to contemplate the use of force. What he said—I do not refer to the veto reference—was that if there was a majority of nine on the Security Council authorising war, France would vote no. [HON. MEMBERS: "Ce soir."] Not "ce soir". That is in a different part of the interview. He said that France would vote no, and that killed the chances of a UN path to peace.
    Clare Short: I shall run out of time. I have the words of President Chirac on 10 March. He said that if the weapons inspectors came back to the Security Council, stated that they could not achieve disarmament, and said:
    "'We are sorry but Iraq isn't co-operating, the progress isn't sufficient, we aren't in a position to achieve our goal, we won't be able to guarantee Iraq's disarmament', in that case it will be for the Security Council and it alone to decide the right thing to do. But in that case, of course, regrettably, the war would become inevitable. It isn't today."
    That is what Chirac said on 10 March.
    We will never know whether, if we had pursued the Blix process and indicted Saddam Hussein, we could have liberated Iraq without the horror, chaos, death and suffering of war. As a result of the secrecy and the element of deceit in getting to war by that date, preparations for the post-conflict situation were inadequate. The Office of Reconstruction and Humanitarian Assistance, which was set up in the Pentagon to deal with post-conflict Iraq, was full of politics about who was going to be the new Government of Iraq. That was not a matter for that body: it should have been left to the UN to be done properly under a Security Council mandate. ORHA did not face up to or prepare for the Geneva convention obligations: the keeping of order being fundamental, as well as the immediate provision of humanitarian relief and the maintenance of civil administration. There is chaos in Iraq, and some 70 people a week are dying.
    Madam Deputy Speaker: Order. May I remind the right hon. Lady that the motion before us is about an independent inquiry?
    Clare Short: I am grateful, Madam Deputy Speaker, but I think that the independent inquiry should extend to these serious matters. Many people have lost their lives, including some of our soldiers and an awful lot of people in Iraq. There must be an inquiry into those matters.
    Madam Deputy Speaker: The motion is about the use of intelligence information. I am sure that the right hon. Lady can concentrate her remarks on that.
    Clare Short: I hear what you say, Madam Deputy Speaker, but the intelligence information was used to justify the action that I am discussing, and it could have been interpreted in such a way that a different route could have been taken to resolving the problems to which it referred.
    My time is almost gone, so I shall briefly explain the conclusions to which I have sadly come. We should have tried to resolve this crisis without military action if we could, but the grave accusation that I am making is that there was deceit on the way to military action. If we can be deceived about that, what can we not be deceived about? We must get to the bottom of this. The Government's record must be made absolutely clear, and there is a major lesson for our system of government. We must not make decisions like this. There must be better ways of making sure that information is properly used and decisions are properly made, especially when the lives of large numbers of human beings are at stake.
    3.31 pm
    Tony Baldry: The right hon. Member for Birmingham, Ladywood (Clare Short) in her opening and concluding comments, made it clear why the Government would be wise to accept this motion. This issue is about the integrity of the Government and the trust that people place in them. The right hon. Lady, who until recently was a member of the Cabinet, has laid the most serious allegations against the Prime Minister. In her opening comments she said in terms that the House had been misled by the Prime Minister. That is from a person who, until recently, had been a leading member of the Cabinet. I worked with the right hon. Lady in my capacity as Chairman of the Select Committee on International Development and, like all members of the Committee, I know the care with which she carried out her duties. We are confident that she would not have resigned from that: post without good reason. After all, she was the first Secretary of State for International Development and had built up the Department over six years. We are all professional career politicians who know that people do not surrender such jobs unless they have some real reason of substance. The right hon. Lady has given us some insight into what that might be.
    We are also concerned about the integrity of the Government when we see the way in which they have responded to the stories in the past couple of days. It is the most bizarre action for No. 10 to put up the Leader of the House to make the allegations that he has made in a newspaper article and on the Today" programme this morning. Everyone in the House knows that the Leader of the House, under any Government, is a senior member of the Cabinet, and he would not have made those press comments unless they had been fully cleared with No. 10 and with the machinery of government as a whole. We all know that the "Today" programme puts in bids for Ministers. We often hear John Humphrys and others saying that so and so was invited on to the programme and that they refused to come. The Leader of the House showed no reticence about going on the "Today" programme this morning to repeat his comments, allegations and accusations against the intelligence service.
    The purport of that and the reason why Members are concerned is that it gives the impression of a Government trying to spin away a story about whether the House has been misled by suggesting that it is all down to some rogue intelligence officer who has been briefing journalists such as Andrew Gilligan and others. They contend that that is really what the story is about, rather than the concerns of the right hon. Members for Livingston (Mr. Cook) and for Birmingham, Ladywood that the House has been misled over a period of time.
    I hope that the Government understand that if they cannot start to reassure our constituents about such issues, confidence not only in them but in the machinery of government will simply leach away. Many of our constituents will be scratching their heads about other matters this evening. We repeatedly heard the Prime Minister say at the Dispatch Box today that the reason why weapons of mass destruction had not been found was that the search had only just begun and the team had only just started its work. I ask those on the Treasury Bench about the large numbers of my constituents who wrote to me and visited me in
    212
    constituency surgeries. They came from Church groups and other groups, and included other concerned individuals, and they lobbied hard before the conflict, saying that the UN weapons inspectors should be given more time to find weapons of mass destruction and establish whether they existed. How on earth will the Government and the Prime Minister explain to those people—my constituents and those of every Member of this House—that there was insufficient time to look for weapons of mass destruction, so it was necessary to go to war and remove a regime by force of arms, but some eight weeks later, when no weapons of mass destruction have purportedly been found, the Prime Minister's excuse is that we have only just started our work? How on earth can those claims be reconcilable? The suspicion among large numbers of our constituents is that this is a question not so much of weapons of mass destruction as of words of mass deception used by the Prime Minister and others.
    Mr. Mark Hendrick: It is a question not of eight weeks, but of about 12 years in which the United Nations has been trying to get the weapons out of Iraq. I put it to the hon. Gentleman that he does his constituents a disservice and insults their intelligence, as the Prime Minister made that clear today.
    Tony Baldry: I think that the hon. Gentleman was not listening to what the Prime Minister said. He was asked repeatedly why weapons of mass destruction had not been found in Iraq. The hon. Gentleman and every hon. Member can read Hansard tomorrow, but it is clear that, on numerous occasions, the Prime Minister said at the Dispatch Box today that the reason why the weapons had not been found was that the new inspection team had only just started its work and could hardly be expected to have found them in such a short period.
    The hon. Gentleman misses the key point, to which I shall return, as it is very important. The key point concerns the integrity of the Government and the machinery of government. That is why it is vital that there is an inquiry such as that proposed in the motion. I also find it bizarre that the Foreign Secretary should be so dismissive of judicial inquiries. I speak as a former Minister who was the subject of a judicial inquiry almost instantly after this Government came to office. I had been a Minister in the Ministry of Agriculture, Fisheries and Food, and no sooner were the Government through the door of No. 10 than they set up a judicial inquiry into the handling of BSE—
    Mrs. Browning: Led by the Master of the Rolls.
    Tony Baldry: Yes. We made no complaint about the judicial inquiry to which we were subject, but at no time did the Foreign Secretary or other Ministers mention the reasons that they have given at the Dispatch Box today for not conducting a judicial inquiry into such matters. Only when the issue starts to touch on the integrity of Ministers in this Government, and of the Prime Minister himself and other key Ministers, do the Government become so reticent about the idea of a judicial inquiry.
    The Foreign Secretary made it clear today that co-operation with the Select Committee on Foreign Affairs will be pretty minimal. As a Select Committee

    213
    Chairman, I had not appreciated until today that the answers that we are given depend on our security clearance. I am not quite sure what my security clearance is or whether one's security clearance as a Member of this House changes when one ceases to be a Minister. I seem to recall that when I was appointed as a junior Foreign Office Minister, like the Minister for Europe, I was given what were known as my powers, of which I was very proud. They were purportedly signed by the Queen. When I took them home and showed them to my children, my daughter, with great perspicacity, said, "The Queen doesn't really know you, does she, daddy?"
    It is clear that the Foreign Affairs Committee will be told only what it is convenient for the Government to tell it, and the excuse will be given that it cannot be told certain things on security grounds. That was the explanation that was given this afternoon. None of us doubts the integrity of members of the Intelligence and Security Committee—they are all very honourable and senior Members of this House—but it is by definition a Committee that meets in secret and is largely dependent on what the Government choose to give it.
    The Government should look themselves in the face and consider the damage that will be done to the machinery of government, given the allegations made by two senior former Cabinet Ministers who were so recently involved in the day-to-day handling of these issues, if they seek to brush matters of such importance under the carpet and refuse to have a full, proper, independent judicial inquiry.
    3.40 pm
    Mike Gapes: This morning John Keegan, the military historian and journalist on The Daily Telegraph, made the extraordinary claim that the war ended too soon. I suppose that for those who wanted millions of refugees and tens of thousands of dead, and wanted us still to be fighting street by street to liberate Baghdad, it did end too soon. One of the underlying elements of the motion that we are debating is that those who opposed military action, together with those who for opportunist reasons wish to associate themselves with a motion tabled by a party that they oppose, have decided to unite with the feeding frenzy that is going on in the mass media.
    Because there is no effective political opposition, certain journalists, including certain correspondents at the BBC, believe that it is their job to generate a feeding frenzy of a kind that—in their view, as they have openly been saying—could bring down the Government. Democracy in this country is ill served by such opportunism. It is also ill served—I say this as someone who has never been a Minister—by people who are happy to be Ministers for many years, but then bite the hand that fed them. I say that with great regret, because I have enormous respect for many of those who have taken that position. I find it sad.
    I remind my colleagues that there was no great opposition from some people in 1998 when we bombed Iraq in Operation Desert Fox, or when we launched military assaults against Serbia without a United Nations resolution. Those same people were happy to be in Government at that time. We have to be honest about the motives behind some of the comments that have been made today.
    214
    On the basis of what has happened in the past few weeks, if the military action had not happened and the Iraqi people had not been liberated, we would presumably be carrying on with the inadequate policy of containment, with, potentially, tens of thousands or hundreds of thousands of Iraqi children dying as a result of a policy that we knew to be flawed, but which, apparently, the former Foreign Secretary thought should have continued. As the hon. Member for Tiverton and Honiton (Mrs. Browning) said, we would have withdrawn cur troops from Kuwait—and presumably from the no-fly zones, too—thereby allowing a resurgent Saddam to take an ideological leadership position and again threaten his neighbours in Kuwait, Iran and Saudi Arabia. We know that he used chemical weapons not only against his own people but against the Iranians, and would have wiped Kuwait off the map.
    Those were the realities, and those were the stakes that we were playing for. I say that as somebody who in 1988 campaigned against the policy of a Conservative Government who were co-operating with military sales to Saddam's regime. I say that as somebody who invited Kurdish leaders to my constituency, including Barham Salih—now prime minister of the Iraqi Kurdish autonomous area—when he was the London representative of the Patriotic Union of Kurdistan. That was before I was even elected as a Member of Parliament, when I worked in the Labour party's international department.
    I make no apologies; I have supported regime change in Iraq for 25 years. When I was a student, I was a member of an organisation called the Committee against Repression and for Democratic Rights in Iraq. There has been a legitimate, non-right-wing republican agenda among many people on the left hoping for regime change in Iraq, and if we had followed the route advocated by some people whom we have heard today, that regime change would not have happened.
    It was suggested by my right hon. Friend the Member for Birmingham, Ladywood (Clare Short) that we should have found another way of putting right the wrong. The Iraqi people tried to put right the wrong in another way. They rose up in 1991 and the Shi'a Marsh Arabs were brutally suppressed and killed, while the Kurds were driven into the mountains. The Iraqis tried to assassinate Saddam Hussein on many occasions. Why were there all those lookalikes, those people who had plastic surgery and who went around pretending to be Saddam Hussein? He had to have them because he was detested by his people.
    Llew Smith rose—
    Mike Gapes: I will give way, but I hope that I will get some injury time.
    Llew Smith: I, too, was one of the people who campaigned against Saddam Hussein in the 1980s. Does my hon. Friend recognise, however, that we were informed by the Government that we were going to war with Iraq not to achieve regime change but because it had weapons of mass destruction and was capable of delivering them within 45 minutes?
    Mike Gapes: There were many reasons why the military action came about. One was that, according to

    215
    UN Security Council resolution 1441, Saddam had not complied immediately and unconditionally with a number of resolutions over a 12-year period. A second reason was the report produced in December by the Iraqi Government in response to that resolution. It was totally inadequate and was shown within a few days to have concealed certain things. A third reason was that, as the Blix report revealed, Saddam had failed—amid a cluster of unanswered questions—to list all the things that had been done to destroy weapons such as anthrax and botulinum. All those things were alleged to have been got rid of, but no evidence or documents were produced.
    We know that since the conflict, the Kurdish forces in the north of Iraq have discovered some mobile vehicles that are still being investigated to discover whether they are mobile biological weapons facilities. That was reported on 8 May. We also know—this has to be placed on record—that when we talk about chemical or biological weapons, we are talking about very small quantities of materials that can be held in tanks in the back of vehicles or buried underground so finding them without co-operation is difficult.
    This is the essence of the point about the Security Council resolutions and the fact that the Saddam regime did not co-operate. Within only nine months of South Africa saying that it was not going to be a nuclear weapons state, the International Atomic Energy Agency inspectors had gone in, with the full co-operation of the South African Government, and had been able to declare the country nuclear weapons-free, because it had got rid of its weapons and told the inspectors how it had been done. The Iraqis never did that.
    Given the nature of the Iraqi regime, the lies that we know were told between 1991 and 1995, the defecting son-in-law Kamal—who then went back—and other information that was revealed by other sources, it is clear that the UN was lied to throughout the 1990s. We now find that we have not been given any information on what happened to various items detailed in the reports that Hans Blix produced in March.
    Mr. Malcolm Savidge: My hon. Friend mentioned Kamal. Am I correct in thinking that Kamal told the UN weapons inspectors that the material had been destroyed by that time?
    Mike Gapes: Kamal might have said that, but he also said that the Iraqis had things that the regime had previously denied having. My point is that this was a lying, corrupt, secretive regime. We therefore have to recognise that we need time to find out what has been going on there.
    I do not know what has been going on because I am not there and I am not carrying out the inspections, but I believe that even if not one single chemical, biological or nuclear weapon or warhead is round, it was right and justifiable to liberate the people of Iraq from Ba'ath fascist tyranny and terror.
    Given the middle east peace process, the stopping of payments to suicide bombers who reject a two-state solution in the middle east, the facilitation of pluralism and democracy throughout the region and the opening
    216
    of possibilities for Iraq's oil wealth to be spent not on gold bath taps but on alleviating poverty and providing electricity and water for the Shi'a Arabs and the Kurds in Iraq, we were right. What we did was right, and most of the rest of all this is a distraction.
    What our Government did in support of the liberation of the people of Iraq is something of which I am proud. We should not apologise. We should say that we did the right thing, as we will be seen to have done in decades to come. Today the liberated Polish people are joining NATO and the European Union. We no longer quibble about whether it was right to go to war in Poland. In the 1930s, 140 Tory MPs lined up with Adolf Hitler in the Anglo-German Fellowship. We do not talk about that now; we forget about it. But the reality of the world today is that sometimes people must admit that they were wrong, and that it was better to do something very painful and difficult than not to act. It was right to liberate Iraq.
    3.51 pm
    Mr. Crispin Blunt: Of course we do not talk about George Lansbury and the Labour party voting for further disarmament in 1935 and 1936 either, so I will not follow up the observations of the hon. Member for Ilford, South (Mike Gapes).
    For nine years the Labour party has been led by the Prime Minister; for nine years the party's presentation has been organised by Alastair Campbell. Now it is reaping the whirlwind that it sowed by subordinating the truth to the necessity of conveying the message that the party decided. Seeing the reaping of that whirlwind, I have a sense of schadenfreude. I entirely supported the Government's decisions on Iraq: I think that that policy was correct, and is now being seen to be correct, given the appalling evidence of crimes committed against the Iraqi people by their Government. Our actions, I believe, stand justified at the bar of world opinion. Nevertheless, the idea that we took those actions to defend ourselves against some immediate threat to the United Kingdom from weapons of mass destruction in Iraq is of course palpable nonsense. It was wrong for the Government to put themselves in the position of having to rely on the preamble to a document referring to Iraq's ability to activate weapons of mass destruction that would pose a threat to the UK within 45 minutes.
    Mr. MacDonald: Will the hon. Gentleman give way?
    Mr. Blunt: I want to develop my point a little further, because it is important.
    The case for action against Iraq relates to our action in 1991, when we went to war in the first place to liberate Kuwait. The fact that that action did not proceed to its conclusion with the removal of Saddam Hussein had to do with the fact that we thought he was going to fall anyway. Two thirds of the provinces in Iraq were rebelling, and it was assumed that the Kurds and the Marsh Arabs would do for the regime. We can say now, with the benefit of the knowledge that we now have, that we made an appalling mistake and an appalling misjudgment in not ending the affair in 1991, and removing the regime by whatever means were then necessary.
    In 1995 or 1996, Saddam Hussein's sons-in-law produced evidence of a biological weapons programme. Their decision to return to Iraq was extraordinary—

    217
    about as extraordinary as the fact that Saddam Hussein did not remove his weapons of mass destruction in the face of the arrival of the inspectors and what was obviously going to happen.
    Mr. MacShane: Excellent speech!
    Mr. Blunt: I am grateful to the Minister. I support the Government in respect of their action; they are in trouble as a result of the presentation of their reasons for that action. The case for action in Iraq has been sustained since 1991. It was sustained by the evidence of a biological weapons programme. It was sustained in 1998 when the weapons inspectors were thrown out. What were we able to do in 1998? We could only engage in Operation Desert Fox, an emotional spasm of air bombardment to try to have some effect on the weapons of mass destruction capability. Why? Because the United States was not prepared to will the military means to take necessary action to rid the middle east, a vital area of the world, of that appalling regime.
    Mr. Bercow: Given that Ministers right up to the Prime Minister knew that Saddam Hussein had had ample opportunity over the years to conceal his weapons of mass destruction, does my hon. Friend not think that there may be many a Minister who now wishes that he had made, in support of the case for military action, the speech that has just been made by the hon. Member for Ilford, South (Mike Gapes), but that the difficulty for the Government is that none of those Ministers did so?
    Mr. Blunt: I entirely agree with my hon. Friend, who displays his usual perspicacity. I am not sure that Ministers would have wanted to make entirely the same speech as the hon. Member for Ilford, South, but they would have wanted to make elements of it.
    Mr. MacShane: Does the hon. Gentleman agree that the threat from Iraq
    "arises also because of the violent and aggressive nature of Saddam Hussein's regime. His record of internal repression and external aggression gives rise to unique concerns about the threat he poses"?
    That was in the report published in September. That was the argument of the Government and of Ministers then.
    Mr. Blunt: Of course I accept that, but then the Government have to embroider the case, as they do with all their other presentations. It may be true that an element of weapons could have been put together within 45 minutes. It would be useful to know the source of the information, and of the assessment that weapons could be put together in 45 minutes. I ask the Minister to publish that at some stage. There cannot be any possible reason for protecting the source.
    What was the technical basis of that assessment? It is a precise time. Are we talking about a particular warhead being attached to a missile? [Interruption.] The Minister will be able to make the case when he winds up. What precise technical reasons underlie the assessment that weapons could be put together in 45 minutes? What was the nature of the weapons? Were they biological
    218
    weapons, chemical weapons, chemical shells? [Interruption.] The Minister will happily refer to that report in his winding-up speech.
    In 1998 we could do no more than undertake Operation Desert Fox, because the United States was not prepared to will the necessary military means—to deploy soldiers on the ground—to do what was necessary in the interests of the Iraqi people and of stability in the region, and to deal with the potential threat from weapons of mass destruction in the hands of someone like Saddam Hussein. We were not prepared to do that in 1998—but that changed on 11 September 2001, when addressing the Iraqi issue became a domestic priority in the United States.
    I suspect that any UK Government between 1991 and now would have been willing to take the action that has been taken to get rid of Saddam Hussein, in the appropriate circumstances, with the support and willingness of the United States to act. It has plainly been in the interests of the middle east, and of the world, to take the action that we did—but the Government are in trouble now and are on the receiving end of legitimate requests for inquiries, because of the culture of spin that goes right to the heart of what they do.
    That was revealed in the attitude of the Prime Minister in responding to a question from my right hon. Friend the Member for Horsham (Mr. Maude) on the G8 summit. The Prime Minister talked in a flippant way, saying, "That is the business of politics." What Ministers, the Government and Labour Members need to understand is the enormous disservice that has been done to the business of politics by the way in which the Labour party has conducted itself under the leadership of the Prime Minister. The way in which they have presented their attacks on other parties and their twisting of arguments throughout that period have done a disservice to the business of politics.
    We have come to the moment when the Prime Minister needs his credibility more than anything else. He has argued for putting British troops into action and for taking military action that, in my judgment, was in the interests of the United Kingdom and of the world. But of course, he does not have that credibility. It has been destroyed by the way in which he and other Ministers—but in particular the Spinmeister himself—have allowed the truth to be twisted and manipulated.
    That process continues now. During Prime Minister's questions, the Prime Minister again advanced the canard that the Conservative party is pledged to a 20 per cent. cut in public expenditure. He knows perfectly well that that is not true. If he goes on—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman is going a little wide of the motion that we are discussing.
    Mr. Blunt: I am dealing with the subject of credibility, Mr. Deputy Speaker. If the Prime Minister comes to the Dispatch Box week after week to deal with what he described to my right hon. Friend the Member for Horsham as the business of politics, and is able to play fast and loose with the truth, is it any surprise that the electorate no longer helieve him when they judge his words on an issue as serious as Iraq? That is why we need an inquiry. A Prime Minister ought to command

    219
    credibility. I believe him on the issue of Iraq, however. To me, his speech to this House last September was the first time that he had commanded total credibility and presented a totally convincing case.
    I want the Government to take this message away. They have played fast and loose with the truth in presenting the case for their policies and the case against those of their political opponents. It is about time that the level of political debate was raised; then, when the Prime Minister needs credibility in order to make a case, he can carry the country with him and not find that there are 2 million people on the streets who do not believe a word that he says.
    4.02 pm
    Mr. Calum MacDonald: We have listened to 10 minutes of pure spin from the hon. Member for Reigate (Mr. Blunt). I listened carefully to the opening speech by the right hon. and learned Member for North-East Fife (Mr. Campbell), and to those who intervened to support the case for an independent inquiry into the intelligence available to the Government before the war. So far as I can discern, there are two basic reasons why this call is being made, and I shall deal with them in turn.
    The main reason is the failure so far to find weapons of mass destruction. That is of course frustrating for anybody who wants these weapons to be dealt with, but the real question is whether we can make the logical leap that many Members seem to be making: that because of the failure to discover weapons of mass destruction, we must conclude that they do not and did not exist, and that the entire war was therefore based on a fallacy. To make that leap of deductive logic would be to fly in the face of more than 10 years of evidence, gathered not by British or American intelligence sources in Iraq, but by the UN itself in Iraq. That 10-year history demonstrates clearly how difficult it was to locate and unearth any evidence of weapons programmes.
    We should remember, for example, that UN inspectors were searching for a full three years in Iraq before they discovered, in 1995, that there was a full-blown biological weapons programme. We should also remember that they discovered that programme not by stumbling across it during a search, but only because of information that they received from a senior defector: Saddam Hussein's own son-in-law, as it happens. He revealed not only the existence of the biological weapons programme, but that key documents were hidden in a chicken farm and that rocket parts were buried in the back garden of an Iraqi general. They would not have been discovered through a physical search; they were discovered only through the information provided by defectors.
    Llew Smith: My hon. Friend gives credibility to the evidence given by the defector—Saddam Hussein's son-in-law—who was later murdered by the regime, so does he also accept the evidence of the same person that Iraq had destroyed its weapons of mass destruction?
    Mr. MacDonald: The evidence provided by that person was important, but when he returned to Iraq,
    220
    Saddam Hussein immediately put him, along with his family, to death. He led weapons inspectors precisely to where the items were located and he revealed the existence of the biological weapons programme.
    There is further evidence of how difficult it is to carry out a physical search in a country like Iraq. The most striking aspect of what the coalition forces have so far failed to find is Saddam Hussein himself, his two sons and his entire entourage. They have not been located and I guess that they would take up more physical space than the chemical and biological agents that we are looking for. They are certainly much more difficult to hide. I assume that Saddam Hussein and his sons cannot simply be buried in the back garden of some Iraqi general, but I hope that no one is leaping from the failure to discover them to the conclusion that Saddam and his two sons are no longer alive or hiding in Iraq. That would be a foolish conclusion to reach. It is similarly foolish, and juvenile, to leap from the failure to discover WMD to the conclusion that the Iraqi Government closed down the weapons programme after the inspectors left in 1998. They consistently avoided closing down the programme through all the years of inspections right up to 1998.
    In my view, the primary task is to locate Saddam and the top party leadership, because, until we apprehend them, we will not have much chance of gaining the inside information based on the confessions of human intelligence that we need to lead us to where the chemical and biological agents are located.
    The second reason advanced to justify the call for an independent inquiry is the claim made by anonymous intelligence sources to the press that No. 10 doctored the intelligence dossier, particularly in respect of the possibility of Iraq using WMD within 45 minutes. It is alleged that that was done in the knowledge that the information was false, or probably false, thereby undermining the case for war. The critics suggest that the 45-minute claim influenced or determined either the legality of the war—the point made by the right hon. and learned Member for North-East Fife—or its political acceptability and public support. I do not believe that either proposition is justified.
    Let us deal first with the legality of war. The proposition that, because the 45-minute claim was a fallacy, the legal case for war becomes invalid is one of the most ridiculous arguments that I have ever heard in this Chamber—and it is particularly disappointing to hear it advanced by the right hon. and learned Member for North-East Fife. The legal case was based entirely on resolution 1441 and the older resolution 687, which the Attorney-General made crystal clear. Contrary to what the right hon. and learned Gentleman said, there is nothing in the Attorney-General's statement about imminent danger to the United Kingdom, or to any other state. It is based entirely on the fact that Saddam Hussein and the Iraqi Government were not complying and were in material breach of existing UN resolutions.
    The argument for war was perfectly simple. The UN knew that the Iraqi Government once possessed large quantities of chemical and biological agents, a significant quantity of which had never been accounted for by that Government. The UN therefore demanded that the Iraqi Government either hand over the remaining agents for destruction or—and it is a highly important "or"—if they had already destroyed them,

    221
    that they hand over the documents to verify their destruction. That option was always available to the Iraqi Government, but they followed neither of those options, as Blix himself confirmed in his final report. Blix did hope that, given more time, the Iraqi Government would eventually do one or the other, but I believe that the judgment of the British Prime Minister and the American President was more valid—that the Iraqis would not comply however much time was extended to them. The use of force was therefore authorised and could be exercised.
    Dr. John Pugh: I have tried hard to follow the hon. Gentleman's argument and he seems to suggest that the failure to find the weapons is no reason to think they do not exist. What other reason could there be, and what other reason would he accept if, as a fair-minded man, he were to reach a conclusion that they might not exist?
    Mr. MacDonald: The fact that no evidence of a biological weapons programme was found in three years by UN inspectors in full cry in Iraq did not mean that it did not exist. It did exist, but that became known only after defections made the information available. Most of the breakthroughs in discovery and location have been made on the basis of human intelligence and the delivery of information, not the physical searches that the hon. Gentleman mentions.
    Some Opposition Members have argued that the 45-minute claim in the dossier was the decisive factor that swung opinion in favour of war, in the House and among the public. Even the Liberal Democrat spokesman appeared to make such a claim. I confess that I was always sceptical—and I was not alone—about the 45-minute claim. Anybody who swung from being anti-war to pro-war on the basis of the 45-minute claim in the dossier needs to have their head examined.
    Because I was always sceptical, I am not surprised—far less shocked—by the suggestion that the 45-minute claim may turn out to have been false. That would be a failure of that piece of speculative intelligence, but it would be a much less striking and embarrassing failure than the one that occurred before the war—as pointed out by the right hon. and learned Member for North-East Fife—which was the claim by British intelligence that the Iraqi Government had tried to obtain uranium ore from Niger in west Africa. That claim was supposedly based on documents that, when they were handed over to the international authority responsible, were shown to be a transparent and rather obvious forgery. That intelligence debacle, or cock-up, was much more embarrassing and worrying in its incompetence than the 45-minute saga.
    Pete Wishart: Can the hon. Gentleman explain what speculative intelligence is? Intelligence is either intelligence or it is nothing at all.
    Mr. MacDonald: Intelligence can be a claim that is passed to intelligence services from a source within a country, and a judgment has to be made on its validity and plausibility. That happens with 99 per cent. of intelligence. If we could look the claim up in a book of statistics, or find some other factual evidence for it, it would not need to be based on intelligence.
    222
    I mention the Niger intelligence failure from before the war, because I do not remember any demands for an independent judicial inquiry into the issue when it was exposed as a forgery and a false claim. Why has the 45-minute claim now assumed so much exaggerated and absurd importance? Why are anonymous sources in the intelligence services briefing the press? It should be noted, incidentally, that they are not approaching their local MP, the Foreign Affairs Committee, the Defence Committee or the Intelligence and Security Committee. Who are these spooks who are briefing the press? Are they the same ones who used to spy on the Campaign for Nuclear Disarmament in the 1980s on the ground that advocating nuclear disarmament made people potential traitors? Have those spooks suddenly turned into pacifists, stricken by conscience? Is the source of the stories free from any political motivation? Anybody who believes that the stories are a disinterested attempt to serve the public good is much more gullible than anyone who gave credence to the 45-minute claim. For that reason, I hope that the House will treat the leaks and briefings with the contempt that they deserve.
    4.14 pm
    Sir Patrick Cormack: It is a particular pleasure to follow the hon. Member for Western Isles (Mr. MacDonald). He spoke with calm and reasoned good sense, and I hope that the House will heed what he said. It is a pleasure to follow him for another reason too, as he and I campaigned very strongly for justice in Bosnia. We were in a small minority, along with the right hon. Member for Birmingham, Ladywood (Clare Short) and the right hon. and learned Member for North-East Fife (Mr. Campbell), who opened this debate. We wanted action to be taken there, and we were not especially bothered about UN resolutions. However, I must not digress on that point, Mr. Deputy Speaker, or you would rightly rule me out of order.
    I am bound to say that I am sorry that the Foreign Secretary is not here. I appreciate the many demands on his time, but I am sorry that neither he nor my right hon. Friend the Member for Devizes (Mr. Ancram), the shadow Foreign Secretary, are present. They should have been here throughout this relatively short debate. That they are not is tantamount to an insult to the House.
    I also think that it is greatly regrettable that the right hon. Member for Birmingham, Ladywood should have exposed her conscience and then walked out. That is not the way to treat the House of Commons. In recent days, there has been some nauseating nitpicking by people who lost the argument and the vote on 18 March. They are trying to revisit the arguments and the debates, and it is important to put that on record.
    I accept what my hon. Friend the Member for Reigate (Mr. Blunt) said, although he too has left the Chamber. He made the point that the Prime Minister had in effect connived at undermining his own credibility by the ultra-reliance on spin that he has displayed during his period in office. I made that point when I spoke in the first or second of the Iraq debates. It is, regrettably, true, although I do not doubt the Prime Minister's good faith or integrity on this issue.
    The question at the centre of the debate is whether we believe that our Prime Minister was acting in the national interest and in good faith. Did he place before

    223
    the House of Commons information that he believed to be true? Frankly, I accept that he did believe it to be true. Like the hon. Member for Western Isles, I always regarded the 45-minute claim with more than a pinch of salt, and I adopted a similar approach to some of the other claims too. However, I do not believe that the claims were made to dupe the House, nor that they succeeded in doing so. I doubt very much whether many of those who voted on 18 March would have changed their vote if it had been proved in that debate that the claims were false.
    In parenthesis, if the vote had gone the other way on 18 March and the British Government had fallen and the Iraqi Government remained in office, would the world have been a better or safer place? Perhaps that is a subject for another debate.
    What should be done by way of inquiry? That is the true subject of today's debate. Sadly, I could not attend the Select Committee on Foreign Affairs yesterday afternoon, as the hon. Member for Thurrock (Andrew Mackinlay) knows. I did not therefore have the chance to participate in its discussion but, as a good democrat, I accept that a decision was made by my colleagues and of course I go along with it. However, on this occasion, I believe that it is right that the Intelligence and Security Committee should be given a prime role.
    I disagree with my right hon. Friend the Member for Devizes, who would prefer a long-winded judicial inquiry. Of course, it is possible in such circumstances for hon. Members of all parties to score points, as happened with the Phillips inquiry on BSE, and all the rest of it. However, what the House is considering today is how best to deal with a particular matter.
    The best way to deal with the matter is quickly. Those of our colleagues who have been appointed to the ISC have the clearance that others do not have. We should entrust to them—
    Andrew Mackinlay indicated dissent.
    Sir Patrick Cormack: It is a sore point with me as well as with the hon. Gentleman, but nevertheless I am merely stating a fact. It is reasonable for us to call on those colleagues to examine the matter with rigorous impartiality and detailed scrutiny, and then to report on it. I believe the Prime Minister's assurance that the report will be published in full. That report must be given to the House as soon as possible.
    Then we can see what it has said. It would be arrogant and presumptuous, as well as downright stupid, to anticipate what it will say. I do not know what it will say. If the report is very critical of the Prime Minister, I shall be surprised and distressed, and it will be a most serious matter. However, we need to know.
    The Intelligence and Security Committee is the right body to conduct the investigation and report to the House. It is, after all, a committee of parliamentarians, and they, above all, are best able to judge the integrity of other parliamentarians. I do not believe for a moment that my right hon. Friend the shadow Foreign Secretary meant to demean the House, but the logical consequence of his argument is that we cannot trust our fellow parliamentarians to report to us on what they
    224
    have assessed and seen. That is very damaging, and adds to the erosion of the influence of this place, which has proceeded at alarming and disturbing speed in recent years.
    I want to bring back public respect for the integrity of Parliament. I want a report that is thorough and detailed that we can discuss and debate. It must be produced quickly and effectively. Producing it with true expedition is the best way in which we can serve the House and the cause before us. That must not, however, afford an opportunity to revisit outworn arguments, or to try to re-run a vote that was decisively carried on 18 March. Nor, above all, must the process distract us from the absolute priority of restoring Iraq and creating a stable democracy, which will take time. It must not take our eyes off the war against terrorism, in which we all have a truly vested interest.
    Nor must we be distracted from the true priorities, and, perhaps above all, from peace in the middle east and the present process there. Let us not imagine for one moment that if we continue to snipe and to attack the Prime Minister on an issue on which many of us fundamentally agree with him, we will not undermine in the eyes of the world his credibility, and the credibility of the President of the United States, when it comes to the middle east peace process. I urge colleagues in all parts of the House to have a thought for such things. Perhaps some of my immediate colleagues may do what I do not often do, or particularly like doing, and join me in the Government Lobby this evening.
    4.23 pm
    Llew Smith: I have been informed that I have only a few minutes, so I shall try to be brief.
    The motion, which I shall support in the Division Lobby, outlines the reasons that we were given for going to war. One was the Prime Minister's assertion that Iraq had weapons of mass destruction and was capable of delivering that weaponry within 45 minutes. Some people could not accept that explanation. Some of us believe that there were other reasons for going to war, including oil and the determination of the United States to control what happens in the Gulf.
    Mr. Gardiner: Will my hon. Friend give way?
    Llew Smith: No, I only have a few minutes.
    Because of our opposition to the war and our refusal to accept the explanations put forward by the Prime Minister, several of us were accused of appeasing Saddam Hussein. That shocked, saddened and surprised us. Some of us opposed Saddam Hussein way back in the 1980s.
    Indeed, some of us have been opposing the arms trade for many a long year. We opposed arms sales to evil regimes such as Iraq and many others. We still oppose the arms trade. We oppose the situation whereby, in 2002, the UK exported to more than 150 countries and licensed arms to 20 countries that had been engaged in serious conflict since 1997.
    Some of us who oppose the war are the same people who have been opposing weapons of mass destruction for our whole adult life. We have opposed nuclear weapons in this country—the weapons of ultimate mass

    225
    destruction. We opposed weapons of mass destruction being in the hands of Israel. For many years, we opposed chemical weaponry and the dropping of napalm on Vietnam by the United States, destroying the land and hundreds of thousands of Vietnamese citizens.
    Some of those who now accuse us of being appeasers are the same people who, in the 1980s, regarded Saddam Hussein as the friend of the west. They supported arms sales not only to Saddam Hussein but to many other evil regimes. They justified those arms sales on the basis that they were good for jobs, forgetting that while that may have been so, those arms were destroying many lives.
    The same people who refused to join us in campaigning against weapons of mass destruction in this country told us that ours were friendly weapons of mass destruction that would defend western civilisation and keep back the communist hordes. One of those people was the Secretary of State for Defence who now says that he would be willing to press the button that would start nuclear confrontation—the ultimate act of madness.
    We continue to be told that war with Iraq was necessary because Iraq had those weapons of mass destruction, which were a threat to the world, and because it was willing to use them and could deliver them within 45 minutes, yet we have still not found those weapons. Even if Iraq had those weapons, it certainly did not use them when the war was going on. We are now told that there is a good reason for that: the Iraqis destroyed their weapons of mass destruction a few minutes, or a few days, before the war commenced. I cannot accept that explanation. I cannot accept that a relatively minor military power such as Iraq would go into battle against the strongest military powers on earth—powers with nuclear weapons, the weapons of ultimate mass destruction—and throw away their most effective weaponry. That does not make sense.
    In a press conference on Monday, the Prime Minister responded to the concerns and criticisms that no weapons of mass destruction had been discovered in Iraq. He said:
    "I think it is important that if people actually have evidence that they produce it."
    I agree with that. However, the Prime Minister has a similar obligation. If, as he says, there are weapons of mass destruction in Iraq, he has an obligation to produce the evidence.
    Before the invasion of Iraq, the Prime Minister referred to an interview with General Kamal about Iraq's attempts to develop weapons of mass destruction. The Prime Minister said that, in 1995:
    "Saddam's son-in-law, Hussein Kamal, defected to Jordan. He disclosed a far more extensive biological weapons programme and, for the first time, said Iraq had weaponised the programme—something that Saddam had always strenuously denied. All this had been happening while the inspectors were in Iraq.
    Kamal also revealed Iraq's crash programme to produce a nuclear weapon in 1990."—[Official Report, 18 March 2003; Vol. 401, c. 761.]
    However, the Prime Minister misled the House by omission because General Kamal also told his interviewers that Iraq had destroyed its weapons of mass destruction by 1995, as had been revealed by Newsweek on 3 March, only a few weeks earlier.
    On page 13 of the transcript of the interview, which was posted on the BBC's "Today" programme website, Kamal is recorded as saying:
    226
    "All weapons—biological, chemical, missile, nuclear—were destroyed."
    On 26 March I asked the Prime Minister if he would place in the Library the text of the interview provided by Kamal on Iraq's weapons of mass destruction. The Prime Minister replied:
    "Following his defection…Kamal was interviewed by UNSCOM and by a number of other agencies. Details concerning the interviews were made available to us on a confidential basis. The UK was not provided with transcripts of the interviews."—[Official Report, 26 March 2003; Vol. 402, c. 235W.]
    But the BBC had those transcripts. Why then were the Prime Minister, the security services and President Bush's Administration prepared to believe the defector Kamal's information on the extent of Saddam's weapons of mass destruction procurement and development network, but not to listen to information on the Iraqi regime's destruction of weapons of mass destruction?
    I repeat that my opinion is that the war had very little, if anything, to do with weapons of mass destruction. I could never accept the explanation that Iraq not only had the weaponry but the capability to develop and deliver them within 45 minutes. I said at the beginning that I thought the war was about oil and about who controlled the Gulf. I thought it then, and I still think it.
    4.31 pm
    Mr. Michael Moore: If nothing else, this afternoon's debate has illustrated that Iraq remains an issue of major public concern to hon. Members in all parts of the House. In framing our motion we might have focused on several different issues to do with Iraq, such as humanitarian issues or the governance of the country. Those two are important and no doubt in future we shall have an opportunity to debate them on the Floor of the House.
    However, right now the public are mostly and properly concerned about the whole issue of weapons of mass destruction and the basis on which this country went to war. In the course of the debate a number of hon. Members have suggested that we are revisiting the arguments for or against the war set out as late as March. In so doing they tend to skip over many of the points that were raised by those Liberal Democrats who opposed the war at that stage.
    Stephen Hesford: Will the hon. Gentleman give way?
    Mr. Moore: No.
    Liberal Democrat Members never denied that there was a history of weapons of mass destruction in Iraq. We never denied the evil history of Saddam Hussein—we were hugely critical of it, as every right-thinking individual would be. We never argued that Saddam Hussein should not be disarmed. We were arguing that containment and deterrence should continue. We argued that we should take the United Nations route. As the weapons inspectors continued their work, we argued that they deserved more time.
    The Government passionately and clearly argued a different case. They did so principally on the basis of weapons of mass destruction. They said that was the major reason why action was required. They did not

    227
    advocate action mainly on the basis of the need for regime change, although they properly point out many of the benefits of the fact that Saddam Hussein has now gone.
    The issue of its being possible for weapons to be fired in 45 minutes was at the crux of the Government's case—
    Mr. Gardiner: Will the hon. Gentleman give way?
    Mr. Moore: Just bear with me. I am afraid my time is rather short.
    The issue was at the crux of the Government's case when they were arguing that we should be going into conflict.
    Mr. Straw: That statement is demonstrably incorrect. I have been unable to find a single speech on 18 March that even mentioned the 45-minute point, still less made it the crux of the debate.
    Mr. Moore: Well, the Foreign Secretary used phrases such as that time had run out, and in different parts of the build-up to the conflict—[Interruption.] The point I was about to make before the Foreign Secretary intervened was, whether or not one accepts what the hon. Member for Western Isles (Mr. MacDonald) was saying about this being a literal truth or otherwise, it was symbolic. It was symbolic of the fact that Saddam Hussein had sufficient weapons of mass destruction, and a sufficient state of preparedness that they were a danger to those around him.
    Mr. Gardiner: Will the hon. Gentleman give way?
    Mr. Moore: No, I shall not.
    The conflict is now well past but we do not underestimate the fragile nature of the situation in Iraq and the real danger in which the Iraqis and our armed forces continue to find themselves. There is no question but that the coalition partners are now in control and supported by United Nations resolution 1483. However, there is a serious question of why it has taken until now to establish the Iraq survey group that will attempt to map and discover where the weapons of mass destruction are.
    We were told in advance of going to war that rogue elements in Iraq and elsewhere would use weapons of mass destruction and that the weapons would represent a serious terrorist threat if passed on to groups such as al-Qaeda or simply leaked out to other countries. Given that context, it is remarkable that we have not been in a position in which we were able to ascertain where the weapons of mass destruction might be until now.
    The Government have argued that there is no need for an inquiry, but the continuing failure of the coalition to account for weapons of mass destruction raises serious questions not only for hon. Members and the millions of people who opposed the war, but for many who supported the Government in the House and elsewhere on the basis of the Prime Minister's assurances and the evidence offered by the Government at different times. My right hon. and learned Friend the Member for
    228
    North-East Fife (Mr. Campbell) set out several key questions, including the specific question of the extent to which Downing street tried to change the dossier last September. Who was responsible for the final content of the so-called dodgy dossier? Who fabricated the assertion that Iraq was trying to obtain uranium from Africa? We now add questions about the extent to which the Government relied on Iraqi sources who were motivated by little else but a desire to overthrow Saddam Hussein's regime, and the extent to which there was wholesale reliance on uncorroborated information from a single source. Other hon. Members have added to those questions.
    The charge has been made that Parliament and Ministers have been misled, and there can be no doubt that we have not received sufficient answers to the questions raised today. Many of the issues go to the heart of government. The Government assert their case passionately and often raise issues that are not specifically relevant to the questions asked today. They have defended their case vigorously and will no doubt do so again during any inquiry.
    The fact that the Government have started to raise questions of their own during the past couple of days is crucially important. They have questioned the loyalty of certain elements of the security services by calling them "rogue elements". Some of that was done on the record but other people, who were not attributed, talked to The Times about "score settling". As my right hon. and learned Friend said earlier, that echoes fears expressed under the Labour Government in the 1970s. There are fundamental questions that need answers and it is vital to hold an inquiry to find out those answers.
    My right hon. and learned Friend discussed the different types of inquiry that might be held. The Government are exercised by the form of the inquiry suggested in the motion and we must hope that they now see the sense of such an inquiry. Their amendment mentions their willingness to participate in an inquiry conducted by the Intelligence and Security Committee and I emphasise again that we do not question that Committee's independence of mind or integrity.
    Perhaps the Minister will respond to one specific point raised by the Prime Minister's comments today. The Prime Minister mentioned that the Joint Intelligence Committee assessments would be made available to the ISC. Will the information on which those assessments are based also be made available to the Committee?
    An inquiry could take a number of forms. Frankly, what matters is that the serious issues raised today by Members on both sides of the House, including Ministers, are tackled and resolved. We are not the only ones asking questions, however. People all over the country are asking them, whether or not they supported the war in the first place. We owe it to them to get the answers. We are pleased that the Conservatives will join us in the Lobby. We hope that Labour Members will do the same.
    4.40 pm
    The Minister for Europe (Mr. Denis MacShane): We have had an excellent debate in which we heard good speeches by my hon. Friends the Members for Western Isles (Mr. MacDonald) and for Ilford, South (Mike Gapes). I am sorry that my right hon. Friend the Member for Birmingham, Ladywood (Clare Short) was not in the Chamber to hear those. Nothing new has been adduced in this debate that was not placed before the House over the past six months. On 18 March my right hon. Friend voted in favour of armed action, and if she now says that she was deceived and duped by the Prime Minister, I do not understand why she remained in the Cabinet during the long months since the dispute started.
    I agree with the hon. Member for Reigate (Mr. Blunt), who referred to the Prime Minister's total credibility. I hope that he will not join the Liberal Democrats in the Lobby. In the Prime Minister's speech in September when the document—
    Mr. Blunt: Will the hon. Gentleman give way?
    Mr. MacShane: No, we have little time left.
    The document is to be the subject of a public inquiry—
    Mr. Blunt: On a point of order, Mr. Deputy Speaker. I am concerned that the Minister has used my words selectively. I clearly commented on credibility on that issue alone—
    Mr. Deputy Speaker: Order. The hon. Gentleman is seeking to prolong the debate, not to raise a point of order with the Chair.
    Mr. MacShane: The hon. Member for South Staffordshire (Sir Patrick Cormack) said that the Prime Minister has acted with integrity and that he will join the Government in what I call the right Lobby tonight.
    I welcome the fact that we have debated Iraq today and that our Parliament has debated and voted on the matter consistently. No other Parliament, congress or national assembly has debated the subject so openly and publicly. I welcome the announcement that one of our great Committees of the House, and possibly a second, will investigate the matters under consideration and report to Parliament.
    I wish that the House had been sitting last week so that we could have dealt with those newspaper reports, which said much more about the nature of journalism than they did about the facts. Who could not enjoy this morning's wonderful discourse between Mr. John Humphrys and the Leader of the House? Mr. Humphrys was a guest on the Leader of the House programme and extracted from him the remarkable confession that Mr. Humphrys had talked to sources in our intelligence services who had views that they wanted to express. So I hope that tomorrow Mr. Humphrys will interview himself about those sources and obtain more details.
    We also had the delicious story in my favourite paper, The Guardian, alleging that my right hon. Friend the Foreign Secretary had been in the Waldorf Astoria in New York to have conversations with Secretary of State Colin Powell. The story was specific. Its reporter alleged
    230
    that the secret meeting—how journalists love the words "secret meeting"—had been on 4 February this year, but that day meant something to me because I was with the Foreign Secretary in Le Touquet to meet Dominique de Villepin and President Chirac. Now, I adore the travel pages in The Guardian, but New York is in America and Le Touquet is in France.
    In the short time left to me, I have had a chance to correct the distortions, half truths and the unattributed and unsourced allegations that have filled our newspapers and media in recent days.
    We might have had a serious debate on the wider issues of Iraq. We might have had a debate on the fact that Chancellor SchrÖder and President Chirac, who did not support the line of the Prime Minister and President Bush, said in Evian at the weekend that the issue of weapons of mass destruction remained of high importance on the international agenda. Instead, we have had speeches from the Liberal Democrats designed not to place the House of Commons at the heart of policy debate on the future of the region and what we need to do to counter weapons of mass destruction, but rather to use the Commons for petty political point-scoring that is an insult to the people of Iraq, who have been liberated from the tyranny, terror and torture of Saddam Hussein.
    Not a word of thanks from the Liberal Democrats to our brave soldiers and airmen. Not a word of praise for our friends in Europe—in Poland and Spain, in Copenhagen and Prague—who have offered political and military support to the cause, first, of freeing Iraq, and today of helping to assure it security. No, this has been the Liberal Democrats bringing the House of Commons down to their level of opportunistic politics. Of course, they were joined by that new member of the Liberal Democrat party, the shadow Foreign Secretary, the right hon. Member for Devizes (Mr. Ancram), who called for an open public judicial tribunal to sit for months, if not years, investigating every aspect of our security services in public. I can think of no more irresponsible suggestion to make at this time, when we need our intelligence services to get on with the high duties that we expect of them.
    We would expect such opportunism from the Liberal Democrats. The Liberal Democrat magazine, Liberator, stated in March 2003:
    "If the party can keep up its criticism of Blair over Iraq it has been potentially handed a way to harness all the other resentments brewing against Labour. This is the sort of chance that comes rarely."
    There we have it.
    Three main charges were made against the Prime Minister—first, that there was always a programme for war; secondly, that the quotations from President Chirac were in some way misused; and thirdly, that the report on Iraq's weapons of mass destruction was doctored to include a reference to 45 minutes. From the time the crisis broke out, it was clear that the Prime Minister and the President of the United States sought to take it to the United Nations, but not at the price of leaving Saddam Hussein permanently in power in defiance of the international community.
    President Bush's predecessor, President Clinton, authorised the use of force, along with Britain and other allies but without any authorisation from the United

    231
    Nations, to bomb Belgrade and bring an end to the tyranny and terror of Milosevic. Many hon. Members opposed that conflict at the time, but then the Liberal Democrats were led by Paddy Ashdown, a man who has never appeared on, "Have I Got News for You", but who knew that fighting tyranny with or without a UN resolution was not something from which to flinch.
    The second charge is that the Government mistranslated what President Chirac said in the week when British diplomats were trying in New York to fashion a resolution that could have provided a final chance for Saddam Hussein to avoid the conflict. I have the full text of what President Chirac said in his television interview. His position was consistent. He did not want to authorise armed action. I have not joined in the chorus of those denouncing him, nor do I challenge the sincerity of the positions of those in France and Germany and in my own country who were opposed to the conflict.
    President Chirac said on Monday 10 March:
    "My position is that whatever the circumstances France will vote No."
    He was pressed again and again by the interviewers. He was asked whether using the veto would be an unprecedented act against the United States. He dismissed that, but no one reading the full transcript can be in any doubt that President Chirac made it clear that he would veto the efforts being made by British diplomats.
    Finally, we have the charge that the dossier on Iraq entitled "Iraq's Weapons of Mass Destruction" was manipulated in some way. The reference to a 45-minute warning was in the Joint Intelligence Committee report sent to Downing street. The allegation made by the BBC journalist Andrew Gilligan that the 45-minute warning period was added to spice up the report was incorrect. The relevant sentence of the report says that Iraq has
    "military plans for the use of chemical and biological weapons against its own Shia population. Some of these weapons are deployable within 45 minutes of an order to use them."
    That intelligence will come as no surprise to the people of Halabja. They did not have a 45-minute warning, or even a four-minute warning, when Saddam used these weapons to kill 5,000 of them. What the JIC reported on was the suffering that the people of Iraq already knew.
    What is new is that anyone can question the clear record set out in the report of Saddam's past practice and future intentions. The report argues:
    "The threat from Iraq does not depend solely on the capabilities we have described. It arises also because of the violent and aggressive nature of Saddam Hussein's regime. His record of internal repression and external aggression gives rise to unique concerns about the threat he poses."
    That threat no longer exists. The men and women of Iraq, and especially the children—they died by the thousands when, for his own evil ends, he stole the money that could have saved their lives—are now free.
    Building on that freedom will be hard. Two months after the end of Hitlerism in Germany there was nothing but chaos, corruption, poverty and considerable violence. The Nazis were in power for 13 years. Saddam's Ba'ath party was in power far longer. We
    232
    should not forget that its ideology was based entirely on European nationalistic, fascist politics. Every day we discover new horrors: the mass graves of the 300,000 murdered by Saddam Hussein are the latest example of his use of holocaust techniques against fellow Muslims whom he wanted to exterminate.
    In the Balkans, four years after we got rid of Milosevic and despite the presence of scores of thousands of NATO soldiers, we still cannot lay our hands on Karadzic and Mladic, the butchers of Srebrenica. In Northern Ireland, we still cannot find the arms caches of the terrorists. But we will, and we will show to the world that for the most part the United Nations, the JIC and other bodies were right to draw attention to concerns about weapons in Iraq, and we were right to join our allies to rid the world of Saddam and his evil regime.
    I am proud to be a member of a Government who have vanquished tyranny. I welcome the investigations that different Committees of the House will now undertake. I believe that the leadership shown by the House as it debated and decided that action should be taken was fully justified. I invite the Liberal Democrats even now to withdraw their opportunistic motion. They will get their headline in the papers tomorrow, but our intelligence services will continue to watch, guard and warn our nation of today's and tomorrow's dangers, and I hope that when the next threat arises the House will not flinch from doing its duty.
    Question put, That the original words stand part of the Question:—
    The House divided: Ayes 203, Noes 301.

    Division No. 217]

    [4:53 pm

    AYES

    Ainsworth, Peter (E Surrey)

    Clarke, rh Kenneth (Rushcliffe)

    Allan, Richard

    Clifton-Brown, Geoffrey

    Amess, David

    Cohen, Harry

    Ancram, rh Michael

    Collins, Tim

    Atkinson, Peter (Hexham)

    Conway, Derek

    Baker, Norman

    Corbyn, Jeremy

    Baldry, Tony

    Cotter, Brian

    Barker, Gregory

    Cran, James (Beverley)

    Barnes, Harry

    Curry, rh David

    Baron, John (Billericay)

    Dalyell, Tam

    Barrett, John

    Davey, Edward (Kingston)

    Beith, rh A. J.

    Davies, Quentin (Grantham & Stamford)

    Bellingham, Henry

    Bercow, John

    Davis, rh David (Haltemprice & Howden)

    Beresford, Sir Paul

    Blunt, Crispin

    Doughty, Sue

    Boswell, Tim

    Duncan, Alan (Rutland)

    Bottomley, Peter (Worthing W)

    Duncan, Peter (Galloway)

    Brady, Graham

    Duncan Smith, rh lain

    Brazier, Julian

    Evans, Nigel

    Breed, Colin

    Ewing, Annabelle

    Browning, Mrs Angela

    Field, Mark (Cities of London & Westminster)

    Burnett, John

    Burns, Simon

    Flight Howard

    Burstow, Paul

    Forth, rh Eric

    Burt, Alistair

    Foster, Don (Bath)

    Butterfill, John

    Francois, Mark

    Calton, Mrs Patsy

    Gale, Roger (N Thanet)

    Campbell, rh Menzies (NE Fife)

    Garnier, Edward

    Carmichael, Alistair

    George, Andrew (St Ives)

    Cash, William

    Gibb, Nick (Bognor Regis)

    Chidgey, David

    Gidley, Sandra

    Chope, Christopher

    Gillan, Mrs Cheryl

    Clappison, James

    Goodman, Paul

    233

    Gray, James (N Wilts)

    Pickles, Eric

    Grayling, Chris

    Portillo, rh Michael

    Green, Damian (Ashford)

    Price, Adam (E Carmarthen & Dinefwr)

    Green, Matthew (Ludlow)

    Grieve, Dominic

    Prisk, Mark (Hertford)

    Gummer, rh John

    Pugh, Dr. John

    Hague, rh William

    Redwood, rh John

    Hammond, Philip

    Reid, Alan (Argyll & Bute)

    Hancock, Mike

    Rendel, David

    Harris, Dr. Evan (Oxford W & Abingdon)

    Robathan, Andrew

    Robertson, Angus (Moray)

    Hawkins, Nick

    Robertson, Hugh (Faversham & M-Kent)

    Hayes, John (S Holland)

    Heald, Oliver

    Robertson, Laurence (Tewk'b'ry)

    Heath, David

    Roe, Mrs Marion

    Heathcoat-Amory, rh David

    Rosindell, Andrew

    Hendry, Charles

    Ruffley, David

    Hoban, Mark (Fareham)

    Russell, Bob (Colchester)

    Hogg, rh Douglas

    Salmond, Alex

    Holmes, Paul

    Sanders, Adrian

    Hopkins, Kelvin

    Sayeed, Jonathan

    Horam, John (Orpington)

    Sedgemore, Brian

    Howard, rh Michael

    Selous, Andrew

    Howarth, Gerald (Aldershot)

    Shephard, rh Mrs Gillian

    Hughes, Simon (Southwark N)

    Shepherd, Richard

    Hunter, Andrew

    Simpson, Alan (Nottingham S)

    Jackson, Glenda (Hampstead & Highgate)

    Simpson, Keith (M-Norfolk)

    Smith, Llew (Blaenau Gwent)

    Jackson, Robert (Wantage)

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

    Jenkin, Bernard

    Johnson, Boris (Henley)

    Soames, Nicholas

    Keetch, Paul

    Spelman, Mrs Caroline

    Kennedy, rh Charles (Ross Skye & Inverness)

    Spicer, Sir Michael

    Spink, Bob (Castle Point)

    Key, Robert (Salisbury)

    Spring, Richard

    Kirkbride, Miss Julie

    Stanley, rh Sir John

    Kirkwood, Sir Archy

    Steen, Anthony

    Laing, Mrs Eleanor

    Streeter, Gary

    Lait, Mrs Jacqui

    Stunell, Andrew

    Lamb, Norman

    Swayne, Desmond

    Lansley, Andrew

    Swire, Hugo (E Devon)

    Laws, David (Yeovil)

    Syms, Robert

    Leigh, Edward

    Tapsell, Sir Peter

    Letwin, rh Oliver

    Taylor, Ian (Esher)

    Lewis, Dr. Julian (New Forest E)

    Taylor, John (Solihull)

    Liddell-Grainger, Ian

    Taylor, Matthew (Truro)

    Lidington, David

    Taylor, Dr. Richard (Wyre F)

    Llwyd, Elfyn

    Taylor, Sir Teddy

    Loughton, Tim

    Thomas, Simon (Ceredigion)

    Luff, Peter (M-Worcs)

    Tonge, Dr. Jenny

    McIntosh, Miss Anne

    Tredinnick, David

    Mackay, rh Andrew

    Trend, Michael

    Maclean, rh David

    Turner, Andrew (Isle of Wight)

    McLoughlin, Patrick

    Tyler, Paul (N Cornwall)

    Maples, John

    Tyrie, Andrew

    Marsden, Paul (Shrewsbury & Atcham)

    Viggers, Peter

    Wareing, Robert N.

    Marshall-Andrews, Robert

    Waterson, Nigel

    Maude, rh Francis

    Watkinson, Angela

    Mawhinney, rh Sir Brian

    Webb, Steve (Northavon)

    May, Mrs Theresa

    Weir, Michael

    Mercer, Patrick

    Whittingdale, John

    Mitchell, Andrew (Sutton Coldfield)

    Widdecombe, rh Miss Ann

    Wiggin, Bill

    Moore, Michael

    Wilkinson, John

    Moss, Malcolm

    Williams, Hywel (Caernarfon)

    Murrison, Dr. Andrew

    Williams, Roger (Brecon)

    Norman, Archie

    Wilshire, David

    Oaten, Mark (Winchester)

    Wishart, Pete

    O'Brien, Stephen (Eddisbury)

    Yeo, Tim (S Suffolk)

    Öpik, Lembit

    Young, rh Sir George

    Osborne, George (Tatton)

    Page, Richard

    Tellers for the Ayes:

    Paice, James

    Richard Younger-Ross and Mrs. Annette L. Brooke

    Paterson, Owen

    234

    NOES

    Ainger, Nick

    Cunningham, Tony (Workington)

    Ainsworth, Bob (Cov'try NE)

    Darling, rh Alistair

    Alexander, Douglas

    Davey, Valerie (Bristol W)

    Allen, Graham

    David, Wayne

    Anderson, rh Donald (Swansea E)

    Davidson, Ian

    Anderson, Janet (Rossendale & Darwen)

    Davies, Geraint (Croydon C)

    Dean, Mrs Janet

    Armstrong, rh Ms Hilary

    Dismore, Andrew

    Atherton, Ms Candy

    Dobbin, Jim (Heywood)

    Bailey, Adrian

    Dobson, rh Frank

    Baird, Vera

    Dodds, Nigel

    Barron, rh Kevin

    Donaldson, Jeffrey M.

    Bayley, Hugh

    Dowd, Jim (Lewisham W)

    Beard, Nigel

    Drew, David (Stroud)

    Begg, Miss Anne

    Eagle, Angela (Wallasey)

    Beggs, Roy (E Antrim)

    Eagle, Maria (L'pool Garston)

    Bell, Stuart

    Edwards, Huw

    Benn, Hilary

    Farrelly, Paul

    Benton, Joe (Bootle)

    Field, rh Frank (Birkenhead)

    Berry, Roger

    Fisher, Mark

    Best, Harold

    Fitzpatrick, Jim

    Belts, Clive

    Fitzsimons, Mrs Lorna

    Blackman, Liz

    Flint, Caroline

    Blears, Ms Hazel

    Follett, Barbara

    Blizzard, Bob

    Foster, rh Derek

    Blunkett, rh David

    Foster, Michael (Worcester)

    Boateng, rh Paul

    Foster, Michael Jabez (Hastings & Rye)

    Borrow, David

    Bradley, rh Keith (Withington)

    Foulkes, rh George

    Bradley, Peter (The Wrekin)

    Francis, Dr. Hywel

    Bradshaw, Ben

    Gapes, Mike (Ilford S)

    Brennan, Kevin

    Gardiner, Barry

    Brown, rh Nicholas (Newcastle E Wallsend)

    George, rh Bruce (Walsall S)

    Gilroy, Linda

    Brown, Russell (Dumfries)

    Godsiff, Roger

    Bryant, Chris

    Goggins, Paul

    Buck, Ms Karen

    Griffiths, Win (Bridgend)

    Burden, Richard

    Grogan, John

    Burgon, Colin

    Hall, Mike (Weaver Vale)

    Burnham, Andy

    Hall, Patrick (Bedford)

    Burnside, David

    Hamilton, Fabian (Leeds NE)

    Byers, rh Stephen

    Hanson, David

    Caborn, rh Richard

    Harman, rh Ms Harriet

    Cairns, David

    Harris, Tom (Glasgow Cathcart)

    Campbell, Alan (Tynemouth)

    Havard, Dai (Merthyr Tydfil & Rhymney)

    Campbell, Mrs Anne (C'bridge)

    Campbell, Gregory (E Lond'y)

    Healey, John

    Campbell, Ronnie (Blyth V)

    Henderson, Ivan (Harwich)

    Caplin, Ivor

    Hendrick, Mark

    Casale, Roger

    Hepburn, Stephen

    Caton, Martin

    Heppell, John

    Cawsey, Ian (Brigg)

    Hermon, Lady

    Challen, Colin

    Hesford, Stephen

    Chapman, Ben (Wirral S)

    Hewitt, rh Ms Patricia

    Clark, Mrs Helen (Peterborough)

    Hill, Keith (Streatham)

    Clark, Dr. Lynda (Edinburgh Pentlands)

    Hodge, Margaret

    Hoon, rh Geoffrey

    Clark, Paul (Gillingham)

    Hope, Phil (Corby)

    Clarke, rh Charles (Norwich S)

    Howarth, rh Alan (Newport E)

    Clarke, rh Tom (Coatbridge & Chryston)

    Howarth, George (Knowsley N & Sefton E)

    Clarke, Tony (Northampton S)

    Howells, Dr. Kim

    Coaker, Vernon

    Hughes, Beverley (Stretford & Urmston)

    Coffey, Ms Ann

    Coleman, Iain

    Hughes, Kevin (Doncaster N)

    Colman, Tony

    Humble, Mrs Joan

    Connarty, Michael

    Hurst, Alan (Braintree)

    Cooper, Yvette

    Hutton, rh John

    Cormack, Sir Patrick

    Iddon, Dr. Brian

    Corston, Jean

    Illsley, Eric

    Cousins, Jim

    Ingram, rh Adam

    Cranston, Ross

    Irranca-Davies, Huw

    Crausby, David

    Jackson, Helen (Hillsborough)

    Cruddas, Jon

    Jamieson, David

    Cummings, John

    Jenkins, Brian

    235

    Johnson, Alan (Hull W)

    Milburn, rh Alan

    Johnson, Miss Melanie (Welwyn Hatfield)

    Miliband, David

    Miller, Andrew

    Jones, Helen (Warrington N)

    Mitchell, Austin (Gt Grimsby)

    Jones, Kevan (N Durham)

    Mole, Chris

    Jones, Martyn (Clwyd S)

    Moonie, Dr. Lewis

    Joyce, Eric (Falkirk W)

    Moran, Margaret

    Keeble, Ms Sally

    Morgan, Julie

    Keen, Ann (Brentford)

    Morley, Elliot

    Kemp, Eraser

    Morris, rh Estelle

    Khabra, Piara S.

    Mountford, Kali

    Kidney, David

    Mudie George

    King, Andy (Rugby)

    Mullin, Chris

    Knight, Jim (S Dorset)

    Murphy, Jim (Eastwood)

    Kumar, Dr. Ashok

    Murphy, rh Paul (Torfaen)

    Lammy, David

    Naysmith, Dr. Doug

    Lawrence, Mrs Jackie

    Norris, Dan (Wansdyke)

    Lazarowicz, Mark

    O'Brien, Bill (Normanton)

    Lepper, David

    Olner, Bill

    Leslie, Christopher

    O'Neill, Martin

    Levitt, Tom (High Peak)

    Organ, Diana

    Lewis, Ivan (Bury S)

    Osborne, Sandra (Ayr)

    Liddell, rh Mrs Helen

    Palmer, Dr. Nick

    Linton, Martin

    Perharn, Linda

    Love, Andrew

    Picking, Anne

    McAvoy, Thomas

    Pickthall, Colin

    McCabe, Stephen

    Pike, Peter (Burnley)

    McCartney, rh Ian

    Plaskitt, James

    McDonagh, Siobhain

    Pollard, Kerry

    MacDonald, Calum

    Pond, Chris (Gravesham)

    MacDougall, John

    Pope, Greg (Hyndburn)

    McFall, John

    Pound, Stephen

    McGuire, Mrs Anne

    Prentice, Ms Bridget (Lewisham E)

    McIsaac, Shona

    McKechin, Ann

    Prentice, Gordon (Pendle)

    Mackinlay, Andrew

    Prescott, rh John

    McNulty, Tony

    Primarolo, rh Dawn

    MacShane, Denis

    Prosser, Gwyn

    Mactaggart, Fiona

    Purchase, Ken

    McWalter, Tony

    Quin, rh Joyce

    McWilliam, John

    Quinn, Lawrie

    Mallaber, Judy

    Rammell, Bill

    Mann, John (Bassetlaw)

    Rapson, Syd (Portsmouth N)

    Mams, Rob (Wolverh'ton SW)

    Raynsford, rh Nick

    Marsden, Gordon (Blackpool S)

    Reed, Andy (Loughborough)

    Marshall, David (Glasgow Shettleston)

    Reid, rh Dr. John (Hamilton N & Bellshill)

    Martlew, Eric

    Robetson, John (Glasgow Anniesland)

    Meacher, rh Michael

    Merron, Gillian

    Robinson, Geoffrey (Coventry NW)

    Michael, rh Alun

    236

    Robinson, Mrs Iris (Strangford)

    Taylor, David (NW Leics)

    Robinson, Peter (Belfast E)

    Thomas, Gareth (Clwyd W)

    Rooney, Terry

    Thomas, Gareth (Harrow W)

    Ross, Ernie (Dundee W)

    Timms, Stephen

    Ruane, Chris

    Tipping, Paddy

    Russell, Ms Christine (City of Chester)

    Todd, Mark (S Derbyshire)

    Touhig, Don (Islwyn)

    Ryan, Joan (Enfield N)

    Trickett, Jon

    Sawford, Phil

    Trimble, rh David

    Shaw, Jonathan

    Truswell, Paul

    Sheerman, Barry

    Turner, Dennis (Wolverh'ton SE)

    Sheridan, Jim

    Twigg, Derek (Halton)

    Simon, Siôn (B'ham Erdington)

    Twigg, Stephen (Enfield)

    Singh, Marsha

    Tynan, Bill (Hamilton S)

    Smith, rh Andrew (Oxford E)

    Walley, Ms Joan

    Smith, Geraldine (Morecambe & Lunesdale)

    Ward, Claire

    Watson, Tom (W Bromwich E)

    Smith, John (Glamorgan)

    Watts, David

    Smyth, Rev. Martin (Belfast S)

    White, Brain

    Soley Clive

    Whitehead, Dr. Alan

    Southworth,Helen

    Wicks, Malcolm

    Spellar, rh John

    Williams, rh Alan (Swansea W)

    Williams, Betty (Conwy)

    Squire, Rachel

    Wills, Michael

    Steinberg, Gerry

    winnick, David

    Stewart, David (Inverness E & Lochaber)

    Winterton, Ms Rosie (Doncaster C)

    Stewart, Ian (Eccles)

    Woodward, Shaun

    Stinchcombe, Paul

    Wray, James (Glasgow Baillieston)

    Stoate, Dr. Howard

    Strang, rh Dr. Gavin

    Wright, Anthony D. (Gt Yarmouth)

    Straw, rh Jack

    Stringer, Graham

    Wright, David (Telford)

    Sutcliffe, Gerry

    Tami, Mark (Alyn)

    Tellers for the Noes:

    Taylor, rh Ann (Dewsbury)

    Charlotte Atkins and Mr. Phil Woolas

    Taylor, Dari (Stockton S)

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
    MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House believes that the Intelligence and Security Committee established by Parliament is the appropriate body to carry out any inquiry into intelligence relating to Iraq; and notes in relation to Iraq's disarmament obligations the terms of United Nations Security Council Resolution 1483.

Pensions
Mr. Deputy Speaker (Sir Michael Lord): We now come to the debate on pensions. I should like to inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister. May I also remind the House that there is an eight-minute limit on Back-Bench speeches in this debate?
5.7 pm
Mr. Steve Webb: I beg to move,
That this House condemns the Government's extensive delay in appointing a new Minister for Pensions at a time of pensions crisis; further condemns the Government for pursuing a strategy of mass means testing of pensioners; notes that the Department for Work and Pensions will have satisfied its PSA target even if a million pensioners are still missing out on their entitlement to Pension Credit by 2006; further notes that the Pension Credit will be run on a computer system described by the previous Secretary of State as 'very decrepit'; believes that the Pensions Green Paper was an inadequate response to a range of pensions problems, including the large number of people of working age who are facing financial insecurity in retirement, particularly many women; further notes the continued insecurity of many members of defined benefit pension schemes and the lack of protection for working age scheme members when schemes are wound up; calls on the Government to address these issues as a matter of urgency; and further calls on the Government urgently to simplify the state pension system and to ensure that the basic state pension provides a firm foundation for income in retirement, with particular reference to the needs of older pensioners.
There are those who might feel that our motion today in unduly critical of the Government. Therefore, in a constructive spirit—the way in which we always approach these issues—I want to offer an olive branch to the Government, and to say that, given that the Prime Minister has clearly been seeking unsuccessfully for the last eight weeks to find a suitable candidate for Minister for Pensions, I am today prepared to step into the breach. I should say that I have not yet cleared that with my right hon. Friend the Member for Ross, Skye and Inverness, West (Mr. Kennedy), but we shall have negotiations later on.
Mr. Charles Kennedy: You have my blessing.
Mr. Webb: Someone needs to get a grip on pensions. The word "crisis" appears in the motion for almost every Opposition day debate, but in few cases can there be a better fit than the pensions crisis. The House need not take my word for this. The chairman of the occupational pensions advisory service—an august body—Malcolm McLean OBE said only last month:
"Although the Government…seem to want to play it down, there is from my and an OPAS perspective, something of a crisis in pensions at the moment."
He continues with a whole litany, of which this is an excerpt:
"The pensions system we have is ridiculously complicated"
—it is certainly that—
"and not easily understood by the majority of the population. Trust in pensions has been eroded… employers are closing down good … schemes … and replacing them with often inferior … schemes … Is it any wonder, therefore, that some people might be starting to lose heart?"
238
That is the backdrop for this debate—and it makes it all the more lamentable that the Government have failed, in eight weeks, to appoint a Minister to take responsibility for pensions.
Mr. John Redwood: Does the absence of any reference in the motion to the massive tax on pensions, along with the fact that the hon. Gentleman wants to be Pensions Minister in this miserable Government—he is backed in that aim by his leader, who obviously wants to remove him from his own shadow Administration—constitute proof that the Liberal Democrats support the idea of taxing pension funds to death?
Mr. Webb: I am intrigued by the suggestion that I have gone native before I have gone over.
If the right hon. Gentleman checks the record I think he will find that both his party and mine voted against the dividend tax credit and have opposed it. I think he will also find that neither his manifesto nor mine pledged to find the £5 billion to replace it. I felt—unlike certain parties—that to oppose something but not to say that we would undo it would not be helpful to this debate.
A Green Paper on pensions was published shortly before Christmas. It assumed that the state pension scheme was sorted out, and tried to bolt on to it a new private pension system. That is like trying to fit together two pieces from different jigsaw puzzles: no matter how hard you try, without the right basis, a fit will never be possible. The problem is that it is not just the private pension regime that is flawed; the state pension regime is fundamentally flawed.
The basic state pension is woefully inadequate. Its value is just three quarters of the level of the means test. Who would have thought that the basic pension described by the Government as the foundation of income in old age would be allowed to sink so low? No one would accept a building constructed on such an insecure foundation.
Women are hit particularly hard. A typical man with a basic pension under the state earnings-related pension scheme receives £92, while a typical woman receives £66. One might imagine that this is some relic of previous generations, but in fact the gap has not closed one jot in a decade. Successive Governments have failed to address trends that are long-term features of the pension system. The Green Paper contains a whole chapter on the position of women and a raft of descriptions of the problem, but the Government have not advanced one practical solution.
Things need not be like this. The basic pension could be the foundation of income in old age, if the Department for Work and Pensions took a lead from the Chancellor. As I often say, the Chancellor has got it exactly right. He has said that poor pensioners tend to be old pensioners, and he gives free television licences not to all pensioners but to the over-75s. In his most recent Budget, deciding that he wanted to help poor pensioners, what did he do? Did he put extra money into the means test? No, he increased the winter fuel payment. For whom? For the over-80s.

239
Why is it that, although the Chancellor has recognised that old pensioners are poor and is helping them, whenever we say as much to the Department for Work and Pensions it says, "That wouldn't be well targeted." They cannot both be right. Perhaps the Minister will tell us whether she disagrees with the Chancellor.
Can Members imagine how much could have been spent on pensions for the over-75s if the money going into the mass means test of pension credit had been devoted to them? According to a written answer, had the Government adopted the pensions rather than the mass means-testing route, not just a few pence, not just a few pounds, but £19 a week could have been spent on those pensions for the over-75s. It is the pensions route that we would have adopted, and that I believe, is what pensioners want: a decent pension, not a mass means test.
It is not just the basic pension that is inadequate. The basic pension was so useless that the Government invented a second pension, which is useless as well. It is called, imaginatively, the state second pension, and it takes 40 years to be completely useless, because the first people to accrue a full pension under it have just left university. If they work for 40 years and receive the basic pension and the state second pension at the full rate, they will be so poor that they will need a means test. That is how good the state second pension really is. It takes 40 years to build up to an amount of money that does not lift people above the poverty line. Can that be the ambition of the Government for generations to come?
Not only do we have a useless basic pension and a useless second pension, but the Government have invented a third, called the pension credit, which is due to be introduced in October to make up for the fact that the first two are useless. However, that will be even worse.
The Government have had some problems with their credits recently. The computers have not worked, but help is at hand. The new pension credit scheme will be introduced not on a new computer—so we can relax—but on the existing computer. The only problem is that the previous Secretary of State described, in a rather appropriate way given the nature of the benefit, the computer that will be used in October as "very decrepit". If that does not fill hon. Members' hearts with horror in the light of the credit system, I do not know what will. That computer will have to bear the burden of millions of pension credit payments. I suggest to hon. Members that they get those hotline numbers ready—they will be needing them.
It is not just administrative chaos that we shall face. The Public Accounts Committee has said:
"we have repeatedly expressed concerns about the Department's computer systems and the impact of their weakness on customer service".
This is not techie stuff. It is about real people who need real money and who may not get it because the computer is too old to do the job properly.
240
The system is not merely going to be run on a dodgy old computer, it is also extraordinarily complex. The House will be aware—I apologise for going over ground with which hon. Members will be familiar—that the new pension credit has two components: a guarantee credit and a savings credit. Obviously, pensioners will be looking at that and calculating their entitlement to savings credit, but they will need to be aware of the full complexity of it. So here we go!
The savings credit is available to pensioners, but not to women aged 60 to 64; although they are pensioners, they can get the guarantee credit but not the savings credit. Therefore, there are two bits to the scheme: one applies to some pensioners but not all. The reward one gets for saving is 60p in the pound for any private pension above the basic pension level but below the income support level—except that that will be called the guarantee credit level, except that, if one does not have a full basic pension, part of one's private pension has to fill up to the basic pension before the 60p in the pound award cuts in, and above income support levels the 40p in the pound taper cuts in until one ends up with zero. [HON. MEMBERS: "Encore."] That was the shortened version. When hon. Members read the transcript, they will find that that was a succinct summary of how the system will work.
The serious point is: who will claim the thing? Who will know, if they have not previously been entitled, that they may be entitled? We can relax, because the Government will write to everyone. The Government will write to all pensioners not currently on income support—except that, because the system is being introduced in October they do not have time to write to everyone, so they will write to one in five pensioners randomly. Presumably, one pensioner will have the letter, and they may understand it and apply. The next-door neighbour, I assume, unless particular villages will get one and the next village will not, will not have the letter, so they will not hear of the thing, unless they read the newspapers.
However, it is all right because the system is being introduced in October and people have a year to claim. If the House reflects on that for a moment, hon. Members will realise that people have a whole year to claim the thing because it is so complicated the Government do not think they can possibly get everyone to claim it on the day they are entitled to it. This is money for poor people, yet the Government have to give them a year to claim it because they know they cannot possibly deliver it on time. What are those relatively poor and needy pensioners who are the priority for the Government supposed to do for the year while they wait for their letter, because the letters may not be delivered until next June? That is the system on which the Government pin the centrepiece of their attack on pensioner poverty.
The Department for Work and Pensions has been set a target. It has one of those public service agreements, and a sort of report card. I do not know who it hands it in to and I do not know what happens if it fails. I do not know whether the Government will say, "We will not let you pay any pensions this week because you have failed." It will just carry on, I think. Perhaps the Government will not appoint a Minister for Pensions, and will make the other Ministers do the work.

241
If the Department fails its public service agreements, what happens? It has been set an objective. By 2006, 3 million pensioner households have to get the pension credit. That sounds pretty good. By 2004, the Government think that 2.8 million could have it. That does not sound too bad but they think that 3.8 million are entitled, so the Government will get a tick in the box, a "Well done" and a pat on the head from someone for missing 1 million pensioners. That will be a success. That is the extent of the Government's ambition for their strategy.
When we point that out to the Government, they say, "Yes, but you don't want to target poor pensioners." Well, excuse me, but who are these 1 million people who are entitled to the MIG or the savings credit? Are they the rich? The poor will miss out because the Government have designed a scheme so complicated that many people will not claim—but everybody claims their pension.
Andrew Selous: Like all of us, I am listening to the hon. Gentleman's speech with a great deal of interest. Does he agree that it is very worrying that the take-up levels for the MIG, which were sneaked out in an answer on the last day before the Whitsun recess, show that there has been no improvement in take-up over income support levels? So the Government's claims that things are going to get better are not borne out by last year's facts.
Mr. Webb: The hon. Gentleman is right. There is a myth that circulates in government, and as with many such myths, some of those who believe them are decent people—they are simply misguided. The point is that such non-take-up levels are inherent in mass means-testing. Simply providing a few more leaflets, a few more phone calls or a few more newspaper adverts will not sort the problem out. Fiendishly complicated schemes that are constantly changing and do not meet people's existing needs will always have the property to which the hon. Gentleman refers.
Mr. Oliver Heald: Does the hon. Gentleman agree that the situation is getting worse? Some 600,000 did not claim what they were entitled to in 1997. That figure has risen to 700,000, and this year it is predicted that it will rise to 1.6 million. Even by 2006, the figure will still be 1 million. Is that not the scale of the problem?
Mr. Webb: The hon. Gentleman is right to point out that the scale of the problem is simply vast. The fact that 1 million people who are by definition poorer pensioners are not getting what they are entitled to cannot be acceptable.
It is not just the state scheme that—through an inadequate basic pension, a useless second pension and hopeless means-testing to top up the two worthless pensions—is failing. The private sector pension regime is also failing.
Kevin Brennan: Is it not disingenuous to describe the pension credit as a means-tested scheme, thereby associating it with schemes from the 1930s, for example, given that any test of resources will not have to
242
be made weekly, as the hon. Gentleman knows? Will he tell the House how often any assessment will have to take place?
Mr. Webb: The key question is how the system is perceived by those for whom it is designed, if pensioners were given a choice between a system in which they have to give all the information about their incomes and personal circumstances and report substantive changes in those circumstances, and a simple system involving a higher basic pension for older pensioners, I have no doubt which they would prefer.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): Given that the hon. Gentleman is reluctant to answer the question asked by my hon. Friend the Member for Cardiff, West (Kevin Brennan), I shall remind him that the answer is once every five years.
Mr. Webb: I think the Minister will find that although that is the theory, the practice will be very different. For example, let us suppose that a pensioner couple are in receipt of the pension credit and one of them dies. Will the surviving partner have to wait for five years for reassessment? No, they will pick up the phone and report the change. Let me put another point to the Minister. If such people are to be reassessed only every five years, the Department will have to make an assumption about what is happening to their income during each of those five years. Let us consider the example of someone who has a company pension. Will the Department assume that that pension goes up in line with inflation each year? If the Department does, as I assume it will, someone who has a company pension that is not uprated in line with inflation will not get enough benefit. Will they have to ring the Department—assuming that they have worked out what is happening—and say, "You're not paying me enough because you haven't compensated me for the non-indexation of my company pension"? This is the new streamlined system that we are looking forward to. I hope that the Minister will clarify this question, because remarkably, I have yet to receive a straight answer to it.
As I said, it is not just the state system that needs attention; the private sector needs urgent—
Mr. Andrew Love: Will the hon. Gentleman give way?
Mr. Webb: I had better not, as there is an eight-minute limit on all contributions other than those from Front Benchers. I hope the hon. Gentleman will forgive me.
The Government were going to ride to the rescue of the private sector with the wonderful stakeholder pension, which was going to reach the parts that other pension schemes cannot reach. What has happened? Stakeholder sales are down by 22 per cent. on the previous year. Half of all sales in the first quarter of this year were not new; they were money being shuffled from one pot into another. The Minister doubtless has some wonderful figures on the billions going in, but what she may not mention is that a lot of it was already in pension schemes; it is simply under a different label. Nine out of 10 stakeholder schemes designated by employers have no money in them. I am not an expert on pensions, but

243
I should have thought that having money in a pension scheme was a prerequisite of a good scheme, on the whole.
The Government are very fond of quoting the Association of British Insurers on this issue. The ABI says that stakeholder pensions
"are not getting to the people who need them most. About half of all sales were transfers … the rest were sold to wealthier people".
Those whom the ABI calls "wealthier people" are seriously wealthier people.
This does not apply to stakeholder pensions alone: the bedrock of pension provision has been the final salary company pension. Final salary schemes are disappearing so fast that there may be none left by the time the Government appoint a pensions Minister. Who knows? Nearly half of all companies offering a final salary scheme closed it to new members last year, and many more are thinking about doing so next year.
Many people have real anxieties about the threat to their company pensions. They have read stories in the papers, admittedly quite limited, about companies going bankrupt without there being enough money in the pension scheme to pay all the pensions. The current combined pension deficit of the top 100 schemes is £65 billion, which makes us enormously vulnerable. If one of those large firms were to go to the wall, hundreds of thousands of people could find the pensions that they have worked and saved for wiped out—and they could do nothing about it. That is why the issue is so urgent, and why the Government's delay is so culpable. People are really anxious, and the Government have failed to deliver.
Mr. David Drew: The hon. Gentleman makes a compelling argument. The problem with the closure of final salary schemes and with what is happening in the public sector is often not talked about—the legacy of early retirement. The Conservative party's answer was always to get people off the books and force them—I use the term intentionally—into early retirement. We now have to pick up the pieces from that legacy. If people had worked to the normal retirement age, many of the problems in the public and private sector would not have come home to roost. Does the hon. Gentleman agree?
Mr. Webb: The hon. Gentleman is right to highlight that as one of several factors that have contributed to the deficits, including the plunging stock market, greater longevity and the £5 billion change to advance corporation tax. A raft of factors has affected the deficit, of which the hon. Gentleman's point is certainly one. The critical point is that with substantial deficits, if a scheme goes belly up, the retired members get the first crack and the people who have worked all their lives in the scheme—and are perhaps within a year of retirement age—receive next to nothing.
Pensions issues are part of a major debate and I shall make a couple of brief points. We must ensure that people are better protected. The right hon. Member for Birkenhead (Mr. Field) proposes to introduce a Bill that attempts to achieve that. There are no easy gains. If the pot of money is inadequate, giving more to one group
244
means giving less to another. I have spoken to retired occupational pensioners who are unsurprisingly nervous about the whole agenda. We need some way of balancing the elements more fairly than we do now, which might require some cap on the entitlements of retired pensioners, some multiple for pension protection and more for those who are nearly at pension age and, frankly, cannot do anything about the problem. That is the avenue down which we should be going, and although the Government may have some sympathy with that proposition, they have made no proposals. They have to get on with it.
It has been suggested in the press recently that the Government want to introduce insurance for company pensions. That is an interesting idea, to which we should respond constructively. The idea is that, just as one insures a car against an accident, one insures a company pension in case the company goes bankrupt. The problem is that the Government have, hitherto, refused to say that they would stand behind such a scheme. Unless they do, we could end up with the insurance scheme going bankrupt as well. That would be the cruellest irony of all: to charge people insurance on their pensions, and then, when the company goes bankrupt, not to pay them because the insurance company cannot cope with the scale of the problem.
Mr. Frank Field: If and when the Government establish such an insurance scheme—I hope that it will be soon—and if the scheme incorporates borrowing powers from the Treasury, there is no reason why it would go under. The unemployment insurance scheme of the 1930s never went under. Does the hon. Gentleman agree that one good use of the unclaimed, as opposed to the orphan, assets would be to support people who have already lost or partially lost their pensions? The sum of more than £13 billion could be used to make good their pension losses.
Mr. Webb: As ever, the right hon. Gentleman makes a creative contribution to the debate, which should help to put it at the top of the agenda. There was obviously a big "if" in his question—a scheme would work only if it had borrowing rights against the Treasury. However, the Treasury has hitherto said, in writing, that it will not stand behind such a scheme. Ministerial spokespersons have been quoted in the press recently as saying that that is central to their plans. I hope that instead of reading that in the press we will hear it from the Minister. Where has the Department got to, and will the Treasury stand behind such a scheme? If so, we would look at it constructively. If not, it could be a delusion.
Mr. John Bercow: Will the hon. Gentleman give way?
Mr. Webb: I hope that the hon. Gentleman will forgive me, but I am about to complete my remarks.
We have only scraped the surface of the vast array of pension problems today, but we wanted to put the issue on the agenda. In my absence, my hon. Friends demanded that we include it as one of our topics today, because it affects so many of our constituents. Some 10 million retired pensioners, and 20 million workers,

245
feel increasingly insecure about their pensions. It is time that the issue was top not only of the Liberal Democrats' agenda, but of the Government's agenda.
5.30 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
"recognises that the UK has the largest stock of private pension saving in Europe and a tradition of pension partnership at the workplace which leaves it well placed to rise to the challenge of longer lives; welcomes the conclusion of the Work and Pensions Committee that the UK pensions system is "basically sound"; further recognises that there are pressures on pension systems at the moment and supports the Government's proposals, as outlined in the recent Green Paper, to renew the UK pensions partnership, to introduce further measures to bolster the UK system which better focus regulation on contemporary anxieties, and to increase security without increasing the overall costs of running pensions; strongly endorses the Work and Pensions Committee's judgement that "current policies have been successful in reducing pensioner poverty"; further recognises that this is of particular benefit to women; welcomes the state second pension which will provide lower earners, disabled people and carers, some 18 million people most of whom are women, with a better pension; believes that good pensions policy must be built on a foundation of the basic state pension, which has increased in real terms for three years in a row; and looks forward to the Pension Credit reform in October which will ensure that those with modest savings are properly rewarded for the first time."
I very much welcome the opportunity that today's debate gives the House to discuss pensions. We cannot discuss the issue too often—I agree with the hon. Member for Northavon (Mr. Webb) about that. It is an issue of vital concern to all our constituents of all ages.
Mr. Heald: So why have we not had a Government debate on pensions for three years?
Maria Eagle: We have had many statements, new legislation, Opposition debates and many debates in Committee on the issue. No doubt we will have more as this Parliament progresses.
I wish very gently to take issue with some of the language used by the hon. Member for Northavon. I understand that in some cases he was telling jokes, but I take issue with the tone of his remarks, of the motion and of his press release. The all-party Work and Pensions Committee recently had this to say in its serious report on the future of UK pensions:
"We agree that the use of the term crisis is unhelpful. Whilst not wishing to minimise the real anxieties about certain aspects of state and private provision, we feel that it is important to recognise that the system of pension provision in the UK as a whole is basically sound."
I very much agree with that conclusion.
Mr. Paul Goodman: I am grateful to the Minister for giving way because it allows me to put on the record the fact that my hon. Friends the Members for Sutton Coldfield (Mr. Mitchell) and for South-West Bedfordshire (Andrew Selous) and I voted for an amendment to that report—which was not agreed—to conclude that there is a pension crisis.
Maria Eagle: That is an interesting point, and I am glad that the hon. Member for Sutton Coldfield
246
(Mr. Mitchell) is in his place. He often takes an interest in such debates and I may refer to some of his previous activities later.
I do not assert: that there are no challenges or problems facing pension provision in this country. That would be nonsense. Indeed, we would hardly have just conducted the biggest and most widespread consultation on the future of occupational pensions in 30 years if that were the case. But we work from the premise, as the Committee says, that the system is basically sound and must be made to work better and more effectively. So the Green Paper does not advocate starting with a blank sheet of paper and designing a system from scratch that is fundamentally different from the one we have now. Nor, to my knowledge, do Opposition parties suggest that we should do any such thing.
I make a plea to hon. Members to deal calmly and sensibly with the challenges that we face, so that we can get our pensions framework in a fit state to ensure stability in the future. That is what is needed above all. Pensions are a long-term business and the policy changes that we introduce now must be capable of lasting for years, not just satisfying the headline writers tomorrow, as the press releases from the hon. Member for Northavon are designed to do. Headlines only last for a day. The pension framework we choose must last for decades if it is to do its job.
When my right hon. Friend the Secretary of State for Work and Pensions made his statement to the House on the Green Paper, he identified three challenges that we have faced since coming to office in 1997: affordability, pensioner poverty and expectations. Rising longevity compounded by a trend towards early retirement has challenged the affordability of pension systems across the industrialised world.
However, the UK is in a stronger position to meet this demographic challenge than most other developed countries, not only because our dependency ratio is expected to increase by half as much as the European average, but because our system is much more affordable and we are concentrating on making it fairer.
Our commitment to alleviating pensioner poverty is vital, given the legacy that we inherited. The 18 Tory years that preceded this Government saw a vast widening in income disparity between the wealthiest and poorest of our pensioners. The income of the bottom fifth of pensioners in those years rose by 34 per cent., but that of the top fifth by 80 per cent. One in three of our pensioner population—that is, 3.5 million people—were living in poverty during those years.
That was not accidental, but the result of policy choices. The previous Tory Government cut the value of the basic state pension by £20 a week in real terms, slashed the value of SERPS not once but twice, and perpetrated the "horrors" of pension mis-selling—a phrase that is not mine but which was used by the hon. Member for Havant (Mr. Willetts) in a recent speech. It is an apt phrase for a fiasco that cost £13.5 billion, which still haunts the industry's reputation today. I therefore do not apologise for this Government targeting pensioner poverty. To accept the income distribution among pensioners left to us by the Opposition would have been absolutely wrong.

247
The other challenge may be characterised as the rising expectations of our citizens, as they reach an ever longer and healthier retirement, to continue with the lifestyles that they have forged. The Green Paper highlighted that perhaps three million such people are not saving enough for their retirement, and that many millions more may not be saving enough to provide the pensions that they want. Additionally, it drew attention to the pressure facing occupational schemes and the much-publicised spate of closures and changes in provision in the private pension sector.
During our Green Paper consultation, we held 35 events. About 2,000 people took part in them, and we have received more than 800 written responses. We are grateful to all the many groups who have shown the interest and taken the time to contribute. They include unions, employers, members of the public, actuary and consultancy firms, voluntary and consumer groups, the occasional political party think-tanks, financial institutions and representatives of industry bodies. All have played their part in helping us to build the long-term solutions that will enable people to work longer and save more for a prosperous retirement.
David Taylor: Will my hon. Friend say whether the list of respondents to the Green Paper included the author for a group called "No Turning Back" who said in 1993 that basic state pension provision should be a function of the private sector? The author was one lain Duncan Smith—whatever became of him, and of that policy?
Maria Eagle: I am the wrong person to ask about what became of the policy. However., I shall ask the hon. Member for North-East Hertfordshire (Mr. Heald), who will speak for the Opposition, a question or two about that. To my knowledge, the "No Turning Back"group did not respond, although I stand to be corrected, given the volume of responses that we have received. If I am incorrect about that, I shall inform the House.
Mr. Heald: I am not personally a member of the "No Turning Back" group, but does the Minister agree that the gap between rich and poor pensioners has widened since 1997? The Pensions Policy Institute is an independent body, and it has produced a document called "The Pensions Landscape" that is highly thought of. On page 14, it states that the gap between rich and poor pensioners has widened: the income of the bottom 20 per cent. of single pensioners as a percentage of national average earnings is exactly the same now as in 1997, but the income of pensioners at the top of the scale has grown and the gap has therefore widened. Does the Minister accept that analysis?
Maria Eagle: As I have said, we are seeking to alleviate pensioner poverty. I do not agree that no progress has been made, as there has been a fall of 60 per cent. in absolute poverty among pensioners—not a claim that the Conservative party could have made when it was in power.
The House will want to know when the response to the Green Paper will be published. The best answer that I can give is that it will be published shortly. We will
248
shortly come forward with our response. I hope that hon. Members appreciate the restrictions that exist on these matters. One other word might give a clue—we will respond soon.
The hon. Member for Northavon talked about pensioner poverty. Our first priority when we came to office in 1997 was to tackle pensioner poverty. We have done so by targeting increasing resources on pensioners and giving the poorest the most. As a result, pensioner households are, on average, £1,250 better off in real terms than they were in 1997, and the poorest third of pensioners are £1,600 a year better off. Absolute pensioner poverty is down by 60 per cent. We will spend an extra £8 billion a year on pensioners as a result of those measures.
Annabelle Ewing: The Minister will be aware, because I have repeatedly made the point in previous exchanges, that after six years of Labour Government, one in four pensioners in Scotland still live in poverty. Is the Minister happy with that record?
Maria Eagle: There is more to do. I am the first to accept that, but we are making progress, and we intend to make more. The pension credit is one way in which we shall do so.
The Select Committee report, which I have already commended, said:
"We commend the Government on their commitment to tackle pensioner poverty and their achievement in reducing it on 3 of the 4 measures in the Annual Report but believe that there are still too many pensioner households in poverty and call on the Government to continue to increase their income in relative and absolute terms."
That point is similar to that made by the hon. Lady. We are committed to doing that, but the policy of both the Liberal Democrats and the Tories is to end the targeting of help on the poorest. Indeed, they would remove help from the poorest and instead distribute it to all on the basis of age. That would redistribute resources from some of the poorest pensioners to the better off. The hon. Member for Northavon admitted as much in the upratings debate on 27 February, when he accepted that that would be the effect of his policy. I do not see how that would tackle poverty.
In contrast to what the hon. Gentleman said about pension credit, it is our contention that it helps women and tackles poverty. We expect women to receive around two thirds of the spend on pension credit, and more than half the people entitled to it will be single women, two fifths of whom will be over 80. Pension credit helps women because, as the hon. Gentleman himself has said, many women pensioners are among the poorest. He must explain how removing an average of £400 a year from the poorest half of our pensioners will help to alleviate poverty and help women. He must explain how removing up to £1,000 a year from the poorest pensioners will do that. It simply will not.
The hon. Gentleman had some fun talking about computers, which he suggested were decrepit. It is, of course, true that my right hon. Friend the Secretary of State for Transport used that word; I do not dispute that. In due course, old and outdated systems will have to be replaced. The systems are old and outdated, but the fact is that they work. Every day, they pay the

249
pensions and benefits of 3 million to 4 million people. The fact that they are old does not mean that they do not work. In due course, they will be replaced.
In the hon. Gentleman's press release, and in his speech, he said that applying for pension credit is fiendishly complicated. I know that he is a professor, but for most people, picking up the phone is pretty easy. In terms of applying for social security entitlements, picking up the phone, giving a few details, then receiving through the post a completed form that one need only sign and return is not bad. No doubt one of the officials in a pension centre can assist the hon. Gentleman by explaining to him how easy it really is. It is not the fiendishly complicated system that he suggests.
I accept that there is some complexity in the calculation of pension credit, but that is also true for the calculation of basic state pension. Fortunately for the poor of this country, we do not require people to do their own calculations before they are entitled to receive money. If we did, we would all, I suspect, be a lot poorer, although perhaps the hon. Gentleman would be a lot richer.
Mr. Webb rose—
Maria Eagle: I do not want to take up all the time available for the debate.
The hon. Gentleman also said that the Government planned to exclude 1 million people from pension credit. We want everyone to claim pension credit. The three million target is a figure for take-up in the first year, not a ceiling. We want everybody to claim.
If the hon. Gentleman stopped characterising pension credit as a crude weekly means test and started telling pensioners how easy it was to claim, instead of suggesting to them that it creates stigma, I would be more willing to listen to his concerns about take-up. He is desperate for the policy to fail because he knows that it is popular. I believe that it will be a great success.
The hon. Gentleman referred to letters and said that it would take us a year to ensure that everyone who claims receives their payment. The payments will be backdated, so we need to ensure the sensible administration of the system, otherwise he will complain that it is not working. We shall be writing to every pensioner. There will be an advertising campaign. People will get to know about the pension credit—perhaps through their MP telling them—and they will be able to claim. Those who claim up until October 2004 will have their entitlement and their payment backdated to the start of the pension credit.
I do not want to take too much more of the House's time but I want to say a few words about the policies of the official Opposition. I was interested to note that, in a recent speech, the hon. Member for Havant launched a six-point plan for pensions. The speech was a bit of a mishmash but interesting none the less; it was notable both for its admissions and for its omissions. For example, the hon. Gentleman accepted that means-testing would remain: "I am a realist", he said. However, the Opposition are committed to getting rid of the pension credit, so how will they make the calculations for the means test? Will they abolish the five-yearly assessment and the simple phone call needed to make a claim? Are they committed to a return to pound-for-
250
pound withdrawal of benefit on a weekly means test? Will they bring back their 40-page form, asking elderly gentlemen if they are pregnant? Admittedly, they asked the elderly ladies as well. When they say that means-testing will remain, are those their commitments?
As for the omissions, the Opposition should really have launched an eight-point plan. Two of their most important policies are not even mentioned. We know, for example, that the Opposition plan to privatise the basic state pension. Lately, they have gone quiet about that plan, but the letter from the hon. Member for Havant to the hon. Member for Sutton Coldfield makes it clear. I am glad that the hon. Gentleman is in the Chamber. The letter states:
"The vision of moving to a funded alternative to the basic state pension is a powerful and compelling one which you and I share."
We have not heard much about that from the Opposition lately. In fact, as stock markets have fallen and we have read more headlines about the deficits in funded pensions, they have gone quieter and quieter about that plan, but it remains their policy.
The other policy that dare not speak its name relates to the 20 per cent. across-the-board public expenditure cuts to which the hon. Member for Arundel and South Downs (Mr. Flight) is committed. He said:
"I have been digging through current spending, finding opportunities for cuts. It's too early to say how much but it could be up to 20 per cent."
The Leader of the Opposition was said to be "relaxed" about that target. What will the right hon. Gentleman cut? What damage would a 20 per cent. cut across the board inflict on pension provision?
Perhaps that is why the Opposition are committed to abolishing contracting out, as the hon. Member for Havant said in his interesting speech—[Interruption.] If the hon. Member for Mid-Worcestershire (Mr. Luff) would stop chuntering, I might be able to conclude my remarks—[Interruption.] Obviously, he cannot stop chuntering, so I shall continue.
The Opposition seem to be committed to the abolition of contracting out, because they have to make some savings somewhere. However, that would represent an £11 billion raid on private pension funds. Perhaps the hon. Member for North-East Hertfordshire will be able to tell us whether his party has a policy commitment to get rid of contracting out.
The rhetoric of the hon. Member for Northavon suggests that he wants to help women to achieve decent state and private pension provision, but his policy of abolishing pension credit and replacing it with age additions would penalise today's poorer women pensioners. He has admitted that.
Mr. Webb: Will the hon. Lady give way?
Maria Eagle: I am coming to the close of my speech.
The hon. Gentleman's policy of abolishing the state second pension would disadvantage today's working women who are carers or in low-paid jobs, who have broken work records or who are disabled. Currently, they are accruing a better second-tier unfunded state pension than SERPS ever offered them. His policy document admits that the state second pension is redistributive. His answer? Abolish it. I am forced to

251
conclude that his rhetoric about helping women is hollow, because his policy prescriptions would do the opposite.
Only the Labour party is committed to tackling pensioner poverty and ensuring the long-term future of occupational pension provision in this country by carrying forward the necessary reforms, building on what is good in our system. I commend the amendment to the House.
5.50 pm
Mr. Oliver Heald: I thought the Minister was rather defensive on a number of issues, and well she might be. It is all very well to trot out the old Labour lie about 20 per cent. cuts, but what we want to cut is tuition fees. We want to cut the bureaucracy that Labour has introduced that means we now have more administrators than beds in the NHS. We want to cut pensioner poverty. We want to take action, not just speak words.
You know, Mr. Deputy Speaker, it is a shocking thing that, with the pensions crisis that this country is facing at the moment, all we get from the Government is consultation. It is a consultation culture. We counted 38 consultations, but when we asked the Government how many consultations they had on pensions, they said they could not answer the question because of disproportionate costs. That shows what they are doing. They have this problem, which has emerged largely as a result of their own action. All they do is talk, talk, and have consultation after consultation—a consultation culture and no action.
As my right hon. Friend the Member for Wokingham (Mr. Redwood) rightly said, through the Chancellor's £5 billion a year pensions tax, first imposed in 1997, the Government have taken tens of billions of pounds from British pension funds and British pensioners. It is no wonder that since Labour came to power, the gap between the richest and poorest pensioners, as shown in independent evidence, has grown substantially. One has only to look at the crisis of Equitable Life to see the body blows that there have been to morale for pensioners and pension scheme members throughout the country.
There is more to come. In the mid-1990s the Government used to criticise us because there were 600,000 people who did not claim the help to which they were entitled. Now it is 700,000 and, as the hon. Member for Northavon (Mr. Webb) rightly pointed out, that is set to rise to a staggering 1 million in 2006.
Mr. Chris Pond: Would the hon. Gentleman recognise a simple point of mathematics—that if more people are entitled, it is very possible that more are not claiming the amount to which they are entitled? Is it not the case that the party that he represents, when it was in government, ensured that as few as possible were entitled to as little as possible?
Mr. Heald: How sad it is for someone who campaigned for better circumstances to be so self-satisfied and complacent about this issue. How can a Labour Government seriously say that their target for
252
2006—three years' time—is to be 300,000 worse in terms of take-up by the poorest pensioners in this country than we are today?
Mr. Bercow: Given that the increased complexity of the Government's means-tested benefits system has meant that hundreds of thousands of elderly pensioners have not received their dues on time or have not received them at all, does my hon. Friend agree that the plight of those poor pensioners is thrown into stark relief by the fact that many Ministers whose Department's public service agreement targets have been missed have been promoted and many other Ministers whose Department's targets have been met have yet been sacked?
Mr. Heald: Yes; my hon. Friend makes an important point. And is it not surprising that the Department of Trade and Industry document about rewards for failure did not cover Government Ministers?
It is pensioners and pension scheme members throughout the country who are being hardest hit by the Government's policies. One only has to think of the workers at Allied Steel and Wire, who are coming to London to march following the effective winding-up of their schemes, and those at Blyth and Blyth in Scotland, following the announcement last week, and those at 50 other companies, to see that action is needed to reform the law on the winding-up of pensions.
We had a debate about that earlier this year but we have seen no detailed proposals. It has been left to the right hon. Member for Birkenhead (Mr. Field), as usual, to come forward with constructive proposals that we can all support and debate.
Kevin Brennan: Will the hon. Gentleman remind the House who introduced the provisions under which pensioners from Allied Steel and Wire are not entitled to anything as a result of the company going bust?
Mr. Heald: It is correct that a Conservative Government introduced the measure in 1995 but the hon. Gentleman should be aware that the protection offered then to a 40-year-old working man if a company became insolvent was about 78 per cent. of his pension scheme entitlement and the protection for a 60-year-old working man was more than 95 per cent. Such levels of protection have collapsed because the Government have allowed the protection available under the Pensions Act 1995 to become deeply eroded.
Mr. Jim Cunningham: Will the hon. Gentleman give way?
Mr. Heald: I have only limited time.
It is shocking that only the Opposition secure or propose debates on pensions issues. The Government have not initiated a substantial debate on pensions policy since 23 March 2000. There was a Minister with responsibility for pensions at that time: Lord Rooker, as he is now. In the debate, he explained how the proposals in the 1998 Green Paper on pensions set out a long-term reform programme for the next 50 years. As I said, yet another Green Paper has been published. It is time that

253
the Under-Secretary said a little more than "shortly" or "soon" in response to questions on when we will have the debate on the Green Paper that was promised in January—we have not had a full-day debate after six months. Will the Minister assure us that the White Paper will be published before the summer recess—she does not have to tell us that it will be published next week?
Maria Eagle: Yes.
Heald: Well, we have made a bit of progress and I am very grateful for that.
Mr. Frank Field: This summer recess?
Mr. Heald: The right hon. Gentleman asks whether the White Paper will be published before this summer recess; let us hope it will be.
The Prime Minister's website sets out a list of Ministers. It shows the Secretary of State for Work and Pensions and says that he has overall responsibility for his Department. There is a marvellous picture of the Minister for Work and his duties are set out. There is then the heading "Minister for Pensions". The name and photograph are blank but that Minister's responsibilities are outlined: basic pension; state earnings related pension; state second pension; stakeholder and private pensions; occupational pensions; the national insurance fund and national insurance recording system; pension credit; Pension Service; minimum income guarantee; and the inter-ministerial group for older people. One would have thought that those responsibilities were associated with an important job that could not remain vacant for two months. It is clear that the Prime Minister is happy to appoint the right hon. Member for Makerfield (Mr. McCartney) as chairman of the Labour party for the party's internal convenience, but when it comes to the deep needs of pensioners in our country, he is prepared to leave things and let them ride. The Government think that it is more important to appoint new junior Ministers in the Home Office or other Departments than to appoint a Minister to deal with the important pensions matters that affect so many of the most vulnerable people in the country.
Tony Wright: Will the hon. Gentleman give way?
Mr. Heald: In a moment.
I wish to press the Minister a little more on the Chancellor's plans to introduce a new index for inflation: the harmonised index of consumer prices, which is the European measure of inflation. He wants to introduce that because he wants harmonisation with Europe ahead of a possible decision that this country should enter economic and monetary union—the euro.
However, the harmonised index of consumer prices, known as HICP and pronounced "hiccup", is a much lower measure of inflation than the retail prices index. One reason for that is that HICP does not include council tax, which has increased by 60 per cent. in recent years. Had HICP been applied since 1997, pension
254
increases over the past six years would have been half those that took place under RPI. In paving the way for the euro, the Chancellor is possibly damaging the future income levels of pensioners who rely on the basic state pension.
During Question Time on 14 April, the Under-Secretary was asked to give an assurance that the planned changes would not affect the annual uprating of pensions and other benefits. She tried to pass the buck to the Chancellor by saying:
"The Chancellor said that he was considering making such a change and, as he does so, he will no doubt examine carefully the impact that it might have on pensioners and upratings. The hon. Gentleman must make his representations to the Chancellor".—[Official Report, 14 April 2003; Vol. 403, c. 604.]
I never let such things go. The House will be pleased to know that about two hours later, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) took the point up in the Budget debate. He asked the Chancellor and the Chief Secretary about that at column 713 and both failed pointblank to say that pensioners would be no worse off if HICP were introduced.
Will the Under-Secretary or the Minister make a categorical statement at the Dispatch Box about what will happen to the uprating of pensions and other benefits following the introduction of the HICP measure? It is not good enough for Ministers in a Department with responsibility for pensions to shuffle the problem off to the Chancellor who is not prepared to give an answer. Millions of pensioners deserve an answer.
Mr. Jim Cunningham: The hon. Gentleman mentions the Chancellor in relation to the measurement of inflation, the RPI. I remind the hon. Gentleman that his party took elements out of the RPI measurement when it was in government. The charge that he levels against the Government Front Bench applies equally to his Government because that change had the same effect on pensioners at the time.
Mr. Heald: I remember when the hon. Gentleman used to stand up for pensioners. If he thought there was a threat to the uprating of their benefits he would say that it should not happen. Does he agree that it is right for the Opposition vigorously to tackle a measure that would halve the rate of increases that pensioners receive? Does he agree that we are entitled to an answer from the Minister in the Department that is responsible for pensions?
Mr. Cunningham: I notice that the hon. Gentleman has not answered my question and has waffled on about something else instead. I reassure him that if I am fortunate enough to catch Mr. Deputy Speaker's eye, I will champion the pensioners' cause. He should not worry about that.
Mr. Heald: I am grateful that the hon. Gentleman is able and willing to be part of the consensus in the Chamber that is trying to improve things for pensioners

255
and pension scheme members in Britain, unlike the Government who just spend all their time talking about it.
Mr. Pond: Will the hon. Gentleman give way?
Mr. Heald: The hon. Gentleman has already had a good go. I want to move on.
The House will know that 375 hon. Members on both sides of the House, including 173 Labour Members, have signed early-day motion 572 which calls for a simpler system of application for a Post Office card account over the counter and fewer barriers to customers obtaining cash from the post office, as they do now. The Government's change to direct payment has been fraught with difficulties, including the revelation that thousands of keypads installed in post offices will have to be torn out or seriously amended. Those with disabilities such as blindness, autism, and Alzheimer's disease, will be severely affected by those changes.
I have received hundreds of letters on that issue and I shall read brief extracts from just two of them. A pensioner from Suffolk wrote to me last month stating:
"I am 83 and have rheumatoid arthritis. I … keep active by collecting pension at the Post Office".
The letter went on to say that the pensioner is
"very, very dubious if I would be able to slot my fingers on the right numbers. Meanwhile some bright spark can be watching and noting my number—so no secrecy (or security) even if I manage to mentally retain the number … I have no recollection of officially being advised of the alteration of payment, beyond grapevine and advertisements".
Another pensioner wrote to me:
"I am registered blind. I recently went to my local post office and saw the key pad on the counter. I could not read the figures at all and would not have enough sight to use the key pad … I understand that a relative or friend can use the PIN number that is given, and draw the benefit on my behalf. I do not want this at all. I am very independent and value my privacy … This whole situation is a complete mess … We have enough difficulties with day to day living without having all this hassle."
Those are the views of hundreds of thousands of pensioners throughout the country. What reassurance can the Minister, who is directly responsible for the situation, give that their views are being listened to? What will happen about the PIN pads? The Minister has admitted in answers to me that there needs to be an exceptions service, but will it be based in the post office? What will the method of payment be? What is the timetable for the introduction of this vital service? I have asked the Minister numerous questions about that, and the answers have not been clear or satisfactory on any of these key points.
Some of the most vulnerable people in our country want to know how they are to receive their income in future. Will the Minister tell them? The Government's record on pensions is, unfortunately, one of which they cannot be proud. They are the Government of the pensions tax, the Government of the savings gap, and the Government of wind-up, HICP and poor take-up. They have failed millions of British pensioners, who are falling behind and will receive worse pensions than their parents for the first time in living memory. What is the
256
Government's response? Is it just the consultation culture, rather than the action that is needed for true reform?
We want a system where no one is held back but, equally importantly, no one is left behind. We want a fair deal on pensions for everyone. We intend to support the motion in the Lobby this evening. I invite Labour Members who believe in standing up for pensioners and pension scheme members to send a message to the Government that they must listen, in the interests of present and future pensioners, to the consensus that is emerging on the Opposition Benches and among some on the Labour Benches. What is needed is not more talk, but urgent action.
Several hon. Members rose—
Mr. Deputy Speaker: Order. Before I call the next Member to speak, I remind the House that there is now an 8-minute limit on Back-Bench speeches.
6.7 pm
Mr. Jim Cunningham: I was interested in the tirade from the hon. Member for North-East Hertfordshire (Mr. Heald). I remember when he was in government, and the attitude of his Government. He made much of the fact that there had been a number of consultations between the Labour Government and various pensioners groups—he gave us the total numbers involved. That was in contrast to his Government, who never consulted anybody about anything and merely inflicted changes on people.
Much more has to be done for pensioners, but we should not lose sight of the fact that the Government have done a considerable amount for them already. I remember the debate in the Chamber one Friday morning about the winter chill allowance. The hon. Gentleman and some of his hon. Friends sabotaged the argument, which resulted in a Minister going. From our point of view, he was an effective Minister in that area, despite being a Tory Minister. That individual happened to be on the receiving end because he was sympathetic to the idea of doing more for pensioners, but his hon. Friends were not so keen on that, so he ended up on the scrap heap of history.
I also remember the debate about the £10 that used to be given to pensioners once a year as a handout. The Labour Government started to put that right by means of the winter chill allowance, which is worth about £200 a year. That is a positive step to help pensioners and alleviate pensioner poverty.
Under the Tories, some local authorities granted free bus passes whereas others did not, and there were disparities. The Tory Government did nothing about that, but the present Government have taken a step in the right direction and at least pensioners now only pay half fare. In the west midlands, pensioners get free bus travel. A start has been made, but a lot more needs to be done.
There is some concern about the Green Paper. I do not think that people want to work beyond a retirement age of 65. Obviously, some may want to work on, and it may be in the interests of the economy for them to do so, but by and large most people like to think that they will retire at 65.
The pensions crisis began under the Tory Government. I worked in factories then, so I have first-hand knowledge. I was involved in the trade union

257
movement when it encouraged people to stop in the state earnings-related pension scheme. When in government, the Conservative party encouraged people to go into private occupational pension schemes. It tends to be forgotten that those schemes were often introduced to offset a wage deal. We should not lose sight of the fact that the seeds of the present pensions crisis were sown under the Conservative Government. When they were in government they used to give us chapter and verse on the misdemeanours of previous Labour Governments. What they sow, they also reap.
The hon. Member for North-East Hertfordshire (Mr. Heald) said that I champion pensioner causes. One of the causes that I am involved in at the moment concerns occupational pension schemes. I think that a pensioner trustee should be elected by pensioners' groups on to the boards, so that they can look after the statutory interests of the scheme and represent pensioners who have paid into the scheme, but who seem to be forgotten when dividends and other matters are considered. Next week, I shall be pursuing a Bill to do that. I hope that the House will let it go through, but I have a funny feeling that it may not.
The hon. Member for North-East Hertfordshire also said that if the Conservatives were to come to power they would cut tuition fees. They introduced them, then they ducked the issue by setting up the Dearing inquiry. They never took a decision: they left it to the incoming Labour Government to deal with.
There is a serious problem with pension funds. It is known that at least 100 companies have serious difficulties in financing their pension schemes, especially those providing staff pensions. Having said that, I must give the Government a little credit. About two years ago they set up what I would have called the financial services regulator. The regulator has had only one or two years, and the House may want at some future point to examine the work of the regulator and see what remains to be put right.
The Rolls-Royce pension fund has liabilities that are more than the value of the company. We heard from people from Rolls-Royce a couple of weeks ago. The regulator knows that the company is sitting down with the trade unions to address the problem, and it is prepared to find extra resources. I am not criticising Rolls-Royce, because it is trying to look after the interests of employees in the pensions area.
As for the criticisms of the Government, I remember the debates about VAT on fuel. The Conservative Government wanted to go for the maximum rate, but when we came to office we reduced it as far as we could within European regulations and agreements. The present Government should be given credit for that. They should also be given credit for providing free television licences. When we attack the Government, we tend to forget that they have done some positive things.
The other policy with a big effect not only on us, but on pensioners, is free eye testing. I can certainly remember that some hon. Members were not too happy about the abolition of free eye tests, which we have brought back. From a health perspective, that must be a very valuable thing.
There are some concerns among pensioners. I take the point about post offices and especially cashpoint services. The Government are trying to address the
258
matter, but I know that many pensioners prefer to go to their local post office and draw cash. We know that there are safety elements, but there is still a culture of people who much prefer to see cash than to use smart cards. That issue will be gradually overcome, and I notice that the numbers are diminishing.
I am one of those people who believe in the pensions link; I always have and I always will. I know that there are arguments against it—
Mr. Deputy Speaker: Order. The eight minutes are up.
Mr. Frank Field: On a point of order, Mr. Deputy Speaker. Will you advise us as to whether, if we all speak for four minutes, we will all get into the debate?
Mr. Deputy Speaker: That is a matter for hon. Members to work out among themselves.
6.16 pm
Mr. Paul Goodman: I shall try to please the right hon. Member for Birkenhead (Mr. Field) by being as brief as possible, but I hope that he will forgive me if I begin my speech by congratulating the hon. Member for Northavon (Mr. Webb) on his entertaining and incisive speech. It reminded me of the happy occasion on Second Reading of the State Pension Credit Bill when my party, his party and the right hon. Member for Birkenhead voted together to raise the basic state pension for over-75s. That would have aided older pensioners, who tend to be poorer, and among whom there are very many women. The hon. Gentleman was right to point out that targeted help does not always mean means-tested help—a point that I wish to refer to later if I have time.
Obviously, the Government cannot possibly take all the blame—I hope to strike a note of consensus here—
Mr. Andrew Mitchell: Most of it.
Mr. Goodman: Indeed, but they cannot take all the blame for what the Select Committee on Work and Pensions described in its latest report as the crisis of confidence in the pension system, and what my hon. Friend and I would describe as the crisis in the pension system. Surely, the Government cannot take all the blame for the fall in the stock markets, the switch from good, defined benefit schemes to less good defined contribution schemes or the challenges posed by an ageing population.
However, I believe that the Government have made two major blunders—one tactical and one strategic—and I hope to have time to refer to both. I shall pass over the tactical blunder briefly—the removal of tax relief on dividends in the Chancellor's first Budget in 1997, which has taken £5 billion a year after pension funds. Like many measures, it seemed a good idea at the time. The Government wished to tax by stealth, rather than doing so openly, but in the recent inquiry of the Work and Pensions Committee, we heard evidence suggesting that that move has been very damaging indeed. I believe that the Minister should apologise for that in his winding-up speech.

259
The strategic error is perhaps even more serious, and the hon. Member for Northavon referred to it—the rise in means testing with the consequences for take-up, which has led to a fall in incentives to save. I wish to begin exploring that theme with a quote from the Chancellor:
"I want the next Labour Government to achieve what in 50 years of the welfare state has never been achieved. The end of the means test for our elderly people."
He said that in 1993, and I think that we can all agree that whatever has happened since, we have certainly not seen the end of the means test. In 1995, when the Conservative party was in government, 38 per cent. of pensioners were on means-tested benefit. Next year, that figure may well be up to 59 per cent.
The right hon. Member for Birkenhead would doubtless remind us that means-testing has pernicious effects on incentives to save, but I want for the moment to concentrate on take-up. According to the Government's own figures, between 1999 and 2000, between 22 per cent. and 36 per cent. of pensioners did not take up the minimum income guarantee.
When the Select Committee on Work and Pensions, on which I have the good fortune to sit, carried out its inquiry into pension credit, the Government made it clear that their expectation of the take up of pension credit—not a target, but an expectation, which they themselves described as ambitious—was some 67 per cent. In other words, the Government expect the non-take-up rate of pension credit in 2004 to be 33 per cent.—a third of pensioners. Despite the Minister's good intentions and the phone service that she mentioned, the Government do not expect the take-up rate to rise. In future, because pensioners will have to apply for the pension credit less frequently, which understandably is a noble aspiration of the Government, it will be even more difficult to assess whether take-up rates are rising or falling. By 2050, some 65 per cent. of pensioners could be on pension credit. In short, an even larger number of pensioners will be on means-tested benefits, with take-up rates possibly as low as 65 per cent. or 67 per cent.
Another problem is that of incentives to save. In any pensions system, there will always be a trade-off between security and the incentive to save, but the problem, which the Work and Pensions Committee touched on in its pension credit inquiry and in its most recent inquiry, is that different elements of Government policy appear to be trying to do completely different things. The Government have added to the basic state pension, as the hon. Member for Northavon said, the state second pension—to replace SERPS, or the state earnings-related pension scheme—the MIG, or minimum income guarantee, and now pension credit and stakeholder pensions, which, when I last looked, were hitting about 2 per cent. of their target group. The state second pension aims to prevent people who have worked all their lives from relying on means-tested benefits in retirement, but the MIG, if the Government continue on this course, will draw more and more pensioners into means-tested benefits when they retire. Government policy is trying to do two completely different things at once.
In the course of the recent Select Committee inquiry, one problem become very clear—namely, that the Government cannot hope to address the difficulties with
260
private pensions unless there is a stable, simple system of public sector pensions that can be relied upon, but because the two completely different major elements of the pension system try to do two completely different things" that certainty is not in place. I refer to the final paragraph of our report on pension credit, which was signed by all members of the Labour-dominated Committee. It said that
"the Pension Credit unquestionably adds further complexity to an already byzantine system of retirement provision, which is causing confusion for pensioners, pension providers and those saving for their old age."
It is sad that after such a long period we still have no pensions Minister to address those problems. There is a widespread feeling in this House and outside it that the Green Paper, whatever else may be said of it, did absolutely nothing to address the fundamental confusions that lie at the heart of the Government's pensions policy. That is why my hon. Friends and I will, with good heart, vote for the motion.
6.23 pm
Mr. Frank Field: The House is clearly very unobservant. We have had a pensions Minister since the election in 1997—he goes by the title of Chancellor of the Exchequer. While it would be engaging for one of us Back Benchers to hold that position after the reshuffle, they would be the wrong candidate if they thought that they would have a real and effective role to play, although they may show the skills to advance further in the Government.
I welcome the debate and wish briefly to make three points. I hope very much that the Government are reviewing with the utmost seriousness what their next step should be on pensions policy.
If we look back to the position when we were elected in 1997, I doubt whether anyone would have thought that we would be having a pensions debate like this one today, or that so many of our constituents would be facing the worry and anxiety that they now face. Of course it is easy and cheap to lay the blame on various individuals and Governments, but I wish to be as constructive as possible in making three points about the fundamental review that I hope the Government are undertaking.
First, the starting point must be what we thought about pensions, pension security and pension promises in 1997. In those days, we would boast that Britain had the largest, most secure form of funded pension provision not only in Europe but weighed against the whole of Europe put together. We underplayed the importance of the poverty of the state retirement pension because we thought that the strain could be taken up by occupational pensions. For various reasons, we now face a very different situation from that pertaining in 1997, and we can no longer rest on our laurels by saying that the occupational system will somehow take us through.
The second issue about which I hope the Government will be honest in their review is that their emphasis on means tests now seems misplaced. It is quite clear that the message has gone out to all too many of our constituents that savings can damage their retirement income. We cannot explain the collapse in savings in this country in any other way than by saying that people are

261
being very rational and that about 40 per cent. of working people cannot now save to make themselves a penny better off—let alone substantially better off—through forgoing income now and trying to push it into their retirement.
Worse still, the means-testing strategy on which the Government embarked—with the best intentions in the world—is not sustainable. The consultation document published by the Government to ensure that we cheered the announcement of the pension credit shows that, by 2050, if only 65 per cent. of those who are eligible take up the pension credit, it will cost an additional 11 p on the standard rate of tax. We are now living in an age of cuts in income tax, not of pushing them or any other taxes up. We know, therefore, that in the longer run, the pension credit cannot survive in its current form. That is the second reason why we need a fundamental review of pension strategy, and I hope that such a review is already well under way in government.
My third point is about occupational pensions. It is a plea to the Government. When they come forward with their review, I ask them please not to insult our intelligence by trying once again to make out that occupational pensions can take the strain. It is possible that, if we are lucky, a few employers will set up new schemes, but no amount of whizz ways of encouraging employers to get their employees into schemes will surmount the pension crisis that we face. The task of introducing the fundamental reforms, which have now been six years in the waiting, will, if anything, help to underpin what remains of occupational pension schemes. Sadly, however, we are not in the game of seeing occupational schemes expand. As my hon. Friend the Member for Cardiff, West (Kevin Brennan) knows, we are in the game of pension wind-up. I hope that the Government will introduce proposals for an insurance scheme, so that those who find themselves having their pension promise snatched away will be secure.
When we were elected, 60 per cent. of those who voted were aged over 45. It is quite possible that when we go to the polls in 10 years' time, the majority of those who vote will not be interested in what the Tories did, because we will have been in power for more than 10 years. Furthermore, probably for the first time, the majority of those casting their votes will be pensioners. If that does not concentrate the mind of the Government wonderfully on the Green Paper, I do not think anything will.
6.30 pm
Mr. Andrew Mitchell: I cannot quite bring myself to congratulate the Liberal Democrats on the motion, but the hon. Member for Northavon (Mr. Webb) is owed some credit for the way in which he opened the debate. I draw the House's attention to my entry in the Register of Members' Interests.
Many of us are so concerned about the current pension crisis that we have even considered deploying the arcane parliamentary procedure of tabling a motion, to be debated on the Floor of the House that would allow us to cut the salary of the Minister for Pensions. As there is no Minister for Pensions, however, that would be otiose.
262
For 60 days there has been no such Minister. As was pointed out by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald), Labour's priorities are clearly revealed by the fact that, having replaced the chairman of the party immediately, after 60 days it still does not think the replacement of the Minister for Pensions is important, despite the present circumstances. The Prime Minister is obviously as paralysed when it comes to appointing a Minister as he is when it comes to implementing a proper pension policy. He clearly needs advice.
I can tell the Prime Minister that there is significant talent, even on the Labour Benches, among members of the Select Committee on Work and Pensions. Several of the Committee's members could easily replace the Minister for Pensions if he had a mind to appoint one of them. I do not want to damage the career of the hon. Member for Stalybridge and Hyde (James Purnell), but it is rumoured that he is about to take on the task. That would certainly be better than an empty chair.
But the real answer may be to bring back the right hon. Member for Birkenhead (Mr. Field), whom it is a pleasure to follow. I mean no disrespect to the Minister who will wind up the debate, but I am sure that every Member would welcome the right hon. Gentleman's reappearance at the Dispatch Box. He would bring some sanity to pension policy.
The handling of the issue of why there is no Minister for Pensions, and has been no such Minister for 60 days, is symptomatic of the chaos of the Government's pension policy. There have been three reports on what has happened in the world of pensions, but there has been nothing from the Government except the Green Paper. In their amendment, the Government pray in aid the Select Committee's report. My hon. Friend the Member for Wycombe (Mr. Goodman) accurately warned them about their selective quotation.
I hope that the Under-Secretary of State for Work and Pensions, the hon. Member for Liverpool, Garston (Maria Eagle), will listen to this. In the amendment, the Government quote the Select Committee thus:
"current policies have been successful in reducing pensioner poverty".
The Under-Secretary included that quotation in her opening speech. The full wording, however, is this:
"While current policies have been successful in reducing pensioner poverty in the short term, we recognise there are doubts that they are sustainable in the long term".
The Government, who we understood were trying to lay off some of the spin, have deliberately taken a quotation out of context and stuck it in the motion. They should at least have the integrity to acknowledge that.
While we are on the subject of the Committee's report, let me add that only two of our 29 recommendations are supportive of the Government. I am delighted to see that the Committee's Chairman is present: he will substantiate that if Ministers require him to do so. All the other recommendations call on the Government to do something. The report speaks of a lack of clarity, and, as my hon. Friend the Member for Wycombe pointed out, if the Government cannot understand that it is for the Government sector first and foremost to provide clarity, the private sector will be able to do nothing.

263
Before I leave the subject of the report that the Government have so iniquitously misquoted, let me draw their attention to paragraph 130, which deals with the state second pension. It says:
"The Government has not responded to that recommendation".
—that is, a recommendation in an earlier report—
"and we ask them to do so within two months of publication of this report".
The previous report had a three-month time scale. In the report I have just quoted, we asked the Government to respond within two months. Those two months have elapsed and the Government have said nothing. Not only is there no Minister for Pensions but we are not getting a proper response to questions on pensions.
As most people apart from the Government know, there is a crisis in the pensions industry and in the pensions community. It is not all the Government's fault, as my hon. Friend the Member for North-East Hertfordshire said, but the £5 billion change cannot have helped. My right hon. Friend the Member for Wokingham (Mr. Redwood), who is after all a banker of some repute, said that the net present value of that change was no less than £105 billion That is the scale of it. It may have looked like a small change to the Government, but not to anyone else.
The difficulties of the pension credit have been well advertised in the debate. There will be serious difficulties in implementation. If Ministers do not realise that, they soon will. I visited the pensions office that serves my constituents in Sutton Coldfield. It is clear that the colossal increase in the prospective work load will be extremely difficult to handle.
The Government stand condemned by almost everyone, not least the right hon. Member for Birkenhead, for their approach to means-testing. Sometimes, I think that the Government will not be happy until every pensioner is on some form of means-testing. It is the wrong approach. It enshrines dependency. The Government give with one hand and take away with the other and that is wrong.
The complexity with which the Government have approached these tasks is noteworthy. It is almost impossible for an independent financial adviser to give advice with confidence without understanding what the Government will do with state provision. The stakeholder pension has been a complete flop. Not only, as the hon. Member for Northavon said, does the ABI dismiss it, but it has managed to hit practically none of the target group. I think I am right in saying that nine out of 10 of the shell stakeholder pensions set up by companies remain exactly that—shells. No one is putting any money into them.
When my party left Government in 1997, our pensions were the envy of Europe. Under this Government, it is a litany of confusion, complexity and failure. Their noble attempt at the start of their time in government to reverse the ratio of funded to unfunded pension provision, which was 40:60, has failed. The Government will have to make some decisions on pensions. The sooner they make them for the benefit of current pensioners and pensioners to come, the better.
6.37 pm
Kevin Brennan: It is coming up to the first anniversary of Allied Steel and Wire in Cardiff and in Sheerness going bust; hence my keener interest in occupational pensions. I was utterly gobsmacked when I discovered that those workers were originally employed by a nationalised industry—although some were employed by a private steel company—that they were compelled as part of their employment contract to participate in an occupational pension scheme and paid into that scheme for decades but then, when the company went bust at the end of that period, they faced the prospect of losing most—80 per cent. or more—of their pension. I was gobsmacked that that could be the legal position in this country in the 21st century, but it is.
I welcome today's announcement—I am sure all hon. Members do—that Celsa, the Spanish steel company, has announced that it will reopen the Allied Steel and Wire plant in Cardiff with 400 of the 800 posts; I hope that many of those who previously had jobs there will again be employed. I commend the National Assembly for Wales, the Government and the local council for helping that to happen.
Nevertheless, many of those workers still see the complex issue of pensions in pretty stark and simple terms. They see that if there is a shortfall in the occupational pension scheme for people who are council employees, it is underwritten by the council tax payer. They see Members of Parliament and Members of the National Assembly having extra sums paid into their pension schemes and having their schemes potentially underwritten by the taxpayer. In contrast, how is the loyalty of Allied Steel and Wire workers repaid? Many of those workers will have worked loyally for the company over many years, and did not take early retirement or early redundancy, often because they were the best of the work force. When the company goes under because the pension scheme and the stock market happen to be at a low ebb, they are left to pay the price and bear the risk.
I welcome the fact that the Government have introduced the Green Paper and that they have been listening on this issue, particularly in the past six months. I want to tell them what I would like to be included in the forthcoming announcement. I want the pension insurance scheme to be introduced, with the Government standing behind it, on the basis of the US Pension Benefit Guaranty Corporation, as suggested in press reports in yesterday's Financial Times and elsewhere.
There are those who talk about moral hazard, but that can be overcome. There can be safeguards in such a scheme. For example, a cap can be put on, so that fat-cat pensions do not get paid out of it. It is also possible to have a system whereby 90 per cent. of the pension, say, is met, rather than 100 per cent. Let us forget moral hazard and other theoretical economic arguments; that system would overcome the immoral hazard that workers face when they pay into pension schemes that at the end of the day, through no fault of their own, are not worth the paper they are written on.
We must take care to understand what happened when the United States set up the Pension Benefit Guaranty Corporation in the 1970s, in terms of existing funds that had yet to be wound up. The US made sure

265
that workers who suffered as a result of the wind-up of those schemes after the companies had gone into insolvency were protected. That is what should happen now, and it is not retrospection. There are schemes, such as the Allied Steel and Wire pension scheme, that have yet to be finally wound up. If the Government are going to legislate in this area to create a body like the PBGC, and if such legislation takes time to introduce—I accept that it does—in the meantime the Government should stand behind those schemes and meet at least the majority of obligations in respect of those that have yet to be wound up. That is a quantifiable proposal that could be costed and met. We have a moral obligation to look seriously into doing that, and I should like the Government to say that they will.
I shall wind up now, because time is very short and I want to hear what the Minister has to say. The issue of pensions—particularly occupational pensions, and the question of whose side we are on—is a key test. Are we on the side of the workers or the fat cats, and who carries the risk when companies go bust? In this case it is the workers who have carried the risk. That is morally wrong, and a Labour Government should be, and I hope will be, prepared to do something about it.
Maria Eagle: On a point of order, Mr. Deputy Speaker. The hon. Member for Sutton Coldfield (Mr. Mitchell) accused me of quoting selectively from the Select Committee report—
Mr. Deputy Speaker: Order. I hate to interrupt the Minister so quickly, but this sounds more like a matter for debate than a genuine point of order. We are short of precious time, and perhaps this is an issue that she can take up at a later date.
6.43 pm
Paul Holmes: This has been a truncated debate on an important issue, but despite its brevity it has been excellent. My hon. Friend the Member for Northavon (Mr. Webb) gave his usual masterly tour de force. As he does every time he speaks on this subject, he not only explained the complexities of the pension system in a clear and understandable way, but made it entertaining. He outlined the failures of the inadequate state pension, the nightmare of means-testing, and the Government target through which they set out to miss 1 million of the poorest pensioners—who should be entitled to the tax credit—just as they missed one third of those entitled to the minimum income guarantee. He also outlined the failure of the stakeholder pension.
The Under-Secretary of State for Work and Pensions, the hon. Member for Liverpool, Garston (Maria Eagle) responded by denying that there was a pensions crisis, although nobody else seemed to agree with that. We heard that the Government had consulted widely and at great length, but so far to no avail. We heard criticism of our policy to target directly the poorest pensioners in the older age ranges through an age addition to the pension. The argument was that that would miss some of the younger pensioners whom the means-testing process was designed to hit. However, the Under-Secretary herself admitted that the Government expect to miss 1 million of the poorest pensioners anyway under the existing system. Our system would miss some, as my hon. Friend the Member for Northavon has
266
pointed out in previous debates, but far fewer than the 1 million whom the Government plan to miss under the new scheme.
The Minister went on to tell us how simple the application process was for various means-tested benefits, particularly the pension credit. In that case, why do one third of the people at whom it is aimed fail to claim it? In closing, however, the Minister attacked Conservative policy, so I could find some agreement there.
The hon. Member for North-East Hertfordshire (Mr. Heald) started by denying his own party's statements about seeking 20 per cent. cuts in order to cut taxes. I certainly disagree there, but he made three valuable points with which I agree. He attacked the consultation culture, which is often bought at the expense of delivery. He mentioned the fact that the Government are considering taking council tax out of the inflation rate, yet the inflation rate is used for uprating pensions. We believe that measures of inflation should take into account the real arid major cost to pensioners of items such as council tax. The hon. Gentleman also made a valid point—I recall encountering it elsewhere in my role as spokesman on disability—about the failure or absence of consultation on the introduction of PIN pads, which many pensioners simply cannot use.
The hon. Member for Wycombe (Mr. Goodman) made the valuable point that when in opposition, the Chancellor said that he intended to end means-testing completely. Instead, after six years in government, he has massively expanded it beyond anything that we have seen before.
In the few remaining minutes, I shall move on to two linked items from the motion. The new Minister for Pensions, when appointed, will be the sixth in six years. That rapid turnover, and the long delay in appointing a new Minister, suggests the lack of priority accorded by the Government to pensions issues. Similarly, I note a lack of urgency in dealing with the problems of private company pension schemes, which are a matter of great concern to many people. Numerous examples have arisen and been widely discussed in the House and across the country.
The Government urge everyone to pay into private pension schemes, warning that we can no longer rely on the state pension. Yet horror stories about underfunded schemes and schemes that fail to pay out when companies go into receivership are numerous and growing and can only deter people of working age from entering into such schemes. Examples abound: some have been raised today, and others in the past by myself and other hon. Members.
In 2001 Chesterfield Cylinders, one of six companies in the country owned by United Engineering Forgings Ltd., went into receivership. The employees, some of whom have worked for the company and paid into its pension scheme for 40 years, are still waiting to hear precisely what will happen, but have been advised that they may receive as little as 30 or 40 per cent. of the pension that they had saved for over their whole working lives. The following year, Dema Glass, also in my constituency, went into receivership and the workers were told exactly the same story: they would eventually receive a tiny fraction of the pensions that they had paid into all their working lives. Many of my constituents

267
have been hit during the past few months by the problems of another company, Coalite Products Ltd., which is based just outside my constituency in Bolsover. Eighty-two of my constituents have been made redundant, and all now face vastly reduced pension payments for the same reason. We heard from the hon. Member for Cardiff, West (Kevin Brennan) about similar problems with Allied Steel and Wire.
The common factor is not fraud, as happened with the Maxwell pensioners. People are losing 50 to 60 per cent.—possibly more—of the pensions that they have paid for all their working lives, but it is legal. It is the product of several factors. The fall in stock market values is one, and pension holidays, which companies take in good times without making up for them in bad times, are another. Using funds for early retirement rather than redundancy robs the pension fund for people who are still in work. To add insult to injury,15 per cent. or more of what is left in the fund often goes to the receivers in the long drawn-out process of winding schemes up.
I raised those issues in a letter of 2001 to the former Minister for Pensions, the right hon. Member for Makerfield (Mr. McCartney), in oral questions and in debate in the Chamber last year. Two years on, however, there has been no concrete response—nothing, other than saying that measures exist to counter fraud. As I said, this is not fraud: it is legalised robbery. The only concrete proposals from the Government side in those two years have come from the private Member's Bill introduced by the right hon. Member for Birkenhead (Mr. Field). I shall be here to support it on Friday 20 June.
I close by repeating the cry that we have heard from several hon. Members over the past two hours. The Government must act on pensions very quickly to tackle the pensions crisis and bring two years of dither and denial to an end.
6.49 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks): This has been a useful and interesting debate, and I congratulate the Liberal Democrats on introducing it. In a spirit of generosity, I confirm that it is wholly fitting that the Liberals should talk about pensions, although when I told a political colleague that I intended to be generous to the Liberals, I was counselled against it. However, it was the Liberal Government in 1908—some time ago—who introduced the first old age pension, at the generous rate of 5 shillings. It was subject to a means test—and, apparently, a test of moral character. I have no doubt that the great majority of Liberal Democrat Members would satisfy at least one of those tests. Whether they would all satisfy the same test is not for me to judge.
A few years later, the Liberals introduced the National Insurance Act 1911, and it was the greatest of Liberal reformers, William Beveridge, who introduced the historic 1942 report on post-war social reconstruction. That is the Liberals' historical record up to the 1940s. Sadly,search as I might, I could find no further achievements in the following six decades. Indeed, while the winding-up speech from the hon. Member for Chesterfield (Paul Holmes) contained a critique, it did not contain any concrete proposals.
268
The hon. Member for Northavon (Mr. Webb), who introduced the motion, made a useful speech, much of it an application for the job of Pensions Minister. I am on the working age side of the Department and have some responsibility, together with my right hon. Friend the Minister for Work, for Jobcentre Plus. It can normally find the job that people are seeking, but that may not be possible on this occasion. I shall discuss it with my colleagues, but the hon. Gentleman should not call us; we will call him—or not.
When we took office, the most immediate challenge that we faced was pensioner poverty. We have therefore had a strategy of targeting the poorest pensioners. We do not apologise for that; indeed, we are proud of it. The targeting has meant that the bottom one third of pensioners in terms of income have gained £3.5 billion a year, which is some four and a half times more than the resources that would have been necessary to restore the earnings link, as some suggested we should do. Pension credit will entitle the poorest 50 per cent. of pensioners to £400 extra a year in addition to what they receive at present.
We have heard some textual criticism of the Work and Pensions Committee's report, and dispute about its conclusions, but it is clear what is meant when it says:
"We agree that the current policies have been successful in reducing pensioner poverty."
The renowned Institute for Fiscal Studies, for which the hon. Member for Northavon has some regard—he may even have a pension from it—has said:
"Quite unlike during other periods of strong economic performance over the last 40 years, pensioner incomes across the distribution have kept pace with the growth in non-pensioner incomes. This has been in large part due to big increases in the generosity of state benefits."
Annabelle Ewing: The Minister referred to the pensioner credit. Given that one in four pensioners in Scotland are still living in poverty after six years of Labour Government, can he say whether a specific target for take-up will be set for Scotland? If so, what will the target be?
Malcolm Wicks: There is not enough time to discuss the definitions of poverty, and I do not necessarily accept the figure that the hon. Lady has given. I hope that despite some controversy about pension credits, every Member of Parliament will be part of the strategy to encourage people to take them up, because that is what is important. We should forget the politics and get behind the policy, for the sake of our poorest pensioners.
The other major theme was the future of occupational and private pension schemes. I cannot reply to all the points that have been made, but my right hon. Friend the Member for Birkenhead (Mr. Field) made a helpful and friendly contribution, as usual. It is obviously a week for ex-Ministers to be as helpful as possible.
My hon. Friend the Member for Cardiff, West (Kevin Brennan) also dealt with those matters. Different views have been expressed in the Green Paper consultation, on a wide range of issues. We must now find the best solution for all involved, balancing the needs of employers and savers, building on consensus where we can, but accepting that there are difficult decisions to be made.

269
Indeed, we must find a balanced way forward for all the matters highlighted in the Green Paper. For example, protection of members when a scheme is wound up, and the priority order of scheme creditors, are critical issues. Many people have welcomed the Government's proposals to share out assets more fully when a scheme is wound up. The challenge is to decide exactly how that can be done to benefit both current and future pensioners in the scheme. Revising the division of assets could take both age and length of service into account for future pensioners. That would guard against people joining a scheme near retirement age and ending up at the head of the queue if the scheme winds up.
Many employers feel very strongly about the priority order of creditors. A range of views has been expressed about the best way forward, and the Government must determine exactly what can be done to strike a balance between those options. As my colleague the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), indicated, we will publish our proposals this summer.
I can tell my hon. Friend the Member for Coventry, South (Mr. Cunningham) that, with consultation about a new kind of regulator currently taking place, the Government hope to build on the work of the Occupational Pensions Regulatory Authority and improve the speed up for such schemes.
Bob Spink: Would the Minister consider relaxing section 67 of the Pensions Act 1995 to enable companies to amend schemes rather than simply close them down?
Malcolm Wicks: We set out options on that in the Green Paper, and we are examining the matter carefully. It is no one's fault, but I am afraid that the timing of the debate and the fact that we are not yet ready to publish our proposals mean that I am not prepared to comment on the matter.
Lynne Jones: Another important challenge for the Government is to establish a sure foundation on which people can plan for their future retirement. The current hotch-potch of benefits, pensions and credits is incomprehensible. Does my hon. Friend agree that it is impossible that it will stand the test of time?
Malcolm Wicks: What is important is that we are giving more money than ever before to the poorest pensioners. That is the key test. We have established a Pension Service to look at the needs of pensioners, and we have published the Green Paper. I think that that shows the Government's good intent.
The hon. Member for North-East Hertfordshire (Mr. Heald), the shadow Minister, raised a number of issues, and I cannot comment on them all. However, he asked about direct payments in particular, and I appeared before the Select Committee on Trade and Industry to deal with that only this morning.
I am sure that the direct payment approach is the right approach. It gives customers—pensioners or benefit recipients—choice as to whether they have a Post Office
270
card account, or a bank or building society account. We are talking to the relevant organisations and to elderly people themselves about the requirements of people with special needs, for whom there will be an exceptions service. I assure the hon. Member for North-East Hertfordshire that we are working and listening very hard to ensure that we get that service right in the future.
Liberal Democrat and Conservative Members have one thing in common—they are both opposed to pension credit. What are the implications of that? The Liberal Democrats make hay with take-up figures, and I have already noted that we must all get behind the take-up issue. If the Liberal Democrats had their way and formed a new Government to follow in the footsteps of the great Government of 1906—I do not know when that might happen, but it might be as far in the future as 2106—the take-up of pension credit would be zero, because the credit would not exist. The implications of that would be grave injustice, and the pound-for-pound withdrawal that exists under the current system would still prevail.
With all due respect, I sometimes think that the hon. Member for Northavon should cheer up. He does not seem to like anything that the Government have done for pensioners—the winter fuel allowance, the state second pension or payment modernisation. He opposes the pension credit—and he probably opposed the invention of the wheel, and of steam wireless, too. He is becoming the moaning Minnie of the House. He is the Victor Meldrew—I beg his pardon, the Professor Victor Meldrew—of the Liberal Democrats. He really should cheer up. He has a proposal—
Sir Robert Smith rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the original words stand part of the Question:—
The House divided: Ayes 202, Noes 313.

Division No. 218]

[6:59 pm

AYES

Ainsworth, Peter (E Surrey)

Burns, Simon

Allan, Richard

Burnside, David

Amess, David

Burstow, Paul

Ancram, rh Michael

Burt, Alistair

Arbuthnot, rh James

Butterfill, John

Atkinson, Peter (Hexham)

Cable, Dr. Vincent

Baker, Norman

Gallon, Mrs Patsy

Baldry, Tony

Cameron, David

Barker, Gregory

Campbell, Gregory (E Lond'y)

Baron, John (Billericay)

Campbell, rh Menzies (NE Fife)

Barrett, John

Carmichael, Alistair

Beggs, Roy (E Antrim)

Cash, William

Berth, rh A. J.

Chidgey, David

Bellingham, Henry

Chope, Christopher

Beresford, Sir Paul

Clappison, James

Blunt, Crispin

Clarke, rh Kenneth (Rushcliffe)

Boswell, Tim

Clifton-Brown, Geoffrey

Bottomley, Peter (Worthing W)

Collins, Tim

Brady, Graham

Cormack, Sir Patrick

Brazier, Julian

Cotter, Brian

Brooke, Mrs Annette L

Cran, James (Beverley)

Browning, Mrs Angela

Curry, rh David

Burnett, John

Davey, Edward (Kingston)

271

Davies, Quentin (Grantham & Stamford)

Maples, John

Marsden, Paul (Shrewsbury & Atcham)

Davis, rh David (Haltemprice & Howden)

Mates, Michael

Djanogly, Jonathan

Maude, rh Francis

Doughty, Sue

Mawhinney, rh Sir Brian

Duncan, Alan (Rutland)

Mercer, Patrick

Duncan, Peter (Galloway)

Mitchell, Andrew (Sutton Coldfield)

Duncan Smith, rh lain

Evans, Nigel

Moore, Michael

Ewing, Annabelle

Moss, Malcolm

Fallen, Michael

Murrison, Dr. Andrew

Field, Mark (Cities of London & Westminster)

Norman, Archie

Oaten, Mark (Winchester)

Forth, rh Eric

O'Brien, Stephen (Eddisbury)

Foster, Don (Bath)

Öpik, Lembit

Fox, Dr. Liam

Osborne, George (Tatton)

Francois, Mark

Page, Richard

Gale, Roger (N Thanet)

Paice, James

Garnier, Edward

Paterson, Owen

George, Andrew (St. Ives)

Pickles, Eric

Gibb, Nick (Bognor Regis)

Portillo, rh Michael

Gidley, Sandra

Price, Adam (E Carmarthen & Dinefwr)

Gillan, Mrs Cheryl

Goodman, Paul

Prisk, Mark (Hertford)

Gray, James (N Wilts)

Pugh, Dr. John

Grayling, Chris

Randall, John

Green, Damian (Ashford)

Redwood, rh John

Green, Matthew (Ludlow)

Rendel, David

Grieve, Dominic

Robathan, Andrew

Gummer, rh John

Robertson, Angus (Moray)

Hague, rh William

Robertson, Hugh (Faversham & M-Kent)

Hammond, Philip

Hancock, Mike

Robertson, Laurence (Tewk'b'ry)

Harris, Dr. Evan (Oxford W & Abingdon)

Robinson, Mrs Iris (Strangford)

Robinson, Peter (Belfast E)

Hawkins, Nick

Roe, Mrs Marion

Hayes, John (S Holland)

Rosindell, Andrew

Heald, Oliver

Ruffley, David

Heath, David

Russell, Bob (Colchester)

Heathcoat-Amory, rh David

Sanders, Adrian

Hendry, Charles

Sayeed, Jonathan

Hermon, Lady

Selous, Andrew

Hoban, Mark (Fareham)

Shephard, rh Mrs Gillian

Hogg, rh Douglas

Shepherd, Richard

Holmes, Paul

Simpson, Keith (M-Norfolk)

Horam, John (Orpington)

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

Howard, rh Michael

Hughes, Simon (Southwark N)

Smyth, Rev. Martin (Belfast S)

Hunter, Andrew

Soames, Nicholas

Jack, rh Michael

Spelman, Mrs Caroline

Jackson, Robert (Wantage)

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 & Inverness)

Streeter, Gary

Stunell, Andrew

Key, Robert (Salisbury)

Swayne, Desmond

Kirkbride, Miss Julie

Swire, Hugo (E Devon)

Kirkwood, Sir Archy

Syms, Robert

Laing, Mrs Eleanor

Tapsell, Sir Peter

Lait, Mrs Jacqui

Taylor, Ian (Esher)

Lamb, Norman

Taylor, John (Solihull)

Lansley, Andrew

Taylor, Matthew (Truro)

Laws, David (Yeovil)

Taylor, Dr. Richard (Wyre F)

Leigh, Edward

Taylor, Sir Teddy

Letwin, rh Oliver

Thomas, Simon (Ceredigion)

Lewis, Dr. Julian (New Forest E)

Tonge, Dr. Jenny

Liddell-Grainger, Ian

Tredinnick, David

Llwyd, Elfyn

Trend, Michael

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

Maclean, rh David

Viggers, Peter

McLoughlin, Patrick

Waterson, Nigel

272

Watkinson, Angela

Wilshire, David

Webb, Steve (Northavon)

Winterton, Sir Nicholas (Macclesfield)

Weir Michael

Whittingdale, John

Wishart, Pete

Widdecombe, rh Miss Ann

Young, rh Sir George

Wiggin, Bill

Younger-Ross, Richard

Wilkinson, John

Tellers for the Ayes:

Williams, Hywel (Caernarfon)

Tom Brake and Mr. Alan Reid

Williams, Roger (Brecon)

NOES

Ainsworth, Bob (Cov'try NE)

Cook, rh Robin (Livingston)

Alexander, Douglas

Cooper, Yvette

Allen, Graham

Corbyn, Jeremy

Anderson, rh Donald (Swansea E)

Corston, Jean

Anderson, Janet (Rossendale & Darwen)

Cousins, Jim

Cox, Tom (Tooting)

Armstrong, rh Ms Hilary

Crausby, David

Atherton, Ms Candy

Cruddas, Jon

Atkins, Charlotte

Cryer, John (Hornchurch)

Austin, John

Cummings, John

Bailey, Adrian

Cunningham, Jim (Coventry S)

Baird, Vera

Cunningham, Tony (Workington)

Banks, Tony

Dalyell, Tam

Barnes, Harry

Darling, rh Alistair

Barren, rh Kevin

Davey, Valerie (Bristol W)

Bayley, Hugh

Davidson, Ian

Beard, Nigel

Davies, rh Denzil (Llanelli)

Beckett, rh Margaret

Dean, Mrs Janet

Begg, Miss Anne

Dismore, Andrew

Bell, Stuart

Dobbin, Jim (Heywood)

Benn, Hilary

Dobson, rh Frank

Bennett, Andrew

Donohoe, Brian H.

Benton, Joe (Bootle)

Dowd, Jim (Lewisham W)

Berry, Roger

Drew, David (Stroud)

Best, Harold

Eagle, Angela (Wallasey)

Belts, Clive

Eagle, Maria (L'pool Garston)

Blackman, Liz

Edwards, Huw

Blears, Ms Hazel

Efford, Clive

Blizzard, Bob

Ellman, Mrs Louise

Boateng, rh Paul

Field, rh Frank (Birkenhead)

Borrow, David

Fisher, Mark

Bradley, rh Keith (Withington)

Fitzpatrick, Jim

Bradley, Peter (The Wrekin)

Fitzsimons, Mrs Lorna

Brennan, Kevin

Flint, Caroline

Brown, rh Nicholas (Newcastle E Wallsend)

Follett, Barbara

Foster, rh Derek

Brown, Russell (Dumfries)

Foster, Michael (Worcester)

Bryant, Chris

Foster, Michael Jabez (Hastings & Rye)

Buck, Ms Karen

Burden, Richard

Foulkes, rh George

Burgon, Colin

Francis, Dr. Hywel

Burnham, Andy

Gapes, Mike (Ilford S)

Byers, rh Stephen

Gardiner, Barry

Caborn, rh Richard

Gerrard, Neil

Cairns, David

Gibson, Dr. Ian

Campbell, Alan (Tynemouth)

Gilroy, Linda

Campbell, Mrs Anne (C'bridge)

Godsiff, Roger

Campbell, Ronnie (Blyth V)

Goggins, Paul

Caplin, Ivor

Griffiths, Win (Bridgend)

Casale, Roger

Grogan, John

Caton, Martin

Hall, Mike (Weaver Vale)

Cawsey, Ian (Brigg)

Hall, Patrick (Bedford)

Challen, Colin

Hamilton, David (Midlothian)

Chapman, Ben (Wirral S)

Hamilton, Fabian (Leeds NE)

Clark, Mrs Helen (Peterborough)

Hanson, David

Clarke, rh Tom (Coatbridge & Chryston)

Harris, Tom (Glasgow Cathcart)

Havard, Dai (Merthyr Tydfil & Rhymney)

Clarke, Tony (Northampton S)

Coaker, Vernon

Healey, John

Coffey, Ms Ann

Henderson, Doug (Newcastle N)

Cohen, Harry

Henderson, Ivan (Harwich)

Coleman, Iain

Hendrick, Mark

Colman, Tony

Hepburn, Stephen

Connarty, Michael

Heppell, John

273

Hesford, Stephen

Martlew, Eric

Heyes, David

Meacher, rh Michael

Hill, Keith (Streatham)

Meale, Alan (Mansfield)

Hinchliffe, David

Merron, Gillian

Hodge, Margaret

Michael, rh Alun

Hoey, Kate (Vauxhall)

Milburn, rh Alan

Hoon, rh Geoffrey

Miliband, David

Hope, Phil (Corby)

Miller, Andrew

Hopkins, Kelvin

Mitchell, Austin (Gt Grimsby)

Howarth, rh Alan (Newport E)

Mole, Chris

Howarth, George (Knowsley N & Sefton E)

Moonie, Dr. Lewis

Moran, Margaret

Howells, Dr. Kim

Morgan, Julie

Hughes, Beverley (Stretford & Urmston)

Morley, Elliot

Morris, rh Estelle

Hughes, Kevin (Doncaster N)

Mountford, Kali

Humble, Mrs Joan

Mudie, George

Hurst, Alan (Braintree)

Mullin, Chris

Hutton, rh John

Murphy, Jim (Eastwood)

Iddon, Dr. Brian

Murphy, rh Paul (Torfaen)

Illsley, Eric

Naysmith, Dr. Doug

Ingram, rh Adam

O'Brien, Bill (Normanton)

Irranca-Davies, Huw

Olner, Bill

Jackson, Helen (Hillsborough)

O'Neill, Martin

Jamieson, David

Organ, Diana

Jenkins, Brian

Osborne, Sandra (Ayr)

Johnson, Alan (Hull W)

Owen, Albert

Jones, Helen (Warrington N)

Palmer, Dr. Nick

Jones, Jon Owen (Cardiff C)

Perham, Linda

Jones, Kevan (N Durham)

Picking, Anne

Jones, Martyn (Clwyd S)

Pickthall, Colin

Joyce, Eric (Falkirk W)

Pike, Peter (Burnley)

Keeble, Ms Sally

Plaskitt, James

Keen, Ann (Brentford)

Pollard, Kerry

Kemp, Fraser

Pond, Chris (Gravesham)

Khabra, Piara S.

Pope, Greg (Hyndburn)

Kilfoyle, Peter

Pound, Stephen

King, Andy (Rugby)

Prentice, Ms Bridget (Lewisham E)

King, Ms Oona (Bethnal Green & Bow)

Prentice, Gordon (Pendle)

Knight, Jim (S Dorset)

Primarolo, rh Dawn

Kumar, Dr. Ashok

Prosser, Gwyn

Lammy, David

Purchase, Ken

Lawrence, Mrs Jackie

Quin, rh Joyce

Lazarowicz, Mark

Quinn, Lawrie

Lepper, David

Rammell, Bill

Leslie, Christopher

Rapson, Syd (Portsmouth N)

Levitt, Tom (High Peak)

Raynsford, rh Nick

Lewis, Ivan (Bury S)

Reed, Andy (Loughborough)

Liddell, rh Mrs Helen

Reid, rh Dr. John (Hamilton N & Bellshill)

Linton, Martin

Love, Andrew

Robertson, John (Glasgow Anniesland)

Lyons, John (Strathkelvin)

McAvoy, Thomas

Robinson, Geoffrey (Coventry NW)

McCabe, Stephen

McCartney, rh Ian

Rooney, Terry

McDonagh, Siobhain

Ross, Ernie (Dundee W)

MacDonald, Calum

Ruane, Chris

McDonnell, John

Ruddock, Joan

MacDougall, John

Russell, Ms Christine (City of Chester)

McFall, John

McGuire, Mrs Anne

Savidge, Malcolm

McIsaac, Shona

Sawford, Phil

McKechin, Ann

Sedgemore, Brian

Mackinlay, Andrew

Shaw, Jonathan

McNulty, Tony

Sheerman, Barry

Mactaggart, Fiona

Sheridan, Jim

McWalter, Tony

Short, rh Clare

McWilliam, John

Simon, Siôn (B'ham Erdington)

Mallaber, Judy

Singh, Marsha

Mann, John (Bassetlaw)

Smith, rh Andrew (Oxford E)

Marris, Rob (Wolverh'ton SW)

Smith, rh Chris (Islington S & Finsbury)

Marsden, Gordon (Blackpool S)

Marshall, David (Glasgow Shettleston)

Smith, Geraldine (Morecambe & Lunesdale)

Marshall-Andrews, Robert

Smith, John (Glamorgan)

274

Smith, Llew (Blaenau Gwent)

Twigg, Stephen (Enfield)

Soley, Clive

Tynan, Bill (Hamilton S)

Squire, Rachel

Vaz, Keith (Leicester E)

Steinberg, Gerry

Walley, Ms Joan

Stevenson, George

Ward, Claire

Stewart, David (Inverness E & Lochaber)

Wareing, Robert N.

Watson, Tom (W Bromwich E)

Stewart, Ian (Eccles)

Watts, David

Stinchcombe, Paul

White, Brian

Stoate, Dr. Howard

Whitehead, Dr. Alan

Strang, rh Dr. Gavin

Wicks, Malcolm

Straw rh Jack

Williams, rh Alan (Swansea W)

Sutcliffe, Gerry

Williams,Betty (Conwy)

Tami,Mark (Alyn)

Wills, Michael

Taylor, rh Ann (Dewsbury)

Winnick, David

Taylor, Dari (Stockton S)

Winterton, Ms Rosie (Doncaster C)

Taylor, David (NW Leics)

Thomas, Gareth (Clwyd W)

Wood Mike (Batley)

Thomas, Gareth (Harrow W)

Woodward, Shaun

Timms, Stephen

Woolas, Phil

Tipping, Paddy

Worthington, Tony

Todd, Mark (S Derbyshire)

Wright, Anthony D. (Gt Yarmouth)

Trickett, Jon

Wright, David (Telford)

Truswell, Paul

Wright, Tony (Cannock)

Turner, Dennis (Wolverh'ton SE)

Turner, Dr. Desmond (Brighton Kemptown)

Tellers for the Noes:

Dan Norris and Mr. Nick Ainger

Twigg, Derek (Halton)

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
The House divided: Ayes 305, Noes 195.

Division No. 219]

[7:13 pm

AYES

Alexander, Douglas

Burden, Richard

Allen, Graham

Burgon, Colin

Anderson, rh Donald (Swansea E)

Burnham, Andy

Anderson, Janet (Rossendale & Darwen)

Byers, rh Stephen

Caborn, rh Richard

Armstrong, rh Ms Hilary

Cairns, David

Atherton, Ms Candy

Campbell, Alan (Tynemouth)

Atkins, Charlotte

Campbell, Mrs Anne (C'bridge)

Austin, John

Caplin, Ivor

Bailey, Adrian

Casale, Roger

Baird, Vera

Caton, Martin

Banks, Tony

Cawsey, Ian (Brigg)

Barnes, Harry

Challen, Colin

Barron, rh Kevin

Chapman, Ben (Wirral S)

Bayley, Hugh

Clark, Mrs Helen (Peterborough)

Beard, Nigel

Clarke, rh Tom (Coatbridge & Chryston)

Beckett, rh Margaret

Begg, Miss Anne

Clarke, Tony (Northampton S)

Benn, Hilary

Coaker, Vernon

Bennett, Andrew

Coffey, Ms Ann

Benton, Joe (Bootle)

Cohen, Harry

Berry, Roger

Coleman, Iain

Best, Harold

Colman, Tony

Betts, Clive

Connarty, Michael

Blackman, Liz

Cook, rh Robin (Livingston)

Blears, Ms Hazel

Cooper, Yvette

Blizzard, Bob

Corbyn, Jeremy

Boateng, rh Paul

Corston, Jean

Borrow, David

Cousins, Jim

Bradley, rh Keith (Withington)

Cox, Tom (Tooting)

Bradley, Peter (The Wrekin)

Crausby, David

Brennan, Kevin

Cruddas, Jon

Brown, rh Nicholas (Newcastle E Wallsend)

Cryer, John (Hornchurch)

Cummings, John

Brown, Russell (Dumfries)

Cunningham, Jim (Coventry S)

Bryant, Chris

Cunningham, Tony (Workington)

Buck, Ms Karen

Dalyell, Tarn

275

Darling, rh Alistair

Jones, Helen (Warrington N)

Davey, Valerie (Bristol W)

Jones, Jon Owen (Cardiff C)

Davidson, Ian

Jones, Kevan (N Durham)

Davies, rh Denzil (Llanelli)

Jones, Martyn (Clwyd S)

Davies, Geraint (Croydon C)

Joyce, Eric (Falkirk W)

Dean, Mrs Janet

Keeble, Ms Sally

Dismore, Andrew

Keen, Ann (Brentford)

Dobbin, Jim (Heywood)

Kemp, Fraser

Dobson, rh Frank

Khabra, Piara S.

Donohoe, Brian H.

Kilfoyle, Peter

Dowd, Jim (Lewisham W)

King, Andy (Rugby)

Drew, David (Stroud)

King, Ms Oona (Bethnal Green & Bow)

Eagle, Angela (Wallasey)

Eagle, Maria (L'pool Garston)

Knight, Jim (S Dorset)

Edwards, Huw

Kumar, Dr. Ashok

Efford, Clive

Lammy, David

Ellman, Mrs Louise

Lawrence, Mrs Jackie

Field, rh Frank (Birkenhead)

Lazarowicz, Mark

Fisher, Mark

Lepper, David

Fitzpatrick, Jim

Leslie, Christopher

Fitzsimons, Mrs Lorna

Levitt, Tom (High Peak)

Flint, Caroline

Lewis, Ivan (Bury S)

Follett, Barbara

Liddell, rh Mrs Helen

Foster, rh Derek

Linton, Martin

Foster, Michael (Worcester)

Love, Andrew

Foster, Michael Jabez (Hastings & Rye)

Lyons, John (Strathkelvin)

McAvoy, Thomas

Foulkes, rh George

McCabe, Stephen

Francis, Dr. Hywel

McCartney, rh Ian

Gapes, Mike (Ilford S)

McDonagh, Siobhain

Gardiner, Barry

MacDonald, Calum

Gerrard, Neil

McDonnell, John

Gibson, Dr. Ian

MacDougall, John

Gilroy, Linda

McGuire, Mrs Anne

Goggins, Paul

McIsaac, Shona

Griffiths, Win (Bridgend)

McKechin, Ann

Grogan, John

Mackinlay, Andrew

Hall, Mike (Weaver Vale)

McNulty, Tony

Hall, Patrick (Bedford)

Mactaggart, Fiona

Hamilton, David (Midlothian)

McWalter, Tony

Hamilton, Fabian (Leeds NE)

McWilliam, John

Hanson, David

Mallaber, Judy

Harris, Tom (Glasgow Cathcart)

Mann, John (Bassetlaw)

Havard, Dai (Merthyr Tydfil & Rhymney)

Marris, Rob (Wolverh'ton SW)

Marsden, Gordon (Blackpool S)

Healey, John

Marshall, David (Glasgow Shettleston)

Henderson, Doug (Newcastle N)

Henderson, Ivan (Harwich)

Marshall-Andrews, Robert

Hendrick, Mark

Martlew, Eric

Heppell, John

Meacher, rh Michael

Hesford, Stephen

Meale, Alan (Mansfield)

Heyes, David

Merron, Gillian

Hill, Keith (Streatham)

Michael, rh Alun

Hinchliffe, David

Milburn, rh Alan

Hodge, Margaret

Miliband, David

Hoey, Kate (Vauxhall)

Miller, Andrew

Hoon, rh Geoffrey

Mitchell, Austin (Gt Grimsby)

Hopkins, Kelvin

Mole, Chris

Howarth, rh Alan (Newport E)

Moonie, Dr. Lewis

Howarth, George (Knowsley N & Sefton E)

Moran, Margaret

Morgan, Julie

Howells, Dr. Kim

Morley, Elliot

Hughes, Beverley (Stretford & Urmston)

Morris, rh Estelle

Mountford, Kali

Hughes, Kevin (Doncaster N)

Mudie, George

Humble, Mrs Joan

Mullin, Chris

Hurst, Alan (Braintree)

Murphy, Jim (Eastwood)

Hutton, rh John

Murphy, rh Paul (Torfaen)

Iddon, Dr. Brian

Naysmith, Dr. Doug

Illsley, Eric

O'Brien, Bill (Normanton)

Ingram, rh Adam

Olner, Bill

Irranca-Davies, Huw

O'Neill, Martin

Jackson, Helen (Hillsborough)

Organ, Diana

Jamieson, David

Osborne, Sandra (Ayr)

Jenkins, Brian

Owen, Albert

Johnson, Alan (Hull W)

Palmer, Dr. Nick

276

Perham, Linda

Stewart, David (Inverness E & Lochaber)

Picking, Anne

Pickthall, Colin

Stewart, Ian (Eccles)

Pike, Peter (Burnley)

Stinchcombe, Paul

Plaskitt, James

Stoate, Dr. Howard

Pollard, Kerry

Strang, rh Dr. Gavin

Pond, Chris (Gravesham)

Straw, rh Jack

Pope. Greg (Hyndburn)

Sutcliffe, Gerry

Pound, Stephen

Tami, Mark (Alyn)

Prentice, Ms Bridget (Lewisham E)

Taylor, rh Ann (Dewsbury)

Taylor, Dari (Stockton S)

Prentice, Gordon (Pendle)

Taylor, David (NW Leics)

Primarolo, rh dawn

Thomas, Gareth (Clwyd W)

Prosser, Gwyn

Thomas, Gareth (Harrow W)

Timms, Stephen

Purchase, Ken

Tipping Paddy

Quinn, Lawrie

Todd Mark (S Derbyshire)

Rammell Bill

Trickett, Jon

Rapson, Syd (Portsmouth N)

Truswell, Paul

Raynsford, rh Nick

Turner, Dennis (Wolverh'ton SE)

Reed, Andy (Loughborough)

Turner, Dr Desmond (Brighton Kemptown)

Reid, rh Dr. John (Hamilton N & Bellshill)

Twigg, Derek (Halton)

Robertson, John (Glasgow Anniesland)

Twigg, Stephen (Enfield)

Tynan, Bill (Hamilton S)

Robinson, Geoffrey (Coventry NW)

Vaz, Keith (Leicester E)

Walley, Ms Joan

Rooney, Terry

Ward, Claire

Ross, Ernie (Dundee W)

Wareing, Robert N.

Ruane, Chris

Watson, Tom (W Bromwich E)

Ruddock, Joan

Watts, David

Russell, Ms Christine (City of Chester)

White, Brian

Whitehead, Dr. Alan

Savidge, Malcolm

Wicks, Malcolm

Sawford Phil

Williams, rh Alan (Swansea W)

Sedgemore, Brian

Williams, Betty (Conwy)

Shaw, Jonathan

Wills, Michael

Sheerman, Barry

Winnick, David

Sheridan, Jim

Winterton, Ms Rosie (Doncaster C)

Short, rh Clare

Simon, Siôn (B ham Erdington)

Wood, Mike (Batley)

Singh, Marsha

Woodward shaun

Smith, rh Andrew (Oxford E)

Woolas phil

Worthington, Tony

Smith, Geraldine (Morecambe & Lunesdale)

Wright Anthony D (Gt Yarmouth)

Smith, John (Glamorgan)

Wright David (Telford)

Smith, Llew (Blaenau Gwent)

Wright, Tony (Cannock)

Soley, Clive

Squire, Rachel

Tellers for the Ayes:

Steinberg, Gerry

Mr. Nick Ainger and Dan Norris

Stevenson, George

NOES

Ainsworth, Peter (E Surrey)

Burstow, Paul

Allan, Richard

Burt, Alistair

Amess, David

Butterfill, John

Ancram, rh Michael

Cable, Dr. Vincent

Arbuthnot, rh James

Calton, Mrs Patsy

Atkinson, Peter (Hexham)

Cameron, David

Baker, Norman

Campbell, Gregory (E Lond'y)

Baldry, Tony

Campbell, rh Menzies (NE Fife)

Barker, Gregory

Carmichael, Alistair

Baron, John (Billericay)

Cash, William

Barrett, John

Chidgey, David

Beggs, Roy (E Antrim)

Chope, Christopher

Beith, rh A. J.

Clappison, James

Bellingham, Henry

Clarke, rh Kenneth (Rushcliffe)

Blunt, Crispin

Clifton-Brown, Geoffrey

Boswell, Tim

Collins, Tim

Brady, Graham

Cotter, Brian

Brazier, Julian

Curry, rh David

Brooke, Mrs Annette L

Davey, Edward (Kingston)

Browning, Mrs Angela

Davies, Quentin (Grantham & Stamford)

Burnett, John

Burns, Simon

Djanogly, Jonathan

Burnside, David

Doughty, Sue

277

Duncan, Peter (Galloway)

Mitchell, Andrew (Sutton Coldfield)

Duncan Smith, rh lain

Evans, Nigel

Moore, Michael

Ewing, Annabelle

Moss, Malcolm

Fallen, Michael

Murrison, Dr. Andrew

Field, Mark (Cities of London & Westminster)

Norman, Archie

Oaten, Mark (Winchester)

Forth, rh Eric

O'Brien, Stephen (Eddisbury)

Foster, Don (Bath)

Öpik, Lembit

Fox, Dr. Liam

Osborne, George (Tatton)

Francois, Mark

Page, Richard

Gale, Roger (N Thanet)

Paice, James

Garnier, Edward

Paterson, Owen

George, Andrew (St. Ives)

Pickles, Eric

Gibb, Nick (Bognor Regis)

Portillo, rh Michael

Gidley, Sandra

Price' Adarn (E Carmarthen & Dinefwr)

Gillan, Mrs Cheryl

Goodman, Paul

Prisk, Mark (Hertford)

Gray, James (N Wilts)

Pugh, Dr John

Grayling, Chris

Randall, John

Green, Damian (Ashford)

Redwood, rh John

Green, Matthew (Ludlow)

Rendel, David

Grieve, Dominic

Robathan, Andrew

Gummer, rh John

Robertson, Angus (Moray)

Hague, rh William

Robertson, Hugh(Faversham & M-Kent)

Hammond, Philip

Hancock, Mike

Robertson, Laurence (Tewk'b'ry)

Harris, Dr. Evan (Oxford W & Abingdon)

Robinson, Mrs Iris (Strangford)

Robinson, Peter (Belfast E)

Hawkins, Nick

Roe, Mrs Marion

Hayes, John (S Holland)

Rosindell, Andrew

Heald, Oliver

Ruffley, David

Heath, David

Russell, Bob (Colchester)

Heathcoat-Amory, rh David

Sanders, Adrian

Hendry, Charles

Sayeed Jonathan

Hermon, Lady

Selous, Andrew

Hoban, Mark (Fareham)

Shephard, rh Mrs Gillian

Hogg, rh Douglas

Shepherd, Richard

Holmes, Paul

Simpson, Keith (M-Norfolk)

Horam, John (Orpington)

Smith sir Robert (W ab'd'ns & Kincardine)

Howard, rh Michael

Hughes, Simon (Southwark N)

Smyth Rev Martin (Belfast S)

Hunter, Andrew

Soames Nicholas

Jack, rh Michael

Spelman, Mrs Caroline

Jackson, Robert (Wantage)

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 & Inverness)

Streeter, Gary

stunell, Andrew

Key, Robert (Salisbury)

Swayne, Desmond

Kirkbride, Miss Julie

Swire Hugo (E Devon)

Kirkwood, Sir Archy

Syms Robert

Laing, Mrs Eleanor

Taylor, Ian (Esher)

Lait, Mrs Jacqui

Taylor, John (Solihull)

Lamb, Norman

Taylor, Matthew (Truro)

Lansley, Andrew

Taylor, Dr. Richard (Wyre F)

Laws, David (Yeovil)

Taylor, Sir Teddy

Leigh, Edward

Thomas, Simon (Ceredigion)

Letwin, rh Oliver

Tonge, Dr. Jenny

Lewis, Dr. Julian (New Forest E)

Tredinnick, David

Liddell-Grainger, Ian

Trimble, rh David

Llwyd, Elfyn

Turner, Andrew (Isle of Wight)

Loughton, Tim

Tyler, Paul (N Cornwall)

Luff, Peter (M-Worcs)

Tyrie, Andrew

McIntosh, Miss Anne

Viggers, Peter

Mackay, rh Andrew

Waterson, Nigel

Maclean, rh David

Watkinson, Angela

McLoughlin, Patrick

Webb, Steve (Northavon)

Marsden, Paul (Shrewsbury & Atcham)

Weir, Michael

Whittingdale, John

Widdecombe, rh Miss Ann

Mates, Michael

Wiggin, Bill

Maude, rh Francis

Wilkinson, John

Mawhinney, rh Sir Brian

Williams, Hywel (Caernarfon)

Mercer, Patrick

Williams, Roger (Brecon)

278

Wilshire, David

Young, rh Sir George

Winterton, ann (Congleton)

Younger-Ross, Richard

Winterton, Sir Nicholas (Macclesfield)

Tellers for the Noes:

Wishart, Pete

Mr. Alan Reid and Tom Brake

Yeo, Tim (S Suffolk)

Question accordingly agreed to.
MR. DEPUTY SPEAKERforthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House recognises that the UK has the largest stock of private pension saving in Europe and a tradition of pension partnership at the workplace which leaves it well placed to rise to the challenge of longer lives; welcomes the conclusion of the Work and Pensions Committee that the UK pensions system is "basically sound"; further recognises that there are pressures on pension systems at the moment and supports the Government's proposals, as outlined in the recent Green Paper, to renew the UK pensions partnership, to introduce further measures to bolster the UK system which better focus regulation on contemporary anxieties, and to increase security without increasing the overall costs of running pensions; strongly endorses the Work and Pensions Committee's judgement that "current policies have been successful in reducing pensioner poverty"; further recognises that this is of particular benefit to women; welcomes the state second pension which will provide lower earners, disabled people and carers, some 18 million people most of whom are women, with a better pension; believes that good pensions policy must be built on a foundation of the basic state pension, which has increased in real terms for three years in a row; and looks forward to the Pension Credit reform in October which will ensure that those with modest savings are properly rewarded for the first time.

EUROPEAN COMMUNITIES (AMENDMENT) ACT 1993
Ordered,
That, for the purposes of their approval under section 5 of the European Communities (Amendment) Act 1993, the Government's assessment as set out in the Budget 2003 shall be treated as if it were an instrument subject to the provisions of Standing Order No. 118 (Standing Committees on Delegated Legislation).—[Gillian Merron.]

BUSINESS OF THE HOUSE Ordered,
Ordered,
That, at the sitting on Tuesday 10th June, Private Business set down for Four o'clock by the Chairman of Ways and Means shall be entered upon at the conclusion of Government business (whether before, at or after Four o'clock), and may then be proceeded with, though opposed, for a period of three hours, after which the Speaker shall interrupt the business.—[Gillian Merron.]

FINANCE BILL (PROGRAMME) (NO. 4)
Motion made, and Question put forthwith,
That the programme order of 6th May 2003, as amended by the order of 8th May 2003, shall be further amended by the substitution in paragraph 3(1) of '17th June 2003' for '12th June 2003'.—[Gillian Merron.]
Question agreed to.

PETITION

  Fireworks
  7.25 pm
  Mr. Roger Gale: I have the honour to present a petition on behalf of Mrs. Margaret Todd, MBE, the founder and secretary of the Lord Whisky Sanctuary Fund, and of more than 5,000 constituents of my own and other constituents in east Kent.
  The petition reads:
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
  The Humble Petition of Mrs M Todd, MBE, and others,
  SHEWETH
  That the setting off of fireworks causes distress and sometimes injury to domestic and farm animals and other wildlife.
  Wherefore your Petitioners pray that your Honourable House will restrict the setting off of fireworks to 5th November and ban the setting off of fireworks on all other days, except for properly organised and licensed public celebrations.
  And your Petitioners, as in duty bound, will ever pray, &c.
  I hope that the petition will give a nudge to the legislation currently going through the House, and that on Friday 13 June we shall take another step forward to the realisation of my petitioners' dreams.
  To lie upon the Table

Tariq Aziz
Motion made, and Question proposed, That this House do now adjourn.—[Gillian Merron.]
7.26 pm
Mr. Tam Dalyell: Over 41 years as a Member of the House, I have initiated just over 100 Adjournment debates. On no occasion have I known less about the subject than I do about today's issue of the detention of Tariq Aziz. I do not know where he is. I do not know in what conditions he is held. Is he in Baghdad? Is he in the continental United States? What were the circumstances in which he went into the hands of the coalition? As I understand it, there is a rumour—I cannot say that it is more than a rumour—that his sister arranged for his going into the hands of the coalition on condition that he should have attention to his three heart attacks. I hope that my hon. Friend the Minister will be able to enlighten us. After all, it is a coalition responsibility, and as a member of the coalition, we are entitled to ask the Americans what they are doing and what they intend to do.
In 1993 and again in 1998 I went to Iraq. On the first occasion I saw Tariq Aziz in his office. On the second occasion, travelling with the former Irish Prime Minister, the father of the peace process, Albert Reynolds, the Taoiseach, we were invited to supper in Tariq Aziz's house. I understand that it was the first time that westerners had been so invited since Edward Heath was invited long before. It was not a particularly sumptuous affair. The meal was made by Mrs. Aziz, with help from a lady who came in.
On that occasion, one of the things discussed at length was Iraq's history. Part of the reason why I was invited may be that my father was the secretary to Sir William Willcocks, the man who did the damming of the Tigris and Euphrates, and was the friend of Leonard Woolley who excavated Ur of the Chaldees and worked for Gertrude Bell, who was Sir Percy Cox's Oriental Secretary.
David Winnick: Will my hon. Friend give way?
Mr. Dalyell: No, not at the moment, please.
In the circumstances, I feel entitled to ask a rather particular question, of which I have given some notice to the Foreign Office.
The issue that has been raised, and which I raise again, concerns the vital need to protect epigraphic, clay tablet and paper archive written records in Iraq documenting extreme global climate fluctuations in the past 5,000 years. I am indebted to Dr. Richard Grove of the Centre for World Environmental History, whom I have known for a long time, and I put forward his concern.
Currently, human societies face a global climate crisis involving a phase of global warming of unprecedented dimensions. The scientific consensus on this is shown in the official publications of the intergovernmental panel on climate change, and is a consensus with which the British Government implicitly concur in their current and relatively sophisticated policies designed to move towards carbon dioxide emissions reductions.

281
To understand the likely social, physical and policy implications of the global warming crisis, scientists have no option but to refer to the physical proxy and documentary historical record of previous warming events or other extreme climatic events as analogues of unstable or extreme climate events produced by global warming. For this purpose, the longer the physical or historical record of climate, the more valuable is the analogue for prediction purposes and for the purposes of scientific insight and analysis.
The clay tablet and paper records in Iraq constitute the longest single, largely unbroken climate record known on earth.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the hon. Gentleman, but I am having some difficulty connecting the present passage of his speech with the subject of his Adjournment debate, which is about the imprisonment of a particular individual.
Mr. Dalyell: I merely raised the question of the detention of Tariq Aziz, because I know very little about the circumstances. I can only ask the question. However, there is the related question of what is happening to the museum, especially the research that has been carried out in the past decade—and in the past five years in particular—showing that during the past five to 5,500 years—
Mr. Deputy Speaker: Order. The hon. Gentleman has vast experience, but nevertheless he is putting me in a difficult position. We cannot have a subject for debate that is put to Mr. Speaker and chosen by him but is the cover for something entirely different. That makes nonsense of the whole system of Adjournment debates. I have to say to the hon. Gentleman that he must speak to the subject that he has given, and not go on to other matters that do not seem to have any direct relationship to it.
Mr. Dalyell: I am always obedient to the Chair. There are other ways of raising the security or otherwise of the tablets. That was a concern of Tariq Aziz. I think that you are being tough on me, Mr. Deputy Speaker. Of course, I obey the Chair. There is an agreement that my hon. and learned Friend the Member for Medway (Mr. Marshall-Andrews) should also participate in the debate.
Mr. Deputy Speaker: Order. I do not like to be severe towards the Father of the House, to whose experience I bow. However, I must defend the basic rules of the House. If the subject submitted is the imprisonment of Mr. Tariq Aziz, then that is what we have to debate, and not a related matter, however important in itself.
7.33 pm
Mr. Robert Marshall-Andrews: I am grateful to you, Mr. Deputy Speaker. I hope that you will be as gentle with me as you always have been. I am also grateful to the Father of the House, who has allowed me to participate, albeit briefly, in this short but important Adjournment debate.
282
I hold no brief for Mr. Tariq Aziz, and I can say straight away that I do not wish to have a brief for him. Equally, I hope that at some stage someone will hold a brief for Mr. Tariq Aziz. If he is to be tried, I hope that he will be tried in all the circumstances that we would regard as humane, humanitarian and in the best traditions of our own form of justice.
That is the matter that causes those of us present a certain amount of concern. There are two questions—a wider and a narrower one. Now that I have reached the grist of what I am going to say, I am pleased to see that the Minister is in his place to hear it. The wider question pertains to the legality of actions taken by the coalition in the invasion of Iraq. We had a debate in the House and views were widely aired on both sides. I have never made any secret of my view that the invasion of Iraq was based on very doubtful legality. Whether that will be shown post facto is a matter that we must now consider, but there is a wider issue of legality and it seems to us that its importance is that the more powerful a man, woman or nation is, the more important it is that legality is observed by that man, woman or nation state.
David Winnick: Is my hon. and learned Friend aware that, as someone who totally disagrees with his views on military intervention in Iraq, I agree that all those major or minor figures who are detained should in due course be brought to justice if charges are to be made? Has not the case of Milosevic demonstrated that, when a powerful figure is detained, charged and arrested, every facility, according to the rule of law, is given to that individual? There is no reason why that should not happen in respect of those who are detained at the moment, if charges are levelled against them in Iraq.
Mr. Marshall-Andrews: I am grateful to my hon. Friend. As he well knows, although we disagree on a number of issues, we make common cause on others. One of them is civil liberties and those who are affected by the law, be it national or international. To take up the case of Mr. Milosevic for a moment, he is'being tried by a special court set up under the aegis of the United Nations. There are now two such courts and they are concurrently running in respect of Rwanda and Bosnia. I concur entirely with those courts, the way in which they were set up and the way in which those who are before them were brought before them, because there was a measure of transparency in all that. There was a measure of transparency in the arrest of Milosevic, who was arrested and given up by his own people into the custody of that court. In Rwanda, although the position is much more opaque, a similar situation pertains.
It is a matter of concern to us that that is not the case in respect of the detention of Tariq Aziz and others, and nor is it the case, I feel bound to say, in respect of the detention of 600 or so individuals in Camp X-Ray in Cuba, who have now been detained for a very considerable period. What concerns us—it concerns me as a friend of America, which I have always been—is the effect that that form of apparently arbitrary justice will have on America's reputation and that of its allies. I repeat that the more powerful a nation is—there has never been a more powerful nation on earth than the United States of America—the greater the necessity that it should adhere to the rules and canons of international law.

283
The detention of Tariq Aziz falls to the occupying forces, which have the right under the fourth Geneva convention to implement the laws of the nation that they occupy. Thus, detention itself is not an issue. If he is thought to have committed crimes in due course—I imagine that there is perfectly good evidence that he has been complicit in crimes—detention is not an issue. What is at issue is the nature of that detention and the fact that we do not know anything about its circumstances, whether he is represented, the extent to which he is subject to interrogation and the form of the interrogation to which he is subject. All those matters may be entirely allowable under the aegis of international law, but it is essential that the international community should be aware of what is happening in its name. If we are to be part of a coalition of the willing rebuilding Iraq in a way that brings us all together in common cause, it is essential that the transparency of justice should be maintained.
I hope that the Minister, in answering those questions, will give us some insight into what the Government believe to be the position with Mr. Aziz and other detainees, when they can be brought to trial, the circumstances of their present detention, and the nature of the representation and trial that they may in due course expect.
7.40 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell): I am genuinely grateful for the opportunity that has been accorded us by the Father of the House in raising a matter that is important to us all. Certainly, it presents the Government with an opportunity to update Members on the situation regarding Tariq Aziz specifically, but also on the wider Iraq issues concerning detainment and the overall reconstruction and rebuilding process that is taking place in Iraq.
Turning first to Tariq Aziz's detention, the Father of the House and other Members will be aware of a written parliamentary answer recently provided by the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North Warwickshire (Mr. O'Brien), which says:
"Tariq Aziz voluntarily surrendered to the coalition forces in Baghdad and is currently in custody. The coalition partners have had the opportunity to interview Mr. Aziz on a number of topics and this will continue."—[Official Report, 3 June 2003; Vol. 406, c. 3W.]
Foreign Office officials recently double-checked that position, and I can confirm that Mr. Aziz remains in US custody in Baghdad and that the International Committee of the Red Cross has been notified and given access to the detention centre where Tariq Aziz and other detainees are being held. We are trying to establish what medical treatment the detainees are receiving, but I can assure Members that all prisoners of war are being treated in accordance with international law and the Geneva conventions.
Andrew Mackinlay: Does that mean that we, as coalition partners, have not had or sought access to such a key figure? That is surprising. Surely the
284
questioning is not exclusively a matter for the United States, but also for us, and we would want to have access to him. Why have we not, and when will we?
Mr. Rammell: As my hon. Friend will be aware, under the terms of the coalition Iraq is being divided into different parts, with different nations having responsibility for different sectors, and people who are captured in a certain area will be a matter for those detaining authorities. Clearly, there is a process of communication. I am trying to update the House on the position as of this evening. If Members have further questions, I am more than happy to pursue them after the debate.
I should like to take this opportunity to add a number of further points about the coalition's general handling of detainees and prisoners of war. It is too early to determine the nature of any criminal charges that Tariq Aziz and other Iraqi detainees may face; and it is not for this Government to bring those charges. Meanwhile, it bears repetition that those prisoners or detainees, including Tariq Aziz and others on the US list of most wanted former members of the Saddam regime suspected of war crimes are, of course, being dealt with in accordance with international law and the Geneva conventions.
Mr. Dalyell: If it is not for the Government to bring charges, who is to bring charges?
Mr. Rammell: The Father of the House anticipates what I am about to say about the way in which I think justice will be brought forward in Iraq.
UN Security Council resolution 1483, which was adopted on 22 May by unanimity, affirms the need for accountability for crimes and atrocities committed by the previous Iraqi regime. It also appeals to member states to deny safe haven to those members of the previous regime who are alleged to be responsible for crimes and atrocities and to support actions to bring them to justice.
The discovery of mass graves in Iraq that became possible only after the fall of the regime has brought home to us all the genuine horrors of Saddam Hussein's regime. The crimes alleged to have been committed by that regime against its own people were, of course, already well known: hundreds of thousands, if not millions, of Iraqis are reported to have been its victims. We have always believed that the Iraqi leaders most responsible for genocide, crimes against humanity and war crimes should be brought to justice as soon as possible. I want to make it clear that that is not victor's justice—I know that that is a concern of the Father of the House and other Members in the Chamber—but will be a system of justice brought forward in accordance with international law and the Geneva conventions.
There are strong arguments for allowing the Iraqis themselves to bring to justice those who have committed crimes against them, and we will need to see what sort of investigative and trial processes they can adopt. We know that, under Saddam's regime, Iraq's judicial system became heavily corrupted. That is beyond dispute. Many judges had to leave Iraq and that has unquestionably reduced the Iraqi judicial system's capacity to cope with legacy crimes. Iraq will need

285
international help to rehabilitate its justice system, and we are willing to play a part, together with our coalition partners, in achieving that end.
I should like to give the House some of the political context within which the rebuilding of the judicial system is taking place. It is important to note that UN resolution 1483 delivers on our commitment to lift UN sanctions, set out in the UK's statement produced at the Azores summit, "A Vision for Iraq and the Iraqi People". Resolution 1483 also stresses the fundamental right of the Iraqi people to determine their own political future and control their own resources, and welcomes the commitment of all parties concerned to support the creation of an environment in which they may do so as soon as possible. It explicitly expresses our resolve that the day when Iraqis govern themselves must come quickly.
In accordance with Resolution 1483, Kofi Annan, the Secretary General of the United Nations, has appointed Sergio Vieira de Mello, the UN high commissioner for human rights, as his special representative for Iraq. Mr. de Mello will work with the coalition provisional administration, the Iraqis and the wider international community to implement resolution 1483. It is important to note that the central political element of resolution 1483 specifically encourages efforts by the people of Iraq to form a representative Government based on the rule of law to afford equal rights and justice to all Iraqi citizens. Crucially, the resolution supports the formation by the people of Iraq—with the help of the coalition authority, working with the UN special representative—of an Iraqi interim Administration as a transitional Administration run by Iraqis, until an internationally recognised representative Government are established at a later stage.
David Winnick: Would it not be of great advantage if open proceedings were to take place against this individual—if charges are to be laid against him—and others who are held responsible for the mass murder of thousands upon thousands of people, so that the Iraqi people themselves can see the rule of law in action? Would that not bring home to them the terrible crimes that have been committed? It is unfortunate that my hon. Friend the Member for Linlithgow (Mr. Dalyell) did not raise the question of human rights when he went to Iraq; I consider that to be totally deplorable.
Mr. Rammell: I agree with my hon. Friend that it is important for the rebuilding and reconstruction of Iraq that justice is seen to be done. He has a strong track record in relation to making that point. Horrific atrocities have taken place, and I would hope that every hon. Member wants a proper system of judicial process to ensure that charges are brought and taken forward.
I have set out the political context in which that process of judicial reform is being attempted and is taking place. I hope, therefore, that it is clear that it will be for the evolving Iraqi Administration, or the eventual Iraqi Government, to deem themselves ready to consider a series of possible mechanisms for the delivery of justice. Such mechanisms could include special chambers to deal with those most responsible for crimes
286
against humanity, war crimes or genocide; the use of the Iraqi courts for serious, but lesser crimes; and truth and reconciliation commissions for the least serious offences. This is certainly not the victor's justice that the Father of the House is concerned about.
International help will be needed to enable those mechanisms to be set up. It could take some time before the past crimes of the regime can be prosecuted, but we are already taking steps to ensure that that matter is dealt with. Protecting evidence is a key element in ensuring that that happens, and it has been a paramount concern of the coalition forces to endeavour to preserve the documentary evidence that they encounter during the course of operations that could relate to possible war crimes by the Iraqis and also to Iraq's weapons of mass destruction programme. I am pleased to confirm that a team of coalition specialists, including forensic experts, has started work on how best to preserve evidence for use in future judicial processes. Their recommendations will be invaluable. As Iraq becomes progressively secured, the activity to amass such evidence can be stepped up.
Given your indulgence, Mr. Deputy Speaker—I recognise that I am beginning to tread on dangerous territory—before you intervened on the Father of the House you allowed him to make certain concerns plain. I am more than happy to respond, in a limited way.
I am grateful to my hon. Friend for raising an important point about the need to identify and preserve antiquities, in particular the Sumerian tablets in Iraq. UN security resolution 1483 called on all member states to take appropriate steps to facilitate the safe return to Iraqi institutions of Iraqi cultural property, and called on UNESCO to help. The British Museum has been involved, and the Department for Culture, Media and Sport is looking beyond the immediate problem of looting and acting to prevent Iraq's treasures from reaching the international art market.
Following a suggestion by my right hon. Friend the Foreign Secretary, Foreign Office officials have spoken about the Sumerian tablets to Professor Richard Grove at the University of Sussex. As the Father of the House knows, Professor Grove is a leading expert on such issues. He says that the tablets date back to 2900 BC, and are thought to constitute the oldest script in the world. They are, in fact, some 5,000 years old. He says that they contain important data on climatic events of the time, and are hugely important to our understanding of climate change today.
It was vital to try to find and secure those treasures. I am happy to confirm that we are now taking steps to identify and protect the Sumerian tablets, along with other antiquities. I hope that that will reassure the Father of the House, although I should be happy to engage in further correspondence.
Mr. Dalyell: The vital question relates to information about possible El Nino activity—but I am extremely grateful to my hon. Friend. Let me also put this on record: I think you were absolutely right, Mr. Deputy Speaker.
Mr. Rammell: I would not wish for a minute to gainsay that assertion.

287
This has been an important debate. There will undoubtedly be legitimate concerns about people who are detained. I have tried to make clear our understanding of the whereabouts of Tariq Aziz, and to make the important point that at all stages international law and the Geneva convention will be adhered to. But as we seek to rebuild Iraq, we must bear in mind that it has to be an Iraq for the Iraqi people. That means that they must be involved in the process of reconciliation, and the judicial processes that are necessary for the bringing to justice of those who have perpetrated unmentionable atrocities. It is important for the Iraqi
288
people to take the lead in that. Whether it applies to Tariq Aziz or any of the other people who have been detained. I hope that the House agrees that the process is extremely important.
I thank the Father of the House for the opportunity to air these important issues.
Mr. Deputy Speaker: I should perhaps say that the Chair always relies on the good will of Members, and I am grateful to the hon. Member for Linlithgow (Mr. Dalyell) for what he said.
Question put and agreed to.
Adjourned accordingly at seven minutes to Eight o'clock.

Preamble
[MR. JOHN MCWILLIAM in the Chair]

Iraq
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Jim Murphy.]
9.30 am
Mr. Barry Gardiner:It cannot have escaped the House's attention that today's parliamentary business includes two scheduled debates on Iraq. I have little doubt that one of those will display the House at its worst, with Members indulging in party-political point scoring, feigning outrage at trumped up and imagined charges, and imputing dishonourable motives and even more dishonourable deeds. I trust, by contrast, that this debate will provide Members with the opportunity to display the House at its best. Colleagues from all parties have been and continue to be rightly concerned that, whatever our differing opinions on the war, its aftermath should be a success not only for the coalition forces but for the people of Iraq.
I begin by welcoming the Minister of State, Department for International Development, my hon. Friend the Member for Leeds, Central (Hilary Benn), who will respond to the debate. In him, the House recognises a politician of humanity and integrity. He began his ministerial career in this Department, and many were delighted to see him promoted there as Minister of State after a brief spell at the Home Office. I know that he will wish to be as open and frank as possible in responding to the questions and criticisms that Members may raise. He is every bit as concerned as we are to ensure that the reconstruction and development of Iraq are achieved as swiftly and effectively as possible.
Yesterday, the concluding summary from the G8 summit at Evian had this to say about Iraq:

"We welcome the unanimous adoption of United Nations Security Council Resolution 1483 and share the conviction that the time has now come to build peace and reconstruct Iraq. Our shared objective is a fully sovereign, stable and democratic Iraq, at peace with its neighbours and firmly on the road to progress".

As a statement of what we in the international community wish to achieve, that is admirable, but it prompts two rather fundamental questions: what needs to be done and who is best equipped to do it? My answers to the first question will be many and varied. My answer to the second will be unitary and unvarying. Although I accept the immediate short-term need for the occupying power to take various actions, I firmly believe that the United Nations is the better equipped and more effective agent in the medium and the long term.
On Monday 2 June, Mr. Sergio Vieira de Mello, special representative of the UN Secretary-General, arrived in Baghdad. Yesterday, he held a 90-minute meeting with the US administrator, Mr. Paul Bremer. I will pass discreetly over the six wasted weeks of General Garner's incumbency and simply note that Paul Bremer welcomed the vital role that the UN has to play. He spoke of their
70WH

"very good first meeting on the wide range of issues in which we can work together to create a democratic, independent and peaceful Iraq."

He continued:

"We have a very good sense of mutual mission".

Mr. de Mello, an experienced career diplomat, merely pointed out that the role of the UN has yet to be defined, but his remarks only a day previously were not so terse. Speaking to the press after his arrival, he emphasised the UN's role in a range of critical areas, including construction, refugee return, economic development, legal and judicial reform, civilian administration and humanitarian assistance. He also referred to the importance of re-establishing the rule of law and security for the population. That is first on my list of things that need to be done.
Reports that I have received from non-governmental organisations and from the Iraqi reconstruction group with which I have been working closely in recent weeks are unequivocal on this point. The key issue facing Iraq in general and Baghdad in particular is the establishment of law and order. Many agencies engaged in the reconstruction effort are under constant threat from armed gangs. Warehouses are regularly looted and NGOs must restrict the areas in which their staff can operate because of fears for their safety. It is clear that crime in Baghdad has reduced since 19 May when US troops in the city began adopting the methods deployed by British military personnel in Basra, including foot patrols and proactive attempts to engage with local committees. None the less, if lawlessness is a problem for aid agencies, it is even more of a problem for the ordinary Iraqi civilian, for whom shootings and fatalities are still a daily occurrence.
I ask my hon. Friend the Minister to investigate reports that World Food Programme distribution could be delayed because of its continued concern about the lack of security provided for its warehouses by US and UK forces. The Office of Reconstruction and Humanitarian Affairs has compounded that failure to establish law and order by sending out mixed messages to the Iraqi people. First, it announced a gun amnesty. Then, on 24 May, it promptly dismissed 500,000 soldiers from duty, without disarming them of their rifles, when it disbanded the Iraqi army. Those 500,000 young men have been provided with no rehabilitation, no reintegration and no employment programmes. They are roaming the country with no income—armed, frustrated and disaffected.
In a subsequent ruling worthy of Charlton Heston and the National Rifle Association in the United States, ORHA has announced that all Iraqis are entitled to keep guns, including the powerful AK47 assault rifles that retail in Baghdad street markets for 50 US dollars. Frankly, that is madness. It shows that the occupying power is incapable of performing its obligations under the Geneva and Hague conventions to establish law and order and to provide security for the local population. It is only to be expected that when a regime has been overthrown with minimal loss of armed personnel, elements of that regime will deliberately disrupt attempts to establish a post-conflict civil society. ORHA should have prepared against that eventuality, not hamfistedly assisted it. I urge my hon. Friend the Minister to persuade the Coalition Provisional Authority, which succeeded ORHA on 1 June, to reconstitute the Iraqi

71WH
army and to re-employ those men until a proper process of demobilisation and reintegration in Iraqi civil society can be put in place.
An occupying power has a legitimate short-term role in maintaining order—indeed, it has a duty to do so—but it is clear that a speedy transition back to a civilian police force is a critical element in the restructuring and development of the country. That brings me to my second question: who is best equipped to do that? Unequivocally, I believe that it is the UN.
The UN's experience of peace and transition missions in East Timor and Afghanistan make it uniquely qualified, because of its experience of failure as much as its success, to conduct a programme of demobilisation and demilitarisation of society. In particular, it has the experience to recruit and train an ethnically mixed group for a civil police service that is accountable to political authority without being politicised as it was under the previous regime. The value of that function being carried out by the politically neutral UN rather than by the politically and militarily tainted occupying power is, I trust, self-evident.
Before leaving the issue of law and order, I should add one further important point. Saddam Hussein's human rights abuses and his process of Arabisation had the effect of removing as many as 4 million refugees and internally displaced persons. Many of those people are returning to their homes, only to find them occupied. The United Nations High Commissioner for Refugees must be allowed to set up a process for handling the consequent property disputes and providing compensation to injured parties. If that is not speedily organised, the potential for groups and individuals to take matters into their own hands will escalate into major violence and disorder. Resolution 1483 resolved that the United Nations

"should play a vital role in humanitarian relief, the reconstruction of Iraq and the restoration and establishment of national and local institutions for representative governance".

It is to humanitarian relief that I now turn as next on the list of things that need to be clone. The reports of several major UK aid agencies are remarkably similar. One says:

"No acute, widespread humanitarian needs have been reported".

That agency has therefore focused its efforts on the recovery of health, water and sewerage infrastructure and capacity, but it points out that

"the potential to drop into an acute crisis is great".

Another agency says:

"There is at the moment no widespread acute humanitarian crisis in southern and central Iraq".

It continues:

"However, all the makings of such a crisis are in place and unless urgent action is taken we will see serious hunger, widespread disease and a further breakdown of Iraqi society in the coming weeks[elipsis] The state of the water and sanitation system is also a serious concern."

I am pleased to note from my hon. Friend the Minister's response to a number of my written questions that food stocks are not expected to run out in Iraq and that the World Food Programme is making arrangements to enable it to purchase wheat from Iraq's
72WH
2003 harvest, thereby supporting indigenous farmers. I welcome the support that the Department has provided to the WFP by giving £33 million towards this supply of food.
I trust that my hon. Friend the Minister is as concerned as I am that under paragraph 13 of resolution 1483, although the oil-for-food programme has been extended for another six months, all funds thereafter will be lodged with the development fund and disbursed at the sole direction of the Coalition Provisional Authority. It is essential that the UN agencies work with the CPA to draw up suitable plans to meet the population's food requirements after that six-month period has expired.
It seems perverse that this function should be expressly taken from the UN and appropriated by the occupying power when the UN has far greater technical capacity and experience of putting together such strategies. That is especially the case when one considers the fact that a long-term strategy is required that can reduce Iraq's dependency on external food aid and stimulate indigenous agricultural production. Again, I urge my hon. Friend the Minister to do all he can to ensure that the UN has the closest possible involvement with the CPA, even to the extent of consideration being given to subcontracting this responsibility to them.
Bob Spink: The hon. Gentleman is making a compelling contribution. Does he also accept that much of the money provided under the old oil-for-food resolution, resolution 986, has still not flowed through? The money is somewhere, and it is gaining interest. We must look at the flow-through of that money to finance the construction of hospitals, schools and so on. We must not take our eye off that ball either.
Mr. Gardiner: I am, perhaps, not as suspicious as the hon. Gentleman about how the balance of that fund will be used, but I take his point.
Central to any allocation of resources is the requirement for an independent and comprehensive assessment of humanitarian needs. It is to be hoped that Mr. de Mello will be able to undertake that. Save the Children, in its report "Winning the Peace in Iraq: Defining a Role for the United Nations", names three separate categories that can be identified from such an assessment—relief activities to address unmet humanitarian need; wider activities to improve public health and welfare that will require negotiated agreement with the CPA, according to obligations under the Geneva convention and the neutrality of humanitarian assistance; and the execution of existing programmes to deliver priority human goods.
There has been widespread concern among NGOs about the access that ORHA has provided. Although they report that communication with DFID is generally good, they are clear about the fact that on-the-ground co-ordination with ORHA has been extremely poor. In the words of one agency:

"While we have had sight of an organisation chart for staff of ORHA, our staff in Baghdad have found it impossible to make contact with any of them."

Another comments that one of its jobs

"has been to lobby the coalition-run ORHA, reminding officers of their duty not just to return the infrastructure of Iraq back to its pre-war state, but as the occupying power, to meet all the needs of Iraq's people."

73WH
I would welcome an explanation from my hon. Friend the Minister as to why such problems have arisen and how they might be addressed. I am concerned that more UK ground staff were not in place earlier. I recognise the issues of security and suggest that it might have been appropriate to deploy such staff to neighbouring countries, where they could at least have met with key partners. I welcome the announcement of 14 May that the Government have sent out a further 24 civil servants, bringing the total to 44 so far. It is clear, however, that NGOs have found difficulty in liasing with military staff, whereas they have long-standing and mostly excellent working relationships with the UN that have developed over many years.
Under Paul Bremer, the CPA is divided into seven directorates, including civil affairs policy, which will deal, among other issues, with education sector reform. Even if one sets aside the obvious technical expertise that both UNICEF and UNESCO have, the UN has one more distinct advantage over the CPA: it is seen to be a politically impartial adviser that is able to draw on its worldwide experience. That is a most practical argument for the engagement of the UN, in that the occupying powers are unlikely to be able to gain the trust and confidence of the Iraqi people.
What is true for education is equally true for other matters, such as economic policy, for which the UN can harness the expertise of the World Bank, the United Nations Conference on Trade and Development and the International Monetary Fund. It is equally true for electoral or judicial reform, in that the UN's department of political affairs and office of legal affairs are seen to be politically divorced from the occupying powers. The specialised agencies within the UN possess enormous reserves of technical and professional expertise that should be deployed to the full in the reconstruction and development of Iraq.
Iraq's situation is truly unique in that it is recovering not only from the immediate effects of a war but from the cumulative effects of 13 years of sanctions, the 1991 Gulf war and 20 years of centralised brutality and dictatorship, during which time the political and administrative structure annealed together in one ossified whole. However, despite those problems, Iraq has a highly educated population and a wealth of natural resources. I am convinced that only the UN has the experience and expertise, coupled with popular respect and impartiality, to enable it not only to deal with the immediate humanitarian problems of food, medicines, water and utilities but to pave the way to a regenerated civil society.
I would have liked to touch on many more issues, such as the need to deal with Iraqi war criminals, the need for the UN to control the oil revenues, the appalling handling of contracts for reconstruction without any open tendering procedures by the US Government, the need to ensure that women are properly protected and fully represented in the new polity, the need to get children back into school and the urgency with which our military must clear all unexploded ordnance. Above all, I would like to have discussed the need to ensure that indigenous and expatriate Iraqi people are used to play a key role in the work of rebuilding what is, after all, their country.
74WH
Many colleagues want to contribute, and it is my earnest hope that the case we are putting to our Government, urging the fullest possible involvement of the UN in the reconstruction and development of the country, fulfils the vision set out yesterday by the G8 of a fully sovereign, stable and democratic Iraq.
Several hon. Members rose—
Mr. Deputy Speaker:Order. Many Members want to take part, so may I encourage brevity to enable the maximum number to get in?
9.50 am
Tony Baldry: I congratulate the Minister of State on his well-deserved promotion and return to the Department. I know that the International Development Committee is looking forward to working with him. I entirely endorse what the hon. Member for Brent, North (Mr. Gardiner) said. I agree with every word, and I do not intend to repeat his comments.
We are not the only ones who are concerned about reconstruction. I noticed in the International Herald Tribune last weekend a report by the Senate Foreign Relations Committee in Washington on 22 May. The International Herald Tribune led into the report with the following comment:

"Lawmakers have been seething for weeks over the administration's failure to consult in depth with Congress about the costs, methods and goals of rebuilding Iraq".

This House has not had very much information about the goals, costs or methods of rebuilding Iraq. The previous Secretary of State appeared before the Select Committee before conflict broke out and talked about the costs of humanitarian rebuilding in Iraq. Since then, with the exception of the daily DFID updates on the web, there has been no coherent ministerial statement on where DFID is going in Iraq, which we clearly need. One gets a sense of there being a void.
The military clearly expects DFID to be doing things. That was reflected in an article for The Guardian last Saturday, written by the shadow Defence Secretary, who had recently been in Iraq. He reported that wherever he went the military said, "Where is DFID?" I suspect that DFID has been saying, "Look, this is Geneva convention territory and the military has to establish security. That is its responsibility. Together with non-governmental organisations, we can go in only when the situation is secure." There is some confusion in the machinery of government that needs to be resolved, but it exists not only in this country. Clearly, there is also confusion in the United States. Senator Richard Lugar, who chairs the Foreign Relations Committee, said:

"I am concerned that the administration's initial stabilization and reconstruction efforts have been inadequate. The planning for peace was much less developed than the planning for war."

Senator Joe Biden referred to

"the administration's failure to acknowledge publicly that the postwar efforts would cost billions of dollars, require years of involvement and get the United States bogged down just as it is in the Balkans."

He added:

"When is the president going to tell the American people that we're likely to be in the country of Iraq for three, four, five, six, eight, 10 years, with thousands of forces and spending billions of dollars, because it's not seen told to them yet?"

75WH
When we considered Afghanistan, all the evidence was about security, security, security. Establishing security in Iraq is obviously a job for the military, but it will take a long time and considerable commitment and resources. It is not yet clear, however, that there is public acknowledgement—in the United States or the United Kingdom—that that is going to happen. Of course, because Afghanistan was under UN responsibility, the advantage was that we could hand over responsibility for the international security assistance force to others, such as the Turks and the Germans, in due course. We will not be able to do that in Iraq, because other countries will not be willing to come forward.
DFID has to be much more forthcoming with the House on issues relating to reconstruction. The Intelligence and Security Committee will consider who said what to whom in its assessment on weapons of mass destruction, and the Foreign Affairs Committee will review the matter. The International Development Committee will follow very closely the reconstruction of Iraq.
I make a gentle final point. The International Development Committee has not heard from the previous Secretary of State since before the outbreak of war. We invited the new Secretary of State to give evidence, and 10 June was fixed as a date. She says that she will be in Iraq then—that is understandable—but no new date has been set. I would have thought that the Secretary of State, who is a Minister of the Crown with responsibilities, would not need to go to Iraq to discover the Whitehall line to take or what DFID is doing in that country, but would want to take the earliest possible opportunity to tell the Select Committee, which scrutinises her Department, exactly what DFID has been doing and intends to do about the reconstruction of Iraq.
The Secretary of State's predecessor was extremely forthcoming about Afghanistan because, I suspect, it was considered to be a good news story. The reticence of DFID Ministers in telling the House what is happening in Iraq creates a suspicion that it is a bad news story. The speedier Ministers are to give a full account, the quicker they will rebut that concern.
Several hon. Members rose—
Mr. Deputy Speaker:Order. May I encourage all Members to emulate the hon. Member for Banbury (Tony Baldry) and keep their comments brief?
9.56 am
Joan Ruddock: I congratulate my hon. Friend the Member for Brent, North (Mr. Gardiner) on securing this timely debate and on the excellence of his contribution. We cannot debate the role of the United Nations in Iraq in the future or the present without reflecting on what has happened in the recent past. We were told that military action was necessary in order to uphold the authority of the UN. I believe that that authority has been undermined by the challenge by the United States to the UN weapons inspectors. We were told that doing nothing was not an option, but we were doing plenty. For seven years,
76WH
international inspectors were destroying weapons of mass destruction in Iraq, and punitive sanctions made it impossible that such weapons could be reinstated in a way that would make them effective, particularly within 45 minutes.
Therefore, the very first thing that we should do in respect of the UN's role in Iraq is apologise to Kofi Annan, Hans Blix and Dr. el-Baradei for the way in which the international community, particularly the coalition, undermined their work and challenged their authority. It is now time to make up for that. We must take very seriously the points that were made by my hon. Friend about the unique ability of the UN to be the key body in the reconstruction and rehabilitation of Iraq. I also believe that, to end the controversy over weapons of mass destruction, we must most urgently return the UN weapons inspectors to Iraq so that they can fulfil the mandate that they were given in resolution 1441.
If the war had been authorised by the UN as a result of a final and negative report by the UN inspectors, perhaps it would have been conducted differently. However, it is certain that the post-conflict situation would have been handled very differently indeed. For instance, there might have been a much smoother transition. There is no doubt that the coalition forces have failed to restore vital water and electricity supplies and hospital services. There has been an extraordinary level of unpreparedness, which I find quite unbelievable, given our experience in the Balkans and, more recently, Afghanistan. Lessons ought to have been learned.
Potentially, post-conflict Iraq should have been much easier to deal with than Afghanistan, where there was civil war for 24 years rather than 24 days. Yet already there are reports of grave disorder and a huge degree of violence was described graphically by my hon. Friend. As he said, guns are on open sale and the suggestion has been made that everyone has the right to carry a gun. I can testify to what he said. What could be more ludicrous in a post-conflict situation in which the priority should be to achieve security for the civilian population than not disarming those who carry guns and prohibiting the further sale of guns to the civilian population? That is a matter of extreme urgency. Such a situation would not conceivably be allowed to pertain if the United Nations had been in charge in Iraq.
Furthermore, I refer to the attempts to establish an interim Iraqi Authority in parallel with what was done in Afghanistan. I accept that I have made many criticisms about that, but it is the core of the reconstruction process and an important procedure was undertaken. All the attempts to make progress in Iraq have floundered completely. There have been many false starts. People with no credibility were appointed. Then they were sacked. Another conference takes place; so does another meeting, at which another suggestion is made. Over and again, we see clearly that people have no experience, no expertise and are not capable of bringing forward proposals. Let us hope that the new appointments will bring about a more secure and sound path towards involving the Iraqis.
There will be no legitimacy if the Iraqi people are not quickly brought into the reconstruction and rehabilitation project. It is not the role of the occupying forces to undertake such work. They are not equipped to do so; they do not have a mandate. Moreover, they do not have the experience. It is not just a matter of

77WH
humanitarian relief. The whole basis of reconstruction is political as well as physical, and that is something that only the United Nations can deliver. There must be a clear mandate as there was in Afghanistan when the Bonn agreement set out a process of stages at six-month intervals in a full two-year programme to arrive at democratic elections. That may not have been possible in Afghanistan, where they were great difficulties, but at least we knew where—to use current terminology—the road map would take us.
UN resolution 1483 is mainly an endorsement of the status quo. It is to be reviewed in 12 months. There seems to be an acceptance that the military forces will run the show for at least a year. That is completely unacceptable. I endorse strongly the paper that was prepared by Save the Children, especially its conclusions and recommendations. I am sure that most hon. Members here will have read it. I shall not rehearse what the paper said because I want to be brief, but the key to reconstruction is—and must be—international humanitarian law and human rights law. Only the United Nations can be the embodiment of international laws and can conceivably provide the basis for reconstruction and relief.
The United Nations needs a clearly defined role, which was one of the arguments put forward in the Save the Children paper. Resolution 1483 is not sufficient; it does not expand the role of the United Nations. It merely endorses the action of the coalition forces. As Save the Children said, there need to be three pillars, not only the humanitarian pillar that was well rehearsed by my hon. Friend, but a second pillar, which is democratisation, institution building, transitional government, electoral assistance and human rights monitoring. Such tasks can be undertaken by the United Nations, and those roles must be fleshed out. Authority to do that must be given. The work must begin because the process is enormously complex. Because of the lack of democracy and the brutal dictatorship, it is obvious that people are not ready to vote and that there is no system to allow that to happen. The work has to begin urgently. The third pillar is civilian security sector reform. Again, that cannot be the job of the coalition forces. Indeed, the United Nations has demonstrated in other countries, albeit imperfectly, how to undertake such work.
There must be a meaningful political process to ensure Iraqi self-determination—that is the key to reconstructing that country. If we compare Iraq and Afghanistan, we find an enormous difference. Historically, the Iraqi population has been well educated, and the country has many professionals. It also has a complete, modern infrastructure. All those factors provide a basis on which it should be possible to begin swift and effective reconstruction.
I want to refer particularly to the position of women. In any post-conflict situation, women suffer most and are most neglected in terms of planning for the future. It is common for men who return home from the war front to inflict violence on them, and that is now happening in Iraq. It was recently reported that Yarmouk hospital in Baghdad had had 300 women rape victims. In the streets, women and children are being kidnapped, and women and young girls cannot walk alone. As people will know, there was never a dress code in Iraq, but
78WH
female students are now banned from university in Basra unless they wear the hijab. A new kind of repression is emerging. Previously, for all the brutal dictatorship, Iraq was at least a secular society, which was to the benefit of women. Now, however, many threats are being made against women. The coalition forces are not dealing with the issue and are ill equipped to do so, but it must be addressed urgently.
Despite the recent disadvantages that the women in Iraq have suffered, they still make up 34 per cent. of university and polytechnic teachers, and 38 per cent. of doctors. They have had equal pay and equal opportunities in the professions, they have been able to drive and, as I said, they have had no dress code. Nasreen Sideek, the Minister for reconstruction and development in the Kurdistan regional government, recently addressed a women's conference in the United States, saying:

"There are 3 women members in the regional cabinet—women are professors and senior administrators".

Women also make up more than 60 per cent. of the staff and half the engineers in her ministry. That is very unusual for a middle-eastern society. If we—the international community—ignore the advances that had been made in the status of Iraqi women, which they have begun to lose in recent years, we shall do a terrible disservice to more than half Iraq's population.
There are parallels with Afghanistan, where pressure from the international community forced the United Nations Assistance Mission in Afghanistan to take the issue on board, and there is now gender mainstreaming. There are huge deficiencies, but the authorities have taken on board the message that they must take care of women, and great efforts are being made to involve them. They are constantly being drawn into the constitutional and legal processes, in particular, because of pressure from the international community and the United Nations.
I pay tribute to the Government, because Ministers have played a key role in getting women involved in Afghanistan, and we are doing the same in Iraq. My right hon. Friend the Minister for Women and other Ministers have been meeting Iraqi women's organisations in this country and talking with women in Iraq. We hope that there will be a women's conference in Iraq—the Government will take a lead role in organising it—so that women there can have an input.
There is so much that I want to say, but I shall draw my remarks to a close. For many reasons that I am sure hon. Members will elucidate, the United Nations needs to play a much more central role, as we were told it would. We were told that there was going to be a UN trust fund for the oil revenues, but that is not going to happen. A central bank will take the oil revenues controlled by the coalition. There are many questions on which I hope the Minister will be able to elucidate. Only the UN has the impartiality, the transparency and the respect to play the central, critical role that is required in the reconstruction and rehabilitation of Iraq.
Several hon. Members rose—
Mr. Deputy Speaker:Order. Again, I exhort hon. Members to be brief. If every speech takes 15 minutes, we shall get very few hon. Members in.
10.10 am
Bob Spink: Within the overall Iraq administrative solution, the Kurds should have an autonomous state with self-government in their own region in a federal Iraq that will, I hope, have a single sovereign identity.
The Kurds have shown great enterprise under the no-fly zone during the past decade. As a people, they are capable and energetic. They have created a strong Parliament with good representation for women, as the hon. Member for Lewisham, Deptford (Joan Ruddock) eloquently said. The Kurds have shown that they respect human rights. They understand how democracy must develop and they have substantially rebuilt their community under the woman Minister for reconstruction and development—a great heroine—about whom we have just heard. Given the right administrative structures and support, they will achieve remarkable results in the north of Iraq and lead the middle east in developing good governance for the entire region. We must, however, be vigilant in resisting any improper Turkish influence in that area of northern Iraq.
To get it right in future, we must learn from the past. UN resolution 986—the oil-for-food programme—was good in parts. It delivered well on education in certain parts of the region, especially under the no-fly zone. In some areas, however, there were problems. I am not unreservedly critical of it; it was good so far as it went, but there are problems. Billions of dollars available under that fund have not yet flown through. One must ask the following questions: where is that money, is the money earning interest, to whom does that interest belong, and when will the money be released for use?" More than four years ago a hospital was approved for Irbil. People are ready to build it; they need it, but the money has not been released to enable them to start the construction. The questions must be addressed. The billions that are tied up must be released.
In some areas, only 30 per cent. of the money that should have been available has been made available for the use for which it was and should have been directed. The issues must be dealt with. There are problems with bureaucracy in the UN. It is possible that there is corruption—that needs carefully to be examined. There is also the issue of the political will to release the money for the purpose for which it should be used.
A number of questions need to be asked. First, will all the 986 money that has not been used be freed up for its original, intended purpose? Secondly, what interest have the billions of dollars earned and should that money also go to the original intended recipients for use in rebuilding the different regions of Iraq? Thirdly, when will the money be released? Fourthly, can the cut of the money that the UN takes for its bureaucracy be reduced from the extraordinary—some have said extortionate—levels it creams off the top? Can that level be reduced to a more reasonable, defendable level in future? Can there be an inquiry into that to ensure a speedy, proper solution? I do not criticise resolution 986; it has delivered tremendously well, and I want it to do even better. It is in that spirit that I make my comments. I encourage the Minister and the international community to answer these points. so as to ensure that Iraq is rebuilt and that its people get the help that they need and deserve.
10.14 am
Tony Worthington: Today, the newspapers are full once again of reports about weapons of mass destruction. Weapons of mass destruction were said to be the reason for going to war, but debates on the subject beforehand distorted the situation appallingly in that we were unable to say what we should do after we had won the war. The danger of our continuing obsession with such weapons is that we are failing properly to consider reconstruction in Iraq. The weapons are important, but they are not the most important factor. More important is what we are debating today, and I congratulate my hon. Friend the Member for Brent, North (Mr. Gardiner) on securing this debate.
We may believe that weapons of mass destruction are more important than other key issues, but that was not why the Americans went to war—and they are now saying so. Wolfowitz has said that the weapons may have been the "bureaucratic" reason, on which everybody agreed, but that it was not why the Americans went to war. They went to war at least for regime change. Wolfowitz said in Vanity Fair that the huge significance of capturing Iraq was the ability to move troops out of Saudi Arabia. No one can tell me that he came across that answer only when the war was over. No, we have to consider the situation as it is.
We have ended up in the position that we were headed for all along, which is to be the occupying power, and we shall probably be there for many years. The hon. Member for Banbury (Tony Baldry) quoted Senator Biden; he could have finished the quote, which said that the American population think that "Johnny and Jane" will be coming home next week. The Americans must be let in on the story, as must we. It is most likely that our forces, in their thousands, will be there for years. We must work on that basis.
One of the things that we did wrong before the war was to take no notice of what the Americans were saying and doing. We seemed willing to follow them everywhere, but without believing what they were saying. Before the war, they set up the Office of Reconstruction and Humanitarian Assistance. I will not skate over the fact that the office was set up publicly, but questions were asked in the Senate about what was being set up under the control of General Garner. We heard that the relief and reconstruction effort would be conducted by the Pentagon. That is still the situation, but it is breaking the first rule of humanitarian effort, which is that those giving help should not be associated with the combatants. Nothing could be clearer than that. If people are receiving assistance from those who bombed them and who are occupying their country, that entirely alters the relationship. That is why those of us in this Chamber believe, without exception, that Iraq's reconstruction should come under the control of the United Nations as rapidly as possible.
I pay tribute to Save the Children and Amnesty International for the documents that they have produced. It is essential that the factors listed by Save the Children—human rights monitoring, transitional governance, technical assistance for post-conflict recovery and the management of oil revenues and reconstruction contracts—should come under the United Nations; and Amnesty International points out the huge need for the UN to be involved in setting up a

81WH
new Iraqi criminal justice system. Crucially, the UN can bring a legitimacy and transparency that we and the Americans cannot, because of doubts about our motives.
Christian Aid correctly believes that the UN and its specialised agencies have been sidelined, which should have been a sticking point for the Government. We should have said that we would not be party to a situation in which, as an army of occupation, we could not uphold the UN to the fullest extent. That ought to have been our doctrine of belief. I hope that we can reach a situation in which, instead of using words in relation to the UN such as "vital role", we can say openly and clearly that there is no feasible chance for the successful recovery of Iraq unless the UN is put in control of the reconstruction phase.
10.20 am
Mr. Simon Thomas: Due to the pressure of time, my congratulations and welcome will have to be taken as read. I say in passing only that I am sorry that the Minister is not in the Cabinet. Responsibility for these debates should be with a Member who is accountable to the Commons.
The hon. Member for Brent, North (Mr. Gardiner) gave a succinct introduction to the debate; it was a good summary of where we stand. He posed two questions that followed from the G8 communiqué in Evian, but he did not pose the questions that I want answered. What do the people of Iraq want out of the reconstruction efforts? What sort of a society do they dream of, deserve and desire? Which Department is best prepared to help them to achieve that? There is no question of which Department is the most experienced and has the best way of working in this regard. It is the Department represented in this Chamber by the Minister. I share with all Members who have spoken a frustration that the Department for International Development has been unable to get down to the ground, as it is best placed to work with the UN. The military cannot work with the UN in that way, but DFID can.
Over the next six to 12 months, I see two main priorities, which are slightly different from the ones identified by the hon. Member for Clydebank and Milngavie (Tony Worthington). The first priority is law and order and human rights, which was mentioned by the hon. Member for Brent, North, and the second is weapons of mass destruction. We must recognise that those were our priorities before going to war. If our priorities before war were human rights, regime change and weapons of mass destruction, our priorities post-conflict must be to continue to pursue those objectives until they are brought to a successful conclusion, which should be within six to 12 months.
The next question is how to achieve a successful conclusion. To paraphrase Paul Robeson, in the next short period in Iraq we need to consider peace, justice and bread. Those are the three things that must be achieved in that country. We have already talked about the bread issue because it relates to the oil-for-food programme. The hon. Member for Brent, North referred to a particular problem with that, which I shall reinforce. The programme comes to an end in six months' time, but the Security Council resolution that authorises the occupying forces in Iraq will not be
82WH
reviewed for 12 months. There will therefore be a six-month period during which we do not know who will be responsible for food aid. I should like the Minister to respond to that.
I do not know how the programme will be funded, and, as hon. Members have said, we do not know about trust funds and we are not clear about what happens to the proceeds of oil going into Iraq. As the hon. Member for Castle Point (Bob Spink) said, we do not know what has happened to previous oil revenues either.
The final problem with delivering aid is that the US still believes in tied aid. This country—DFID, in particular—has moved away from tied aid, but we are now working with a main agency that strongly believes in that. That will affect not only the companies that get the contracts—we have already heard about that—but the way in which Iraq is rebuilt. We have not begun to consider how a massive injection of a particular sort of tied aid will affect the country, or whether the Iraqi people will respond favourably to that way of working.
The issue of justice has been mentioned so I shall concentrate on one related objective that I should like to see achieved. The human rights provisions under new resolution 1483 are somewhat weak. We talk about accountability for crimes and atrocities, but we do not say how that can be achieved. The International Criminal Court presents a magnificent opportunity to ensure that atrocities and crimes in Iraq are examined, and the role of the UN in international relations and justice is strengthened, but we are not going to go down that route. I am certain of that because the US will not allow us to go down that route. So what can we do? One suggestion from Amnesty that bears a great deal of scrutiny is the possibility of a UN commission to consider the new criminal justice system for Iraq and to look into crimes in that country. We must put the UN at the centre of the future justice system in Iraq. If we do not do that and rely on the Guantanamo bay approach, we will once again take away from the people of Iraq their desires and hopes.
My final point concerns achieving peace in Iraq. We have already heard about the militarised society there and the difficulties of achieving even a day-to-day peace. It is certainly the case that the UN would be better placed to provide that than the previous combatants. We also have to examine the way that we have allowed the desecration not only of the lives and homes of people in Iraq but of their very culture. We have not protected them from that. We have also lost documents that may have been useful in bringing prosecutions.
I return to weapons of mass destruction. What is the point of concrete barriers around the House of Commons if we honestly believe that there are weapons of mass destruction free and available in Iraq, able to be used in 45 minutes, which are not yet found, in a country that we were told before the war was a nest of international terrorism? What is the priority: concrete barriers outside this place or finding weapons in Iraq? That is the question—unless, of course, a great deceit has been played on Members of Parliament and the British public. I want the UN inspectorate to go in now under the old, existing mandates, along with the

83WH
International Atomic Energy Agency, and look again for weapons of mass destruction so that we can be absolutely sure about their existence.
Plaid Cymru opposed the war completely and utterly. We remain completely and utterly sure that we were right in opposing the war, but, as Members of Parliament, we will work with the Department for International Development in the same way that the previous Secretary of State tried to work with all parties. We hope that that opportunity will be there in future, because we want to ensure that the House continues to focus on the reconstruction of Iraq. I congratulate the hon. Member for Brent, North on securing the debate and ensuring that we had this opportunity.
10.27 am
Hugh Bayley: The test of Britain's and. more important, America's military might and of our resolve to confront tyranny and human rights abuse was over much more quickly than many of us thought possible. The test of our humanitarian intent—of whether the Iraqi people will benefit from our intervention in their country—has only just begun. We have discovered that restoring law and order in a country that has not enjoyed the basic democratic rights that we take for granted, and, therefore, the responsibilities that come with those democratic rights, is not as simple as driving a fascist dictator out of power.
As my hon. Friend the Member for Brent, North (Mr. Gardiner) said, without law and order, the basic job of post-war reconstruction for the humanitarian agencies is impossible. UNICEF reported a couple of weeks ago that repairs to the Rustumiya water treatment plant were destroyed as soon as they were carried out. The new equipment installed was stolen by armed gangs.
We shall also discover that building democracy, rights for women and human rights are difficult. That is more difficult, in fact, than the economic redevelopment of the country because Iraq has the benefit that Afghanistan does not have, of oil. It is essential that we achieve these aims, because they are the only ways of guaranteeing that the economic benefits that come from Iraq's oil go to aid the poor in Iraq.
In the short term, humanitarian needs and the country's reconstruction and development will have to be funded by aid. I and other members of the International Development Committee were in New York on 28 March when the UN launched its appeal for Iraq. It is its largest ever appeal: an appeal for $2.2 billion. If it raises that much, it will account for about 70 per cent. of all the funds raised this year by the UN to deal with famine in Africa, reconstruction in the Balkans and all its other responsibilities. It is an enormous sum.
The UN must take the lead, because it is the only body with the capacity to deliver food aid in the quantities that are required and to guide the reconstruction of Iraq. In New York. we were told that the UN already had 3,000 Iraqi nationals on its books as employees in Iraq. Other agencies do not. A UN lead is also essential because countries that did not support military action will not work with the occupying powers. Many of those will, however, work with the UN on reconstruction.
84WH
The importance of the UN's role is emphasised by the figures. From the total of $1,284 million given so far in humanitarian aid, $978 million—more than three quarters of that total—has been channelled through the UN. I say to those countries that have argued so strongly for a UN lead, especially those that opposed military action, that they should provide the UN with the resources to do its job, now that the UN Security Council has agreed a resolution giving it a prominent role in the reconstruction of Iraq.
I went to the UN website yesterday, on which the contributions to the UN appeal from various countries were shown as follows: the US has contributed $472 million; the UK $117 million; Japan $88 million; and Australia $45 million, but Germany has contributed only $10 million. France has contributed only $5 million, which is less than the sums contributed by India and Korea. If those countries want the UN to deliver, they must provide the resources to enable it to do so.
I wanted to say much more about the economics of redevelopment, but time is against me. I am delighted to hear the hon. Member for Ceredigion (Mr. Thomas) supporting the Labour Government's decision to untie aid. That must happen across the piece, because the $1.2 billion that has already been contributed will buy more in terms of reconstruction if contracts are let to whichever country can do the job for the lowest price. Aid will be more effective if it is untied.
In the longer term, Iraq's oil revenues will make a big contribution to post-war reconstruction. It is not a poor country. When Saddam seized power, Iraq's per capita income was higher than many countries in Europe. It is now one of the poorest countries in the world. When its economy is rebuilt it will have resources for its own development.
On debt relief, I am glad that debt interest and capital repayments have been frozen in the short term while the Paris Club decides what to do with Iraq's debts. However, I want the Government to ensure that the terms for debt relief applied to Iraq are the same as those applied to other countries. First, they should be conditional on Iraq's ability to repay. Secondly, if debt is forgiven, as it were, the proceeds should be used on development by the Iraqi Government to assist poor people. A poverty reduction strategy would need to be agreed by a new Iraqi Government.
We took action in Iraq as part of our post-11 September response to terrorism. At the start of my speech, I said that the test of whether we are on the side of the Iraqi people will be our humanitarian response to their needs now. If we rise to that challenge we will win friends in the middle east, but if we do not we will fuel the resentment in the region that creates the conditions for terrorism.
10.34 am
Dr. Jenny Tonge: I congratulate the hon. Member for Brent, North (Mr. Gardiner) on securing the debate and on an excellent speech. I welcome the Minister back to international development, although I suspect that he will have to write long letters to everyone after the debate to answer the points that they have made.
The title of the debate should really have been: "Role? What Role for the United Nations in Iraq?" Most Members have expressed their frustration that there is

85WH
not such a role. The Prime Minister promised a vital role for the UN in the aftermath of war and instead we have resolution 1483, which gives the USA and the UK authority and huge scope for the reconstruction and development of Iraq. That goes way beyond any rights of occupying powers under the Geneva convention, as the hon. Member for Clydebank and Milngavie (Tony Worthington) said.
There is a sort of justice, however. Let the countries who destroyed Iraq have the problem of rebuilding it. However, as the hon. Member for Lewisham, Deptford (Joan Ruddock) pointed out over and over again, the UN is the only body that is seen to be fair. The accusation stands that the US, and its faithful little friend the UK, will use Iraqi money from Iraqi oil revenues to repair the damage that they have done, so that they can have a permanent and secure base in the middle east, as the hon. Member for Clydebank and Milngavie pointed out. That is a nice thought.
A couple of weeks ago, the late-lamented right hon. Member for Birmingham, Ladywood (Clare Short) said that

"the UN mandate, which is necessary to bring into being a legitimate Iraqi Government, is not being supported by the UK Government."—[Official Report, 12 May 2003; Vol. 405, c. 36.]

I share her angst. The Government have misled us time and time again. In March, the Prime Minister, referring to oil, told an MTV audience:

"We don't touch it, and the US doesn't touch it."

Really? In truth, control of the oil revenues has been seized by the USA and the UK, reducing the UN role to one seat on an international advisory and monitoring board. Think about the oil revenues and the oil-for-food programme in six months' time. The hon. Member for Castle Point (Bob Spink) made the point about the money that is in the account already—we do not know what is happening to it. All of that money presumably goes into the development fund, which is under the control of the coalition until the interim authority is formed. That is very worrying.
Can the Minister explain the proposal from the occupying powers that Iraq's oil revenues should be used as collateral for extended borrowing? Does the UN approve of that? An important point was also made by the hon. Member for City of York (Hugh Bayley), who asked what was going to happen to Iraq's debt.
What of the interim authority—the Iraqi Government in preparation? It was promised that that would follow soon after the end of the conflict when Iraq's immediate security and humanitarian needs had been met. Again, the UN was to play a vital role. In reality, the Office of Reconstruction and Humanitarian Assistance, under the coalition, is still in charge, distributing largesse in the form of contracts to American companies, without any input from the UN.
We were also led to believe certain things about aid. On 18 March, the Prime Minister said:

"The UN should have a key role in administering the delivery of humanitarian aid."

The reality has been somewhat different. Again, it is the US and the UK. A UN special co-ordinator is there somewhere to assist UN agencies and non-governmental organisations to co-ordinate with one another, but not with the occupying powers.
86WH
I recently asked a parliamentary question to ascertain when a full survey of child malnutrition would be undertaken in Iraq. We all know the situation of the children in Iraq. The answer from the Department on Tuesday 3 June was:

"A full and detailed nutritional survey is not immediately feasible because security conditions in many parts of Iraq are preventing humanitarian agencies' access to households."

Security conditions are the nub of the matter. Security, security, security. Where is it? Without it there is no victory. It is six weeks after the war. There are 250,000 troops, the coalition is in control and the population is still waiting for proper water supplies, food and medical care. What is stopping these things? The answer is lack of security. The aid agencies cannot operate. Iraq is awash with arms, as we have heard from many Members. Every household and shop has guns. Even doctors in the hospitals are carrying guns to defend themselves. There is no police force yet, and, as the hon. Member for Brent, North said, the occupying powers have discharged all the soldiers of the Iraqi army. How will it help security to have tens of thousands of unpaid soldiers roaming around under no one's command?
Where, oh where is the UN? The Americans are not popular. Yes, the Iraqis are glad to see the back of Saddam Hussein—are not we all?—but the plinth from which his statue toppled in that famous television footage now bears the slogan, "All Donne—Now Go Home". A Kirkuk policeman is quoted as saying that the Americans seem to be completely lost because they are all military and do not understand the politics of the place. The Americans do not do peacekeeping—we all know that. When will the UN be asked to take control? As discussed by the hon. Member for Ceredigion (Mr. Thomas), how long will it take to retrain the civilian police force and the judiciary so that they can take on justice in Iraq?
Before I leave the subject of security, where are the weapons of mass destruction? There are many disaffected, angry Ba'ath party members still in Iraq. How long will it be before someone finds the weapons of mass destruction and uses them, if they are there? Why are the Government not pressing for the return of the UN inspectors, not only to ensure that if any weapons are found the USA and the UK will not be accused of planting them, but for the security of Iraq itself? If weapons of mass destruction exist, why were British troops sent into battle at the beginning of action without any protective clothing for chemical or biological weapons?
I repeat that without security Iraq is nothing. Today is Iraq in Westminster day. We lucky few have started the debate, and there are those still abed—I shall not continue the quota: on, but it could be very apt. The Liberal Democrats will call for a proper inquiry into whether the House was misled by the Prime Minister on the reasons for waging war, but let us also call for a rebirth and strengthening of the UN, for that body to be given a truly vital role in Iraq and, as mentioned by the hon. Member for Lewisham, Deptford, an apology for the way in which it has been undermined. It may not be a perfect organisation, but it is the best that we have, and the Iraqi people need the UN.
10.42 am
Mrs. Caroline Spelman: I am grateful to the hon. Member for Brent, North (Mr. Gardiner) for securing this debate. There has been a dearth of debate on Iraq, particularly in the post-conflict period. Since Baghdad fell, we have been short of opportunities to discuss the matter. I believe that we are all glad to welcome the Minister back to the Department for International Development, but I am sure that the frustration of Members is tangible to him. He should be exonerated from the comments and criticisms that I am about to make because he was not in the Department during the period in question, but I have to ask why the contingency planning was so poor.
As the former Secretary of State admitted in an interview on the "Politics Show" this past weekend,

"the preparations for post conflict were poor, and we've got the chaos and suffering that we've got now."

She went on to say that the advice that she was giving about the need

"to keep order, to keep basic humanitarian services running"

was, to quote her, "all being ignored".
Those extremely serious allegations need further scrutiny. We cannot expect the Minister in a Westminster Hall debate of an hour and a half to give adequate answers to all the questions that have been asked, but there must be a thorough post mortem on why the contingency planning for the war was so poor.
There is no excuse for the terrible sense of déjà vu that we are experiencing. The lessons from Afghanistan, which was a recent conflict, were not applied. The record in Hansard shows that in November and December last year the Secretary of State was deluged with questions, in which she was asked what contingency plans her Department was making for a possible conflict in Iraq. The record bears me out that a one-word answer of "None" was given. In January, when asked what discussions were taking place with the Governments of surrounding countries about dealing with the impact of the conflict, the answer that came back was, "None."
I do not exonerate the former Secretary of State from blame. It is unfortunate that she is not here this morning, participating in the debate. While criticising the poor planning, she should also be willing to answer some criticisms about her role in the matter. I feel strongly about such issues. There is a clear need to prioritise quickly. As other hon. Members have said, the key lesson is security, security, security. That should have been learned from Afghanistan and should have come as no surprise. The lack of security hits the vulnerable in Iraq most severely. As the hon. Member for Lewisham, Deptford (Joan Ruddock) said, it is women who suffer the most in the post-conflict scenario. It was recently reported that 13 schoolchildren were abducted from school in central Baghdad. It is not safe to get on with ordinary life. That is the reality of the situation, so we can hardly say that we have fulfilled our role in accordance with the Geneva convention as an occupying force restoring and maintaining law and order. That is a clear failing.
Children are the other vulnerable group. I was appalled to learn that there is no possibility of a child nutrition survey. I saw shepherd boys lying in hospital in Kuwait, who had been injured in the conflict. A
88WH
14-year-old weighed only four and a half stone as a result of chronic malnutrition. There is an urgent need to help the most vulnerable, but that cannot be done without security.
I join other hon. Members in chiding the Government on their contingency planning for phase 4. Clearly, it has failed. Phase 4 envisaged taking on board the Iraqi army and police, purging and vetting the Ba'athist elements and recycling them to help keep the peace in their own country. We were told that that did not work out because people removed their uniforms and went home with their automatic weaponry, which aggravated the security situation. Given the lessons learned in Afghanistan, will the Minister explain why there was no back-up plan for phase 4? The advantage about Iraq was that at least there was an army and a police force, and some possibility of recycling them.
What is the thinking about inter-ethnic tension? Kirkuk has become a no-go area for the non-governmental organisations to work in because the returning Kurds are at loggerheads with the Arabs. The problem is spreading to Mosul. The situation is entirely predictable. It could have been envisaged in any contingency plan that was made last year. How does the coalition intend to deal with a situation that is only likely to become worse? I flag that up now to try to prevent a disaster from happening.
After decades of distorted priorities under Saddam Hussein and the impact of sanctions, it is no surprise that the utilities are in such a bad state. It is a good deal worse than a sticking plaster job. The fact that there were no spares for the power stations and water supply plants has produced a chronic situation. It could all have been envisaged in the contingency planning. I have received calls from people who work in the utilities here and who want to help to restore the utilities there. Why were such matters not factored into contingency planning? Why were experts who were willing to help with the problem not lined up in advance? I reiterate that we need a proper post mortem to find out why the Government's contingency planning for Iraq was so weak.
What about the relationship with the United Nations? Resolution 1483 gives America and Britain legal cover to occupy and govern Iraq, but it has been said by the leaders of our countries that the UN will have a "vital" role to play. However, so far it seems to be very much the junior partner. The group whose role is most consistently eroded seems to be the Iraqi people. On 2 April, the Prime Minister said:

"Iraq should not be run either by the coalition or by the UN but should be run by the Iraqis."—[Official Report, 2 April 2003; Vol. 402, c. 911.]

Is that still the case? Yesterday, the Prime Minister's envoy to Iraq, John Sawers, told The Times that the Iraqis were not ready for democracy and that the coalition would appoint a political committee of 25 to 30 Iraqis. What role do the Government expect the Iraqi people, and women in particular, to play in running their own country?
None of my remarks is intended to denigrate the hard work and accomplishments of our armed forces—we are all proud of what they have achieved in Iraq. The information that I have received from recently returned aid workers is that the Iraqi people are, contrary to

89WH
much of what we hear in the media, delighted to be rid of Saddam Hussein and glad to have British forces there trying to restore order amid the anarchy. Of course, they would like the current phase to end, and they would like to see a plan setting out the way forward. However, that should not detract from the role that our armed forces played in liberating the country from the repression that it suffered for far too long. The coalition's victory over Saddam was swift and impressive, and our forces did Britain proud in their successful prosecution of the campaign. Our responsibility is to ensure that we do not ruin the peace.
10.50 am
The Minister of State, Department for International Development (Hilary Benn): First, I join other hon. Members in congratulating my hon. Friend the Member for Brent, North (Mr. Gardiner) on securing the debate and on setting out so clearly what must be done.
As this is my first contribution to a debate since taking up my post at the Department for International Development, I want to place on record the appreciation that I am sure all hon. Members feel for the enormous contribution that my right hon. Friend the Member for Birmingham, Ladywood (Clare Short) made in setting up DFID and leading it with passion and distinction for six years. The Department's reputation in this House and in the wider world owes a great deal to her efforts, which we much appreciate.
The debate has made clear the sheer scale of the challenge that Iraqis face in rebuilding their country, which has suffered so much in the past 25 years. It is evident from hon. Members' contributions that we are talking about not only the impact of the recent war but about trying to overcome an entire generation of destruction in all its forms—physical, social and political. That makes it all the more important for members of the international community—the UN, the coalition and others—to work together to carry out the task before us.
Hon. Members have rightly spoken about the great strengths on which Iraq can draw—its proud history, its rich natural resources, its highly educated and skilled people, its history of public administration and public service, and its potentially vibrant civil society, to which the experience of Saddam's regime laid waste. Given that potential, it is an indictment of that generation of nightmare that so many people now live in poverty. As was said a moment ago, Iraq was about as wealthy as Portugal a generation ago. Even before the recent conflict, however, 16 million Iraqis—about 60 per cent. of the population—depended on food handouts from the United Nations to survive.
In a moment, I shall come to the UN resolution and the process that flows from it. The UN's involvement in Iraq does not, however, begin with that resolution—it is very much part of what has happened in recent years and, indeed, in recent months. I want to place on record the appreciation that I am sure hon. Members feel for the role played by the UN and its agencies, together with the Red Cross and the Red Crescent, in responding to humanitarian needs in Iraq before the conflict and in managing relief operations subsequently. As my hon. Friend the Member for Brent, North said in reporting on the views of NGOs in Iraq, it is a tribute to the
90WH
effectiveness of the UN's work that there is currently no humanitarian crisis. Let us be honest, before the conflict started, some people, feared that there would be such a crisis.
The UN has now established a significant presence on the ground. It has five regional teams in Iraq, and agencies such as the World Food Programme, the World Health Organisation and UNICEF are carrying out vital humanitarian work. DFID has been working in a practical way t o help that process, predominantly through UN agencies.
I hear what the hon. Member for Banbury (Tony Baldry) and others have said about the thirst for debate and information. I very much welcome the early opportunity to have this debate, in which the issues can be aired. The hon. Gentleman will be aware that Baroness Amos and I have written to all hon. Members to provide information about both the work that DFID is undertaking and our strategy. I know that— [Interruption.] If hon. Members are saying that they have not received the letters, I shall check, because they are certainly on their way. The very first thing that Baroness Amos and I did was to recognise the need for more information for hon. Members, which is why we have written. I shall ensure that the letters arrive quickly.
On Baroness Amos's appearance before the Select Committee, her view is that it might be more helpful for the Committee to have that session once there has been a chance to look at things on the ground, although that dialogue through the usual channels will no doubt continue.
We have so far committed £115 million in support of the emergency efforts of the United Nations and other agencies. We have also set out on the DFID website and in the letter, which is on its way, all of the ways in which that money has been allocated to various UN agencies for food, emergency supplies, mine clearance, health and surgical kits, repairs to the electrical system, and so on. On the question that my hon. Friend the Member for Brent, North raised about liaison with NGOs, the Coalition Provisional Authority is now holding weekly open-house meetings with the NGOs in Baghdad. My understanding is that that will begin to address the problem that he identified when he referred to previous experience.
Overall, the UK has to date sent to Iraq about 60 people—volunteer civil servants from a number of Departments. However, there has been some ill-founded criticism, so I make the point that DFID's help with reconstruction has been practical, although what matters is not whether that contribution has a flag on it that says "UK" or "DFID", but whether the help is delivered to where it needs to be delivered at the right time. It is sensible to work as much as possible through UN agencies that are already there, and hon. Members know that that is our policy.
Having said all that, I remind Members that the situation in Iraq is undoubtedly difficult, albeit improving. We must acknowledge the scale of the task that lies ahead, because trying to overcome the generation of disaster is an enormous undertaking. I agree with every Member who has said that security is the key—it is, and we have all seen the problems, especially in Baghdad. Reference has been made to the

91WH
Iraqi police, but one of the difficulties in a society such as Iraq's that was controlled by sheer fear is that when that fear is lifted, many things happen. In that sense, the lessons to be learned are different from those in relation to other examples about which Members have spoken. The truth is that each nation, each history and each set of political circumstances is absolutely unique. The challenge in Iraq is large because of the political legacy.
As Members are aware, the coalition is now undertaking joint patrols in Baghdad with police—7,000 policemen have reported back to work. However, I accept the challenge that Members have set out. The real test in the end will be whether the people in Baghdad and throughout the country feel secure. With security, the other work of restoring the country can begin. I can report that all 12 major public hospitals are now working in Baghdad, although sewerage remains a big problem, while in Basra the three main power stations are working and electricity has been restored to pre-conflict levels. Indeed, water supply is now better than it was before.
Resolution 1483 has been enormously significant: it has lifted economic sanctions against Iraq, which is a hugely important step that has not been mentioned so far in the debate, and will enable Iraq's oil revenues to be used to meet humanitarian, reconstruction and development needs.
On food, Iraq's public distribution system, which has been mentioned, resumed on 1 June for the first time since the war. I will check on the issue of security that was raised, but we expect the World Food Programme to continue to implement food distribution. The resolution also provides for the establishment of the development fund, which will be overseen by the advisory board, comprising the World Bank, the IMF and others. I accept the point made by my hon. Friend the Member for City of York (Hugh Bayley) about debt and about the need for an assessment by the World Bank and others, and for a donor conference so that we can look at longer-term needs.
In conclusion—
Mr. Deputy Speaker:Order. The time is up. I thank all Members for co-operating and keeping their contributions short. I apologise for the fact that the hour and a half allowed under the temporary Standing Orders is not sufficient for a debate of such magnitude. I invite all Members not wishing to stay for the next debate to leave quietly.

Election Turnout
11 am
Mr. Bill Tynan: I am delighted to have secured a debate on the important issue of turnout in UK elections. There are serious concerns about voter turnout among all elected Members at all levels and across all political parties; they have expressed those concerns on numerous occasions. Unfortunately, a huge proportion of the electorate do not share those concerns with politicians. That is a matter that we must address if, in the long run,s we are to convince the electorate that low turnout is bad for democracy.
I understand that the Minister attended yesterday's launch of the "Voting for Change" report by the Electoral Commission. The report suggests a number of welcome changes to update election arrangements and make them more accessible and convenient. I hope that, in addition to commenting on the report, she reassures me on the proposals for election pilots in 2004. I will also make other proposals for her consideration.
This is the third parliamentary debate in six months on issues closely related to the subject, but I make no apology for raising it again. I intend to continue the debate, highlight concerns and examine measures taken to address voter turnout and raise public awareness. The Minister will also have an opportunity to share her thoughts with the House.
In recent elections for the Scottish Parliament, turnout dropped to 49 per cent., from 58 per cent. in 1999. In the Welsh Assembly elections, turnout dropped to 38 per cent. from 46 per cent. We could have expected a large turnout to have been generated, owing to the importance of the Scottish Parliament and the Welsh Assembly, but that simply did not happen.
We are all aware that very few of the electorate bother to vote. More worryingly, that is becoming a downward trend. That should concern every one of us. At what point do we admit that the democratic legitimacy of councillors, MEPs, MSPs and, dare I say, MPs, has become suspect because too few votes have been cast in their election? I am certain that, with the decline in turnout, that is a question that we shall face time and again.
There are no easy solutions—otherwise, we would have adopted and implemented them before now—but there are common-sense measures, such as the recent proposal to hold the Greater London Authority, European and local authority elections on the same day in 2004. Asking voters to turn out on two separate days would be a disaster—we can only imagine the turnout had we maintained the idea of going out to vote twice.
Of deeper concern is the turnout among various age groups, especially younger voters, who are less likely to vote than other people. Anyone who mans a polling station on election day is amazed at the determination of those of mature years, who, whatever the weather and whatever the circumstances, make a supreme effort to use their vote. I can only assume that the years of experience that they have gathered ensure that they recognise the worth of that vote. That is an attitude that we must instil in the younger population.
There is little consensus on why turnout is declining, although a range of arguments has been put forward. In countries governed by dictatorships—where the

93WH
electorate have been deprived of a vote—we know that there is a massive turnout when democracy is restored. It is important to recognise that phenomenon, although I am not suggesting for one minute that a dictatorship should be created in this country to increase electoral turnout.
Strong views on particular issues can increase turnout, as demonstrated by the election of independent candidates on single-issue platforms, while lack of trust in the political process, as well as a feeling that policies are much of a sameness and that the vote makes no difference, can reduce it. Politicians scored 18 per cent. in a recent poll on trustworthiness. That is something that we should all, as politicians, be deeply concerned about.
Although it is difficult to see how to tackle the root of the problem of low turnout, I want to make three brief observations. First, those in favour of proportional representation often argue that under such a system every vote would count and none would be wasted, and that a PR system for all elections would increase voter turnout. However, experience does not support that theory. In the 1999 European elections, turnout fell by 50 per cent. Turnout for the Scottish Parliament and Welsh Assembly elections has also declined. That is extremely disappointing and it gives the lie to the notion that PR is a panacea for all the ills of low voter turnout.
Secondly, I welcome the introduction of citizenship education in schools, and I hope that it will reawaken interest in the political system and make young people committed to using their vote. If citizenship is taught in schools, young people can go home and, I hope, persuade their brothers, sisters and parents that they should participate in the electoral process.
Thirdly, all of us who hold elected office have a duty to engage with the electorate, redouble our efforts to encourage people to vote and ensure that we have their trust. In the past few years, trials and studies have been held of different methods of voting that are designed to encourage turnout. The Electoral Commission, created in November 2000, has provided a useful means of consulting on such trials and of suggesting ways to proceed and strengthen the electoral system. I congratulate the commission on its advertising during the recent campaigns in Scotland and Wales, but, like me, it will be very disappointed that turnout was low in those elections despite the intensive campaigning.
Day after day, the Daily Record, a Scottish national newspaper, highlighted the reasons why people should vote and emphasised the fact that the democratic deficit would be apparent if less than 50 per cent. of voters turned out to vote for the Scottish Parliament. Those who produce that newspaper will also be disappointed, and the turnout problem is one that we must address.
The commission, after undertaking the appropriate consultations, has made two announcements recently. Its proposal on merging the polling days for the 2004 local and European elections into a single super Thursday is sensible, and I also welcome the proposal to trial weekend voting, although some minor points concern me. A previous trial of Saturday voting in Watford showed that because the trial occurred after the main polling day, turnout fell, owing to the electors' perception that the local elections were over. I trust that such issues will be addressed if we consider Saturday voting.
94WH
I am keen that trials should be carried out over consecutive elections to establish whether the new methods being tested increase turnout merely on a temporary basis because of their novelty, or whether they provide a long-term solution. The failure of various methods of electronic voting to increase turnout in 2002 provides some reassurance on that aspect, and I would like a more long-term approach to the trials to be taken.
Although I know that the consultation addressed many concerns, I would like to be reassured on a number of points. Before 1974, voting in local elections could occur on any day other than Sunday, including Saturday. I asked staff in the Library to provide me with details of whether Saturday voting had a beneficial effect on turnout and why it was abandoned. I am extremely grateful for their research. They said that such information might be available, but that they were unable to obtain it. I am concerned by that, and I would like the Minister to confirm that, before any proposed piloting of weekend voting, the implications of the pre-1974 system will be thoroughly studied and that appropriate lessons will be learned.
I am apprehensive about whether we are radical enough in our approach to such problems. Although the continual re-running of the Serbian presidential elections must serve as a warning, the Electoral Commission should consider introducing turnout thresholds, even if they are set moderately. I am also intrigued by the proposal put before the House in November 2000 by my hon. Friend the Member for Clydesdale (Mr. Hood) to create a "rewards for democracy commission" to study whether we should give people incentives to vote. Opposition Members decried that proposition, and a vote on it was lost, but in such a serious situation, we must consider all aspects of how we can encourage people to vote. We must try to convince them that voting is worth while and give them some incentive to vote, such as a council tax rebate.
Alternatively, we could take the polling station to the public, particularly the younger generation. Young people could be given the opportunity to vote at places of learning such as universities and further education colleges. We should consider whether the general public could cast votes at, say, railway or underground stations. We must consider taking radical steps to give people the opportunity to vote, and places of entertainment could also be used.
There is also the difficult issue of whether to make voting compulsory. If turnout continues to decline and the democratic deficit becomes an increasingly major problem, compulsion might have to be considered sooner rather than later. That of course raises the question of civil liberties and civil rights. An additional suggestion is that ballot papers should contain a box marked "none of the above". That might encourage people to vote even if they do not like any of the candidates. We must examine the fact that countries such as Luxembourg, Cyprus and Australia have such systems, and that that has not brought about unduly unstable Governments or led to accusations of serious breaches of human rights. Electoral turnout in the UK has reached the point at which we need a proper debate and proper consultation on the issue.
Mr. Russell Brown: I congratulate my hon. Friend on once again managing to raise this issue

95WH
in an Adjournment debate. I and many other colleagues share his concern that the percentage of people who vote has fallen, especially in the Scottish Parliament elections. In my constituency, there was a 52 per cent. turnout, but 2,500 people disappeared off the register because of legislation passed in this House under which householders were removed if they did not return their registration form for two consecutive years. So, although the figures are bad enough as they stand, the percentage turnout would have been even lower if we had not passed legislation to reduce the number of people on the register. I am not saying that that is a good thing, because some people have missed out on the opportunity to vote.
Mr. Tynan: The figure of 2,500 for my hon. Friend's constituency was seen across every constituency in Scotland. He is right that without the removal of people from the register, the percentage turnout would have been much lower. The election figure for Scotland could therefore have been, to a degree, false compared with that for the previous election, which must give rise to concern.
Electoral turnout in the UK has reached the point at which we need a proper debate. Perhaps the Electoral Commission will consider the practicalities and popularity of introducing a "none of the above" scheme. I suggest, with only a little irony, holding a referendum on whether to introduce such a system. Perhaps those voting to defend their right not to vote might find the process relatively painless and, finding that their votes are indeed important, adopt the practice for future elections.
In the interim, I await the Electoral Commission's report, which is due in the autumn, on the 2003 round of trials of postal and other forms of voting. I hope that it provides a useful range of suggestions on how to increase turnout. The system is not yet in crisis but, with some wards registering turnout as low as 10 per cent. and some Scottish constituencies registering under 30 per cent., we must address the problem. It is only a matter of time before there will be a general election turnout of under 50 per cent., and that should deeply concern every one of us.
I welcome the Government's commitment to look at ways of making voting quicker and easier. If they are unwilling at present to take the drastic action of introducing compulsory voting, I urge them at least to consult on more far-reaching options for safeguarding the hard-won right to vote from the threat of apathy. It is important that we connect with the people, that we have a national debate on the question of turnout and that we encourage as many people as possible to reconnect with the political system to support our claim that we have a democratic mandate.
11.16 am
The Parliamentary Secretary, Lord Chancellor's Department (Yvette Cooper): I congratulate my hon. Friend the Member for Hamilton, South (Mr. Tynan) on securing this debate, on what I agree is an extremely important issue. Low turnout in elections of all sorts over the past few years is of concern to all democrats. He
96WH
is right that the facts make unwelcome reading. Turnout can fluctuate from one election to another. Nevertheless, over the past 20 years, the broad trend is clearly a significant fall in turnout, whatever election one considers. There was a particular drop between the general elections of 1997 and 2001 from 70 per cent. to less than 60 per cent. Between those general elections, millions of voters decided not to show. Turnout in European elections has dropped to 24 per cent.; 2 million fewer voters turned out for the local elections in 2002 compared with 1986; and, as my hon. Friend said, turnout for elections to the Scottish Parliament has dropped from 58 per cent. to 49 per cent. We should be concerned about that.
We should also be concerned about a deep-rooted phenomenon over an even longer period: some groups are less likely to vote than others. As my hon. Friend has said, young people have always been less likely to vote, as have those on lower incomes, those who have had less education, and those from some minority ethnic communities. That should be of persistent concern to all those who care about democracy.
Theories on the drop in turnout over the past 20 years are many and varied. Some argue that voter turnout will increase again; others argue that the drop is part of a long-term, sustained trend. Some argue that this is about generational change—that younger voters today compared with those of previous generations are not simply less likely to vote while they are young, but will continue to be less likely to vote as they grow older. Others point to the nature of the current political and media debate. Some argue that there is too much confrontation; others argue that there is not enough. There are debates about the nature of political parties and policies, and about whether election results are perceived to be close.
We cannot wait for those debates to be resolved. We cannot wait until we know exactly the different causes and factors; we must do more immediately to address some of the issues on low turnout. We have to recognise, too, that there is a danger of extremism slipping into any political vacuum that might occur.
There are three challenges: the first is that facing political parties and politicians; the second concerns wider institutions in democracy—whether in schools or in debates across society—and includes citizenship, education and the role of the Electoral Commission, which my hon. Friend raised; and the third concerns voting systems and the removal of barriers that make voting difficult or inconvenient in any way. I shall concentrate first on the third category, as my hon. Friend mentioned such issues in some detail, but if there is time I will return to the others.
My hon. Friend raised a series of issues about voting and made various proposals. It is important to consider a wide range of voting systems and ways of making it easier for people to vote. My personal view is that the voting system will never be a panacea for low turnout; there will always be a wide range of factors involved. Nevertheless, it is right to make it more convenient for people to vote, not only because that clearly has some impact on turnout, but because it should be convenient to vote. It should neither be a hassle for people to exercise their democratic right nor an effort to vote:

97WH
people are entitled to do those things in a democracy. For those reasons, making voting easier and more convenient is very much the right way to go.
I agree with my hon. Friend on holding the 2004 elections on the same day. People are less likely to turn out twice in the space of five or six weeks than they are to vote in both elections—as well as the Greater London Authority elections—on the same day. The Electoral Commission is conducting a wider review of the timing and dates of elections, so we will await its report before considering the issues for future years.
Mr. Russell Brown: The only elections that we have in Scotland next year are those to the European Parliament. Few pilot schemes on voting opportunities have been carried out in Scotland, although a council by-election in the Scottish borders was conducted wholly by postal ballot and the percentage turnout doubled. Does my hon. Friend agree that, keeping in mind the fact that Scotland counts as only one constituency in the European Parliament elections, we should consider a 100 per cent. postal ballot for Scots next year?
Yvette Cooper: I am keen to consider that—and a wide range of options—for the 2004 elections. Holding elections on the same day complicates pilot voting schemes, and means that we need to consider such issues across the regions where there will be both European and local government elections. The position is simpler in Scotland, where no local authority elections are taking place. We are keen to continue with the programme of pilots on both postal voting and e-voting, and need to consider the implications of the 2004 combined elections. Work is under way between the Lord Chancellor's Department and the Office of the Deputy Prime Minister to set out the possible options, after which we will need a wide debate about how to take them forward.
I agree with my hon. Friend the Member for Hamilton, South that some issues concerning all-postal voting pilots are interesting. The average turnout in recent elections in areas adopting all-postal ballots increased from 33 per cent. to just under 50 per cent., and there was a substantial increase in some individual local authorities. We need to take those findings seriously because, clearly, large numbers of people wanted to use that postal vote and were prepared to vote when a ballot was sent to their homes, but were not prepared to vote if it meant going to the local school, or wherever the polling station might have been.
We should not underestimate how inconvenient traditional methods of voting can be for some groups of people. People may lead a busy life with complicated shift patterns, they may have to be away from home suddenly on a particular day or they may have to get back from work to put their small children to bed. Once the children are in bed, the parent may think, "It's polling day. How am I going to get out to vote? There's nobody in the house, there's no babysitter and the neighbours are not in." So, people just do not vote. Making voting more convenient for a certain part of the electorate is important because it would make a significant difference to voter turnout.
98WH
Interestingly, postal voting has been much more successful so far than some e-voting pilot schemes. People often talk about the importance of using new technology. We should explore new technology and the uses that text messaging and e-voting could have, but it is interesting that a technology that has been around for hundreds of years—the postal system—should have proved the most effective way to make voting more convenient. Over the long term of five to 10 years, some more high-tech methods will have a greater impact, even if they do not do so immediately or in the short term, as people get used to the new voting methods.
My hon. Friend also mentioned weekend voting, and I agree that the Watford example is interesting. It shows that holding the election on the weekend after everyone else in the country voted meant that many people in Watford felt that their election had been and gone, probably because they saw the results of those other elections in the newspapers. That is why we need more trials of weekend voting. We are considering trials for by-elections over the next few years and the potential for larger-scale weekend-voting pilots.
My hon. Friend made an important point about people's experience before 1974, and I will examine the evidence from those experiences. One has to go back a long way to obtain any evidence of weekend voting in general elections. I know of only one occasion, which was a Saturday in the years just after the first world war. The intention behind achieving more convenient voting is to fit it around modern-day lifestyles, but we must be cautious and remember that there have been substantial changes to patterns of daily and weekly life since the last instances of weekend voting.
My hon. Friend also raised the more radical options of incentives to vote and compulsory voting. I have always been cautious about compulsory voting, and people have a right to choose not to vote. I recognise that there are other ways of exercising that right, but we are not keen to consider compulsory voting. If people do not think that any of the candidates are worth voting for, they have the right to choose not to vote. Equally, over the long term, we will have to consider a range of issues and options, depending on turnout over the next five to 10 years.
On incentives to vote, I confess that I have not considered that option in any detail. Again, I am uneasy about its implications, but I am happy further to discuss my hon. Friend's ideas with him. He also made some interesting suggestions about voting in different locations. There are some interesting issues here and, with the success of postal and other forms of voting, the prospect of voting in different locations becomes more possible.
Yesterday's Electoral Commission report is about ensuring that, whatever system is used, we can be confident that it is secure and that the ballot has proper integrity. Furthermore, people must think and, importantly, believe that the system has integrity. Our electoral system must be secure and those who vote must feel that it is legitimate, because, ultimately, that underpins a democratic society. Therefore, it is hugely important for the long-term health of our democracy.
Sitting suspended until Two o'clock.

Tax Credits
2 pm
Hywel Williams: I am glad to have been given the opportunity to hold this debate on the tax credit system. It is very timely, given that problems persist two months into the new system. I am surprised that the Government Benches are so empty. As the subject afflicts many of my constituents and those of other hon. Members, I thought that we might have a better attendance this afternoon.
Before I start in earnest, I assure the Paymaster General that I acknowledge that millions of tax credit claims are being paid and that many people are getting the money that is vital and of great help to them. Hon. Members do not need to be told that again. What interests me and, I suspect, other hon. Members is not how many correct tax credits are paid on time, but how many are not. Why are correct tax credits not paid on time, and what are the Government doing about the problems? Surely, the proof of the system is not that it gets it right sometimes or even most times—it should do that anyway—but the extent to which it gets it wrong and how the mistakes are addressed. There continues to be real hardship.
Although I intend to talk about the working tax credit and the child tax credit, other tax credits are beset with similar problems. I spoke the other week to someone who is involved with research and development tax credits and asked what problems had been identified. There are great potential benefits for those in R and D, but the system is complicated. It is not clear who can apply or how they should apply. There are other tax credits, as well; for example, the pension credit is on the way. Clearly, there are problems and lessons to be learned from our current experience, and I hope that we will have an assurance from the Government that the lessons are understood.
Last week, I wrote to one of my constituents about her problems with a simple claim for tax credit. In my constituency, 75 per cent. or so of the population speak Welsh, so my letter to her was in Welsh. When I was printing it out, I pressed the English spellchecker by mistake. The first suggested correction was to replace the Welsh word "credyd", which means credit, with the English word "Cruddy". Computers are wonderful things—clearly, they see to the heart of the matter.
Cruddy or not, tax credits are particularly important to my constituents, as well as those of other hon. Members. In my constituency, the local rate of economic activity is relatively low. We have many people on low wages in the service industry, and many work in the tourist industry. The predominant pattern of employment is self-employment, which is particularly subject to low earnings, insecure earnings and earnings that can vary a great deal over a short time.
The tax credit system could be very useful in helping people into work and in keeping them in it. That was shown by the wage top-up scheme that was introduced in north Wales and several other pilot areas by the previous Government. It was found to be very useful indeed—anecdotally, at least. I am not sure what the considered research opinion on the matter is, but I know of several people who found and kept work because of that system.
100WH
It is clear that the central plank of the Government's anti-poverty strategy is not working as well as it should. For some, the tax credit system is not a means of getting back to work; it has proved to be yet another obstacle to getting back to and staying in work because they are not getting the money on which they have come to depend. In effect, they are having to subsidise the Government's failings, but they cannot afford to do that because, by definition, they are on low earnings. We must also remember that the system is largely aimed at families with children, and lower-earning families with children cannot afford to subsidise the Government even for a short time.
The Government were warned that the system was complicated and would be difficult to implement in April 2003. As long ago as July 2001, the Low Income Tax Reform Group said:

"The year 2003 may well prove to be an over-ambitious target if the new tax credits are going to reach out smoothly to those intended to benefit. The LITRG is most anxious to avoid a re-run of the 1999 introduction of the old tax credits where we found that claimant issues had to play second fiddle to administrative necessities."

The Government were warned by many organisations that introducing the tax credit in 2003 might be over-ambitious and that it could lead to problems.
I wonder what advice the Paymaster General received to the contrary. Who advised her, and did she act on that advice? If she acted on it, the advice has proved to be hopelessly optimistic, so who should be held responsible and how? Perhaps she did not take advice, in which case the mess is all her own work—and the current situation is still a mess. I suspect that many claims were submitted correctly and on time. A week or more ago, I tabled a question on the matter, asking for figures, but I am still awaiting an answer. Will she tell us how many of the claims that were submitted correctly and on time are still pending?
I know from experience that the public helpline remains clogged, and is usually jammed. I also know that, when one eventually gets through one is often put on hold for up to half an hour, with the line then going dead. That is a common experience. I have also had difficulties in accessing the MPs helpline. The IT system is often down for long periods. Officials have told me that, as a result, they cannot answer my questions, and I am asked to phone back later. I do so, but it still takes a great deal of time to get through, although the IT system may be running by then—or possibly not.
I also know that the staff are under extreme pressure. I understand that they have taken brief industrial action and, although I know nothing directly about it, the system is clearly causing great problems for the staff. It will not be good enough for the Paymaster General to say that most of the claims have been processed, and that many of the others were not properly completed. It will be no use saying that to a constituent of mine, who applied correctly and on time as part of her business plan, but who received nothing until I intervened on her behalf.
That person was previously in receipt of the working families tax credit, and her claim should not have been a problem; as I said, it was part of her business plan. The family have a small farm, and they have diversified, as everyone told them to. They have become entrepreneurs; they ventured into tourism and small-

101WH
scale retailing. All those businesses are marginal, as they are small businesses in a remote rural area and they make little money. Between them, the family just about succeed. However, the tax credit is akin to Mr. Micawber's shilling. It is the difference between just managing and disaster, and that family have been facing disaster.
Millions of people may already have been helped, but that is of no comfort to my constituent. She is now receiving the proper tax credit, but she had to contact her Member of Parliament and I had to intervene on her behalf. It took some time, but I eventually got a result. Cases such as hers reveal the true level of misery and desperation that people experience, and show the failures of the system and the problems that they cause. Significantly, the damage done to trust in the system in the long term is one of the less obvious casualties.
I shall cite other cases involving not millions of people but individuals from my own dealings with the system. By the way, all those people tried the helpline first, but got nowhere. However, they got through to me and I dealt with their cases for some hours, eventually, I hope, with success. I am sure that many other hon. Members will have similar accounts to tell.
For example, many people in the inland areas of my constituency are called Jones, Hughes or Williams, and many others are called Hughes-Jones, Jones-Hughes, Hughes-Williams or Williams-Hughes. Sometimes those surnames are linked with a hyphen. Apparently, however, the IT system cannot deal with hyphens. I phoned up on behalf of someone with a hyphenated surname and was asked if he had a hyphen in his name. I could not answer that question as I had been contacted by phone, but I was told that the computer could not deal with hyphens.
Mr. Stephen O'Brien: I can reinforce the hon. Gentleman's argument. Computers cannot recognise apostrophes either, of which I have personal experience. One therefore tends to get filed under the letter "B" if one's surname is O'Brien.
Hywel Williams: I must admit that I have not come across that problem, but it is interesting. There have been other very serious cases. Some constituents have come to see me literally in tears. One constituent has cerebral palsy. She has done her best and got herself a small job for more than 16 hours a week, earning under £100 a week. She depends on the working families tax credit and, therefore, on receiving a proper payment. Five weeks into the system, she had received nothing and was owed many hundreds of pounds. She was struggling to live on £100 a week. She managed it, but I defy anyone else to do the same.
I telephoned the helpline and was told that there was a mistake in that constituent's address. Interestingly, the mistake was that her house had a Welsh house name, and I was asked what it meant. I said that it was a conventional house name in Welsh, and the response was, "Oh!" I presume that "mistake" was crossed out and the form marked "correct".
My constituent eventually received her benefit. In the meantime, however, she was very badly off and very much in need of the interim payments that the Government offer. I contacted the tax office and off she
102WH
went, after having had considerable trouble arranging for someone to mind her children and cadging a lift from someone who kindly took her on the 20-mile round trip. Her trip was 20 miles, but I represent a rural district, and it could take a round trip of up to 76 miles for some of my constituents to get to their tax office. She made the 20-mile trip on a Friday and was told that, although she had come during working hours, no one was available who could write a giro for her. So she went home and waited until the Monday—managing on little, if any, money—before going to the tax office and eventually receiving her payment. That caused her many emotional as well as practical problems, and a lot of worry and pain.
I shall, if I may, detain the Chamber a little longer to talk about a few other cases—there are many. In one case, I telephoned the tax office and was told me that it could not pay because it did not have pay-as-you-earn reference numbers for two of my constituents. I told the member of staff that if they looked they would see that they were both self-employed. The mistake was corrected immediately. Another constituent applied by e-mail as soon as an e-mail application was allowed, but was told that her application had disappeared. It is unclear whether she will be paid for the period before she submits a new application. In another case, all that was needed was to check the name on the application against the name on the file. The operation should have taken about 10 seconds, but the applicant had to wait more than five weeks for the money. Lastly, and most intriguingly, the tax office said that some applicants had sent too much—not too little—information. It said that the computer could not cope with information that was not in an acceptable form.
I therefore have several questions for the Paymaster General. First and most important, what assurances can she give us about these problems with payments, IT, helplines and simple mistakes by officials? Is there an end in sight? What steps are being taken to ensure that similar problems do not arise when we have the pension credit in one year hence? What consideration is she giving to compensating claimants who have suffered unreasonable delay? Will they be compensated for their distress and worry? Will claimants be compensated for the financial loss incurred by having to borrow from sometimes dubious sources at high rates of interest? Will small businesses, whose viability depends on these tax credits, be compensated for their difficulties?
There is also the question of compensation for those who have suffered indirectly. A constituent had to lay off her child minder because she could not pay her wages. That constituent had great difficulty keeping her job as a bar manager because she worked irregular hours, but she kept it because she had a good child minder. Now, however, that child minder has lost her job. What compensation might there be for people who lose their jobs through no fault of their own?
Is the Paymaster General satisfied with the services provided by the IT company that established the system? Is she seeking some redress from it for the problems that we have all experienced? Lastly, given the mess that the Government continue to make of the

103WH
introduction of tax credits, is it not reasonable to expect a full-scale debate in the main Chamber and in Government time?
Several hon. Members rose—
Mr. Deputy Speaker (Mr. John McWilliam): Order. Before I call the hon. Member for Aberdeen, South (Miss Begg), I should say that gentlemen may remove their jackets as it is rather hot this afternoon. Ladies, of course, do not need to ask.
2.17 pm
Miss Anne Begg: I congratulate the hon. Member for Caernarfon (Hywel Williams) on securing this debate. At business questions before the Whitsun recess, I asked whether the Paymaster General could make a statement to the House, but the Leader of the House rightly pointed out that this afternoon's debate would take place. I am therefore pleased to be here and to have caught your eye, Mr. Deputy Speaker. I might add that the Speaker prevented me from finishing my question to the Leader of the House because I wanted to say everything that I shall say this afternoon. Now I have a chance to put my comments on the record.
Like the hon. Member for Caernarfon, I welcome the new child tax credit. I am a great supporter of everything that the Government have done on tax credits. The child tax credit and the working tax credit make a huge difference to those lucky enough to receive them. Such measures are the right way for the Government to proceed.
I have long said that the best way to remove the stigma from the benefits system is to merge it with the taxation system. The responsibility is then on all of us, as citizens, to fill in a form declaring our income every year or every five years. If we are getting too much money, the Government take some from us in the form of tax; if we are not getting enough, they give us more in the form of what is now called a tax credit. Ultimately, that could simplify the benefits system by cutting out some of the poverty traps in which many people find themselves and some of the odd quirks that exist in the system at present. I very much support the thrust of what the Government are doing.
I know that, for many people, the receipt of the child tax credit makes a huge difference to their lives. It is because that money is very important and because it makes a huge difference, that there is a problem. Two months after the tax credits were introduced, there are still people who are not getting the money to which they are entitled. It is no use saying to a mother of two small children who is dependent on child care to keep her job that she will get the money eventually. She needs it now. She will be used to the money that she received through the working families tax credit and, as a result, she is dependent on the weekly income that she should receive through the child tax credit and the working tax credit.
That is probably where the heartache and frustrations have come from. There have been frustrations for people who cannot get through on the helpline and have not been able to get things sorted out, but it is the fear
104WH
of the lack of income that has probably made the constituents who have contacted my office most upset. They have been quite distressed. They are frightened that they will have to give up their job. They are frightened that their children are going to be kicked out of their child care places because the family have not been getting the money.
Luckily, the Inland Revenue in Aberdeen has been extremely helpful. My office has put a number of my constituents on to the Revenue, and the local Jobcentre Plus has also been helpful in accessing funds for the women who have found themselves in that position. That has certainly eased their fears and prevented them from worrying as much as they did. Initially, in the first two weeks of the tax credits, that process was not in place and local tax officers did not know that.
Although the Inland Revenue has been helpful and has been able to give interim payments, there is still a problem for anyone who takes that route because it can lead to even greater delay in the final settlement of what people should receive through the tax credit. Obviously, those people will have to be reassessed if they have received an interim payment. That is the position that some of my constituents are now in, two months down the line. Having obtained the money through that route, they are now facing further delays and frustrations in getting what they were entitled to in the first place.
Part of the reason that I am here today is that it is two months since the tax credits were introduced. I listened to my right hon. Friend the Paymaster General when she gave us assurances that everything should be up and running by this time. I repeated that to many of my constituents. I told them that, once it was all sorted out, the system would be smashing—everything would be fine and work well. That simply has not happened. I am still getting a number of complaints, which are probably arriving at the same rate per week as they were four or five weeks ago.
The MPs helpline has been extremely useful and, in most cases, my office has been able to sort out my constituents' problems thanks to the helpline, so credit should go to the work that it is doing. It is unfortunate that my office has to take that route and that people cannot use the normal helpline. It is obviously clear that, if there is someone at the other end of the helpline who knows what they are doing, resolving the problems becomes possible. There are still problems, however, and I will come to them later.
Unfortunately, not everyone knows that they should get in contact with their Member of Parliament. I find myself out socially with people from other constituencies and busily give them the phone numbers of MPs of different political parties. I tell them, "Get in touch with your local MP because they will be able to sort it out". I was dismayed that much of the coverage in the press and other media has not highlighted that a Member of Parliament's office is one of the routes for sorting things out. The impression has been given that we do not exist in the equation or that MPs have no role in what the Government do. That has been a shame.
Mr. Peter Duncan: Does the hon. Lady accept that things should not have to be that way? The problem should be capable of being sorted out without recourse to a Member of

105WH
Parliament's office. Although I, like the hon. Lady, am delighted to help constituents and have done so, things should not need to be that way.
Miss Begg: I absolutely agree. I honestly wish—and so do my staff who have had the increased work load—that things did not have to be that way. However, there is at least a means of getting a problem sorted out. I pay tribute to the MPs helpline. It would be much better if, in another month, the complaints and problems that we face were sorted out through the normal helpline or did not arise at all. I am fairly sure and hopeful that that will happen.
The Paymaster General (Dawn Primarolo): My hon. Friend is right that I was not looking to enlist MPs' offices in the administration of the new tax credits. However, I am sure that she is an avid reader of the House of Commons information documents, which list the occasions when someone should contact their MP. If I may say so, my hon. Friend is a fine example of why any constituent should contact their MP.
Miss Begg: I thank my right hon. Friend for that. I was wondering—perhaps I have been doing my job too well—why the number of complaints that have come to me has been so high. Taking the advice of the Treasury and others, I undertook an exercise in informing my constituents about the new tax credit. I wrote to every parent in my constituency telling them about it and giving them my telephone number. Unfortunately, because that was done through the schools and because not everyone who goes to a school in my constituency necessarily lives in it, parents may have received the letter and telephoned my office when, in fact, they are not constituents of mine. That is why I am disappointed and why I am here today—I am an advocate of the tax credits. They are a good idea and will make a huge difference, and I want to ensure that the take-up of the child tax credit is as high as possible.
Let me move on to some of the problems that still exist. There seems to be a major problem with the IT. I serve on the Select Committee on Work and Pensions, and it seems to me and, I think, the other members of the Committee—its Chairman is here today—that every time that the Department for Work and Pensions or the Treasury moves to a new system, there are IT problems. The Passport Agency was one of the first examples, but the same is happening with the Child Support Agency. I have great concerns about that. We are about to introduce such measures as the pension tax credit—another Government policy that I have been proselytising about and advocating—to, I hope, great effect. I want to encourage pensioners in my constituency to be aware of their rights under the pension tax credit and to take advantage of it when it is introduced.
Obviously, we have such concerns with any new system, but I should like to ask my right hon. Friend the Paymaster General what provision will be made with regard to the pension tax credit to ensure that the IT is properly tested and that the unusual circumstances outlined by the hon. Member for Caernarfon will be taken into account. Will the lessons from the introduction of the child and working tax credits be learned in time for the introduction of the pension tax credit?
106WH
It still seems to be a problem that there is no mechanism for staff at the other end of the telephone on the MPs helpline to change information that is incorrect on the computer. Even though a constituent of mine may have sent in the form properly filled out and with all the correct information, if the data inputter has got the information wrong, there seems to be no way for those operating the helplines to get into the system to put that information right.
For instance, on gentleman who called me did not receive payment because a computer glitch had "cancelled" his children. He was told that he was not eligible because he had no children. We have finally managed to get that sorted out. In fact, that gentleman now thinks that he is being paid too much and he is frightened to spend the money in case it is clawed back.
What will happen in cases in which there has been computer error or other difficulties with the system? If people are paid too much, will the Treasury claw that money back? If so, in what form will that be? Or will people be able to keep the money, because it is the Inland Revenue's error? I suspect I know what the answer will be. What mechanism will be there to deal with such cases?
The IT system seems unable to cope with unusual circumstances. I have a constituent who has twins with cerebral palsy. Obviously, she qualifies for a large amount of money under the child tax credit. Her children are in a nursery provided by the Care Commission, which does not have a nursery or child care registration number. Therefore the system is unable to recognise that her children are receiving child care and that she qualifies. We have got that problem sorted out, but the system still cannot process her claim because it thinks that someone else might be claiming on her behalf. We have not managed to get that sorted out yet. It is important that we deal with fundamental glitches in the way the computer system works and how it copes with the unusual circumstances that some people inevitably have.
Yesterday, I received a complaint from a constituent who receives the working tax credit. The problem may be caused not by the Inland Revenue but by the fact that her employer pays his portion of the tax credit in arrears. By the time that she catches up with the arrears, she has had very little money for almost six weeks. She is constantly running to catch up. As she points out, she has bills to pay today that cannot wait until she has enough money to pay them.
How long will it be before those quirks and problems are sorted out? I appreciate the problem of paying arrears can always take time to work through, but once it does everything is fine. However, we were assured two months ago that the problems would be sorted out in a month. We are now two months into the operation of the system, and there are still problems. My fear is that the bad publicity that the child tax credit and the working tax credit have received will undermine what should be a Government flagship policy. It will put people off claiming when it is important for them to claim. I want the policy to succeed, as I am a great believer in it. I hope that my right hon. Friend the Paymaster General can assure us that the complaints that I and other hon. Members have highlighted will be sorted out as soon as possible.
2.33 pm
John Barrett: I add my congratulations to the hon. Member for Caernarfon (Hywel Williams) on securing the debate. Many hon. Members have mentioned that this is one of their biggest surgery issues, and my experience up in west Edinburgh is certainly no different. Constituents generally do not contact me to say that their credit has come through on time, but I can accept that a number of people are being processed through the system successfully.
Usually, the problems that people come up against are not major ones, and they go to their MP who often sorts it out for them very quickly. Sometimes they simply cannot get through on the helpline. Something as simple as having their telephone call answered can solve the problem. But whether it is a hyphen, an apostrophe or some other minor detail, people should not have to go to their MP to get the matter resolved, and they should not have to wait week after week for sums without which they struggle to get by.
I welcome the Paymaster General to the debate. I thought that she might feel like a Christian being thrown to the lions as there would be nothing but complaints this afternoon, but most hon. Members will agree that some people are getting the service, although others are not. I should like to highlight a few cases; each individual is not too bothered about the people who are receiving their credit on time. I hope that things have moved on since 28 April, when the Paymaster General addressed the House in a classic new Labour statement, saying that things "could only get better". Sadly, for my constituents, things have not got better in the four weeks since then.
Things have not got better for my constituent Robert Park from East Craigs. He applied for the child tax credit, only to receive a letter asking him for his full name, home address and national insurance number. Considering that the letter came from the Inland Revenue, with his full name, home address and national insurance number as the reference, and that his wife received an identical letter on the same day, it naturally left both him and me puzzled. He is still awaiting further correspondence and payment.
Another constituent in Carrick Knowe submitted forms including pay slips and child care costs to the Inland Revenue as requested. Despite showing a combined income with her partner of well below the Inland Revenue level, the Revenue processed it at above the level, and despite the fact that she had included bills and receipts showing child care costs of £54 per week, it processed her claim assuming zero child care costs. She is still awaiting further correspondence and payment.
Things have not got better for my constituent Shirley Todd in Parkgrove, who has faced frustrating mistakes and delays to her claim. After applying to the Inland Revenue in January—before the Government's 31 January deadline—she heard nothing for over a month. When she managed to get through to the credit helpline, she was told that the computer systems were down and that she would have to wait a further few weeks. Having still heard nothing, she contacted the helpline again on 17 March, only to be told that she would have to fill out a second claim form because she had given birth to a second child since her original claim in January.
108WH
However, she was informed that any amount owed would not be backdated but instead allocated on the basis of her second application.
In April, Mrs. Todd finally received correspondence from the Inland Revenue to confirm her entitlement. However, the amount was massively wrong, as the Inland Revenue admitted when she contacted the helpline for a third time on 7 April. She was told that it would take another eight weeks to process the correct amount, but when her payment finally did come through, she received only £300—over £1,000 less than the amount agreed with the Revenue. Mrs. Todd is not unlike many of my constituents, and those of other hon. Members, who have faced similar problems, and she remains angry and frustrated at the total shambles of a system. Today, four and a half months after making her original claim, she is still waiting to receive her money, on which she, as a mother of two, is heavily dependent.
As in cases mentioned by other hon. Members, the people concerned are dependent on the Government to give them the money that the Minister says they rightfully deserve. Dozens more constituents have contacted me to say that they are also trying to apply for one of the tax credits or seeking advice or guidance but that they cannot get an answer on the helpline. Who knows how many more in my constituency and throughout the country have not contacted their MP but face such obstacles to payment?
Following the Paymaster General's statement to the House on 28 April, I asked several parliamentary questions about additional resources being allocated to the helpline. She may repeat today what she has said in the House and in written answers about extra money and resources being allocated, but she must understand that we are not seeing those additional resources by way of an improved service.
I contacted my constituency staff again this morning for the most up-to-date situation, and they told me that they are still having trouble getting through to either the public helpline or the helpline for hon. Members. When they get through, they are faced with inconsistent information. They have sometimes been told that officials will contact individual constituents and on other occasions they have been told that that is not agreed practice. Whether a system is right or wrong, it must be consistent, but in my experience, such consistency is not present.
Looking ahead, one of my biggest worries is that the Government will not learn from the mistakes that have been made. If the introduction of the working tax credit and children's tax credit could be messed up to such a degree, what potential exists for similar problems with the pension credits due to be introduced in the autumn? I fear that the mothers and fathers coming into my surgery over the last few weeks about the child tax credit will soon be replaced by worried and upset pensioners who are not receiving the money to which they are entitled.
One of the biggest criticisms of the Government's tax credit system is its sheer complexity. The pension credit was designed to be a super-deluxe minimum income guarantee, and that may still end up being the case. However, whereas the minimum income guarantee was relatively simple, the new pension credit certainly is not. My researcher, who studied mathematics at Edinburgh

109WH
university, had to go through the Government's allocation formulae three times before understanding the figures. I can only imagine what an old age pensioner in my constituency would do if mistakes were made with the applications, if incorrect amounts were allocated or if no allocation were made at all.
The debate this afternoon has probably developed in rather a predictable way. However, that should not detract from the seriousness of the problems that I and other hon. Members have raised. I often worry that the Government are obsessed with targets, and that they think of people merely as statistics. The ordinary MP, however, who receives letters in their mailbag, telephone calls to their office and visitors to their surgery, sees at first hand the problems and distress caused by the failure of the system.
I am sure that the people of Bristol, South have made the Paymaster General well aware of the problems in her own neck of the woods, but I hope that today has helped to re-emphasise to her that this shambles, which is of the Government's own making, must not be allowed to continue, nor to happen again.
2.40 pm
Vera Baird: I offer my congratulations to the hon. Member for Caernarfon (Hywel Williams) on securing the debate.
I am a parliamentary "secondee" to the One Parent Families charity, with which I have had discussions about the impact of the credits beyond those that I would have had in my constituency. One Parent Families welcomed the introduction of tax credits, due to the significant impact that they are expected to have on child poverty. It organised policy simulations, which were carried out by Holly Sutherland, an academic who is probably well known to my right hon. Friend the Paymaster General. She found that, compared with simulation results for previous regimes, the effect of the credits on poverty rates was expected to be "dramatic"—a word that is infrequently used in academic circles. Compared with 1998–99, child poverty rates are expected to fall by nine percentage points, from 36 to 27 per cent., calculated on an after-housing-costs basis.
The Inland Revenue has, however, faced a massive task in getting the scheme up and running. It has been phased in, with 1,250,000 families on income-based jobseeker's allowance or income support still to be included in April 2004, or in October if they are over 60. It seems that 4.5 million people have been eligible since April 2001. One or two people in Redcar have readily admitted to me that they did not apply early enough—by 31 January—to get their awards processed in time. However, significant numbers of people who claimed in time did not receive their awards very quickly. By 28 April, 4 million claims had been received, 3.2 million had been paid or were being set up, and the remaining 800,000 were being processed as quickly as possible, although further information sometimes had to be requested. I, too, heard the Paymaster General's remarks about that in the House.
In The Times yesterday, it was reported that between 500,000 and 600,000 claims had still not been processed. I do not know whether the Paymaster General will be able to comment on that, and I cannot say whether those
110WH
unprocessed claims had been submitted punctually. However, lone parents of all groups cannot afford interruptions in income, and tax credits often form a substantial part of their weekly income. In the early days of the scheme, not only the One Parent Families helpline but my constituency surgery received calls from lone parents who were extremely concerned that they might have to give up work or their child care places because of delays in payment. I am sure that most other MPs received similar calls.
I do not pretend to be as good an MP as my hon. Friend the Member for Aberdeen, South (Miss Begg), who spoke earlier, but in Redcar we did our best to encourage take-up. The constituency party organised a concerted campaign to distribute leaflets on the high street, to try to ensure that everyone understood their entitlement to the new tax credit, and to ensure that, if they had not had a response to their written application in time, they had the claim phone number.
When that number was engaged, as it often was, the same constituents were led to phone me, because although they had of course been pleased to receive my encouragement to make the claim, they wanted to hold me responsible for the fact that they were experiencing delays. However, it is my good fortune to have an extremely experienced and well connected caseworker. As other hon. Members have said today, it is plain that MPs' helplines have played a major role in trying to sort out the problem. In my constituency, interim payments have been made from the Inland Revenue inquiry centres, which has been crucial in enabling people to manage until the regular payments come through.
I should like to look to the future. It is important not only that the difficulties that have been experienced this year be resolved as soon as possible but that steps are taken so that people can be confident that the next tranches of claimants joining the system will be paid on time. It is implicit in the system that there will be huge demands on the Inland Revenue's administrative resources at the beginning and end of every tax year. As the majority of people already have awards in payment, I assume that in future years those awards can run on until a new one is made. I also assume that payments of income support and income-based jobseeker's allowance will run on until claimants are transferred to the child tax credit. However, I seek reassurance that I have understood that properly.
Once awards for this year are in payment, attention must be turned to ensuring that there are no problems of over-payment, which again, perhaps, is a danger implicit in the system, excellent though it is. A feature of the system, as I understand it, is that annual awards are made that can be affected by changes in circumstances during the year. The Government appear to expect about 1,750,000 families, which would be 30 per cent. of all claimants, to have some income changes during the year that would affect their awards. One guesses that the figure would be higher in the first year, as the awards are, at the outset, based on income from the previous two years.
There are penalties of up to £300 for failure to report certain changes, such as a change in the number of adults heading the household and significant changes in child care costs within a fixed period of three months. It is vital that an effective strategy be put in place to ensure that people understand what changes will affect their

111WH
awards. That should include an advertising campaign, with posters in doctors surgeries and on public transport to remind parents of the changes that they need to report. It is crucial of course that staff at Jobcentre Plus and on the tax credit helpline fully understand and can advise effectively on such difficult and potentially troublesome issues.
To speak briefly about the future, One Parent Families would like two policy changes to be introduced in the next pre-Budget report, on top of those mentioned. The first request is that the amount of child tax credit be increased by 2004–05 by at least £5 per child. At the end of the One Parent Families annual general meeting a couple of weeks ago I helped to carry a large box of postcards that those attending the meeting had sent to the Chancellor asking for that change.
The other request is that the proportion of help provided with child care costs be increased above the current 70 per cent. Analysis by the same academic, Polly Sutherland, for One Parent Families shows that for a significant number of parents the gains from being in paid work are still quite modest. The average gain for lone parents who move into paid work at 16 hours on the national minimum wage, for example, is £34 a week. An increase of that modesty can quickly be eroded by the requirement to meet 30 per cent. of child care costs.
Another suggestion is that the Chancellor should consider what could be called a child care cost run-on. Entitlement to working tax credit and therefore to child care assistance ends as soon as a job ends. A run-on for a period would allow lone parents to keep child care arrangements going. After a child is settled, it is good, if at all practical, to keep him or her in that place during a temporary period of unemployment. The danger, of course, is that if a settled place is not available, those in one-parent families are very vulnerable to having to give up work because they have lost their child care place and have therefore been locked out of Fresh employment.
I suggest that those three matters be considered, and I look forward to the imminent end—I assume that it is imminent—to the problems with tax credits. I believe, as my hon. Friend the Member for Aberdeen, South does, that they are a landmark in the process of drastically cutting child poverty. I believe the problems to be teething troubles, although they are extremely troublesome to many people. As soon as they are over, I am clear that not only the non-governmental organisation in question but all the other ones concerned with poverty will see the tax credits for the important development that they are.
2.50 pm
Mr. Peter Duncan: I am grateful for the opportunity to take part in the debate, which I must say I believed would become more heated. The Room may be warm, but the debate has not quite matched the temperature in it. As hon. Members have said, the issue has fired my constituency surgery, my e-mail account and my mailbag. I make no apologies for asking the Government some pointed questions about how they will deliver an end to this chaos.
112WH
I congratulate the hon. Member for Caernarfon (Hywel Williams) on securing the debate. I suspect that there were many hon. Members in that particular raffle. The hon. Gentleman was fortunate, and I congratulate him on coming out ahead of the rest of us.
The widening of the net for tax credits up to £58,000 of family income is clearly bringing more people into the tax credit net, but that obviously also widens the problem of addressing the issues that they present to us. I make no apologies for focusing on families at the bottom end of the spectrum, because they are the ones who have come to my surgeries with the most heart-rending tales and looking for help.
The chaos is recognised by the wider public, claimants, and Members of Parliament generally and in this debate. It is also recognised by Department for Work and Pensions staff. In Scotland and, I believe, the rest of the United Kingdom, many thousands of them staged a one-hour walk out simply to show how strongly they felt and how poorly resourced they were to deal with tax credits.
I, too, can cite examples of simple, administrative errors, to which hon. Members have already referred. I shall not repeat them, but letters have been sent asking for national insurance numbers when national insurance numbers are mentioned on them, as have letters telling claimants that they do not have children when the names of the children are confirmed at the bottom. They are legion, and do not do any credit to a Department that is supposed to be in control of another change.
The helpline is key for my constituents. I represent a very rural constituency, and the hon. Member for Aberdeen, South (Miss Begg) rightly referred to access to the offices of hon. Members, Jobcentre Plus and the Inland Revenue. I know that there are some rural parts in the hon. Lady's constituency. If someone lives in a very rural area and 40 or 45 miles from the nearest of those representative offices, their only recourse is to a helpline. Frankly, the Government have handled it absolutely dreadfully. They have lost all credibility among my constituents and among those who are most dependent on the helpline as the only way to reach Government and sort out their problems.
Vera Baird: I assume that the hon. Gentleman's route to solving all this chaos, as he puts it rather hyperbolically, is simply to abolish the benefit. I have not heard one word of welcome for it yet, but it is an excellent tool.
Mr. Duncan: I am grateful to the hon. Lady for adding spice to the debate. In fairness, tax credits have many plus points, and we should look to build on them. However, the system is overly complex, and it is a nightmare to administer. We have had 14 changes to the system during the past few years, and to a large extent the chaos is of the Government's own making. The chaos was indeed predictable, which I find most disturbing.
My hon. Friend the Member for Havant (Mr. Willetts) said in April that it had been known for many months that it was going to happen. He released one document showing that, at a meeting in January 2003, local authorities had warned Inland Revenue and

113WH
Department for Work and Pensions staff that tax credit claims had to be processed in time if a housing benefit crisis was to be avoided. Another showed that, in a national survey of housing benefit managers in February 2003, not one respondent spoke favourably about the implementation of the new tax credits. Lastly, in March, local government representatives were so worried that they wrote directly to the Chancellor—they must have been very concerned—to warn him of the impending problems.
That train has been coming towards us for many months, but the Government have not seen it and have failed to take action. That is the substance of my principle criticism. The most vulnerable of my constituents also saw their income being affected by the change in national insurance, and the coincidence of the two did not help.
Most other problems have been examined by previous speakers, but some of the knock-on issues are significant. In recent years, money for local government has become so tight that local authorities—to a degree understandably, but in my view somewhat excessively—have devoted their attention to defaults and late payments of council tax. If two payments are late by only a week in Scotland, the case immediately goes to sheriff officers proceedings. That is a significant side effect of the crisis in tax credits. I have had to extract a statement from Dumfries and Galloway council whereby they agree to hold proceedings for the most vulnerable of local residents who cannot make their council tax payments because tax credits are not coming through.
Two issues have not yet been raised that I would like to put to the Paymaster General, subjects on which feedback from local offices has been variable. Some problems have eventually been resolved, and however it has been done, I am delighted about it. However, when the backdating of that tax credit is agreed, can I have an assurance that the backdating will be paid up to date? Several of my constituents are very concerned that if the payment of tax credit is four weeks late, the money is being paid back over the succeeding 48, 47 or 46 weeks of the year. To many of my constituents, that is not good enough. They are working in debt: the Government's debts have been passed on to them, and they need reimbursement. The payments should be brought up to date at the time. I would appreciate an assurance from the Paymaster General that that can be achieved.
Secondly, several hon. Members have referred to the flexibility of local staff in making interim payments. I want an assurance that when an interim payment is made, further payments of tax credit do not hit the buffer. In my experience, when a problem has been resolved and an interim payment has been made, it gets shunted into a siding and cannot be progressed until someone reviews the case. That is all very well, but if those who are firefighting in the front line are always dealing with new cases, they will never get to those that have been shunted into the sidings. That is a matter of considerable concern.
Finally, the tax credit system depends on people believing that it will deliver what the Government have promised. In my constituency, many people can benefit from the tax credit system, which I welcome. However, one constituent sums up the problems in an e-mail, in which she said:
114WH

"We cannot avoid the inevitable conclusion that this Labour government is deliberately making it as hard as possible to get what is due to me and my family. The wise words of the Chancellor of the exchequer are a long, long way from the reality of the nightmare we are living through."

That is the reality of the day-to-day life of people who depend on tax credits. The Government's complacency does no credit to future tax credits; the pension credit may be the next instalment of chaos at the heart of the Department for Work and Pensions.
3 pm
Mr. Steve Webb: I join in congratulating the hon. Member for Caernarfon (Hywel Williams) on securing the debate on a subject that many of us want to discuss. The hon. Gentleman has done the House a service.
Tax credits, when people get them, help the fight against child poverty. No political party opposed the Tax Credits Act 2002 during its passage through Parliament, but when Parliament legislates for a scheme to give financial assistance to families, it expects the Administration to deliver it. The dispute is not about whether Parliament wanted the scheme—it clearly did—but about why delivery has been such a shambles.
The hon. and learned Member for Redcar (Vera Baird) mentioned art important group that has received no attention during this fiasco: the families on income support who have not yet been transferred to child tax credit. The low-waged families who have been transferred suffered real pain when they lost out, but at least they had a wage to keep them going, yet their pain is as nothing compared to that which will be suffered by families if their income support stops before the child tax credit starts. I hope that the Minister will clarify the position of that group.
A bizarre feature of the system is that everyone who has a child should claim child tax credit even if they know that they are far too rich to be entitled to a penny. For example, a business that usually brings in £70,000 a year for a self-employed person and that is doing well at the beginning of the year may do badly later in the year; the income from the business may fall dramatically, bringing the family within the scope of child tax credit. Unless they claim by July, they are past the three-month deadline and will not get the money from the start of the financial year, but if they claim and receive a letter replying that they are not entitled to anything now, and later in the year they turn out to be entitled to something, the money will be backdated to April, provided they made what is called a protective claim before July. Thus, there is the bizarre scenario of the rich having to rush out and claim the credit because of the three-month deadline.
If the credit is part of the tax system, why does the benefit rule of three months to claim it apply? If the policy is supposed to be about integrating tax and benefits instead of bolting benefits on to the tax system, which is what actually happens, there should not be a three-month deadline. The system would then not have to cope with rich people being encouraged to claim something to which they know they are not entitled, in case they stop being rich. That is a daft way to run a system.
The take-up of the lax credit was raised in the debate and the Treasury has consistently given a misleading impression of the true position. The Treasury says two

115WH
things at the same time: that nine out of 10 families will be entitled to benefit from the credit and that it expects 5.75 million families to claim. There are seven million families in Great Britain; nine out of 10 gives a total of 6.3 million families. The Treasury's best guess is therefore not that nine out of 10 families will claim, but that 5.75 million families—500,000 fewer—will claim. In other words, the Government's public spending plans build in an assumption that 500,000 families will not claim what they are entitled to. That does not include the 500,000 mentioned by the hon. and learned Member for Redcar and perhaps a further 500,000 whose claims may not have been processed. What sort of system builds in an assumption that 500,000 people will not get what they are entitled to, even when every problem has been sorted out? Is that a rational way to design a tax-benefit system?
Computers always get blamed n these cases. The Chairman of the Work and Pensions Committee, my hon. Friend the Member for Roxburgh and Berwickshire (Sir Archy Kirkwood), who has had to leave the debate, told me that EDS, the company involved in supplying the computer system, has a bit of a track record in that respect. Will the Minister give us a clear answer to the question: has EDS suffered any penalty for the fiasco?
I am still slightly unclear whose fault the Treasury says it is. Some of the Inland Revenue press releases would have us believe that it is the claimants' fault. People did not know that they were entitled to claim under some of the phantasmagorical schemes and they failed to claim three months before they were due to begin. I do not think that it is the claimants' fault. If the Government introduce scheme after scheme, change the names and come up with complicated new rules, and people do not claim three months before those schemes are due to start, is that the claimants' fault?
Is it the computers' fault? We are constantly being told when we ring the MPs hotline that the computer is down. Several hon. Members have had that experience. Whose fault is that? Is it EDS's fault? Is there a trigger point or penalty? Who is going to meet the cost of the compensation and, as the hon. Member for Caernarfon (Hywel Williams) asked, how much will it be?
Mr. Alan Reid: In my experience of phoning the hotline, part of the problem appears to be with the scanners. One of my constituents had a claim rejected because he apparently earned more than £500,000, which was 100 times more than he actually earned. Apparently, the scanners were scanning in pence as pounds and multiplying incomes by 100.
Mr. Webb: I am grateful to my hon. Friend for raising that point. I defy anyone to read my handwriting at such a distance, but "scanners" is the next thing written in my notes.
When we phone up the hotline we are often told that the forms have been put through a scanner, not entered by a human. They are presumably subject to optical character recognition, which is where the hyphen problem originates. Will the Paymaster General tell the House whether that is the norm? Is that the way
116WH
Government forms have been processed in the past, or is it a new innovation? Is it the system that will be used in the future? Presumably the Inland Revenue had most of us listed on its computers already and the problem has arisen because optical character recognition has been used with scanned documents and—surprise, surprise—the computer cannot get a match. That is why we get the barmy letters asking for a national insurance number that is printed at the top of the letter—it cannot match up people with the documents. Will the Paymaster General tell us if that is the way things are done in Government now? Is that the root of the problem? Is it EDS's fault, and who is going to pay for it?
As well as people who get no money, some people get far too much money, which could be a serious problem. A member of my constituency office staff, who has phoned the hotline for lots of other people, got a fantastically generous tax credit award. When she told me about it, knowing a little about her personal circumstances I said, "You realise that's wrong, don't you? That's thousands of pounds more than you are entitled to." She was a little concerned about that, so she contacted the Department and—lo and behold—she had been given far too much money. Because we spotted that, she will not get any more, and she will not have received much of an overpayment, but what about people who do not spot it? There are such cases.
If people get 10 times what they should get—£5,000 not £500—at the end of the year there will be a vast overpayment. Normally, overpayments are clawed back the following year by reducing the award. However, if someone owes £4,500 and the next year's award is £500, would they get nothing for the next eight years? I think not. I think that the Inland Revenue would want a big chunk of money. If someone did not know that they were not entitled to the money in the first place, there could be real problems.
I will put the following to the Paymaster General as a written question if it will help. Has her Department tabulated last year's entitlement to working families tax credit plus children's tax credit against the entitlement to the new tax credits for 2003–04? Has the Department looked for cases in which people were given £500 last year, and £5,000 this year? If there are a lot of those cases, is it going to take a sample of them and see whether the system has gone crazy? I hope that the Paymaster General will assure me that such an exercise will be carried out to stop people reaching the end of the year with a huge overpayment.
Finally, the working tax credit component of the system for childless people is the dog that has not barked. Whenever we ask written questions about it, we receive virtually no information. It will bring new people into in-work benefits, but that set of people is not very likely to take up the benefit because they do not know that they are entitled to it. Will the Paymaster General tell us definitively how many childless couples and single people should have been brought into the working tax credit for childless people for the first time ever, and how many people have actually claimed? Something tells me that if the Paymaster General were to give us that answer there would be a big gap between those two numbers.
3.9 pm
Mr. Stephen O'Brien: I congratulate the hon. Member for Northavon (Mr. Webb) on a very articulate demonstration of many of the problems. I also congratulate the hon. Member for Caernarfon (Hywel Williams) on securing this timely and important debate. It is another opportunity to hold the Labour Government to account over their tax credit fiasco, which has been experienced by MPs from both sides of the House who have been deluged with complaints from constituents complaining about the failure of the new system. The helpline has been overwhelmed and desperate claimants have besieged benefit offices.
The hon. Member for Caernarfon (Hywel Williams) called into question the absence of any link between the Chancellor's rhetoric on making work pay and the practical application of what is now going on and recognising that the wage top-up scheme has been of benefit. We meet today just two days after tax freedom day, when we can start providing for our families and ourselves. Compared with 1996, we must now work an extra week to pay for the Chancellor's 60 tax rises, which Labour has introduced since 1997. The cry that has gone up is: where are the improvements in public services?
On 6 April the Government launched its latest version of tax credit. Working tax credit replaces working families tax credit and disabled persons tax credit, and child tax credit replaces children's tax credit. Since October 1999, the Government have introduced five new tax credits for families, scrapped four and then introduced two new ones. That averages a new tax credit for families every six months. We supported and continue to support tax credits in principle, but we do not support this stop-go system. It is apparently the Chancellor's flagship, but as he forces the Inland Revenue to become as effective in paying out money as it has been in collecting it from our constituents, his flagship has been sailing into uncharted waters. It has run into a predictable storm and is foundering. Only a Government, Chancellor and Paymaster General in denial would require the Minister when she stands up to carry the can for her boss and to attempt to dismiss the widespread tales of misery, frustration, anger and distress of people throughout the country, especially hard-working mums and dads with young children, often with child care responsibilities, in their dealings with the Chancellor's foundering tax credit system.
The Inland Revenue claims to have processed, but not necessarily paid, 3.5 million of 4 million claims. It admitted on Monday that 600,000 had not been processed—there are 100,000 missing somewhere. What is the precise number of credits claimed but not paid? How many eligible people have not yet claimed? Is it the 1 million that many estimate? If it is, 1.5 million people may be suffering and not receiving what they are entitled to under the Government's new system.
Of those whose claims have been processed, how many are suffering because of sloppy inaccuracy by the Revenue or further failures of the computer system? My constituent, Mrs Catherine McCabe of 45 Bradbury road, Winsford, has made a completed application and received some documents, but her tax is wrong because her earnings were misrecorded. She has three young children, but the Inland Revenue says that she has none. She has had three different assessments. The last stated
118WH
wrongly that she is entitled to nothing, but £63.13 went into her account, which is a woeful sum compared with the £100 she is due.
I hope that the Paymaster General will tell us whether all those who made a completed application but had yet to receive any money did so by 2 May. She said in the House on 28 April that they would do so

"by the end of this week".—[Official Report, 28 April 2003; Vol. 404, c. 54.]

How many interim payments have been made? The Chancellor changed the rules and it is up to him to get them right. People have had to go into debt, incur bank charges and interest, and default on paying basic bills. The parliamentary ombudsman has said that she will consider cases in which individuals have suffered financial loss because of delays. Will the Government now come clean, confess their shortcomings and confirm that compensation—not just interim payments—will be paid for financial loss such as overdraft charges? The Revenue is the first to charge interest on late payment of tax and this shambles comes at a time when personal disposable incomes are being hit by the Chancellor's national insurance contributions increase and the increase in council tax bills resulting from the Government's changes to the way in which Whitehall funds local authorities.
Amid all that, the Government have a helpline. Its very name has turned out to be another of the Government's sick jokes to the hundreds of thousands of people who spend hours, days and even weeks trying to get through. At an original cost of £53 million, the Government in their panic rushed in 700 more staff. If callers did not get through they spoke to the "overflow department" which could not answer their questions because it could talk only about the system. What system, one might ask. For a short period, the department offered to ring people back. Mrs McCabe, my constituent, has been waiting since 16 April, and no wonder because the call-back service has now been stopped. No wonder we heard about Mr. Maddison, who had to superglue his hand to a desk in his local office at Bridgwater in Somerset to get paid after more than 200 attempts to contact the helpline. He was eventually paid before his hand was released because it got so sweaty.
Is it any wonder that all those frustrations, coupled with the number and speed of the Chancellor's changes to his own tax credit system is resulting in poor take-up rates? The Council of Mortgage Lenders estimates that one in five who are eligible for £60 a week or more are failing to claim. Will the Paymaster General stand by her Chief Whip's comment to The Scotsman newspaper that

"Gordon Brown's flagship system of tax credits is not appreciated or understood by the low paid",

or with her Cabinet colleague, the Secretary of State for Trade and Industry, who said that the tax credits system is

"not having the transforming impact that we thought it would have and that it should have"?

Does the Paymaster General think that the taxpayer has received value for money for the £10 million in round figures that was spent on the promotional campaign for the new tax credits?

119WH
What is so utterly despicable is that all the chaos and confusion was predictable and predicted. It was predicted by the official Opposition months before April's implementation. It was predicted by others, who have been mentioned today, including Labour councils, which one would have thought were not political opponents of the Government, and by Inland Revenue internal auditors. The information technology specialists at the Office of Government Commerce warned in December last year—four months before April—that the new system for tax credits ranked as

"among the highest across Government for assessed risk".

They cautioned that the project was very ambitious and that the "very large and complex" nature of the initiative would rest on unprecedented levels of co-operation between Government Departments. My hon. Friend the Member for Havant (Mr. Willetts), the shadow Secretary of State for Work and Pensions, stated:

"The problems were entirely predictable because the computer system for administering credits was rushed into use before it was ready. It was a great pity the Government ignored the warning signs … It is clear the blame lies with the Chancellor himself."

Frankly, the Chancellor should be here today to apologise.
It gets worse. The Revenue thought that nothing would go wrong, so it made no contingency plans. That is a pattern for the present Government, as my constituents found during the foot and mouth crisis. Despite the Local Government Association now calling for such plans, today it is reported in the newspapers that the Revenue are rejecting any need for contingency plans—another of the Government's sick jokes. On the subject of sick jokes, the Revenue first said about the new tax credits system that there were

"no problems with computer systems",

and that the review team's opinion of the project was that

"it was an exemplar of good project management and well-equipped to successfully deliver".

Only recently did it resile and confess that

"The new tax credits system is not yet performing as well as we would like."

Spare a thought for the Revenue and benefits office staff who work amid all the Government incompetence, confusion and denial. Hundreds of them staged a spontaneous walkout because of the chaos—the grim situation—that they are faced with in their offices and the sheer pressure heaped on there by the Chancellor, the Paymaster General and the computer system. In the House, we can hold the Minister accountable, but I hope that she will tell us that Ministers are holding EDS and other suppliers accountable. The hon. Member for Northavon also made that point.
Before the Chancellor drives the culture of dependency further and further into decent, hardworking individuals and families up and down the land through his increasing means-testing of the citizens of Britain, this appalling experience must be fully examined. The official Opposition call for a full, open, public and independent inquiry into the systemic failure of the administration of the Chancellor's new tax credits system, for which we did not vote. An inquiry must be
120WH
held to establish what has gone wrong and why, and the Chancellor's policy decisions that brought about the problems. We welcome the National Audit Office investigation into the way the system was introduced, but it is clear that that is not good enough for the hundreds of thousands of people whose lives are blighted by the system. A full and independent public inquiry must be held to expose the damage and the unnecessary distress caused by the Government's incompetence and to ensure that the lessons are learned. Otherwise, what will we get?
Let us hope against all hope that today the Paymaster General will not repeat her claim of 29 May on GMTV that the problems are caused not by her or Inland Revenue but by late and incorrectly completed forms submitted by claimants. That statement was met by incredulity and anger on the part of huge numbers of frustrated claimants for its sheer arrogance and eye-watering denial. The Paymaster General should not try today to defend the indefensible. She should admit that the Government's incompetence has led to callous chaos and confusion and that their shameless shambles of a new tax credits system has caused unnecessary distress and anger.
The Government are denying a fair deal to the people of this country. They should now add to the apology given in the House by the Paymaster General on 28 April, which I acknowledge, and authorise a full, public and independent inquiry into the predicted and predictable shambles of the Government's new tax credits system.
3.19 pm
The Paymaster General (Dawn Primarolo): In the few minutes that are left in the debate, I wish to say that the contribution of the hon. Member for Eddisbury (Mr. O'Brien) was particularly breathtaking. He suddenly finds sympathy with the poor, but the Conservative Government drove millions of children into poverty. We are debating this afternoon the introduction of the tax credit, but if the hon. Gentleman wants to see what a system that is not working looks like and how complex it can be, I suggest that he looks at the family credit system under his party's Government.
The hon. Member for Caernarfon (Hywel Williams), who introduced the debate, asked me to deal specifically with several points. I pay tribute to him, not only for acquiring the debate, but for having the good grace to acknowledge that the basic foundation of the tax credit system and its aim to assist people into paid employment is an absolute bedrock that he supports. He recognises that it has never existed before.
I turn to the questions about how many tax credits are left unpaid and where we are in the system. When I made a statement about tax credits to the House on 28 April, the Inland Revenue had paid tax credits to more than 1 million families. As of today—a month on—I am pleased to say that tax credits are being paid to 3.7 million families. About a third of those families are being paid weekly and are now in their eighth week of payment. The other two thirds are being paid on a four-weekly basis, on time and as planned. Last week, they received their second monthly payment.
Those numbers are in addition to the 1.3 million families with children on income support and income-based jobseeker's allowance who will be transferred

121WH
automatically in April next year to the child tax credit, but who are receiving the increased level of support through their benefits now. The transfer next April means that 5 million families, as opposed to 1.4 million families on working families tax credit, are now benefiting from tax credits. Tens of thousands of additional claims are still coming in each week and the Inland Revenue is paying more than 100,000 more families each week.
Take-up of the new tax credits remains strong. All those families with children with income below £58,000—nine out of 10 families with children—are eligible for child tax credit. In addition, working tax credit is newly available to low-income working families without dependent children or a disabled worker. As of today, more than 4.25 million claims for tax credits have been received. That means that 5.5 million families have either applied for or are already receiving tax credits. As a result, enhanced family support is reaching far larger numbers of people than either the old system of family credit or the working families tax credit.
Far from failing to claim the new tax credits, millions of people have claimed them. Because we want all those who are eligible to apply, our take-up campaign is continuing, and last week we launched a new publicity campaign to encourage people to apply by 5 July, so that if they are entitled to tax credits, their claims can be backdated in full to 6 April. We are also encouraging people to apply if they think that their income will qualify them for payment this year—a matter to which the hon. Member for Northavon (Mr. Webb) referred.
As for turning claims into payments, I can tell hon. Members that successful claims from everyone who applied by the end of April have now been paid, apart from those about which more information is needed or more checks have to be made. The detailed figures at the end of May were that 3.7 million awards are in payment and 115,000 claims have also been decided but the claimant has not met the qualifying conditions and no tax credit is due.
Since my last statement, approximately 500,000 more awards have been put into payment. Of the remaining claims still being processed, the Inland Revenue received more than 200,000 only in the past four weeks, some arriving as late as last week. All of the outstanding claims are either incomplete or require further checks to be conducted to verify information. Last week, the Inland Revenue cleared more than 100,000 cases. At its peak, the system is capable of clearing 25,000 per day, and we are working to ensure that that number is delivered every day.
I acknowledge—I have made no attempt to resile from this either in my statement to the House or in interviews on television and radio—that some families have experienced serious difficulties. I have rightly apologised for that. However, to characterise the whole system as being in chaos is simply wrong. The present position is that about 5 million families are now benefiting from tax credits and the number of awards will continue to rise as more and more claims are put into payment in the coming weeks. I am glad to be able to report that as the number of awards and payments rises, the number of calls to the helpline has fallen—the pressure is easing, although it is still there.
122WH
Several hon. Members have referred to selective quotes from incorrect reports, and I should like to correct them. A few months ago, a report suggested that the tax credit system was too risky to go ahead. In fact, the report of the Office of Government Commerce found that the tax credit programme was a model of good governance and careful management of risk. I shall quote the report's key conclusions in December, which are that

"The Review Team finds that the programme is well on the way to successful delivery of Release 2 in April 2003 although it still has to complete a large amount of work against a very tight schedule.

The Review Team's opinion is that this is an exemplar of good programme management",

and the programme is well equipped to successfully manage challenges.
Several other issues were raised by the hon. Member for Caernarfon and others. It is important to point out that claimants in rural areas may be isolated from their nearest Inland Revenue office. I recognise that and we are trying to do several things to address it. First, we can arrange for payment to be sent directly, either couriered or by registered delivery, in particular where there are travel problems because the distance is too great or because travel is not possible owing to family responsibilities.
Mr. Reid: Will the right hon. Lady give way?
Dawn Primarolo: The hon. Gentleman did not speak in the debate, and I have many other questions to get through.
Questions were asked about hyphens. That was a story in the early days, but I assure hon. Members that the system can deal with claimants whose names have hyphens.
Key points were raised about housing benefit, such as the planning that was involved. We have always recognised that the introduction of tax credits will mean new work for local authorities, which is why they received well in advance of £17 million to pay for additional administrative costs. We understand that local authorities face pressure, and that it is sometimes difficult to process queries. However, we have made considerable efforts to get information to local authorities. Housing benefit should not be adjusted until tax credits are actually paid to the customer. Legislation was specifically amended to ensure that housing benefit was not reduced merely because a claimant claimed the tax credits. We have, however, gone further. If a tax credit award includes a payment of arrears, the payment is treated as capital for housing benefit and is effectively ignored. If a lump sum is necessary, it is paid in one go; if any backdating is necessary, it is not spread over the year. Local authorities should only take into account tax credits in payment. They cannot assume that tax credits are already being paid or treat them as notional income.
This is an important debate. Many questions have been asked but because of time constraints, I cannot answer all of them. The policy is to help and support those on the lowest incomes to help them to get into work. The system was not in place before April this year. It will work and I intend to ensure that it does.
Mr. Deputy Speaker:Order. May I ask those hon. Members not wishing to stay for the next debate to leave quickly and quietly please?

A47
3.30 pm
Mr. Keith Simpson: I am grateful for the opportunity to have a short debate on route management strategy and the A47. I appreciate the presence and support of my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) and the hon. Member for Norwich, North (Dr. Gibson).
The debate has strong cross-party support from all the Members in Norfolk. Our primary objective is to consider a strategic plan for the whole of the A47 and to ensure that it is fully dualled from the A1 west of Peterborough through to Great Yarmouth. That is vital for the economic growth of Norfolk and for road safety. Since 1994, the A47 alliance—a coalition of local councils, businesses and other interested parties—has consistently lobbied for that strategic objective.
The catalyst for my debate was the recommendations from the study undertaken for the Government Office for the east of England, entitled, "Norwich to Peterborough Multi-Modal Study: Final Report"—a title that easily runs off the lips—which was published on 11 March. Without exception, all the interested parties in Norfolk—the parish, town, district and county councils and businesses—were bitterly disappointed with its piecemeal and inadequate recommendations. Indeed, some of its proposals have been deleted from the final strategy agreed yesterday by the regional planning panel. That has caused even more disillusion in Norfolk.
Sadly, the Department for Transport has no strategic vision for the whole of the A47 in Norfolk. Rather, we have seen a series of independent, piecemeal studies that deal with some local concerns through stretches of dual carriageway and some remedial work, but those do not deal with the overall economic arid road safety issues throughout the length of the A47. The failure to achieve a strategic plan has led to much disillusion and cynicism among all our constituents, who think that Norfolk is low down the list of priorities and can safely be offered some worthy short-term improvements and some long-term aspirations.
I shall move on to a critique of the Norwich to Peterborough multi-modal study and ask the Minister some questions. I realise that he may not be able to answer all my questions at the end of the debate, but I would be grateful if he would write to me.
The study began with a clear aim that was consistent with Government policy: to realise the potential of the Norwich to Peterborough corridor, including the economic regeneration of northern East Anglia, which is essentially Norfolk. That aim was supported by an objective—one of eight—to identify the contribution that improvements to the transport corridor could make to the economic regeneration and future prosperity of northern East Anglia. That clearly recognised that Norfolk's perceived remoteness and poor transport accessibility to the midlands and the north could be harming its economy, leading to pockets of deprivation, especially in Great Yarmouth, Norwich, King's Lynn and some remote rural areas.
The Norfolk community strategy has recognised that, and its delivery will partly depend on improved strategic accessibility. If anything, that assessment has been
124WH
reinforced by a recent forecast from the business analysts Experian, which revealed that Norfolk will soon lag behind neighbours such as Cambridgeshire and Suffolk. The economic factor is therefore crucial to Norfolk in terms of growth.
Dr. Ian Gibson: Does the hon. Gentleman agree that tourism in Norfolk has tremendous possibilities and potential? Hundreds of people penetrate into places such as Hunstanton, King's Lynn, Cromer and so on, round to Yarmouth, every year, but it is forgotten sometimes that those people have to travel on awful roads such as the one to which the hon. Gentleman is referring—the A47—and that the accident rate goes up significantly during that period. For that reason alone, there is a huge case to be made for improving that highway.
Mr. Simpson: The hon. Gentleman makes a strong point. Hundreds of thousands of tourists come to Norfolk, and many are unfamiliar with our patchwork road system.
I shall briefly take up the study recommendations. Many of the proposed measures gain our support, including those for public transport improvements. No one in Norfolk believes that merely dualling the A47 will resolve all the transport and road safety problems or, indeed, immediately bring about economic improvement. Although we accept that various considerations have to be balanced and that there are many demands on the nation's purse strings, we have to reject the fundamental proposal not to bring the A47 fully up to dual carriageway standard. That was recommended despite full dualling being the option with the best economic efficiency—by that, I mean a function of travel time and a measure of whether it is a good public investment.
The main proposals in the study were: dualling between Dereham and Norwich by 2016; single carriageway bypasses for Middleton, East Winch and Bilney by 2026—those have now been dropped—and dualling from the A1 to King's Lynn by 2031, except for a Wisbech bypass, which I think will also be dropped. Many of the people involved in the study may well be in retirement homes by that date. Although these proposals are welcome in themselves, even the limited ones, they do not go far enough and would not be implemented soon enough. Even these basic proposals mean that, by 2031, there would be still be 60 km of single carriageway east of the A1.
I shall put a series of questions to the Minister.
Mrs. Gillian Shephard: I congratulate my hon. Friend on obtaining this debate on such an important issue. Before he comes to questions for the Minister, I believe that he said that even limited improvements to the A47 had yesterday been rejected by something describing itself as a regional planning panel. I wonder whether he or the Minister could give us some information on the status of that panel, such as whether it is composed of elected representatives, to whom they are accountable and on what information they are drawing, because it is self-evident from what my hon. Friend has said that they are

125WH
not drawing on information about traffic flows on the A47 or, indeed, on any public opinion in Norfolk regarding the future of the A47.
Mr. Simpson: My right hon. Friend reflects the amazement that was engendered in Norfolk by that regional planning body, and she raises a very good point about political accountability. That body is certainly not accountable to the electors of any of the Members here today.
I shall return to my questions. The process itself needs to be questioned. The A47 was studied by breaking it down into 22 discrete sections, so it was not seen as a strategic whole route. In a strategic study, why was the main highway route not treated from a strategic perspective? That is the fundamental question.
The economic regeneration focus, as caught by the aim and objective quoted earlier, was lost during the study. It became a traditional predict-and-provide transport study that predicted where congestion was likely to happen and recommended providing improvements at those discrete locations. Although addressing congestion is important, it should not be the only factor to consider when deciding where transport improvements are needed. Many parts of Norfolk are not congested by national standards, but they are deprived. Improvements to the A47 are needed to enhance their accessibility and economic performance, not to address congestion, which is usually a result of strong economic activity.
Will the Minister explain how continuing to improve transport infrastructure in areas of the United Kingdom that are already enjoying the benefits of strong economic activity and are congested, rather than improving it in deprived areas for accessibility reasons, is consistent with Government policy to reduce the economic imbalance? Furthermore, how are remote rural areas such as my constituency expected to diversify successfully if the root problem of poor accessibility remains?
The wider economic aspect was considered only at the end of the study, just to consider whether the recommended strategy would produce any wider economic benefits. The conclusion was that King's Lynn would enjoy regeneration benefits. Only one section of dualling is proposed east of King's Lynn between Norwich and Dereham, which lies mainly in my constituency. Although regeneration in King's Lynn is welcome, is it a coincidence that where the majority of the A47 dualling stops, the wider economic benefit also stops?
Social inclusion is a Government priority, and I fully endorse it. The main cause of social exclusion is unemployment, so does the Minister agree that the best way of delivering social inclusion is to regenerate deprived areas and promote job opportunities? We have an example of that, as it looks likely that the outer harbour will be developed at Great Yarmouth, but once it is developed, it will not have an east-west transport system that is capable of dealing with the economic activity. Surely common sense says that we should get the transport system up and running either before or in conjunction with the development of the outer harbour.
The study concluded that the wider economic benefits of full dualling are not fully understood. Fortunately, a Government study is currently investigating the
126WH
relationship between transport infrastructure improvements and wider economic benefits. That will report in the summer, so why is this study being rushed through with such undue haste? Would it not be more sensible to delay the process and await the outcome of the Government's report? Once better understood, the economic and environmental considerations related to full dualling can be given a clear and transparent examination that is open to public scrutiny.
Although the final report accepted that full dualling was the best option for economic efficiency—a measure of whether it is a good public investment—it stated that that was outweighed by environmental concerns. I accept that the protection of the environment is an important factor, but no real analysis of the environmental costs compared with the economic benefits was shown in the report. Can that be provided or explained?
Furthermore, the latest road traffic accident data were not used, despite the upward trend in recent years on the A47. For example, between 1997 and 2001, there were 812 personal injury accidents between the A1 and Easton, which is on the western outskirts of Norwich. Those accidents resulted in an estimated 1,200 casualties. Worryingly, the trend is upward, with 149 accidents in 1997 and 190 in 2001. Given that rising trend, it is surprising that the accident data for 2002 was not used. How can the Highways Agency maximise its important contribution to the targets when studies ignore the most recent data?
The A47 is part of the trans-European network, and links to Europe are vital for our economy. Why are roads comprising the trans-European network not given priority when deciding where infrastructure improvements should be made? Finally, medium traffic growth forecasts were used and we are not convinced that that was justified, especially considering the emerging regional planning guidance and the proposed growth of Norwich and other places served by the A47. No explanation was given for that choice. Why was that assumption made?
This is a crucial issue for Norfolk. This short debate merely flags up our major concern that there is no overall strategic plan for the A47 to deal with important issues of economic growth and road safety. The consensus at every level of government in Norfolk, which is cross party and includes the business community and the police, is that dualling of the A47 is the priority and that the other options are unacceptable. Norfolk county council hopes to meet the Secretary of State for Transport to press these matters further. We will continue to raise the issue so that dualling of the A47 moves up the list of priorities within the Department for Transport. Without that dualling we will not see the economic growth required in Norfolk to meet the Government's targets. Sadly, we will see a continuing rise in road traffic accidents.
3.46 pm
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on securing this debate and on the way in which he has prosecuted his case. I am pleased that the right hon. Member for South-West Norfolk (Mrs. Shephard) is

127WH
present. When I visited her constituency to look at a road scheme she treated me famously with sandwiches, even giving me a doggy bag. I am pleased also to see my hon. Friend the Member for Norwich, North (Dr. Gibson). My hon. Friend the Member for Great Yarmouth (Mr. Wright) also takes a great deal of interest in these matters, but he is unable to be here today.
As we have heard, the A47 is a major artery through Norfolk, and in particular through the Mid-Norfolk constituency. The hon. Member for Mid-Norfolk has dealt in some depth with the problems that are a common concern for him and his fellow Members in the region. As he implied, the A47 is a major strategic route into Norfolk and is an important trans-European route across the north of the region, serving Wisbech, King's Lynn and Norwich as well as Great Yarmouth and Lowestoft. It is also an important link to the more isolated areas and key market towns along the corridor.
Several major routes converge along the A47. West of King's Lynn, the Al7 from the north meets it and to the east of the town, at the Hardwick roundabout, the A149 to Hunstanton and the A10 to Cambridge and London join. At Norwich, the A47 bypasses the city and is joined by the A11, the most important route into the area from the south, and also the A140 from the Ipswich direction.
What have we already done on the A47? Considerable progress has been made in improving the road over a number of years by different Governments. To give the impression that nothing has happened would be quite wrong. The schemes have cost more than £150 million. In addition, we have also started work on the improvements to the Hardwick roundabout and have added the Thorney bypass and the Blofield to North Burlingham dualling to the targeted programme of improvements. This is a considerable investment by my Department that indicates the importance that is attached to the route.
It should be noted that we are also continuing to improve the A11, which is the major trunk road access to Norwich from the south and west. We opened the latest dual carriageway section in March, and two more schemes are currently being taken forward by the Highways Agency. The A11 is expected to be fully dualled by 2010, which will emphasise its key strategic role in the network and in relation to the A47.
The recent addition to the targeted programme of improvements—the TPI schemes—of the A14 Cambridge to Huntingdon trunk road improvement scheme, as recommended by the Cambridge to Huntingdon multi-modal study, reinforces the key strategic role of the A11–A14 corridor in providing links between Norfolk and the west.
I assure the hon. Gentleman that we have not neglected the A47. We have commissioned two studies to examine how the rest of the route could be improved and if a parallel railway line could serve as an alternative to the A47. I note the hon. Gentleman's comments about the importance of public transport.
The Norwich to Great Yarmouth road-based study recommended the Blofield and North Burlingham improvement, which, as I said, was mentioned in the TPI. We have commissioned further work from the
128WH
Highways Agency to re-examine the Acle straight between Acle and Great Yarmouth. It is investigating whether a dual carriageway, a simple widening or, indeed, doing nothing at all would be the best option from an environmental point of view. It is also investigating the economic impacts of potential delays to traffic during the construction of either of the first two options. In addition, it is undertaking some investigative geo-technical work.
Dr. Gibson: When will the study on the Acle straight reach its conclusion?
Mr. Jamieson: I will jot a line to my hon. Friend rather than shoot from the hip. I will ensure that he and other hon. Members taking part in the debate know.
I am aware that there is a local perception that the road needs to be dualled for the economic regeneration of Great Yarmouth, but we are not yet satisfied that the evidence for such a conclusion is available. The Highways Agency is implementing other recommendations from the study, which will improve safety along the A47 and improve the traffic flow at the Vauxhall junction in Great Yarmouth. That should significantly reduce journey times along the Acle straight.
Mrs. Shephard: I thank the Under-Secretary for his generosity in giving way and for his tribute about sandwiches, which remain unforgotten in his mind.
In the unavoidable absence of the hon. Member for Great Yarmouth (Mr. Wright), I must ask him what is the point of putting money into regenerating Great Yarmouth if it cannot be reached by road.
Mr. Jamieson: I will come to that. I noted what the right hon. Lady said in an intervention on her hon. Friend the Member for Mid-Norfolk.
The Norwich to Peterborough multi-modal study was commissioned to make recommendations that would address the transport problems and realise the potential of the Norwich to Peterborough corridor, including the possible economic regeneration of East Anglia and the entire route to Great Yarmouth. The study incorporated the A47 and the parallel railway line via Thetford and Ely. It reported in March 2003 and was passed to the regional assembly for its consideration. I believe that the assembly met yesterday to confirm its recommendations, and I note from the hon. Gentleman's remarks that neither he nor other local interests approve of them. However, the Department has not yet received its official response, and so I cannot comment on it in detail.
The right hon. Lady asked who the people on the regional panel were. The panel is made up of elected local councillors from the region. I understand that most of them are from her own party. If she wants a route of communication and contact with them, she may want to beat a path to their door, because they were the ones who recommended that dualling the whole of the A47 was unnecessary. That recommendation did not come from my Department, but was made locally to my Department.
The study concluded that a combination of measures would be needed to address its objectives. The preferred strategy, which the regional assembly was invited to

129WH
consider, therefore includes targeted measures to increase capacity on the A47, new bus and coach services and some localised improvements to rail facilities. It also supports increases in the take-up of travel plans and the promotion of walking and cycling strategies in the towns along the corridor. It would be premature of us to give our views on the recommendations now. However, the study has raised a number of important issues and it may be helpful if I briefly run through them.
The study concluded that the major rail schemes are not feasible and that other public transport measures alone would not deliver a strategy to meet the study objectives. The study therefore proposed, in addition, staged programme improvements to the A47, to be constructed as and when the traffic conditions warranted them.
The study has also concluded that the A47 is not congested over the whole of its length and that improvements need to be targeted on those sections that are currently at or near capacity, rather than on those that are expected to be able to carry the forecast traffic growth in their current form for many years to come. The sections identified as the first two priorities are in the west between the A1 and Sutton, west of Peterborough, and in the east between North Tuddenham and Easton, west of Norwich. The study also suggested the introduction of improved traffic management measures on the A47 at Peterborough parkway, with the aim of preventing queues on slip roads from tailing back on to the main carriageway. It is recommended that all these schemes be implemented before 2016.
In addition, the study proposes that further improvements to the A47 be undertaken after 2016. If all of these were to be built—clearly I can give no commitment today—we would achieve the hon. Gentleman's aim of improving the entire length of the A47 from the Al to Norwich. Although I appreciate that the hon. Gentleman and others would prefer such schemes to be implemented sooner rather than later, the multi-modal study suggests that the justification for them, in terms of traffic flows and consequent delays, will exist not in the near future but in 15 to 20 years' time. I stress that such matters are being dealt with locally. The relevant studies have not been undertaken by the Government; they have been generated by those in the local area who can best understand the issues involved.
The conclusions of the study suggest that it would be imprudent of us to bring forward major road schemes that do not make best use of our limited resources and that do not provide good value for money. When we consider the findings of the study and the other views that we have received, we shall be mindful also of the
130WH
need to ensure that large areas of the countryside are not blighted through proposals for road schemes that have no prospect whatever of being built in the next 20 years. That would not help the regeneration of the area. It is also important for constituents that their properties should not be blighted.
The hon. Gentleman said that a predict-and-provide model was used, and he mentioned the need for new roads to help the economic regeneration of his constituency. It is always difficult to quantify with confidence how many jobs a transport scheme will generate—each area will react differently, and there is always a danger that jobs could be lost from an area if transport links are improved.
As required by the brief, the Norwich to Peterborough multi-modal study considered the wider economic benefits that the preferred strategy, including all the A47 improvements which have been proposed, would bring to the area. The study concluded that in the long term the strategy would improve accessibility to areas outside the sub-region, provide greater opportunity for development, reduce actual and perceived peripherality and expand markets and labour market catchments for businesses in the area. Further analysis suggested that the overall additional benefit of dualling all the A47, as compared with the preferred strategy, would be small when considered against the additional cost. It was also suggested that some of the further schemes that would be required to achieve full dualling would have potentially serious effects.
Mr. Keith Simpson: I began and ended by asking the Minister a question. He represents the Department for Transport, so can he say whether the Department, in its strategic vision, accepts that to dual the whole of the A47 for economic and road safety reasons is, in principle, logical and correct? I realise that there is a cost factor and do not hold the Minister on that. It is all well and good to refer to individual studies, but the crucial point is the principle.
Mr. Jamieson: The principle is that not even the regional planning body has come up with that solution. His party and his councils have not come to that conclusion. We should be making improvements for the throughput of traffic while taking into consideration the important environmental issues on the route.
Time is against me, and if there are issues that I have not been able to cover at the end of the debate, I shall be pleased to correspond with hon. Members.
Mr. Deputy Speaker:Order. I ask hon. Members who are not staying for the next debate to leave quickly and quietly. I assure hon. Members that I have driven on the A47.

Taiwan
4 pm
Mr. Tom Cox: I start by declaring my interest in seeking this debate: I am the co-chairperson of the all-party group on Taiwan, which has members from all political parties in both Houses. It is an active group, which is fully supported by the Taiwanese office in London. I am delighted that the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Harlow (Mr. Rammell) is replying to the debate. We are all aware of his interest in Taiwan.
The United Kingdom and Taiwan have a good relationship, which benefits both countries. Some 155 Taiwanese companies operate in the UK. Taiwan has invested vast sums of money in the UK, creating many thousands of jobs for British workers, and has brought in some of the most advanced technological developments in the world.
Taiwan has the world's 16th largest economy; it is the 14th largest trading nation in the world, the eighth largest outward investor, and the world's third largest exporter of information technology. The UK is the third largest trading partner of Taiwan in Europe, and receives 48 percent. of Taiwan's investment in Europe. Taiwan invests more in the UK than in any other European country. Those are impressive figures that demonstrate how the UK benefits from its involvement with Taiwan. The importance to Taiwan of the relationship is seen by the high calibre of the person appointed to head its London office. That person has always been a senior diplomat, as is the current representative, Dr. Tien.
I hope. as does the rest of our group, that contacts between the UK and Taiwan can he upgraded, through discussions between Ministers, Dr. Tien and his officials, and senior civil servants and through the exchange of ministerial visits between our countries. I welcome the recent visits to Taiwan by my hon. Friend the Minister for Trade and Investment and by the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Edinburgh, South (Nigel Griffiths).
Discussions such as those to which I referred could form the basis for the establishment of joint projects between the UK and Taiwan to develop trade and business links with mainland China. In Taiwan, many thousands of companies have links with mainland China. Taiwan has invested the equivalent of $100 billion in China, and fully understands the attitude and culture of the Chinese. I hope that the Government will enter into serious discussions on the setting up of joint venture projects, and I will welcome the Minister's comments on that point.
Every year, thousands of Taiwanese students come to this country to study—at present, the figure is 14,000—and that obviously brings us enormous benefits. However, those students could go to many other countries to study, which leads me to say that the problems that they have in obtaining visas must be greatly improved. British nationals visiting Taiwan can have a visa-free visit of up to 30 days, but it certainly is not as easy for Taiwanese people wishing to visit the United Kingdom to obtain a visa. I would welcome the Minister's comments on how the problem can be improved.
132WH
Another issue that the all-party group wishes to see greatly improved is the treatment of visits and stopovers in the United Kingdom by Taiwanese Ministers and senior officials when en route to other countries. Sadly, the Government place restrictions on such visits and stopovers, and I clearly ask the Minister why that is still happening. He must be aware that the United States Government and a number of European countries are far more responsive than the United Kingdom in assisting such visits. It is time for improvements to be made, so I ask: will they and, if not, why not?
I turn now to an issue that causes Taiwan and the British all-party group deep concern and disappointment. That is the refusal, yet again, to admit Taiwan as an observer to the World Health Organisation. Early-day motions are regularly tabled—they attract a great deal of support from Members of all parties—that clearly call for the Government to be seen to support the request for observer status to be given to Taiwan. The British Medical Association, a respected organisation in this country and in the world, fully supports that request. Taiwan has one of the most advanced health and medical care systems in the world, so why is it being denied observer status?
In January 2002, Taiwan became a member of the World Trade Organisation. If the country can qualify for membership of that organisation, what is the real reason for its being refused observer status at the World Health Organisation? I ask my hon. Friend to be frank in replying to that point. The United States Government and the European Union fully support Taiwan's application for observer status, so why does it not have that status? What is the United Kingdom's position on that matter? Does the United Kingdom support Taiwan's application for observer status at the World Health Organisation?
Taiwan has a population of about 23 million people. It is a democracy with a deep respect for human rights and freedom of the press. It obviously wants a role within the United Nations, yet it has been excluded from the UN since 1971. Here is a country that in the view of many people, and certainly in the view of the all-party group on Taiwan, has a right to be seriously considered for playing a positive role in the United Nations. Let us compare Taiwan with some members of the UN. Some countries are certainly not democratic, and human rights and press freedom either do not exist or have little respect paid to them, but those countries are still members.
In September this year at a meeting of the UN, Taiwan will again press its claim for involvement in the UN. Can the Minister tell me what the United Kingdom's view will be on the issue? In recent years when the issue has been discussed, the UK has sadly opposed Taiwan. Will we do that again, and, if so, for what reason? Why is it necessary for the UK to do that? Who are we seeking to please by showing opposition to Taiwan and the role that it wants in the UN?
I also wish to refer to the ongoing pressure—indeed, threats—which Taiwan faces from mainland China. President Chen of Taiwan has repeatedly sought to build a good relationship with China, but has received a poor response. We know that China has several hundred missiles aimed at Taiwan, and I want to know where we stand on China's attitude. China is a major country, but many would question several aspects of the

133WH
policies that it follows within China and with other countries throughout the world. It wants to play an ever-increasing role in the world, but we have standards, such as respecting the views of a country and its people as to how they want to live. That applies to Taiwan and its people. The Minister can be in no doubt that, although Taiwan wants to co-operate with China, it will not be taken over by China. I hope that he and certainly the British Government fully understand that. If they do, should we not make that clear in our discussions with China?
I welcome this debate, and close my remarks by saying that I and many other Members, irrespective of party, will continue to work to develop the co-operation that exists between the United Kingdom and Taiwan. As I said, the relationship is good, but it can be improved. I have highlighted several ways in which that can be done. We have greatly benefited from the contacts that exist between our countries, but the all-party group on Taiwan looks to the United Kingdom to be, and to be seen to be, more supportive on key issues related to Taiwan. We must make it clear to China that its policy of threats against Taiwan is not acceptable to this country or to many other countries. I hope that that statement will be made clearly by the British Government in its dealings with China.
4.13 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell): I am grateful for the opportunity to reply to this debate, which has been secured by my hon. Friend the Member for Tooting (Mr. Cox). I pay tribute to his assiduous work on this issue.
I think that I am correct in saying that this is the first debate on Taiwan in the House for three years. It is therefore a welcome and timely opportunity to reflect on relations. I will certainly argue this afternoon that I believe that our bilateral, commercial, educational and cultural links are in excellent shape. Before setting out the state of relations between the United Kingdom and Taiwan, it is perhaps worth while reflecting on two major changes that Taiwan has seen since our previous debate. I want also to say a few words about the SARS epidemic, which is clearly affecting Taiwan.
With the election of Chen Shui-bian in March 2000, we witnessed an historic event: the first democratic transfer of political power in Taiwan. It was the first time that a non-Kuomintang leader had been elected. The transfer was smooth and peaceful, demonstrating once again Taiwan's impressive achievements in establishing a fully functioning democracy in recent years. I am sure that I will be joined by hon. Members throughout the House in welcoming that event and in applauding it.
The pace of reform has led to an evolving and sometimes tense relationship with the mainland. Clearly, my hon. Friend was referring to that. We consider that the future of Taiwan is a matter for people on both sides of the Taiwan straits to settle among themselves. Conflict in the Taiwan straits would be destabilising for not only those concerned but the whole region and beyond. I say directly to my hon. Friend that we would view with extreme concern any raising of tensions or recourse to military action.
134WH
We take every suitable opportunity to convey to the Chinese Government and, informally to the Taiwanese authorities, that we are strongly opposed to the use of force. We believe that practical steps to build confidence, such as the recent indirect charter flights between Taipei and Shanghai, are the best way forward to lower tensions and to find a mutually acceptable basis for the resumption of a peaceful dialogue.
The second major change happened in January 2002. Taiwan joined the World Trade Organisation as the separate Customs Territory of Taiwan, Kinmen, Matsu and Penghu. The United Kingdom was a strong supporter of Taiwan's WTO membership, and I am pleased to place that fact on the record. We welcome its increased substantive engagement with trading partners. Their commitment to the WTO can only strengthen our commercial relationship. Such participation highlights the importance of Taiwan's economy in the global marketplace.
It is impossible to discuss the current situation in Taiwan without mentioning the SARS epidemic. Only a few weeks ago, it seemed that Taiwan was relatively unaffected by SARS. Tragically, since then there has been a rapid deterioration. I understand that, as of today, 81 people have now died from SARS in Taiwan. I wish to take this opportunity to place on the record my sincere condolences and sympathy to those who have died or who have lost a loved one from SARS. I am sure that I speak for both sides of the House when I say that our thoughts are very much with them at this difficult time. SARS does not yet seem to have peaked in Taiwan and, in response to that, the United Kingdom has offered both expert and practical help. We remain ready to offer whatever assistance we can to the Taiwanese authorities in this difficult period.
My hon. Friend also mentioned the World Health Organisation. Clearly, there is a difficulty with Taiwanese involvement in a United Nations specialised agency, when statehood is a requirement of membership. This year, some countries proposed that the health authorities of Taiwan be allowed to participate in the WHO as an observer. Statehood is not necessarily a requirement for observer status. However, China and several other countries strongly oppose the Taiwanese application.
The United Kingdom gave serious consideration to the Taiwanese application, and we discussed it with our European Union partners. My hon. Friend is no doubt aware that the objective of the WHO is the attainment by all people of the highest possible medical care. All WHO members are anxious to achieve that goal. However, the World Health Assembly in Geneva could not reach consensus on including the issue of observer status for Taiwan on the WHA agenda.
I note that Dr. Bruntland, the WHO director general, said that Taiwan has full access to the WHO's expertise, and I trust that that is the case. We certainly welcome the fact that the WHO's experts are in Taiwan. The British Trade and Cultural Office in Taipei has liaised with them to discuss where UK expertise and/or medical supplies might complement what is already being done and is available in Taiwan.
My hon. Friend also raised the issue of the United Nations, and perhaps it is appropriate for me to deal with that now. The United Kingdom spoke briefly

135WH
against including the Taiwanese application on the agenda, and we did that because the UN charter makes it clear that statehood is a prerequisite for UN membership. As only 27 countries currently recognise Taiwan as a state, there is no prospect of Taiwan gaining full membership. That is fully consistent with our position on the status of Taiwan. However, in our contribution, we drew attention to Taiwan's democratic achievements.
I now turn to the main subject of the debate, which is UK-Taiwan relations. My hon. Friend made a knowledgeable and well argued speech about those relations, and he is well known and respected in the UK and in Taiwan for his knowledge and interest in that country. I want to take the opportunity to thank him and all the members of the all-party group for the very important work that they do. My hon. Friend has led groups of MPs to Taiwan and arranged visits for Taiwanese legislators to the UK. I believe that that has played an important role in contributing to the flourishing of relations between the UK and Taiwan. When such a delegation has gone to Taiwan in the past, I have taken the opportunity to meet members of that delegation following their visit so that I can learn of their experiences.
I hope that my hon. Friend will agree that UK-Taiwanese relations are now stronger than ever. Despite having no diplomatic relations with Taiwan, we have built up strong links in several areas. Commercial, cultural and educational ties are in excellent shape. Our position on the status of Taiwan is well known, and it remains our policy and forms the foundation of our dealings with Taiwan. The non-recognition issue should not inhibit the development of close relations in areas of mutual benefit that can help both partners.
Traditionally, trade has been the cornerstone of our relations. As the 17th largest trading economy, Taiwan has an important contribution to make in bringing about free and fair world trade. WTO membership will foster lasting reform. It should lead to more secure access to WTO members' markets, increased levels of foreign direct investment in Taiwan, and a more transparent and predictable business environment in Taiwan for British businesses, which is something that we all want. It is the case that the UK remains the favoured destination for Taiwanese investment in Europe. Historically, the UK has had 70 per cent. of Taiwanese investment in Europe, and that is concentrated in the manufacturing sector.
Many Taiwanese companies now manufacture in China rather than in Europe, and the Taiwanese are increasingly opting for low-cost manufacturing locations. As a result of that change, Taiwanese investment into the UK has slowed markedly from its peak in the late 1990s. Nevertheless, the UK is still the leading location for Taiwanese investment in Europe, which is something that we very much welcome.
It is pleasing to note that the Taiwanese companies in the UK that have chosen to remain here continue to do very good business. There are about 150 such companies in the UK and we are encouraging them to diversify their work from manufacturing into research and development. It is worth noting that recent successes
136WH
include the decision by China Magnetics Corporation and Ritek, the world's two leading producers of digital storage media, to invest in the UK.
Such investment has by no means been one-way traffic. UK exports to Taiwan last year amounted to £853 million. During his recent visit to Taiwan, my hon. Friend will no doubt have been impressed by the number of familiar high-street names from the UK that he saw present in Taiwan. We very much welcome the recent announcement by China Airlines that it will produce 12 Airbus A330–300s for regional passenger traffic. BAE Systems will build the wings for those airframes, and Rolls-Royce is currently bidding for a £500 million order to supply aeroengines to China Airlines. Both Shell and BP hope to be involved in the supply of liquefied natural gas. I hope that such world-class, flagship British companies will continue to prosper and succeed in Taiwan.
The UK Government are keen to play their part in promoting and strengthening our trade relationship. The British Trade and Cultural Office, the non-governmental office in Taiwan that represents UK economic and cultural interests, is active in boosting Britain's profile in Taiwan and in improving our unofficial links. The BTCO now has more than 50 staff promoting Britain's economic and cultural interests in Taiwan, not only in Taipei but in Kaohsiung too. Despite not being able to carry out the normal range of consular work, the BTCO gives valuable assistance to the 2,500 or so British nationals in Taipei.
Last year, the BTCO handled 40,000 visa applications from Taiwanese visitors and businesspeople who wanted to visit the United Kingdom. I noted my hon. Friend's comments about visas, and I shall look into the issue. The Home Office, not the Foreign and Commonwealth Office, is responsible for immigration policy, and I shall raise his concerns with my hon. Friend the Minister for Citizenship and Immigration.
The BTCO is supported in Taipei by an active British chambers of commerce and by the Taiwan British Business Council. Founded in 1999, the TBBC is an industry-led, Government-supported organisation, which aims to promote business in and investment between Taiwan and the UK. It held its fifth annual meeting in Taipei in April this year. A total of 18 companies attended from the UK, and the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Edinburgh, South (Nigel Griffiths), who has responsibility for small business, has supported and participated in the last two annual events. That has been worth while and welcomed in Taiwan.
My hon. Friend the Member for Tooting mentioned joint ventures between UK and Taiwanese companies and mainland China, and that was one of the key themes discussed at the recent TBBC meeting. It is one of several ways in which British companies can work with their Taiwanese counterparts. I have outlined the steps that the Government take to support British companies in Taiwan, and the Department of Trade and Industry is similarly active in mainland China. Last year, trade between Taiwan and mainland China grew by 36 per cent., as my hon. Friend mentioned.

137WH
I also want to make it clear that our relationship is not simply commercial. As my hon. Friend said, education plays a vital role. Approximately 13,000 Taiwanese students are enrolled on courses of various lengths in the United Kingdom, which is a significant increase from about 300 some 10 years ago. We now have a 30 per cent. share of the Taiwanese overseas student market, and the BTCO offered 29 scholarships to help Taiwanese students to study in the UK. That is valuable, and we want that educational cross-fertilisation to continue.
Cultural links also form a major element of our relationship with Taiwan. The British Council is active and does significant work in Taipei, and its work in promoting British education and culture with UK and Taiwanese partners has expanded rapidly in recent years. Last year, the British Council organised events in Taiwan that brought 750,000 people into direct contact with UK expertise and ideas, which should lead to a significant strengthening of our relationship. Some 17 arts events were presented to audiences totalling 83,000 people, and in collaboration with the Taiwanese national museums, the British Council showcased UK expertise in science education to more than 600,000 Taiwanese young people. It is also worth noting that, in February this year, the Taiwanese Minister for Culture visited the UK to learn from our experience in the creative industries. That provided further opportunities to deepen our relationship.
138WH
The Taipei representative office in London must take a great deal of credit for improving relations. It shares our aim of developing substantive links between the UK and Taiwan, and as my hon. Friend noted, it is headed by Dr. Tien Hung-mao, who is well respected as both a politician and an eminent academic, following the track record of previous appointments to the post. We have a substantial programme of visits by Ministers for non-political reasons in both directions, and we want that to continue.
I listened carefully to my hon. Friend's comments about visits by senior Taiwanese politicians. I must say that we treat all applications on a case-by-case basis. There is no outright ban on their visits, but we must treat such requests in line with our non-recognition policy. However, there have not been such adverse comparisons with other European countries and the USA in the figures that I have seen, and we may want to pursue that point further.
This has been an important debate. Within the policy of non-recognition, relations with the Taiwanese authorities continue to prosper at a series of levels. We are happy to see that continue, and the deepening of that relationship can only be helped by the contributions of my hon. Friend and the all-party group that he chairs. I hope that he will continue that work and that we can move forward for the benefit of both the UK and Taiwan.
Question put and agreed to.
Adjourned accordingly at half-past Four o'clock.

CABINET OFFICE

  Internet
  Dr. Kumar
  To ask the Minister for the Cabinet Office what role Government Offices will play in the new campaign to increase internet usage; and if he will make a statement. [115542]

  Mr. Alexander
  Between 1999 and April 2003, Regional Government Offices were responsible for negotiating contracts between the Department for Education and Skills and over 2,800 UK online centres funded by Capital Modernisation funding. All regional Offices were informed about the Get Started campaign and invited to get involved. During the campaign, people will be encouraged to visit UK online centres offering free internet starter sessions.

  Secondments
  Mr. Liddell-Grainger
  To ask the Minister for the Cabinet Office how many civil servants were seconded to private sector industry in(a) 2000–01, (b) 2001–02 and (c) 2002–03. [115604]

  Mr. Alexander
  350 civil servants were seconded to the private sector (industry and commerce) in the financial year 2000–01 and 607 in the financial year 2001–02. The Cabinet Office Interchange Unit will shortly be seeking statistical information from Departments for the 2002–03 financial year.

  Mr. Liddell-Grainger
  To ask the Minister for the Cabinet Office how many people were seconded to the Civil Service from private industry in the last year for which figures are available. [115605]

  Mr. Alexander
  409 people were seconded into the Civil Service from the private sector (industry and commerce) in the financial year 2001–02. This is the most recent period for which the Cabinet Office has data.

  Mr. Willis
  To ask the Minister for the Cabinet Office how many employees have been seconded from Capita to the Cabinet Office since 1997; for how long they worked in the Office; and what positions they held. [115625]

  Mr. Alexander
  No records are held for secondments prior to 1999. From 1999 to 2003, there were no secondments from Capita to my Department.

  Sickness Absence
  Mr. Bercow
  To ask the Minister for the Cabinet Office how many staff in the Department have been on long-term sick leave in each of the last two years. [115855]
  400W
  Mr. Alexander
  I refer to the answer I gave to the hon. Member on 7 May 2003,Official Report, column 697W.

TRANSPORT

  Concessionary Travel (Pensioners)
  Mr. Best
  To ask the Secretary of State for Transport if he will make extra funds available for local authorities to pay for free, full-fare travel opportunities for pensioners in England. [116951]

  Mr. Jamieson
  I refer to my reply of 23 January 2003 to the hon. Member for Romford (Mr. Rosindell),Official Report, columns 508–09W. We have no plans to make extra funds available for local authorities in England beyond the present provision.

  Railways
  Mr. Don Foster
  To ask the Secretary of State for Transport if he will place in the Library a copy of the WS Atkins report for the Strategic Rail Authority on a North-South rail line. [115715]

  Mr. Jamieson
  Since the report contains commercially sensitive information, supplied by third parties on a confidential basis, it would not be appropriate to do so.

  Road Traffic Accidents
  Mr. Watson
  To ask the Secretary of State for Transport what steps he is taking to prevent sleep-related driving accidents. [116024]

  Mr. Jamieson
  We are concerned about sleep-related road accidents and have an extensive programme of publicity and research aimed at reducing these.

  Campaigns to warn drivers of the dangers of falling asleep at the wheel have run since August 2000 and have included leaflets, posters, TV and radio advertising. Most recently, radio adverts were run over Easter and the May bank holidays advising drivers to take a break. These were reinforced by some 190 truck backs, delivering to Moto, Sainsburys, Asda and others, carrying the 'Don't Drive Tired' message over the April to June period this year. We have also recently produced a new public information film, for use by TV stations, to remind drivers to take proper breaks during long journeys.

  Advice on how to avoid and combat driver tiredness is in The Highway Code and on the DfT's road safety website at: www.think.dft.gov.uk

  The Department has also undertaken considerable research to study driver sleepiness. The University of Loughborough Sleep Research Laboratory has carried out a series of road audits into sleep-related vehicle accidents on sections of selected trunk roads and motorways in the UK. The results were published in February 2001 in Road Safety Research Reports No. 21 and 22, available on-line at: www.roads.dft.gov.uk/ roadsafety/index.htm A report on six more audits is due to be published in the summer. A project to study the effectiveness of motorway service areas in reducing fatigue-related accidents is also under way.

  Vehicle Licences
  Bob Russell
  To ask the Secretary of State for Transport if he will introduce a payment scheme to reward local authorities who enable the Driver and Vehicle Licensing Agency to recover unpaid licence fees from vehicle owners; and if he will make a statement. [116315]

  Mr. Jamieson
  The Driver and Vehicle Licensing Agency is working closely with local authorities to tackle the problem of vehicle excise duty (VED) evasion. Enforcing VED helps to improve the accuracy of DVLA's database of vehicle keepers, which in turn, enables local authorities and the police to identify those who offend on parking charges, speeding, and other offences.

  DVLA does not charge local authorities for information on the name and address of vehicle keepers, and there are no plans to introduce a payment scheme for local authorities who provide information on unlicensed vehicles to DVLA. However, those local authorities that have taken on devolved powers to wheel clamp and impound unlicensed vehicles are able to retain the penalties charged to offenders to release their vehicles. Furthermore, the Government are in discussion with these authorities to see what else can be done to help with the costs associated with this initiative.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Animal Species
  Mr. Don Foster
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list for each animal species to which they apply the nature of the legal requirements upon the driver of a vehicle which kills one of the species; and if she will make a statement. [115712]

  Mr. Morley
  The Wildlife and Countryside Act 1981 protects all wild birds. It is an offence to kill, injure or take any wild bird (Section 1). Under Section 5(1)(e) it is an offence to use any mechanically propelled vehicle in immediate pursuit of a wild bird for the propose of killing or taking that bird.

  Certain species of animals, listed on Schedule 5, are also protected by the 1981 Act. It is an offence to intentionally kill, injure or take any wild animal included on Schedule 5, unless it can shown that it had not been killed or taken in contravention of the provision of the 1981 Act.

  Sections 4(2)(c) for birds and 10(3)(c) for animals provides a possible defence for the driver who may kill or injure a bird or Schedule 5 animal; because a person "shall not be guilty of an offence by reason of any act made unlawful if he shows that the act was the incidental result of a lawful operation and could not reasonably have been avoided".

  Certain other animals listed on Schedule 6 of the 1981 Act may only be killed or taken by certain methods. It is an offence under Section 9(2)(e) of the 1981 Act to use any mechanically propelled vehicle in immediate pursuit of a Schedule 6 animal.
  402W
  Under Section 1(2) of the 1981 Act it is an offence to possess any wild bird unless it can be shown that it was killed or taken not in contravention of the Act. A similar defence exists for Schedule 5 animals.

  Penalties for offences committed under Part I of the 1981 Act are a maximum fine of £5,000 and/or six months custodial sentence.

  In addition the Deer Act 1991 makes it an offence in Section 4(4) for any person to (a) discharge any firearm, or project any missile, from any mechanically propelled vehicle at any deer, or (b) use any mechanically propelled vehicle for the purpose of driving deer.

  It is also an offence under section 170(4) of the Road Traffic Act 1988 not to report an accident which occurs owing to the presence of a motor vehicle on the road by which damage is caused to an animal other than an animal in or on that motor vehicle or a trailer drawn by that motor vehicle.

  ("Animal" means horse, cattle, ass, mule, sheep, pig, goat or dog).

  The maximum penalty is £5,000 and/or six months custodial sentence, with between 5–10 penalty points on a licence or a disqualification.

  Alternative Fuels
  Mr. Oaten
  To ask the Secretary of State for Environment, Food and Rural Affairs what targets she has set for the use of industrial crops for alternative fuel use. [115306]

  Mr. Meacher
  The Energy White Paper, published earlier this year, sets out the Government's aspiration to achieve the production of 20 per cent. of the UKfs electricity through renewable sources by 2020. Specific targets have not been set for different renewable technologies and the market will decide which are developed. Biomass, including purpose-grown industrial crops, could become one of the largest contributors to the renewables mix by 2020. Funding under the Energy Crops Scheme is aimed at establishing around 20,000 ha of purpose-grown energy crops by 2006. The Bio-energy Capital Grants Scheme is aimed at developing projects fuelled by purpose-grown energy crops and other biomass to produce around 100MW of electricity and the production of heat and combined heat and power.

  The recently agreed Directive on the Promotion of Biofuels and other Renewable Fuels for Road Transport requires the UK and other Member States to set their own indicative targets for the use of biofuels and other renewable fuels in their areas. The Government will consult key stakeholders in due course on targets. The Government is promoting the production of biofuels through the existing 20 pence per litre duty incentive for biodiesel and the intention announced in Budget 2003 to introduce a similar duty incentive for bioethanol with effect from January 2005.

  Animal By-Products
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs how and when her Department intends to advise hunt kennels on
  403W
  how to upgrade their incinerators to knackers yard standards according to the EU Animal By-products Regulations. [115087]

  Mr. Morley
  Interim Guidance on Incinerators is available on the Defra website at the following address: http://www.defra.gov.uk/animalh/by-prods/default.htm

  We are discussing more detailed guidance with interested organisations. Once it is finalised, we will make it available to hunt kennels and other premises. In the interim period, hunt kennels are advised to contact their local Defra Animal Health Office for advice.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will estimate the annual number of each species of animal affected by the EU Animal By-products Regulations which will require disposal. [115089]

  Mr. Morley
  Information regarding the annual number of each animal species requiring disposal is not available.

  However, the industry has estimated that something in the order of, at least, 39 million carcases of fallen stock need to be collected and disposed of annually.

  The estimated number of animals requiring disposal is made up of the following:
  1,316,000 adult animal carcasses (bovine, ovine, swine and equine);
  2,262,000 immature animal carcasses (bovine, ovine, swine and equine); and
  36,000,000 poultry carcasses (avians).

  In arriving at this figure, assumptions have been made about mortality rates for adult and immature animals.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) how the accrued funds from the proposed national fallen stock collection scheme will be allocated to the approved renderers;[115085]

  (2) if an approved renderer of the proposed national fallen stock scheme will be obliged to pick up all the fallen stock within a defined geographical area. [115086]

  Mr. Morley
  Until the viability of the proposed national fallen stock scheme is known, it is not possible to ascertain how any accrued funds might be allocated or on what detailed basis the scheme may operate.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the costs likely to be incurred by a farmer to dispose of(a) a cow, (b) a sheep and (c) a pig under the proposed national fallen stock collection scheme. [115088]

  Mr. Morley
  It is not possible to provide separate costings for(a) a cow, (b) a sheep and (c) a pig, as the proposed national fallen stock scheme is based on a cost per holding rather than a cost per animal basis.

  The proposed fee was £100 per year for the average holding. There would be a discounted rate of £50 for small holdings and a higher rate of £200 for large holdings.
  404W
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the landfill sites approved to take ash from animal incineration plants. [115090]

  Mr. Morley
  The Environment Agency's database shows, as at 16 May 2002, 77 landfill sites approved to dispose of ash arising from incinerators burning Specified Risk Material. A list of landfill sites has been placed in the Library of the House.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what allowances will be made for hill farmers under the proposed national fallen stock scheme. [115091]

  Mr. Morley
  Although no specific allowance is made for hill farmers under the proposed national fallen stock scheme, we recognise that there may be practical difficulties in collecting and removing fallen stock from upland areas.

  Although we expect hill farmers to make every effort to dispose of any carcases in accordance with the Animal By-Products Regulation, we will be asking enforcement agencies to take a pragmatic approach during wintertime and poor weather conditions.

  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what research she has commissioned into the effect which the Animal By-products Regulation will have on small abattoirs; and what the results of that research were; [115184]

  (2) what assessment she has made of the change in (a) running and (b) capital costs for small abattoirs as a result of the Animal By-product Regulations. [115187]

  Mr. Morley
  On 1 November 2002 the Department wrote to all slaughterhouse operators to obtain information on existing blood disposal routes. Analysis of the responses indicated that a number of red meat slaughterhouses disposed of their blood direct to sewer and did not have collection tanks. As many as one third of slaughterhouses expected to have to install suitable storage facilities.

  The Department has worked closely with the Meat and Livestock Commission (MLC) and other industry experts to develop guidance on simple, low cost ways in which slaughterhouses could comply with the new requirements. This suggests that the cost of providing the necessary facilities could be as low as £200 but if more substantial work is needed it could be several thousand pounds.

  It has been estimated that the ban on applying raw blood to land or direct to sewer may increase the cost of disposing of blood from around £16/tonne, for landspreading, to £60-£80/tonne for rendering, incineration or treatment in an approved biogas or composting plant.

  A partial Regulatory Impact Assessment on the Animal By-products Regulation is in the Library of the House, as part of the consultation on the enforcing Regulations dated 27 January 2003.
  405W
  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what grants are being made available by other EU member states to help small abattoirs implement the Animal By-products Regulations; [115186]

  (2) what effect she estimates the Animal By-products Regulation will have on her plans to make small abattoirs an essential link of the chain of quality meat production and direct food retailing; [115181]

  (3) what discussions she has had with the European Communities about grant funding for small abattoirs to provide capital to upgrade to the standards required under the Animal By-products Regulations. [115185]

  Mr. Morley
  Information is not available about grants to help small abattoirs implement the Animal By-products Regulation in other member states and we have had no discussion with the EC about grant funding for UK abattoirs. However, the Regional Development Agencies are analysing the needs for selective assistance in their regions to encourage innovation and investment in the meat supply chain. It is of course a prerequisite that abattoirs qualifying for any such assistance fully comply with all relevant hygiene and environmental legislation.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she is taking to ensure that fallen stock will be collected within 24 hours of death under the proposed national fallen stock scheme; what penalty will apply for collection after 24 hours; and to whom that penalty will apply. [116591]

  Mr. Morley
  Although no specific time has been specified we would envisage that fallen stock will, once an approved collector has been notified, normally be collected within 24 hours and not more than 48 hours.

  This would be consistent with existing contractual arrangements where collectors are expected to carry out the collection of fallen bovines and ovines within 24 hours for TSE testing purposes.

  The Animal By-Products Regulation requires animal by-products to be consigned or disposed of "without undue delay", which in essence means as soon as is reasonably practicable, taking into account the circumstances of the case.

  Any person in possession of animal by-products, such as fallen stock, who do not comply with the Regulation may face prosecution. Prosecutions may result in a fine of up to £5,000 and six months' imprisonment for cases heard in a magistrate's court or an unlimited fine and up to two years imprisonment for cases heard in the Crown Court.

  Animal Welfare
  Mr. Oaten
  To ask the Secretary of State for Environment, Food and Rural Affairs from what date the policy of not publishing the results of welfare checks conducted by the State Veterinary Surgery applied. [115315]
  406W
  Mr. Morley [holding answer 22 May 2003]
  The results of veterinary inspections are confidential to the people responsible for the animals inspected. But summaries of such farm welfare inspections have been published in the reports of the Chief Veterinary officer for many years.

  Beef Exports
  David Burnside
  To ask the Secretary of State for Environment, Food and Rural Affairs what the total tonnage of beef exports from the United Kingdom was in each of the last seven years. [115267]

  Mr. Morley
  The following table shows the volume of beef exports from the United Kingdom for each of the last seven years (1996–2002).

  Tonnes million

  Year

  Total

  1996

  75

  1997

  10

  1998

  13

  1999

  9

  2000

  9

  2001

  8

  2002

  8

  Note:

  From 1997 onwards exports are mainly from the UK as country of dispatch and not as country of origin.

  Source:

  HM Customs and Excise, Data prepared by Statistics (Commodities and Food) Accounts and Trade, ESD, DEFRA, 2002 data is provisional and subject to amendment

  Biodiversity
  Linda Perham
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to help reduce the rate of biodiversity loss throughout the world. [116046]

  Mr. Morley
  The World Summit on Sustainable Development set a target to significantly reduce the rate of loss of biodiversity at the global, regional, sub regional and national levels by the year 2010. A challenge of this magnitude requires international co-operation. We are working within existing international agreements such as the Convention on Biological Diversity (CBD) to this end.

  The CBD reviewed the outcomes from WSSD at its intersessional meeting in March 2003. The UK was among those Parties which pressed successfully for a recommendation that each Conference of Parties should assess progress towards the target. To faciliate this, the CBD together with the United Nations Environmental Programme-World Conservation Monitoring Centre organised an international conference in London from 21–23 May 2003 with financial support from my Department. The meeting made a number of recommendations on how we might better co-ordinate efforts to achieve the goal and monitor progress towards it.

  The Darwin Initiative is one means by which the Department provides direct support to other countries to help safeguard their biodiversity. This grant programme launched at the Rio Earth Summit in 1992 assists countries that are rich in biodiversity but poor

  407W
  in resources to conserve and sustainably use their biological diversity. Phase II of the Initiative launched in November 2002 by my right hon. Friend, the Secretary of State, focuses on enhanced legacy to produce greater biodiversity gains, increasing partnership with local organisations and communities and stronger links to the aims of the Convention on Biological Diversity. So far it has committed over 30 million to over 300 projects with links to some 100 developing countries and countries with economies on transition. On 2 August, the Prime Minister announced an increase in funding from £3 million per annum rising to £7 million a year by 2005–06.

  Last year also saw the largest ever replenishment of the Global Environment Facility (GEF) which now stands at three billion dollars over four years. In addition to its assessed contribution to this replenishment, the UK contributed a voluntary additional amount of £15 million, making a total contribution of around £118 million. A substantial proportion of the GEF goes to biodiversity projects and within that a substantial proportion to protectedareas.

  Bovine Tuberculosis
  Mr. Martlew
  To ask the Secretary of State for Environment, Food and Rural Affairs how many cases of bovine TB there have been in Cumbria in each of the last five years. [116174]

  Mr. Morley
  The number of new bovine TB herd incidents in Cumbria 1998–2002 is given in the following table.

  New Herd Incidents in Cumbria 1998–2002

  Year

  Number

  1998

  8

  1999

  9

  2000

  4

  2001

  2

  2002

  33

  Note:

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

  David Davis
  To ask the Secretary of State for Environment, Food and Rural Affairs what the incidence was of bovine tuberculosis(a) Haltemprice and Howden, (b) the East Riding of Yorkshire and (c) England in the last five years for which figures are available. [116762]

  Mr. Morley
  The data requested is not available for(a) Haltemprice and Howden or (b) the East Riding of Yorkshire. However, the incidence of bovine tuberculosis in Humberside and England, from 1998 to 2001, is given in the following table

  TB Herd incidence 1998–20021

  (percentages)

  Year

  Humberside

  England

  1998

  0.00

  2.43

  1999

  0.00

  2.63

  408W

  TB Herd incidence 1998–20021

  (percentages)

  Year

  Humberside

  England

  2000

  0.00

  3.29

  2001

  0.00

  3.94

  2002

  0.37

  4.78

  1Confirmed new herd incidents as a percentage of tests on unrestricted herds.

  Note:

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

  David Davis
  To ask the Secretary of State for Environment, Food and Rural Affairs how many cattle were slaughtered in the last five years in(a) Haltemprice and Howden, (b) the East Riding of Yorkshire and (c) England and wales as part of the campaign against teberculosis. [116762]

  Mr. Morley
  The data requested is not available for(a) Haltemprice and Howden or (b)the East Riding of Yorkshire. However, the incidence of bovine tuberculosis in Humberside and England, from 1998 to 2002, is given in the following table.

  Number of cattle slaughtered under bovine TB control measures 1998–20021

  Humberside

  England and Wales

  1998

  1

  5,788

  1999

  1

  6,708

  2000

  5

  8,295

  2001

  4

  22,682

  1TB reactors plus direct contacts.

  Note:

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

  Brazilian Beef
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs how many beef carcases from Brazil were tested for disease in each of the last 10 years, broker down by type of disease; and what proportion were found to pose a health risk. [116856]

  Mr. Morley
  There are no provisions for beef imported from Brazil or any other approved countries to be routinely tested for disease. Other controls are designed to prevent serious exotic diseases entering the country via imported meat.

  All meat imported from third countries must be accompanied by official veterinary certification. This must confirm that the meat is derived from animals which have been subjected to a veterinary inspection during the 24 hours prior to slaughter and showed no signs of diseases. Meat from Brazil must have been

  409W
  matured and tested to confirm that it has reached a sufficiently low pH (acidity) and then de-boned so as to remove any risk of the FMD virus being present. Whole carcase meat and bone-in cuts are not permitted.

  European Community law requires that all meat imported into the UK from third countries must enter at designated Border Inspection Posts (BIPs) where it is subject to veterinary inspections. All consignments are subject to documentary and identity checks and at least 20 per cent. of consignments undergo physical checks, which may include taking a sample for testing. It is the responsibility of the Official Veterinary Surgeon to decide what type of test might be carried out. These checks ensure import conditions are met and that the products remain in a satisfactory condition during transport.

  BSE Status
  David Burnside
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps have been taken to achieve moderate BSE status for the United Kingdom. [115268]

  Mr. Morley
  To achieve moderate risk status, the UK must provide evidence that it complies with World Animal Health Organisation (OEE) and EU rules. Essentially, there are three key areas where steps have been taken.

  First, the UK's normal veterinary surveillance and active monitoring programmes are in line with EU rules concerning effective surveillance systems for BSE.

  Secondly, the UK has implemented all EU legislation on TSEs in order to deal effectively with BSE risks.

  Thirdly, the UK's BSE incidence must be below the upper threshold for moderate status. This target was altered at the recent annual general meeting of the OIE for countries that have implemented active monitoring programmes, to 200 confirmed cases per million adult cattle. The consistent decline of the epidemic is steadily bringing the UK closer to this threshold.

  Date-based Export Scheme
  Mr. Hancock
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the effectiveness of the Date-based Export Scheme; and what plans she has to amend the scheme. [116584]

  Mr. Morley
  The Date-based Export Scheme has been effective in enabling the UK to resume exporting British beef albeit in small quantities.

  We are currently exploring with the commission a number of proposals to amend the scheme.

  Deer
  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs whether(a) the carcasses of all deer found and (b) deer culled on the Baronsdown Deer Sanctuary will have to be disposed of at an appropriate plant under the EU Animal By-Products Regulation. [115251]
  410W
  Mr. Morley
  The carcases, or parts of carcases, of wild animals, including wild deer, are exempt from the scope of the Regulation unless they are thought to be diseased or are used to produce game trophies. However, the carcases from other deer would have to be disposed of via a disposal route permitted under the Regulation e.g. by rendering or incineration.

  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) whether her Department is carrying out a welfare study of the deer at the Baronsdown Deer Sanctuary; [115254]

  (2) whether the study carried out by the State Veterinary Service involved checking post mortem records of all deer carcasses found on the Baronsdown Deer Sanctuary; [115256]

  (3) on what date she was given the State Veterinary Service Report on the Baronsdown Deer Sanctuary; who commissioned the Report; and what criteria of investigation were given to the State Veterinary Service to determine the health of the deer at the Baronsdown Deer Sanctuary; [115252]

  (4) how long representatives of the State Veterinary Service spent at the Baronsdown Deer Sanctuary; and whether the State Veterinary Service carried out a detailed health assessment on the deer at the Baronsdown Deer Sanctuary; [115255]

  (5) what samples were taken and whether post mortem examinations were carried out by the State Veterinary Service on the deer at the Baronsdown Deer Sanctuary. [115257],

  Mr. Morley
  The Baronsdown Deer Sanctuary was inspected by officials of the State Veterinary Service on 1 April 2003. The detailed findings of the inspection are confidential to the managers of the Sanctuary.

  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs whether the State Veterinary Service has required that all deer carcases found or deer culled on the Baronsdown Deer Sanctuary be subject to post mortem examination by a qualified veterinary surgeon. [115258]

  Mr. Morley
  The State Veterinary Service has not required all deer carcases found at Baronsdown Deer Sanctuary to be subject to a post mortem. The deer at Baronsdown are wild animals and it would not be usual for the State Veterinary Service to arrange post mortems on wild deer (these would not normally be examined unless they were intended for sale for human consumption). A veterinary inquiry pursuant to the provisions of article 6 of the Tuberculosis (Deer) Order 1989 would be undertaken only if the information received indicated that this was appropriate.

  Environmetal Protection
  Mr. Wray
  To ask the Secretary of State for Environment, Food and Rural Affairs what measures are in place to make large industrial companies responsible for their immediate environmental surroundings; and what plans she has to strengthen regulations. [115151]
  411W
  Mr. Meacher
  Many industrial activities in Great Britain are currently regulated under Part I of the Environmental Protection Act 1990. This introduced the systems of Integrated Pollution Control, which controlled releases to all environmental media, and Local Air Pollution Control, which controlled releases to air only.

  The Pollution Prevention and Control (England and Wales) Regulations 2000 were made under the Pollution Prevention and Control Act 1999 and will eventually replace Part I of the Environmental Protection Act 1990. The Regulations implement the European Community (EC) Directive 96/61/EC on Integrated Pollution Prevention and Control (IPPC) in so far as it relates to installations in England and Wales.

  The IPPC regime applies an integrated environmental approach to the regulation of certain industrial activities. This means that emissions to air, water (including discharges to sewer) and land, plus a range of other environmental effects, must be considered together. It also means that regulators must set permit conditions so as to achieve a high level of protection for the environment as a whole. These conditions are based on the use of the 'Best Available Techniques' (BAT), which balances the costs to the operator against the benefits to the environment. IPPC aims to prevent emissions and waste production and where that is not practicable, reduce them to acceptable levels. IPPC also takes the integrated approach beyond the initial task of permitting, through to the restoration of sites when industrial activities cease.

  Separate systems have been introduced to apply the IPPC Directive to Scotland, Northern Ireland and the offshore oil and gas industries. Regulation of industrial pollution in Scotland and Northern Ireland is a matter for the appropriate Ministers in these devolved administrations.

  Fish Stocks
  Mr. Wray
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent assessment has been made of the(a) size and (b) future of fish stocks in UK waters; which European countries have permission to have fishing fleets in UK waters; and what recent discussions she has had with representatives from these countries regarding conserving fish supply. [115155]

  Mr. Morley
  The International Council for Exploration of the Sea's Advisory Committee on Fisheries Management produces advice every year on the state of a range of fish stocks in EU waters and the waters of third countries, as well as international waters. The most recent advice was produced last October.

  France, Belgium, the Netherlands, Ireland and Germany have limited access to fish in UK waters in the six to 12 mile zone, in line with their historic rights. The Faroe Islands and Norway also have access to certain UK waters under the terms of the bilateral fisheries agreements with the EU.

  I regularly speak to these and other EU member states, and last did so at the Agriculture and Fisheries Council on 26 May 2003.

  Flood Defence
  Mr Ian Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs what(a) total remuneration and (b) benefits will be received by the Chairman of the Wessex Flood Control Committee. [115596]

  Mr. Morley
  The Chairman will receive £15,195 per annum based on a time input of five days per month. This payment is not pensionable.

  He may in addition claim travel and subsistence expenses incurred away from his normal place of work, and any other expenses necessarily incurred on business in line with the expenses guidance for Committee Chairmen issued by the Environment Agency.

  Mr. Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs what the job description is of the chairman of the Wessex Flood Defence Committee; and how many hours per week he is contracted for. [115597]

  Mr. Morley
  The specification sent to applicants stated as follows:

  "Applicants will need to demonstrate an interest in and knowledge of flood and coastal defence matters; experience of chairing meetings at a senior level; excellent communication skills; good knowledge of their regions; a balanced and broad understanding of relevant environmental issues; and the ability to liaise with a wide range of interest groups. No specific academic or professional qualifications are required and there are no age limits for these appointments. Applicants must have sufficient energy and dynamism to cope with a demanding role.

  Applicants should have a background of successful achievement in the area covered by the Committee. They should have proven representational skills and the ability to deal with people at all levels. They also need good chairmanship skills to be able to bring together differing interests and opinions to ensure the Committee works efficiently and effectively. They need intellectual skills to be able to find solutions when faced with conflicting demands."

  The Chairman of he Wessex Regional Flood Defence Committee is appointed on the basis of five days input per month.

  Mr.Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs what safeguards there are to prevent conflicts of interest by Flood Defence Committee chairmen. [115598]

  Mr. Morley
  This is explored at interview with candidates, who are asked to make sure that there are no conflicts of interest.

  Chairmen are issued with various guidance documents along with their formal instrument of appointment, including: Cabinet Office Guidance on Codes of Practice for Members of Public Bodies; and guidance on political activities.

  Their letter of appointment specifically says that they "should avoid situations in which their official duties and private interests conflict or where there would be a

  413W
  suspicion of conflict. Relevant interests should be entered in the Register of Interests maintained by the Environment Agency and the entry kept up to date. Guidance on conflicts of interest wi11 be provided by the Environment Agency and should be adhered to". The letter also informs them of the provisions of the House of Commons Disqualification Act.

  Mr. Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs how many people applied for the post of Wessex Flood Defence Committee Chairman. [115600]

  Mr. Morley
  Twenty.

  Mr. Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs what(a) employment and (b) membership of political parties was declared by the new chairman of the Wessex Flood Defence Committee. [115601]

  Mr. Morley
  Humphrey Temperley declared that he is currently Executive Director of the European Nature Trust. He was at the time of application Chair of the Parrett Catchment Project Management Group. Since then he has informed us that he has resigned the position with a replacement chair taking over from 7 May 2003. He has also informed us that he will be terminating his consultancy contract with the Group from 30 June 2003.

  Other positions declared by Mr. Temperley were: Executive Chair of Somerset Flood Defence Committee since July 2000, following membership of the committee since 1985; Corporate Performance Assessor (Part-time) for the Audit Commission 2002–03; self employed consultant providing environmental policy advice; Chair of Exmoor National Park Authority 1993–2001; Chair of Somerset County Council 2000–01; CountyCouncillor 1985–2001; District Councillor 1983–1999. Current voluntary interests: Chair Corporate Forum for National Parks; Co-opted Council member, Council for National Parks; Trustee of two small charitable environmental trusts; Member, Exmoor Consultative Forum and the Exmoor Society; Member, England Forestry Forum; Member, SWRDA rural policy advisory group.

  In relation to political involvement, Mr Temperley stated that he was an elected County and District Councillor 1983–2001; Yeovil Constituency Chair for two years; Parliamentary candidate for Wells, 1992; and politically inactive since 2000. Mr. Temperley said that his activity was undertaken for the Liberal Democrats.

  Mr Ian Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs when the Chairman of the Wessex Flood Defence Committee will take up his post. [115602]

  Mr. Morley
  On 1 July 2003, for a three year period.

  Dr. Cable
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the need to in crease the Thames flood defence measures as part of the planning for the Thames Gateway project; and if she will make a statement. [115797]

  Mr. Morley
  The government recognises that flood risk management is crucial to the successful development of the Thames Gateway. In order to 414W
  improve understanding of the likely effect of the Thames Gateway construction on existing and future flood management arrangements, my department has consulted with the Environment Agency. As a result, the Agency has accelerated plans for a strategic flood risk assessment of the Thames Gateway Zones of Change.

  This study is scheduled for completion at the end of May 2003, but early indications are that cost effective and sustainable flood risk management within the Thames Gateway, can be achieved by creative and intelligent planning and design. This will require close partnership working between the government and all agencies and developers involved. This strategic approach also opens up opportunities for significant enhancement of the environment that would not be possible if development is undertaken in an uncoordinated way. There are financial and environmental benefits to be gained from developing the Thames Gateway in a careful and sustainable way, including building flood defences at the time of development rather than later, or by allowing sufficient space for future defence construction in the development.

  Food (Terrorism
  Mr. Hancock
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent assessment she has made of the adequacy of protection against terrorist action in the(a) food production and (b) food distribution industries. [116276]

  Mr. Morley
  The terrorist threat to the UK, including the threat to the food production and food distribution industries, is monitored regularly by the Government and we and the industry remain vigilant. Advice on any terrorist threat to the UK is the responsibility of the Security Service. The Director General of the Security Service is responsible to my right hon. Friend the Home Secretary for this advice, which is provided on a continual basis. Strategic assessments about terrorist threats to the UK are provided to the Government by the Joint Intelligence Committee.

  Defra is also heavily engaged in the central Government programme to improve civil contingency planning, especially in areas relating to our departmental responsibilities. Planning is developed and agreed with stakeholders, both in government and industry, including food and agriculture interests, to ensure that the UK's resilience to emergencies of all kinds, including possible terrorist action against the UK food chain, is improved.

  Illegal Meat Imports
  Mr. Hancock
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent discussions she has had with HM Customs and Excise regarding intelligence on illegal meat imports. [116075]

  Mr. Morley
  Officials from Defra have regular meetings with colleagues in HM Customs and Excise to discuss intelligence matters with regard to illegal imports of animal and plant products.
  415W
  We will be jointly analysing available data to look for trends and will be discussing ways in which we can disseminate the information.

  Job Losses
  Mr. Clifton-Brown
  To ask the Secretary of State for Environment, Food and Rural Affairs how many jobs have been lost in UK agriculture in the last five years. [114885]

  Mr. Morley
  Figures from the Agricultural and Horticultural Census indicate the labour on agricultural holdings in June each year (including farmers and their spouses if working on holdings). These figures show the net change in the labour force.

  Total UK Labour force (thousands)

  1998

  608.2

  1999

  586.0

  2000

  556.9

  2001(e)

  549.9

  2001(f)

  568.4

  2002

  550.5

  Notes:

  Includes estimates for minor holdings

  Estimates have been made for non-respondents

  Figures exclude school children but include trainees employed under an official youth training scheme and paid at Agricultural Wages Board rates or above.

  From 1998, all farmers managing holdings for limited companies or other institutions in England and Wales were asked to classify themselves as salaried managers.

  (e) June 2001 results assuming England register improvements had not taken place (comparable with June 2000).

  (f) June 2001 results including England register improvement (not directly comparable with June 2000).

  Livestock Movements
  Ms Atherton
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the progress of the European Commission's proposals for the transportation of horses and donkeys to slaughter. [115248]

  Mr. Morley
  The European Commission proposals for changes to the welfare of animals during transport Directive (91/628/EEC), which includes rules on the transport of horses for slaughter, are still awaited.

  David Byrne, European Commissioner for Health and Consumer Protection, indicated on 4 April that proposals would be announced in the "not too distant future" during a speech to the Veterinary Officers Association of Ireland.

  We hope proposals will be released soon and look forward to a major role in negotiations. My right hon. Friend the Secretary of State has already called for a reduction in the maximum journey times permitted for slaughter animals.

  Livestock Traceability
  Mr. Hancock
  To ask the Secretary of State for Environment, Food and Rural Affairs what research her Department has commissioned on the effectiveness of the regulations on livestock traceability; and what plans she has to amend them. [116583]
  416W
  Mr. Morley
  Defra propose to run a pilot trial to fully test Electronic Identification (EID) and Electronic Data Transfer (EOT) systems within the English sheep industry. The aim is to test the effectiveness of EID/EDT in a live working environment, analysing take up issues on the use of electronic tracing and identifying the benefits. We plan to run the pilot trial from December 2003 to December 2004, with a full report available in February 2005. This trial will help to inform future policies in this area.

  Pesticides
  Mr. Wray
  To ask the Secretary of State for Environment, Food and Rural Affairs what controls are in place to govern the use of pesticides on crops; who is responsible for allowing the use of new pesticides; what checks are in place; and if she will make a statement on her most recent assessment of the effectiveness of pesticides. [115134]

  Mr. Morley
  The use of pesticides on crops is governed by two legislative systems running in parallel. Established agricultural pesticides are regulated by the Control of Pesticides Regulations 1986 (as amended), made under the Food and Environment Protection Act 1985. New pesticides for use on crops are regulated by the Plant Protection Product Regulations 1995 (as amended), which implement EC Directive 91/414/EEC.

  All established agricultural pesticides are subject to an on-going EU review programme to ensure that the data supporting their approvals meet modern safety standards. Subject to a satisfactory outcome, they are then regulated, with new pesticides, under the Plant Protection Product Regulations 1995.

  The following Government Departments have joint responsibility for allowing the use of new pesticides: the Department of Food, Environment and Rural Affairs, the Department of Health, the Health and Safety Executive (for the Department for Work and Pensions), the Food Standards Agency, the Welsh Assembly and the Scottish Executive.

  The Health and Safety Executive carries out checks on the safe use and storage of agricultural pesticides during inspections of farms and other holdings, as part of their work in assessing compliance in general with health and safety legislation.

  The effectiveness of pesticides is considered as an integral part of the approval process and is assessed when an application is made for the marketing and use of a pesticide product.

  Mr. Wray
  To ask the Secretary of State for Environment, Food and Rural Affairs what assistance is available to farmers who do not use pesticides on their crops; and what proposals she has to encourage non-use of(a) pesticides and (b) other chemicals on crops. [115135]

  Mr. Morley
  The Government's Organic Farming Scheme encourages the expansion of organic production which uses only a limited range of pesticides. Under the Scheme, farmers moving from conventional to organic farming methods receive financial help during the conversion process. From 30 May 2003,
  417W
  assistance will also be available under the Scheme for existing organic farmers who comply with certain environmental measures.

  It is established Government policy to encourage farmers and growers to reduce the use of conventional pesticides. This policy is supported in a number of ways including the work of the Pesticides Forum, which promotes responsible pesticide use. The Government also support the industry-led Voluntary Initiative, which aims to encourage farmers to adopt practices that reduce impacts on the environment.

  It is also Government policy to encourage farmers to minimise their use of other chemical inputs. One of the most important measures we have taken in England is the introduction of Nitrate Vulnerable Zones, in which the use of nitrogen fertiliser is limited and controlled.

  Mr. Wray
  To ask the Secretary of State for Environment, Food and Rural Affairs what European Union funding is available to support farmers to encourage non-use of pesticides on crops; and what recent discussions have taken place with EU representatives regarding organic foods. [115136]

  Mr. Morley
  The EU co-funds the Countryside Stewardship, Environmentally Sensitive Area and Organic Farming Schemes under the England Rural Development Programme (ER DP). These agri-environment schemes offer a range of management options primarily designed to achieve a range of objectives including protecting and enhancing biodiversity, wildlife, landscape, historic environment and access. Some of these Schemes do place restrictions on the use of pesticides where it is necessary to achieve these objectives. Agreements are however, not offered solely for the non-use of pesticides.

  It is our intention to integrate continuing support for Organic Farmers into the new Entry Level Agri-environment Scheme, due to be launched in 2005. This is currently under development and being discussed with stakeholders now. The proposals will be discussed with the European Commission later this year.

  Mr. Peter Duncan
  To ask the Secretary of State for Environment, Food and Rural Affairs what the operating cost was of the Pesticides Safety Directorate, in each of the last five years. [115802]

  Mr. Morley
  The operating costs for PSD for the past five years are as follows:

  £ millions

  Operating costs

  2001–02

  11,9181

  2001–01

  11,263

  1999–2000

  11,185

  1998–99

  11,070

  1997–98

  11,305

  1Additional costs of £898,000 in 2001–02 associated with the foot and mouth disease are not included in the above figure.

  Seaforth Docks Bird Reserve
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Environment, Food and Rural Affairs what types of 418W
  birds and what size of population are supported in the bird reserve in Seaforth Docks; and if she will make a statement. [116610]

  Mr. Morley
  Seaforth Nature Reserve, owned by the Mersey Docks and Harbour Company, and managed by the Lancashire Wildlife Trust, is of national, European and international importance for the numbers of redshank (1,590 individuals) and turnstone (760 individuals) it supports in winter, and of national and European importance for its population of breeding common tern (124 pairs), a species listed in Annex Ito the EC Birds Directive (79/409/EEC). The aforementioned population numbers are average counts from the period 1994–95 1998–99 for the two wintering species, and the period 1996 –2000 for breeding common terns. These were the most recently available data used to justify the inclusion of part of Seaforth Docks within the Mersey Narrows and North Wirral Foreshore potential Special Protection Area (in accordance with the EC Birds Directive 79/409/EEC) and Ramsar site (in accordance with the Convention on Wetlands of International Importance Especially as Waterfowl Habitat 1971).

  Mrs. Curtis-Thomas
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the condition of the flood defence measures on the Sefton coastline from Formby pinewoods to Seaforth Docks. 1116608]

  Mr. Morley
  Defra provides grant aid on capital flood and coastal defence projects that meet specified criteria and an appropriate priority score. Operational responsibility for planning, design, construction, maintenance and operation of defence measures rests with the operating authorities—normally the Environment Agency (EA), local councils and internal drainage boards—which have the relevant local knowledge. They also identify the need for defence measures and decide which projects to promote and their timing.

  Defra also encourages operating authorities to take a strategic approach to coastal defence measures. I understand that both Sefton Council and the EA, who are responsible for lengths of this coastline, are preparing coastal defence strategies which will, inter alia, take into account the condition of defences and seek to identify sustainable measures. Defra is providing grant to the Council towards the cost of related studies.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the condition and management of the SSSI sites between Formby pinewoods and Seaforth Docks. [116609]

  Mr. Morley
  Formby Pinewoods to Seaforth Docks is part of the Sefton Coast SSSI, which extends for over 20 km between Southport and Crosby covering a total area of 4605.32 ha. 3834.81 ha of the SSSI is recorded as being in favourable or recovering condition and 770.51 ha is recorded as being in unfavourable condition.Sefton Metropolitan Borough Council is the largest single owner/manager with English Nature, The National Trust, MoD and five golf courses are responsible for other substantial areas. These partners are guided by "The Sefton Coast Management Strategy
  419W
  1999" and "The Sefton Coast Management Plan 1997–2006",which have been agreed in consultation with English Nature.

  Seaforth Docks is located within the 117.84 ha of Mersey Narrows SSSI which covers both sides of the mouth of the Mersey Estuary. Seaforth Docks is recorded as being in favourable condition with the last condition assessment completed in May 2000, prior to notification.

  The Mersey Docks and Harbour Company is the owner of the SSSI area within the Seaforth Docks. This site is currently under positive management for nature conservation by the Lancashire Wildlife Trust as agreed and consented by English Nature.

  Sewage Treatment
  Mr. Drew
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to discuss(a) reed bed and (b) other soft technology approaches with representatives of (i) Ofwat, (ii) the Environment Agency and (iii) waste companies, with specific reference to sewage alleviation. [115137]

  Mr. Morley
  Reed beds and other sustainable drainage systems can, in the right conditions, help to alleviate sewer flooding. My Department has already been in discussions with the Environment Agency, Ofwat and the water industry on this subject and the Environment Agency published the Framework for Sustainable Drainage Systems consultation paper on 19 May.

  Sickness Absence
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs how many staff in the Department have been on long-term sick leave in each of the last two years. [115851]

  Alun Michael
  I would refer the hon. Member to my earlier reply of 30 April 2003, Official Report, column 383W.

  Responsibility for attendance matters within the Central Science Laboratory Agency, the Veterinary Laboratories Agency, the Rural Payments Agency and the Centre for the Environmental Fisheries and Aquaculture Science Agency has been delegated to the Agency Chief Executives and I have asked them to reply direct. The Pesticides Safety Directorate and Veterinary Medicines Directorate Agency are covered by the Departmental response.

  Letter from Peter Greig-Smith to Mr. Bercow, dated May 2003 The Secretary of State for Environment, Food and Rural Affairs has asked me to reply to your question regarding how many staff were on long term sick leave in each of the last two years. I am replying on behalf of the Centre for Environment, Fisheries and Aquaculture Science (CEFAS).
  For CEFAS staff, a review of point of 60 days (ie 2 months or more) is used to define long term absence. During the past 2 years, the numbers of staff on long term absence were as follows:

  2001–9

  2002–7

  420W
  CEFAS has successfully introduced a scheme for 'Return to Workplace' interviews and is fully committed to managing attendance effectively. We are on target for achieving the reduced levels of sickness absence we have set out for the Agency.

  Letter from Steven Edwards to Mr. Bercow dated May 2003 The Secretary of State has asked me to reply to your question regarding how many staff in her Department have been on longterm sick leave in each of the last two years.
  There is no central definition of what constitutes long-term sick absence. VLA has adopted a pro-active stance to monitoring attendance with earlier and speedier referrals to the Occupational Physician.
  The following figures cover staff within VLA for absences beginning in the years listed:

  2001–15

  2002–20

  VLA is committed 10 the effective management of sickness absence and to meeting sickness absence reduction targets.

  Letter from Professor Mike Roberts to Mr. Bercow dated May 2003 The Secretary of State for Environment, Food and Rural Affairs has asked me to reply, with respect to the Central Science Laboratory, to your question concerning how many staff were on long-term sick leave in each of the last two years.
  I would refer the Honourable Member to my letter of 15 April 2003 in response to parliamentary Question No. 2668 which contained details of CSL's long-term sick absence for each of the last five years.

  Letter from Johnston McNeill to Mr. Bercow dated 23 May 2003 I have been asked to respond directly to your recent Parliamentary Question concerning long term sick leave.
  Question: To ask the Secretary of State for Environment, Food and Rural Affairs, how many staff in her Department have been on long term sick leave in each of the last two years.
  Information on the number of staff who have been on long term sick leave in each of the last two years is not available for the Rural Payments Agency (RPA).
  RPA is a relatively new organisation formed in October 2001. RPA is still developing a computerised Personnel System to provide sickness absence data of the kind requested. Specific information on numbers of staff on long term sick leave could only be obtained at disproportionate administrative cost and time.
  RPA is committed to managing sickness absence effectively and to meeting internal performance targets for reducing sickness absence for 2003–04.
  RPA has developed n sickness absence management policy and procedures, that includes a revised strategy for managing long term sickness absence, 'or implementation from June 2003.
  RPA also acts responsibly to the legal obligation to provide a safe working environment for employees and is committed to meeting targets for reducing the number of working days lost generally due to work related injuries and illness, arising from the government's Revitalising Health and Safety initiative.

  Strychnine Hydrochloride
  Mr. Peter Duncan
  To ask the Secretary of State for Environment, food and rural Affairs at assessment she has made of the cost to farmers of non-availability of strychnine hydrochloride; what representations she has received from the farming industry on its availability; what research she has commissioned on alternative poisons for farming pest control; and if she will make a statement on future supplies of strychnine hydrochloride. [115801]
  421W
  Mr. Morley
  Defra first became aware of difficulties obtaining strychnine hydrochloride in early February when a number of regular users contacted Defra's Rural Development Service who are responsible for authorising use of this compound to control mole infestations. Enquiries by my officials revealed that the difficulties had arisen due to a shortage of raw material experienced by the supplier used by many pharmacies. An alternative supplier, who gave assurances that they were able to meet demands, was identified and contact details were posted on the Defra website in early March (www.defra.gov.uk/wildlife-countryside/vertebrates/strychnine-shortage.htm).

  Furthermore, to ease difficulties obtaining strychnine, Defra temporarily suspended the practice of specifying a named pharmacist on the permit to purchase strychnine (Form LP10). This change, which remains in force, enables authorised permit holders to purchase strychnine from any pharmacist with stocks of the compound.

  In view of the temporary nature of the shortages, an assessment of the cost to farmers was considered unnecessary.

  Representations were received from regular users, including pest controllers and farmers.

  Aluminium phosphide is also approved for use as an alternative for mole control. In the past the Department has commissioned work on a further alternative preparation, micro-encapsulated bromoform. This preparation has not been through the approvals process and it is not considered appropriate for the Department to pay for such registration costs.

  Defra has recently asked the Central Science Laboratory to undertake a review of the range of mole control methods which exist across the EU. The aim of this review is to produce guidance to UK interests on the most humane and effective methods of mole control which are currently available.

  As far as I am aware, strychnine hydrochloride is currently available from pharmacies, and there have been no recent enquiries reporting shortages. I am unable to comment on the long-term availability of this compound, as this is a matter for the importers.

  TB (Somerset)
  Mr. Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on TB control in Somerset. [115414]

  Mr. Morley
  TB control in Somerset is carried out in accordance with national policy.

  The latest available data show there are 3,459 cattle herds registered in the county. Of these, 182 herds (5.3 per cent.) have been under TB restrictions at some point in the period 1 January to 31 March 2003. Up to the end of March there had been 63 new TB incidents (22 confirmed, 26 unconfirmed and 15 with laboratory results outstanding).

  The State Veterinary Service has worked very hard over the last 18 months to reduce the number of overdue TB herd tests. By the end of March the number of herd tests overdue in Somerset had been reduced to 222.

  Water Extraction
  Colin Burgon
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps can be taken by the Environment Agency in an emergency situation to speed up the process of granting a licence to extract water from a river. [115678]

  Mr. Morley [holding answer 3 June 2003]
  The Water Resources Act 1991 provides that the requirements for abstraction licensing do not apply under certain emergency situations, including the abstraction of water for fire-fighting, and for the purpose of preventing the flooding of land and property.

  All other qualifying abstractions are required to follow the normal process. The speed at which the application will be dealt will depend upon a variety of circumstances, such as the complexity of the case and the need to investigate.

TRADE AND INDUSTRY

  Alstom
  Mr. Lindsay Hoyle
  To ask the Secretary of State for Trade and Industry if she will make a statement on the imminent closure of Alstom's traction production; and what discussions she(a) has had and (b) will have with officials from Alstom regarding the closure of the new build train production. [116275]

  Alan Johnson
  It is disappointing that Alstom has chosen to end traction production in Preston. This is a commercial matter for the company but it will have come as a bitter blow to the workforce. We will liaise with regional partners and Job Centre Plus to ensure that individuals are given help to find new jobs or help with new training.

  My right hon. Friend the Secretary of State for Trade and Industry has held discussions with the company about its general restructuring strategy, announced on 12 March. Ministers and officials will remain in close contact with the company.

  Broadband
  Mr. Waterson
  To ask the Secretary of State for Trade and Industry if she will make a statement on the level of competition in the broadband market. [116514]

  Mr. Timms
  The Government target is for the UK to have the most extensive and competitive broadband market in the G7 by 2005. Latest statistics indicate that at the end of March 2003, we had the third most competitive market based on measures of choice, price and regulatory framework. This is up from fourth in the G7 a year before.

  Consumer Credit Act
  Mr. O'Neill
  To ask the Secretary of State for Trade and Industry if she will ensure that consultations are held with bodies representing(a) small business and (b) finance providers on whether to amend provisions of the Consumer Credit Act 1974 concerning the provision of business finance before decisions on the issue are taken. [116263]
  423W
  Miss Melanie Johnson
  Bodies representing small businesses and finance providers have been closely involved in the review of the Consumer Credit Act since July 2001. These groups continue to play a key role in the review process. They are involved in on-going discussions with officials, and receive and comment on consultation papers when they are published.

  One key aspect of the review, is to ensure that changes to the legislation will not diminish the access to business finance currently available to small and medium-sized businesses.

  Veterinary Medicines
  Mr. Jim Cunningham
  To ask the Secretary of State for Trade and Industry if she will make a statement on the proposals not to allow veterinary surgeons to charge for prescriptions over the next three years, within the OFT proposals based on the Competition Commissions inquiry into the supply of prescription only veterinary medicines. [115080]

  Miss Melanie Johnson
  [holding answer 3 June 2003]The Competition Commission's reasoning for not allowing veterinary surgeons to charge for prescriptions over the next three years is set out in paragraphs 2.169 to 2.173 of volume I of the report. The Commission stated in the report that if it was concerned simply to establish the correct market price for prescriptions then it might be reasonable to leave vets to set their own prices and then rely on the market. The Commission reasoned that prescription charges have a major impact on competition with pharmacies, as vets are able to set the charges so as to deter clients from asking for prescriptions. In that way, they can influence the terms of competition with pharmacies to their own advantage. The Commission's view is that the three-year period of writing prescriptions at no additional charge is necessary in order to ensure that charges will not deter animal owners from obtaining written prescriptions and making use of pharmacies.

  Mr. Jim Cunningham
  To ask the Secretary of State for Trade and Industry what organisations were consulted in the Competition Commission's inquiry into the supply of prescription only veterinary medicines. [115081]

  Miss Melanie Johnson [holding answer 3 June 2003]
  Parties who gave evidence during the course of the Competition Commission's inquiry included: manufacturers of veterinary medicines, veterinary wholesalers, veterinary surgeons, pharmacists, veterinary organisations, Government bodies and other interested parties. 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.

  Mr. Weir
  To ask the Secretary of State for Trade and Industry (1) what discussions she has had with representatives of veterinary practices in Scotland on the impact of the recommendations contained in the Competition Commission's report Veterinary Medicines: a Report on the Supply within the United Kingdom of Prescription-only Veterinary Medicines on rural veterinary practices; [116103]
  424W
  (2) what discussions she plans to have with the Scottish Executive on the impact of the Competition Commission Report, Veterinary Medicines: a Report on the Supply Within the United Kingdom of Prescription-only Veterinary Medicines in Scotland. [116104]

  Miss Melanie Johnson
  [holding answer 3 June 2003]My right hon. Friend, the Secretary of State for Trade & Industry has asked the Office of Fair Trading (OFT) to discuss with interested parties the terms of orders that could be made under the Fair Trading Act 1973 (FTA) to implement the Competition Commission's proposed remedies. The OFT has written out to the Royal College of Veterinary Surgeons, the British Veterinary Association and the British Small Animal Veterinary Association, among others. Each of these bodies have members who practice in Scotland. Many vets based in Scotland have also written individually to the OFT.

  The Department for Environment, Food and Rural Affairs is currently preparing a response to the Competition Commission's regulatory recommendations. The Scottish Executive has been asked to contribute to this.

  Mr. Jim Cunningham
  To ask the Secretary of State for Trade and Industry what guidance she gave to the Competition Commission regarding the consideration of animal welfare in its recent inquiry into the supply of prescription only veterinary medicines; and whether animal welfare fell within the remit of the Competition Commission's inquiry. [115079]

  Miss Melanie Johnson [holding answer 3 June 2003]
  The Competition Commission was asked to assess whether there was a monopoly situation in the supply of prescription-only veterinary medicines, and whether such a monopoly acted against the public interest.

  The Commission, in its report, fully accepted that the supply of prescription-only veterinary medicines raises issues that go wider than competition and that the public interest includes protection of public safety and animal welfare. The Commission received submissions from interested parties including vets, members of the public, animal charities and the Government's Chief Veterinary Officer, which touched on animal welfare issues. The Commission took account of these submissions in reaching its conclusions.

WALES

  Antisocial Behaviour
  Dr. Hywel Francis
  To ask the Secretary of State for Wales what initatives the Government is taking to combat anti-social behaviour in Wales. [116432]

  Mr. Touhig
  The Government remains committed to tackling anti-social behaviour. The Anti-Social Behaviour Bill currently before this House provides many new tools for practitioners in dealing with the causes and effects of anti-social behaviour.

  Manufacturing
  Mr. Ben Chapman
  To ask the Secretary of State for Wales what recent discussions he has had with the First Secretary about manufacturing industry in North Wales. [116433]
  425W
  Peter Hain
  We have discussed how the down turn in the global economy has effected some sectors in North Wales and how the long-term future of other sectors is good particularly with the growing trend towards high-tech high-skilled industries and centres of excellence such as Airbus, Broughton.

  Bovine TB
  Mr. Wiggin
  To ask the Secretary of State for Wales what meetings he has held with secretaries in the National Assembly for Wales about the Government's efforts to prevent the spread of bovine TB. [116434]

  Mr. Touhig
  My right hon. Friend the Secretary of State has regular meetings with the First Secretary, whilst I meet the Assembly Agriculture Secretary and DEFRA Ministers to discuss a variety of issues, including the issue of bovine TB.

  Agriculture Department
  Ann Winterton
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary about the work of the National Assembly for Wales' Agriculture Department. [116435]

  Mr. Touhig
  My right hon. Friend and I have regular meetings with the First Secretary to discuss a variety of issues in relation to agriculture.

  Advertising
  Mr. Bercow
  To ask the Secretary of State for Wales what the total expenditure on advertising by the Department was in(a) 2001–02 arid (b) 2002–03; and what the level of planned expenditure is for (i) 2003–04 and (ii) 2004–05. [114429]

  Peter Hain
  I refer the hon. Member to the answer which my predecessor gave him on 15 April 2002,Official Report, column 750W.

  Civil Service (People with Disabilities)
  Mr. Bercow
  To ask the Secretary of State for Wales what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in the Department. [110523]

  Peter Hain
  My Department has only one Senior Civil Service post and so a target cannot be meaningfully applied.

  In total, my Department has two people (equivalent to about 4 per cent. of its staff) with a disability.

  Efficiency Savings
  Mr. Bercow
  To ask the Secretary of State for Wales what the target is for efficiency savings in 2003–04 expressed(a) in money terms and (b) as a percentage of the Department's expenditure limit. [114113]

  Peter Hain
  My Department seeks maximum efficiency in every spending decision it takes; it does not have a fixed annual target.

  Legal Deposit Libraries Bill
  Mr. Simon Thomas
  To ask the Secretary of State for Wales what discussions he has held with(a) Secretaries in the National Assembly for Wales and (b) ministerial colleagues regarding the Legal Deposit Libraries Bill. [115059]

  Peter Hain
  I have regular discussions with Cabinet colleagues and with Ministers in the Welsh Assembly Government on matters affecting Wales. Officials in the National Assembly have been involved in detailed discussions with those in the Department for Culture, Media and Sport.

  Mental Health
  Mr. Paul Marsden
  To ask the Secretary of State for Wales how many of his staff retired on medical grounds due to mental health problems in the last year.[111944]

  Peter Hain
  Staff of my Department are all on secondment or loan from other Departments. Any retirement would therefore be taken from the Home Department rather than from the Wales Office.

  Sickness Absence
  Mr. Bercow
  To ask the Secretary of State for Wales how many staff in the Department have been on long-term sick leave in each of the last two years. [115858]

  Peter Hain
  In my Department there has been only one staff on long-term sick leave in each of the last two years.

  Long-term sick leave is defined as continuous sickness absence of 30 days or more.

  Sponsorship
  Mr. Oaten
  To ask the Secretary of State for Wales which of his Department's projects have received sponsorship in the last financial year; who the sponsor was in each case; what the nature of each project was; what time period was covered by each project; what the total cost of each project was; how much money was involved in each sponsorship deal; and if he will make a statement. [112392]

  Peter Hain
  None.

EDUCATION AND SKILLS

  Literacy
  Mr. Battle
  To ask the Secretary of State for Education and Skills how many adults are illiterate; and what percentage of adults this represents. [116011]

  Mr. Ivan Lewis
  The Moser Report (1999) indicated that around 7 million adults in England have poor literacy skills (equivalent to 21 per cent. of the population aged 16–65), and that even more have a problem with numbers. 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.
  427W
  These estimates will be mapped to the new national basic skills standards and will be published in September 2003.

  Playing Field Sales
  Mr. Reed
  To ask the Secretary of State for Education and Skills what steps he is taking to reduce the number of school playing field sales. [114690]

  Mr. Stephen Twigg
  Prior to October 1998, there was no regulation of the sale of playing fields at local authority controlled schools. If a local authority wanted to sell a school playing field there was nothing to stop it. No central records were kept of how many school playing fields were sold before October 1998.

  Section 77 of the School Standards and Framework Act 1998 was introduced on 1 October 1998 to stop the indiscriminate sale of school playing fields that occurred in the 1980s and early to mid 1990s. Local authorities and governing bodies of all maintained schools now need the Secretary of State's consent before they can dispose of a playing field or any part of a playing field.

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

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

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

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

  All applications made since 16 July 2001 have been scrutinised by the School Playing Fields Advisory Panel. The Panel comprises representatives from the National Playing Fields Association, the Central Council of Physical Recreation, Learning through Landscapes, the National Association of Head Teachers and the Local Government Association. The Panel provides advice on the extent to which applications meet the published criteria. In 1999 the Government approved 42 applications to sell school playing fields larger than a sports pitch; 32 applications were approved in 2000, 22 in 2001 and 23 in 2002.

  Mr. Wyatt
  To ask the Secretary of State for Education and Skills how many school playing fields have been sold in the last 10 years. [115777]

  Mr. Miliband
  Section 77 of the School Standards and Framework Act 1998 was introduced on 1 October 1998 to stop the indiscriminate sale of school playing fields that occurred in the 1980s and early to mid 1990s. Local authorities and governing bodies of all maintained schools now need the Secretary of State's consent before they can dispose of a playing field or any part of a playing field. Applications to sell school playing fields are only approved where it is clear that they meet the published criteria and, in particular, that any proceeds will be used to improve school sports provision or education facilities.

  There are no central records of how many school playing fields were sold before October 1998. Between October 1998 and December 1998, the Government
  428W
  approved 7 applications to sell school playing fields larger than a sports pitch; 42 applications were approved in 1999, 32 in 200, 22 in 2001 and 23 in 2002.

  Publicity Photographs
  Mr. Andrew Turner
  To ask the Secretary of State for Education and Skills whether he(a) sought and (b) obtained agreement to pupils being photographed for publicity purposes on the occasion of his announcement on pupil testing on 20 May from (i) their parents, (ii) the school governors, (iii) the head teacher and (iv) the local education authority. [116234]

  Mr. Stephen Twigg
  I can confirm that permissions were sought. The Department has clear guidelines setting out when permission needs to be sought and how it is to be sought.

  Tewkesbury After-Hours Club
  Mr. Laurence Robertson
  To ask the Secretary of State for Education and Skills if he will make a statement about the OFSTED report into the Tewkesbury After-Hours Club. [116134]

  Mr. Miliband [holding answer 3 June 2003]
  This is a matter for Ofsted and their HM Chief Inspector, David Bell, will write to the hon. Member and a copy of his letter will be placed in the Library.

  Young Carers
  Tim Loughton
  To ask the Secretary of State for Education and Skills what measures have been instituted in schools in recognition of extra demands put on carers under the age of 16. [114743]

  Mr. Ivan Lewis
  We have made a Vulnerable Children's Grant (worth £84 million this year) available to all local education authorities. This will help them secure access to education for all vulnerable children, including young carers. Sixty-one LEAs are also receiving additional funding for Behaviour Improvement Programme projects. These typically include multi-agency Behaviour and Education Support Teams who provide additional support for pupils who are at risk of becoming disengaged from their education.

TREASURY

  Benefit Claims
  Mr. Barnes
  To ask the Chancellor of the Exchequer how many claims were made to the Inland Revenue on forms(a) P161; (b) R27 and (c) R40 in the last year for which figures are available; how many of these claims were successful; and what estimates he has made of the numbers who were entitled to the benefit concerned. [114599]

  Dawn Primarolo
  522,371 R40 forms were received during the year ended 31 March 2003, of which 521,533 were successfully processed by 31 March. In addition, some forms were issued and processed by local offices. No estimate is available of the number of individuals who received repayments of tax.
  429W
  Information relating to forms P161 and R27 is not held centrally and could only be provided at disproportionate cost.

  Construction (Public-private Partnership)
  Mr. Streeter
  To ask the Chancellor of the Exchequer what assessment he has made of the capacity of the construction industry to meet the Government's PPP requirements in the current financial year; and if he will make a statement. [115951]

  Mr. Boateng
  The Government keep all aspects of market capacity under review in order to safeguard high quality competition and value for money. In addition, officials maintain an on-going dialogue with the key representative bodies in the construction sector, including the Commission for Architecture and the Built Environment (CABE), Confederation for British Industry (CBI), and the Major Contractors Group (MCG).

  Heavily Indebted Poor Countries
  Mr. Gardiner
  To ask the Chancellor of the Exchequer (1) pursuant to his Answer of 15 May 2003,Official Report, column 377W, on heavily indebted poor countries, whether he will make a detailed proposal for a donor-funded technical assistance facility to provide advice to HIPC countries facing litigation at the forthcoming G8 summit in Evian; [116111]

  (2) if he will introduce tax incentives for creditors taking part in the HIPC initiative; [116005]

  (3) pursuant to his Answer of 15 May 2003, Official Report, column 377W, on heavily indebted poor countries, what steps have been taken by (a) the IMF and (b) the World Bank since the G7 Kananaskis summit to encourage creditors to take part in the HIPC Initiative; [116109]

  (4) pursuant to his answer of 15 May 2003, Official Report, column 377W, what plans he has to amend legislation governing litigation against heavily indebted poor countries; [116112]

  (5) pursuant to his answer of 15 May 2003, Official Report, column 377W, on heavily indebted poor countries, what plans he has to convene a conference to discuss with creditors the value of participating in debt relief for heavily indebted poor countries; [116059]

  (6) pursuant to his answer of 15 May 2003, Official Report, column 377W, on heavily indebted poor countries, what the implementation status is of each of the commitments from the G7 Kananaskis summit;[116108]

  (7) pursuant to his answer of 15 May 2003, Official Report, column 377W, on heavily indebted poor countries, whether the World Bank has drawn up a timetable to investigate options for assisting with HIPC-to-HIPC debt. [116110]

  John Healey
  The UK government has been at the forefront of the international debate on debt relief issues, and continues to press for the rapid and full implementation of the Heavily Indebted Poor Countries (HIPC) initiative. In particular, the UK is seeking agreement that additional bilateral voluntary debt relief 430W
  should be excluded from the calculation of topping-up at Completion Point in the HIPC initiative, and this rule change could provide a further US $1 billion in debt relief to HIPCs. The UK is also seeking to explore further options to address the issues of creditor litigation within the enhanced HIPC initiative. While the initiative does not alter the legal rights and obligations between HIPCs and their external creditors the UK believes that an adequate HIPC legal defence is still essential in reaching fair and equitable settlements with some creditors. More detail on the steps taken by the IMF and World Bank to encourage creditor participation and the status of commitments on HIPC from the G7 Kananaskis Summit, can be found in the September 2002 HIPC Status of Implementation Report and the March 2003 HIPC Initiative—Statistical Update. Both are available from the World Bank Website www.worldbank.orq/hipc.

  On March 12, 2003, the Executive Board of the IMF paper discussed creditor participation issues in the HIPC initiative. The Public Information Notice issued by the IMF on April 3, 2003, for this meeting reported the discussion between Directors on the issue of HIPC-to-HIPC debt:
  "On HIPC-to-HIPC debt relief, Directors took note of the fact that these claims are concentrated in a few HIPC creditors, and that some creditors have already made commitments to deliver their share of debt relief under the Initiative. Directors agreed that, where resolution of such outstanding claims is hindered by technical issues, the staff should be ready to provide technical assistance when requested by both parties, to help HIPC creditors and debtors themselves resolve these outstanding technical disputes.
  Many Directors welcomed the proposal of the World Bank staff to establish and administer a trust fund to channel donor assistance to finance HIPC-to-HIPC debt relief. They agreed that such a trust fund should be used in cases where HIPC creditors are unable to deliver their share of HIPC relief owing to financial constraints, in accordance with the principles and conditions set out by individual donors. Others, however, questioned the need for such a fund given the small size of HIPC-to-HIPC debt and the existence of moral hazard issues."

  The full text of this Public Information Notice is available from the IMF website www. imf.org/external/news.htm. With respect to tax incentives for creditors taking part in the HIPC initiative, corporate loan creditors can already claim relief under the loan relationships regime for losses on the release of debt owed by HIPC countries. The Inland Revenue is not aware of any non-corporate loan creditors.

  While the UK continues to work hard to promote the HIPC initiative the Government acknowledges that debt relief is not a panacea for broader economic development problems; even the provision of 100 per cent. debt relief to all low-income countries would still fall short of the resources needed to meet the Millennium Development Goals. That is why the Chancellor has proposed an International Finance Facility (IFF) that would seek to double the amount of development aid from just over US$50 billion a year today to $100 billion per year in the years to 2015.

  Market Testing
  Mr. Bercow
  To ask the Chancellor of the Exchequer what the estimated level of saving to the Department is from the use of market testing in 2002–03. [107769]
  431W
  Mr. Boateng
  Past use of market testing has led to the contracting-out of a variety of Treasury services. During 2002–03 the Treasury re-tendered a number of services, but did not conduct any new market testing.

  Postal Services
  Mr. Carmichael
  To ask the Chancellor of the Exchequer (1) what representations the Government has made to the European Commission regarding the impact of the imposition of value added tax on postal services; [113931]

  (2) what assessment the Government has made of the impact of the imposition of value added tax on postal services; [113937]

  (3) what steps the Government are taking regarding the imposition of value added tax on commercial postal service providers. [113936]

  John Healey
  The European Commission has recently published proposals to amend the provisions of the Sixth VAT Directive concerning the VAT arrangements applicable to postal services. The proposals have yet to be tabled for discussion at Council, and the Government has therefore not formally responded to the Commission on them. However, the Government is opposed to VAT on stamps, and will make this clear in negotiations on the proposals. Amendments to the Sixth VAT Directive must be agreed unanimously by Member States.

  Tax Credits (Solihull)
  Mr. John Taylor
  To ask the Chancellor of the Exchequer if he will investigate the causes of the difficulties encountered by some Solihull constituents in(a) seeking working tax credit and child tax credit and (b) making telephone contact with the Inland Revenue; and if he will make a statement on the compatibility and mutual recognition of relevant departmental computer systems. [114792]

  Dawn Primarolo
  I refer the hon. Member to the statement I made in the House on 28 April 2003,Official Report, column 53.

INTERNATIONAL DEVELOPMENT

  Capita
  Mr. Willis
  To ask the Minister of State, Department for International Development how many employees have been seconded from Capita to her Department since 1997; for how long they worked in the Department; and what positions they held. [115628]

  Hilary Benn
  There have been no secondments from Capita to the Department since 1997.

  Malawi
  Dr. Tonge
  To ask the Minister of State, Department for International Development what discussions he has had with the government of Malawi regarding the treatment of AIDS patients in the Queen Elizabeth Teaching Hospital in Blantyre. [116407]
  432W
  Hilary Benn
  DFID's development programme in Malawi has a substantial focus on HIV/AIDS but Queen Elizabeth Hospital is not targeted specifically. £10 million is provided to support the provision of sexual and reproductive health services through a local non-governmental organisation (Banja la Mtsogolo) in which HIV/AIDS counselling for young people and other vulnerable groups is a key component. A further £3.5 million is planned to help improve effectiveness of the National AIDS Commission. £1.9 million has been allocated to improve DFID's response to HIV/AIDS in sectors other than health, and to strengthen the capacity of other donors to implement AIDS programmes.

  Millennium Development Goals
  Mr. Don Foster
  To ask the Minister of State, Department for International Development what arrangements have been made to ensure delivery of the Millennium Development Goals on water and sanitation in terms of(a) ministerial responsibility, (b) departmental structure and (c) budget allocation. [116841]

  Hilary Benn
  The Secretary of State is the Minister responsible for the delivery of all MDGs. I hold responsibility within the Department for the specific goals on water and sanitation.

  DFID supports an integrated approach to sanitation, water supply, and hygiene to improve health and combat poverty. Expenditure on specific water sector or related projects and programmes has remained roughly constant over the past three years; estimated at £82 million in 1999–2000, £91 million in 2000–01 and £87 million in 2001–02. However, DFID's budget allocation is managed on a country rather than sector basis; our recent departmental report 2003 provides this information.

  The work DFID does has regard to what other donors are doing, and to our comparative advantage. In the water sector we have developed a role focused on improving policy. The provision of direct budget support (£296 million in 2001–02) rather than funding projects has given us this leverage, particularly in Africa. A small proportion of the budget allocated through direct budget support may go directly to the water sector, but the main contribution of budget support to meeting the water/sanitation MDGs is through improvements in public sector capacity and governance. We continue to push for the inclusion of sanitation, water supply and hygiene in individual country Poverty Reduction Strategies Papers (PRSPs).

  DFID also provides funds, which may include spending on water, through a number of multilateral channels. DFID continues to work to ensure aid efficiency and for example, is currently engaged in the EU Water Initiative, which aims to improve the efficiency of existing financing mechanisms for water infrastructure through better donor co-ordination between member states.

  Rwanda
  Mrs. Spelman
  To ask the Minister of State, Department for International Development what representations the Department has made to the government of Rwanda regarding the ban on the Mouvement Democratique Republicain. [116703]

  Hilary Benn
  We are continuing to encourage the government of Rwanda to set out publicly how they plan to open up political space and ensure inclusive elections this year, and how they can reassure the international community of their commitment to due process and transparency in dealing with the dissolution of the MDR and actions against individuals.

FOREIGN AND COMMONWEALTH AFFAIRS

  Entry Clearance
  Mr. Lidington
  To ask the Secretary of State for Foreign and Commonwealth Affairs when his Department intends to send the appeal papers to the Independent Appellate Authority in the case of Mr. N.A., ref KA417109, who has been refused entry clearance from HM High Commission in Islamabad. [116489]

  Mr. Rammell
  I am withholding the information requested under exemption 5 of the Code of Practice on Access to Government Information.

  It is not our practice to disclose details of individual entry clearance cases in a public forum. However, I will write to the hon. Member with regard to this matter.

  Peacekeeping
  Mr. Jenkin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what funds have been paid from the United Nations to(a) his Department and (b) the Government in respect of peacekeeping duties carried out by UK armed forces operating under the auspices of that organisation in each of the past 10 years. [115330]

  Mr. Rammell
  Her Majesty's Government is reimbursed at a set rate in respect of peacekeeping duties carried out by UK armed forces. These reimbursements are made to Her Majesty's Treasury.

  For 2002–03, we have, so far, received £2,674,367.30; the final quarter remains to be paid. We estimate this will be around £900,000.

  HMG received d£3,594,654.20 from the UN for financial year 2001–02.

  Figures for the eight-year period prior to 2001–02 are not held centrally. This could only be provided by the UK Mission to the UN, at disproportionate cost.

  Convention on the Future of Europe
  Mr. Redwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs what his policy is on surrendering vetos over policy areas in the proposed European constitution. [116159]
  434W
  Mr. MacShane
  More Qualified Majority Voting (QMV) is essential to push through our solutions to Europe-wide problems in key areas, such as immigration and asylum and to promote the completion of the single market.

  Mr. Redwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the main unresolved issues are in the Convention on the Future of Europe. [116162]

  Mr. MacShane
  The Convention on the Future of Europe is due to present its conclusions to the European Council on 20 June. The Government will continue to work within the Convention to achieve the best deal for the UK. Final decisions will be taken only by Heads of State and Government by unanimity at the Inter-Governmental Conference.

  All aspects of the draft constitutional treaty continue to be debated in the Convention.

  Mr. Redwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs who would settle a dispute over powers between the EU and the United Kingdom under the proposed draft constitution. [116164]

  Mr. MacShane
  Article 230 of the Treaty establishing the European Community provides that the European Court of Justice shall review the legality of acts of the institutions. For this purpose, it has jurisdiction, inter alia, in actions brought by the member states on grounds of lack of competence. The draft constitutional treaty maintains a similar provision.

  Mr. Redwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the current draft of the EU constitution will require amendment to the European Communities Act 1972 if it is accepted by member states. [116169]

  Mr. MacShane
  As has been the case with previous treaties amending the original treaty structure, any amending treaty or new constitutional treaty agreed upon by the member states in the next Intergovernmental Conference would have to be laid before Parliament, and any necessary amendments to the European Communities Act 1972 passed by Parliament, before it could be ratified.

  Democratic Republic of the Congo
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many people have died in the Congo in each of the last 10 years, broken down by gender; what percentage of the population this represented in each year; and what recent discussions he has had with the UN about the conflict. [116743]

  Mr. Rammell
  Reliable information on the number of deaths in the Democratic Republic of Congo (DRC) over the last 10 years is unavailable. But media reports have suggested that more than four million people may have died as a result of the current war. Most were civilians. The DRC's population is estimated at 52 million.

  We are in regular discussion with the UN about the conflict in the DRC. The UN Secretary General has asked the UK and others to contribute to an

  435W
  international rapid deployment force for Ituri (North East DRC). We think it is important to contribute to this force, to support the UN and the DRC peace process. The UK will, therefore, participate in the Interim Emergency Multinational Force (IEMF). We are in consultation with those involved about the most appropriate and effective contribution the UK can make.

  Diplomatic Missions
  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to his answer of 16 May 2003,Official Report, column 497W, what information he has on the facilities provided by other diplomatic missions for people to get a message about their health and safety to relatives in the UK. [116139]

  Mr. Mike O'Brien
  When a British national gets into difficulties overseas, the nearest British Consulate or embassy will make every effort to inform the next of kin in the UK. In cases of serious accidents or deaths, we ask the police in the UK to deliver the news personally.

  We expect foreign nationals with relatives or friends in the UK to contact their own Consulate for assistance.

  Enemy Documents (Seizure)
  Dr. Julian Lewis
  To ask the Secretary of State for Foreign and Commonwealth Affairs what lessons for the seizure of enemy documents in future campaigns have been drawn from the seizure by unauthorised personnel of Iraqi Government documents. [116597]

  Mr. Mike O'Brien
  We are reviewing this and other lessons learned.

  EU Enlargement
  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what period after accession countries joining the European Union will be allowed derogations on matters within EU policy.[116795]

  Mr. MacShane
  I will write to my hon. Friend shortly and place a copy in the Library of the House.

  Euro
  Norman Lamb
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he received the Treasury documents relating to the five economic tests and the 18 background studies; what discussions he has held with ministerial colleagues on the tests since receipt of the documents; when he expects to complete his analysis of the documents; and what representations(a) he and (b) departmental officials will make to other Departments before a decision is reached on the economic tests. [115389]

  Mr. MacShane
  The Treasury's 18 supporting studies on EMU were sent to Cabinet Ministers on 16 May. My right hon. Friends the Prime Minister and the Chancellor held meetings with Cabinet Members. There was an initial discussion at Cabinet on 22May which will be followed by a special Cabinet meeting on 5 June. The Chancellor will make a statement to the House of Commons on 9 June.

  Indonesia
  Mr. McNamara
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the government of Indonesia concerning the use of Hawk fighter jets in Aceh. [115784]

  Mr. Mike O'Brien
  Following the outbreak of hostilities in Aceh, our Ambassador in Jakarta sought to reconfirm the assurances from the Indonesian Government that British military equipment would not be used in an offensive role. Subsequently we have been told that Hawk aircraft have not and will not be used for combat; including ground attack in Aceh.

  Mr. McNamara
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many members of the Indonesian armed forces have been trained by the United Kingdom since 1997; and at what cost. [115786]

  Mr. Mike O'Brien
  The United Kingdom has trained 27 officers from the Indonesian armed forces since 1997 at a cost of £317,693. A further 23 officers were awarded Chevening Scholarships since 1997 at a cost of £302,924.

  In addition, two officers and one civilian member of the Indonesian Ministry of Defence attended the regional 'Managing Defence in a Democracy' course held in Singapore in September 2002. The cost of this course was approximately £2,800 per student.

  Mr. Berry
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what notification the Government received from the Indonesian Government of their intention to deploy(a) Hawk aircraft and (b) other equipment built in and exported from the UK, in Aceh; [116498]

  (2) what assessment he has made of whether the activities of the Indonesian armed forces in Aceh are consistent with assurances he has received from the Indonesian authorities; [116497]

  (3) what assessment he has made of the Indonesian Government's adherence to its assurances that no British military equipment will be used in counter-insurgency operations in Indonesia; [116500]

  (4) whether the Indonesian Government's assurances that equipment will not be used to infringe human rights in Aceh or elsewhere extend to equipment other than armoured personnel carriers. [116499]

  Mr. Mike O'Brien
  The British Government received notification from the Indonesian Government that they might deploy British-built military equipment to Aceh for casualty removal and logistics in August 2002. In light of this, fresh assurances were given by the Indonesians that British-built military equipment would not be used to violate human rights anywhere in Indonesia in September 2002. The Indonesians also said that the equipment would not be used offensively. These assurances cover all British-built military equipment.

  The Indonesian Government confirmed that British-supplied Hawk aircraft were used in Aceh on 19 May 2003, on the first day of renewed military action, but assured us that they were not used offensively. Nonetheless, I remain concerned that the use of the Hawk in Aceh may have been in breach of earlier

  437W
  assurances, and am actively seeking further assurance from the Indonesian Government about the future use of Hawk aircraft in Aceh. I will be raising the issue of the use of British-built equipment with the Indonesians on a visit to Indonesia this week. There have been no confirmed reports of other British-built military equipment being used in military action in Aceh. We continue to monitor the situation closely.

  Intergovernmental Conference
  Mr. Moore
  To ask the Secretary of State for Foreign and Commonwealth Affairs what status will be accorded to the accession states of the European Union at the forthcoming intergovernmental conference in terms of(a) negotiation rights and (b) voting rights; and if he will make a statement. [116062]

  Mr. MacShane
  The UK fully supports the conclusions of the Copenhagen European Council, which state that "the new Member States will participate fully in the next Intergovernmental Conference". We understand this to mean they will have the same negotiating rights and voting rights as current member states.

  Iraq
  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what his policy is on the admission of UN human rights monitors throughout Iraq and the establishment of a UN commission of experts to advise on approaches to ensuring justice in Iraq. [114880]

  Mr. Rammell
  The fall of Saddam Hussein's regime brought to an end a long period of violations of the Iraqi people's human rights. As requested in UN Security Council Resolution 1483, put forward by the UK, US and Spain and adopted on 22 May 2003, the UN Secretary-General has appointed a Special Representative whose responsibilities include the promotion of human rights. The UN, including the Office of the UN High Commissioner for Human Rights, is examining how to take this forward, including whether to deploy UN human rights monitors. We aim to work closely with the Special Representative. In addition, working to support the people of Iraq in moving toward the establishment of a representative government based on the rule of law and affording equal rights and justice to all Iraqi citizens will be the best means to ensure that their human rights are protected.

  As for ensuring justice in Iraq, we are keen for the UN to play a role in the reform of the judicial system and, as appropriate, in transitional justice It will be necessary to follow the wishes of the Iraqi people on this issue and, as far as this is possible, to have an Iraqi led process. We have sent a small team of experts to Iraq to assess the current capacity of the Iraqi judicial system in relation to transitional justice, to consult suitable Iraqi bodies as they are established and to make recommendations.

  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what response he has made to the request by the Director-General of the United Nations International Atomic Energy Agency on 19 May 2003 that IAEA inspectors be allowed back into Iraq. [115672]
  438W
  Mr. Mike O'Brien
  An announcement was made on 21 May 2003 that inspectors from the International Atomic Energy Agency (IAEA) will be allowed to return to Iraq to resume their monitoring activities in relation to the IAEA'S nuclear safeguards agreement with Iraq. They will check to ensure the continued safety of Iraq's declared nuclear materials and facilities in accordance with Iraq's safeguards agreement with the agency.

  Bob Russell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Turkish Government on retaining the territorial integrity of Iraq; and if he will make a statement. [115683]

  Mr. MacShane
  My right hon. Friend the Foreign Secretary discussed Turkey's policy towards Iraq with Abdullah GÜl, the Turkish Foreign Minister, during bilateral talks in Brussels on 21 March 2003. He also raised the subject with Mr. GÜl in a telephone conversation on 12 April 2003. In addition, we have frequently discussed Iraq with the Turkish Government at official level in the past few months. The Turkish Government have consistently affirmed their commitment to maintaining the territorial integrity of Iraq.

  Adam Price
  To ask the Secretary of State for Foreign and Commonwealth Affairs what restrictions have been placed by the occupying powers in Iraq on exiles wishing to return to their country. [115892]

  Mr. Mike O'Brien
  The coalition has placed no formal restrictions on exiles wishing to return home to Iraq.

  UK Government travel advice currently advises British nationals against visiting Iraq. Iraqi nationals wishing to return to Iraq should be aware of the continued security risks of doing so and should register their interest with the International Organisation for Migration in London.

  Iraqis who have applied for asylum status in the UK may find that the credibility of their asylum application could be affected if they visit Iraq and then return to the UK.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of the United States concerning the representation of women on the interim administration for Iraq. [116035]

  Mr. Mike O'Brien
  Our Special Representative to Iraq, John Sawers, and his team in Baghdad are working closely with Ambassador Bremer and US officials in the Office for Reconstruction and Humanitarian Assistance (ORHA) on the issue of engaging Iraqi women in the political and reconstruction process in Iraq. We have also seconded a gender expert from the Women and Equality Unit to the ORHA team. We believe having women well represented in any interim administration is a priority and are working towards this goal.

  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports he has received of Palestinian refugees in Iraq being evicted from their homes because they have no money to pay rent previously waived; and if he will make a statement. [116259]
  439W
  Mr. Mike O'Brien
  We are aware of the problems faced by the Palestinians resident in Iraq generally. We are continuing to work through the Coalition Provisional Authority in Iraq on refugee issues and are liaising closely with humanitarian agencies in Baghdad, including the Office of the United Nations High Commissioner for Refugees (UNHCR).

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department has made of the ethnic violence in Kirkuk. [116414]

  Mr. Mike O'Brien
  Coalition forces and the Office for Reconstruction and Humanitarian Assistance (ORHA) are seeking to reduce ethnic tensions across northern Iraq. We remain in touch with Coalition forces on the ground, which have recently been reinforced to increase security throughout the city and beyond. We welcome the formation on 24 May of the Kirkuk interim technical council comprising representation from all ethnic communities, together with the selection of a Kurdish Mayor, Arab Deputy Mayor and provision for mayoral assistants from other ethnic groups on 28 May.

  Dr. Julian Lewis
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department made before the Gulf conflict of the importance of capturing Iraqi Government documents in relation to the discovery of Iraqi (i) weapons of mass destruction and (ii) links with terrorist groups. [116599]

  Mr. Mike O'Brien
  The UK Government recognise the importance of securing evidence of Iraq's weapons of mass destruction programmes and links to terrorist organisations, both through the seizure of documents and through information obtained by interviewing Iraqi scientists and Government officials. We see this as a high priority, and the effort to uncover evidence will continue.

  Dr. Julian Lewis
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the(a) role and (b) activities of al-Jazeera in supporting the former regime in Iraq, following the seizure of Iraqi documents by the Iraqi National Congress. [116603]

  Mr. Mike O'Brien
  The coalition partners in Iraq have secured a large number of official Iraqi documents. We are working on the analysis of these documents. It will take some time to reach conclusions and there is no guarantee that it will be possible to publicise the results of such analysis.

  Dr. Julian Lewis
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what reason access to the Iraqi Foreign Ministry in Baghdad had not been sealed by coalition forces by 22 April. [116605]

  Mr. Mike O'Brien
  The instructions issued to both UK and US coalition forces were to attempt to secure any documents that might be in the possession of the Iraqi authorities. Following entry into Baghdad, the coalition forces on the ground had to set priorities, focusing in particular on stabilising the security situation and minimising loss of life.

  Nadhmi Auchi
  Norman Lamb
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he was informed of the international arrest warrant against Mr. Nadhmi Auchi. [112871]

  Mr. Mike O'Brien
  This is a matter for the Home Office.

  Nigeria
  Harry Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his oral answer of 6 May 2003,Official Report, column 528, on Nigeria, what response he has received to his latest representations to the Nigerian Government. [116705]

  Mr. Rammell
  Nigeria had federal and presidential elections in April and May 2003. The new Government has not yet been formed, but we will raise our concerns as soon as it is practicable. Amina Lawal's next appeal should have been heard by the Katsina State Sharia Court of Appeal on 3 June 2003, but has now been postponed to 27 August 2003.

  Nuclear Non-proliferation
  Mrs. Ann Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs what measures the Government has taken to implement the Nuclear Non-Proliferation Treaty 2000. [115742]

  Mr. Mike O'Brien
  The UK is a strong supporter of the 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT). We also support the 1995 Decisions and Resolution of the 1995 Review Conference on the implementation of the NPT, and the Final Document agreed at the 2000 NPT Review Conference. We are committed to all aspects of the NPT and have taken steps towards implementation of the Treaty, for which I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Blaenau Gwent (Llew Smith) on 12 May 2003,Official Report, column 85W.

  Saudi Arabia
  Mr. Hoyle
  To ask the Secretary of State for Foreign and Commonwealth Affairs what measures he is taking(a) to protect UK citizens in Saudi Arabia and (b) to establish support and advice for families of those affected by the terrorist attack in Saudi Arabia.[114510]

  Mr. Mike O'Brien
  Both before and since the bombings in Riyadh on 12 May 2003, we have worked closely with the Saudi authorities on security measures to protect British nationals in Saudi Arabia. A team from the Metropolitan Police (MPS) has since travelled to Riyadh to provide advice and assistance to the Ambassador. Our staff in Saudi Arabia are in touch with the British community directly and through regular meetings with the warden network to pass on as quickly as possible relevant information and advice—including on security. Our travel advice is kept under constant review to make sure that it reflects the latest information available to us.
  441W
  Our Embassy in Riyadh has been in touch with those in Saudi Arabia affected by the attack. It has been reinforced by a Rapid Deployment Team, which is talking to those affected to assess what additional support we might usefully be able to provide.

  Turkey (Kurdish Population)
  Mr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Turkish authorities in respect of their undertaking to ensure that Kurds in Turkey gain full political and social rights, including the right to learn and study the Kurdish language, by 2004. [115037]

  Mr. MacShane
  My right hon. Friend the Foreign Secretary periodically discusses a range of issues with senior members of the Turkish Government, including progress in ensuring the rights of minorities in Turkey.

  Her Majesty's Government welcomes recent Turkish reforms which allow for the teaching in private schools and public broadcasting of minority languages, including Kurdish, but remains concerned that such provisions are limited in scope and that significant obstacles stand in the way of their effective implementation.

DEFENCE

  Correspondence
  Mr. Bercow
  To ask the Secretary of State for Defence how many staff have been employed in the Ministerial Correspondence Unit of the Department in each of the last two years. [115887]

  Dr. Moonie
  The Ministry of Defence has employed seven staff in its Ministerial Correspondence Unit in each of the last two years. Three of these staff have other duties not directly related to processing correspondence—such as managing the Private Office budget, supporting Ministers during Defence debates in the House, and general administrative support to the Department's Parliamentary Branch.

  Current Programme Status
  Mr. Keith Simpson
  To ask the Secretary of State for Defence which current programmes undertaken by RO Defence for his Department are(a) subject to delay and are concurrently (b) undergoing a Ministry of Defence investment appraisal. [115960]

  Mr. Ingram [holding answer 3 June 2003]
  There are currently two programmes involving Royal Ordnance Defence Ltd. (ROD) which are experiencing delays. These are the Extended Range Ordnance/Modular Charge System (ERO/MCS) programme which is currently under review and the programme to design, develop and supply improved ammunition for the 4/" Mk 8 Gun, fitted to Royal Navy frigates and destroyers. Neither is currently the subject of a Ministry of Defence investment appraisal.

  One current programme that will involve an investment appraisal as part of the Initial Gate Business Case submission is the exploration of options for a more collaborative approach with industry for the equipment
  442W
  support of the AS90 self propelled artillery system. One option will be that of partnering with ROD. The Initial Gate submission is planned for October 2003, the programme is not subject to delay.

  Defence Science and Technology Laboratory
  Rachel Squire
  To ask the Secretary of State for Defence (1) what estimate he has made of the(a) housing, (b) career development and (c) personal development costs pertaining to each DSTL employee at Rosyth who is being required to relocate; [114574]

  (2) if he will make a statement on the relocation costs of moving Rosyth DSTL staff to Porton Down; [114575]

  (3) what estimate he has made of the cost of recruiting and training replacement staff for DSTL staff at Rosyth who are unable or unwilling to relocate to Porton Down; [114576]

  (4) what the fixed limit is on the assured tenancy of DSTL at Rosyth. [114577]

  Dr. Moonie [holding answer 21 May 2003]
  At present, Defence Science and Technology Laboratory (DSTL) staff are spread over 15 sites across the United Kingdom. Continuing with this level of dispersion will ultimately degrade DSTL's effectiveness and long-term viability. The split of the former Defence Evaluation and Research Agency has resulted in DSTL being left with many capabilities that are supported by small teams or individuals. If we are to preserve and develop these capabilities effectively then we need a degree of consolidation to exploit their synergies, achieve critical mass and sustain their technical excellence. We also know that, despite everything that information technology can do, there are enormous gains in communication and knowledge-sharing when people actually work together in the same or adjoining buildings. In addition, career development is much easier when people do not have to uproot themselves simply in order to work in a different technical area. Additionally, there are financial considerations. As a Government agency, DSTL is publicly accountable for how it uses taxpayers' assets and money. In anything but the short term the additional costs imposed by the current level of dispersion are considerable. These costs will inevitably divert funds from more productive uses in maintaining and developing facilities and delivering better quality science for the Ministry of Defence.

  To address these issues, DSTL intends to move its staff onto three core sites at Fort Halstead, Porton Down and Portsdown Main. This was announced in July 2002 and hon. Members whose constituencies were affected were written to at the time explaining this decision. The site rationalisation plan commenced in August 2002 and it is intended to be completed by late 2006. It will involve the relocation of approximately 1,600 staff during this timeframe. The moves will ultimately reduce the fragmentation of the science and technology base of DSTL, bringing together like capabilities and reducing overheads and duplication of support functions in the organisation. This will ensure that DSTL can sustain long-term capability whilst

  443W
  providing an improved career structure for staff. While there is a possible risk that relocation will have a short-term impact that could affect capability in some areas, any effects will be more than outweighed by the significant long-term advantages these changes will produce. The relocation of the four staff currently employed at DSTL Dunfermline is part of the DSTL site rationalisation plan.

  The investment appraisal conducted by DSTL to support the site rationalisation plan was independently reviewed and agreed by the MOD Senior Economic Adviser. This work considered both the costs of re-provision of facilities and staff transfer. Staff will be eligible for support under the DSTL relocation procedures and the specific application of the procedures will be discussed on an individual basis taking into account personal commitments. The costs associated with the housing of staff who intend to relocate to the core DSTL sites will depend on the personal circumstances of the individuals but the organisation estimates an average cost of £27,000.

  DSTL uses the planned goals and objectives of the laboratory to identify the career and personal development requirements for its staff. The career aspirations and personal development needs are obviously specific to individuals and determined by their own personal development plans and all staff in the organisation, regardless of their location, are given equal opportunity to undertake appropriate training and development to deliver the organisation's objectives. Costs for career and personal development are not determined on a per capita basis and depend on the individual's training and development needs. DSTL always looks to develop the talents and capabilities of its current staff and would look to existing staff to fill any vacancies created by the loss of DSTL Dunfermline staff from within the organisation. DSTL does not therefore envisage a significant increase in such costs attributable to their relocation plans. It currently has a relatively low annual turnover of staff and has an effective recruitment and training strategy, recruiting over 100 science graduates each year. Two of the four members of staff based at DSTL Dunfermline are within five years of normal retirement and succession plans and the associated costs to train staff to replace them are required regardless of any individual's intention to relocate.

  Finally, it has to be recognised that as a result of the split of DERA some moves are unavoidable. On those sites owned by QinetiQ, DSTL only has assured tenancy for a fixed period. Rather than embarking on a number of relocations as each lease expires that would place the organisation into a long-running series of moves, which would cause continuing disruption to staff and delay the benefits arising from rationalisation, it has been decided that a single plan that covers all sites should be adopted. The current lease at DSTL Dunfermline is for a period of five years, ending 12 August 2006. However the other members of their technical group, which is currently based in Farnborough, will be relocating to Porton Down in the final quarter of 2003 and the intention is to consolidate the technical team at Porton Down as soon as is practicable.

  Departmental Advertising
  Mr. Bercow
  To ask the Secretary of State for Defence what the total expenditure on advertising by the Department 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. [114438]

  Dr. Moonie
  The Ministry of Defence's advertising and publicity expenditure in 2001–02 was published in the annual Departmental Performance Report, broken down into categories of RN, Army, RAF and civilian recruitment, PR, marketing and business support services, Chief of PR, sales promotion, scholarships and National Employers' Liaison Committee. Copies of this document are available in the Library of the House.

  The 2002–03 Departmental Performance Report is due to be published in the Autumn and will include information on advertising and publicity expenditure; this may be in a revised format due to the introduction of Resource Accounting and Budgeting. Final costs for 2002–03 are not yet available. However, advertising and publicity expenditure is estimated to be approximately 54 million, including recruitment publicity.

  Planned expenditure for 2003–04 is 54 million including recruitment publicity. Detailed plans for 2004–05 have not yet been agreed.

  Discharged Personnel (Call-up)
  Mr. Keetch
  To ask the Secretary of State for Defence how many personnel discharged following a manning control point review have been called up for service in all operations; and how many are currently serving on operations. [108204]

  Dr. Moonie [holding answer 10 April 2003]
  Eight service personnel who, having been discharged since 1997 under Queen's Regulations for the Army 1975 Paragraph 9.413 'Not required for a full Army Career', have subsequently been called-out for military service on operations. Six of these individuals are currently still serving.

  Fred Nerac and Hussein Osman
  Mr. Jenkin
  To ask the Secretary of State for Defence (1) whether the Royal Military Police will provide on the ground assistance in the search for the missing ITN crew members Fred Nerac and Hussein Osman; [116226]

  (2) if he will make a statement on the latest reports he has received on missing cameraman Fred Nerac and local translator Hussein Osman. [116224]

  Dr. Moonie
  Subject to the constraints of the security situation on the ground, British troops in southern Iraq, including members of the Royal Military Police (RMP), have been providing ITN investigators with whatever assistance they reasonably could in trying to establish what has happened to Fred Nerac and Hussein Osman.

  The Ministry of Defence's position has always been that the RMP would only undertake a formal investigation into the disappearance of the two men if they had sufficient grounds to suspect that a war crime might have been committed. Following new information

  445W
  that has recently come to light, however, the RMP Special Investigations Branch will now investigate the disappearance of Fred Nerac and Hussein Osman.

  Mr. Jenkin
  To ask the Secretary of State for Defence (1) what representations he has received from the United States regarding the disappearance of Mr. Nerac and Mr. Osman; [116228]

  (2) if he will hold an investigation into the shooting incident during which Mr. Nerac and Mr. Osman disappeared; and what requests he has received to do so. [116227]

  Dr. Moonie
  Officials in the Ministry of Defence and British troops in southern Iraq have been in close contact with representatives of the United States concerning the disappearance of Mr. Nerac and Mr. Osman and, particularly, the original shooting incident in which Terry Lloyd was killed and the two men went missing.

  The US military are formally investigating this incident. They have requested our assistance and we have co-operated fully with them on this.

  Iraq
  Jeremy Corbyn
  To ask the Secretary of State for Defence how many targeted weapons of mass destruction sites have been inspected in Iraq by Coalition forces; and what has been found. [110268]

  Mr. Hoon [holding answer 28 April 2003]
  As at 20 May 2003, Coalition forces had initiated investigations into 99 sites within Iraq which may be connected to programmes to develop weapons of mass destruction. Investigations have been initiated into a further 53 sites identified since the conflict began.

  Such sites are only one potential form of evidence. Others forms of evidence could include samples of chemical or biological agents, delivery systems, documentation or interviews with relevant Iraqi personnel. Coalition forces have identified materials which may be related to Iraqi programmes to develop weapons of mass destruction, including vehicles which appear to match descriptions of mobile biological agent production facilities in the document "Iraq's Weapons of Mass Destruction" published on 24 September 2002, and as presented to the United Nations Security Council by the United States Secretary of State. Investigations continue. We expect gathering and collating evidence from these sites and from other sources to be a long and complex task.

  Jeremy Corbyn
  To ask the Secretary of State for Defence how many depleted uranium weapons have been dropped on Iraq since the start of recent hostilities by(a) value and (b) total weight by (i) UK and (ii) US forces. [110269]

  Mr. Hoon
  [holding answer 28 April 2003]: A total weight of around 1.92 tonnes of depleted uranium ammunition has been fired in Iraq by United Kingdom forces since the start of recent hostilities. I am withholding information regarding these munitions in accordance with exemption 13 of the Code of Practice on Access to Government Information. Ordnance expended by US forces is a matter for the US authorities.
  446W
  Mr. Mullin
  To ask the Secretary of State for Defence what correspondence he has received from Mr. Abed Hassan Hamoudi of Basra; and if he will place copies of(a) such correspondence and (b) his response in the Library. [111108]

  Mr. Ingram
  Although Mr. Hamoudi has not written to my right hon. Friend the Secretary of State for Defence directly, Ministers were made aware of a letter which Mr. Hamoudi sent to General Officer Commander 1 (UK) Division and were consulted on the terms of the reply. I am withholding copies of the correspondence under Exemption 12 of Code of Practice on Access to Government Information (privacy of the individual).

  Mr. Tynan
  To ask the Secretary of State for Defence how many sorties were flown by Iraqi military(a) aircraft, (b) helicopters and (c) unmanned aerial vehicles during the recent conflict; how many were destroyed by Coalition forces; and how many are now in the possession of Coalition forces. [114834]

  Mr. Ingram
  Since 19 March 2003, no sorties have been flown by Iraqi military aircraft or unmanned aerial vehicles, although a number of helicopter sorties were flown in support of operations. Approximately 100 aircraft and 40 helicopters were destroyed by coalition forces during Operation TELIC and coalition forces are currently in control of approximately 400 aircraft, 250 helicopters and a number of unmanned aerial vehicles that remain in Iraq.

  Cadet Organisations
  Dr. Cable
  To ask the Secretary of State for Defence what financial assistance his Department is providing in this financial year to the(a) Sea Cadet Association, (b) Air Training Corps, (c) Combined Cadet Force and (d) Army Cadets; and if he will make a statement.[116638]

  Dr. Moonie
  For the financial year 2003–04, the Cadet Organisations will receive the following funding from the three Services:

  Service

  £million

  Sea Cadet Association (RN)

  8.0

  Army Cadet Force (Army)

  50.0

  Air Training Corps (RAF)

  20.0

  Combined Cadet Force

  Royal Navy

  1.5

  Army

  10.0

  RAF

  1.0

  Total combined Cadet Force

  12.5

  Ministerial Transport
  Mr. Bercow
  To ask the Secretary of State for Defence what the cost of(a) ministerial cars and drivers and (b) taxis for his Department was in 2002. [101536]

  Dr. Moonie
  I refer the hon Member to the answer my hon Friend the Minister of State, Cabinet Office (Mr Alexander) gave on 20 May 2003,Official Report, column 663W.
  447W
  A contract for a taxi service is in place and expenditure against this contract for 2002 is £15,786. This figure excludes any amounts spent on taxi hire outside of this contract reclaimed by officials as travel and expenditure. That information is not held centrally and could only be provided at disproportionate cost.

  Ministry of Defence Commercial Policy Group
  Mr. Simon Thomas
  To ask the Secretary of State for Defence if he will list the(a) members of the Ministry of Defence Commercial Policy Group, (b) organisations which have contracts to supply services to UK forces and (c) value of those contracts in each case. [115039]

  Mr. Ingram
  A list of the members of the Ministry of Defence/Industry Commercial Policy Group is set out in the list. All the industry members attend the group as representatives of the trade associations indicated on the list and not as members of the organisations that employ them.

  In the Financial Year 2002–03 the employing organisations of the Commercial Policy Group's industry members were awarded a total of 525 contracts valued at £2.096 billion.

  I am withholding the value of contracts within the total under Exemption 13 of the Code of Practice on Access to Government Information.

  Commercial Policy Group

  List of members

  Industry Co-Chairman

  Mr. Guy Griffiths

  Chief Operating Officer

  MBDA

  Six Hills Way

  Stevenage

  Herts

  SG12DA

  Ministry of Defence Co-Chairman

  Mr. Stan Porter

  Director General Commercial

  MOD Abbey Wood

  Maple 2b #2219

  Stoke Gifford

  Bristol

  BS34 8JH

  Defence Manufacturers' Association

  Mr. Willy Hockin

  Director Commercial

  The Defence Manufacturers Association

  Malborough House

  Headley Road

  Grayshott

  Surrey

  GU26 6LG

  Mrs. Alison Partington

  Commercial Manager

  INSYS Ltd.

  Reddings Wood

  Ampthill

  Bedford

  MK45 2HD

  448W
  Defence Manufacturers' Association

  Mr. Alan Hayman

  Managing Director

  J&S Marine

  Pottington Business Park

  Barnstaple

  North Devon

  EX31 1LY

  Intellect*

  Mr. Neil Bennett

  Commercial Contracts Manager

  BT Global Services

  PPC2 North House

  Star Avenue

  Swindon

  Wilts, SN2 1BS

  Intellect*

  Ms Ruth McKie

  Cogent Defence & Security Networks Ltd.

  Meadows Road

  Queensway Meadows

  Newport

  NP19 4SS

  Confederation of British Industry

  Mr. David Scillitoe

  Chairman, CBI Defence Procurement Panel

  BAE Systems

  Grange Road

  Somerford

  Christchurch

  Dorset

  BH23 4JE

  *Formerly Federation of Electronics Industry and Computer Services and Software Association

  Society of British Aerospace Companies

  Mr. Peter Brown

  Director Sales Commercial

  Rolls Royce Plc

  P.O. Box 3

  Filton

  Bristol

  BS34 7QE

  Mr. Mark Farrar

  Group Commercial Executive

  Smiths Industries Aerospace

  Bishops Cleeve

  Cheltenham

  Glos

  GL52 4SF

  British Naval Equipment Association

  Mr. Richard Taylor

  Group Contracts Director

  Vosper Thornycroft (UK) Ltd.

  Victoria Road

  Woolston

  Southampton

  SO19 9RR

  449W

  Mr. Steve Butler

  Commercial Director

  Claverham Ltd. Bristol

  BS49 4NF

  Business Services Association

  Mr. David Plester

  Operations Director

  Babcock SG1 Services

  7 Blenheim Court

  Beaufort Office Park

  Almondsbury

  Bristol

  BS32 4NE

  Mr. Toby Hirst

  PFI Projects Director

  Sodexho Defence

  St. Anne's House

  Louise Margaret Road

  Aldershot

  Hampshire

  GU11 2PP

  Other MOD members

  Mr. Charles Draper

  Director General Smart Acquisition

  MOD Abbey Wood

  Maple 2b #2213

  Stoke Gifford

  Bristol

  BS34 8JH

  Mr. Steve Waddingham

  Commercial Services Group

  Group Leader

  MOD Abbey Wood

  Maple 2b #2227

  Stoke Gifford

  Bristol BS34 8JH

  Mr. Mark Pedlingham

  Principal Director Commercial Defence Logistics

  Ministry of Defence

  Spur 7, Block E

  Endleigh

  Bath

  BA1 5AB

  Commodore Martin Alabaster

  Procurement Group Leader

  MOD Abbey Wood

  Larch 3 #2305

  Stoke Gifford

  Bristol

  BS34 8JH

  Ministry of Defence Co-Secretary

  Mr. Steve Land

  Commercial Services Group

  Ministry of Defence

  Abbey Wood

  Maple 2b, #2233

  Bristol

  BS34 8JH

  450W
  Industry Co-Secretary

  Derek Marshall

  Defence Industries Secretariat

  Russell Square House

  10–2 Russell Square

  London

  WC1B 5EE

  Mr. Simon Thomas
  To ask the Secretary of State for Defence what criteria are used by his Department when appointing commercial organisations as members of the Ministry of Defence Commercial Policy Group; and whether there are restrictions placed on foreign commercial organisations becoming members of this group. [115040]

  Mr. Ingram
  Industry representation on the Commercial Policy Group (CPG) is co-ordinated by the Defence Industries Council (DIG) who seek to ensure membership representative of the United Kingdom defence industry.

  There are no restrictions placed on overseas commercial organisations becoming members of the CPG. However, they are not usually members of the trade associations represented on the CPG unless they have also established a UK based capability to supply goods and services to MOD.

  Mr. Simon Thomas
  To ask the Secretary of State for Defence what sustainable development guidelines are issued to the Ministry of Defence Commercial Policy Group. [115041]

  Mr. Ingram
  None. The aim of the Commercial Policy Group is to provide a forum for Ministry of Defence and Industry to consider the development of future policy issues raised as part of the implementation of Smart Acquisition. The Commercial Policy Group may become involved later if it becomes clear that new or commercial processes Defence Contract Conditions (DEFCONS) will be needed to deliver MOD's contributions to the sustainable development agenda.

  Mr. Simon Thomas
  To ask the Secretary of State for Defence what measures are in place to ensure that members of the Ministry of Defence Commercial Policy Group do not gain an unfair advantage when tendering for contracts to supply goods and services to the Ministry of Defence. [115042]

  Mr. Ingram
  The Commercial Policy Group (CPG) acts as a forum for Ministry of Defence and Industry to develop future commercial policy and encourage best practice.

  The CPG's Terms of Reference require that its work is reported to MOD, Confederation of British Industry (CBI) and Defence Industries Council (DIC). This ensures that all its stakeholders have full visibility of its activities. The policy guidelines produced by the CPG, as well as its Terms of Reference, are also placed in the public domain using the MOD Acquisition Management Website (AMS) which can be accessed via the internet at www.ams.mod.uk.

  The CPG plays no part in MOD's tendering processes or contract award decision making.

  Nuclear Weapons
  Lynne Jones
  To ask the Secretary of State for Defence what discussions he has had with his US counterparts about(a) their intention to repeal the 1993 legislation banning the research, development and production of nuclear weapons and (b) the statement at the second session of the Preparatory Committee for the 2003 Review Conference of the Nuclear Non-Proliferation Treaty that the US was reducing reliance on nuclear weapons. [116837]

  Dr. Moonie
  We have regular contacts with the United States about matters relating to nuclear weapons. I am not aware of any substantive discussions on either of the two issues but the Ministry of Defence is aware of US Administration statements and views.

  Phoenix
  Mr. Jenkin
  To ask the Secretary of State for Defence how many Phoenix Air Vehicles were lost during Operation Telic; and how many have been lost since the Phoenix system entered service. [113955]

  Mr. Ingram
  23 Phoenix Unmanned Aerial Vehicles remain lost on Operation TELIC, which count towards a total of 29 vehicles that have not been recovered since the Phoenix entered service in May 1999.

  Porton Down
  Mr. Hancock
  To ask the Secretary of State for Defence how many procedures have been carried out on animals at Porton Down since 1997; and what breeds of animals were involved. [115585]

  Dr. Moonie
  The Defence Science and Technology Laboratory Porton Down submits annual returns to the Home Office detailing the number of procedures undertaken which involve the use of animals as defined in the Animals (Scientific Procedures) Act 1986.

  In the years 1997 to 2002 the annual returns to the Home Office, broken down by species, are detailed in the table.

  1997

  1998

  1999

  2000

  2001

  2002

  Guinea pig

  1,109

  1,039

  636

  636

  727

  644

  Ferret

  0

  30

  0

  0

  0

  0

  Hamster

  396

  222

  144

  24

  0

  0

  Mouse

  8,569

  7,477

  10,144

  10,856

  11,944

  14,874

  Pig

  85

  96

  84

  106

  23

  88

  Rabbit

  31

  48

  10

  19

  23

  24

  Rat

  717

  1,999

  410

  350

  125

  268

  Goat

  2

  22

  0

  0

  0

  0

  Sheep

  17

  30

  13

  9

  45

  0

  Primate

  30

  128

  60

  34

  68

  42

  Total

  10,956

  11,091

  11,501

  11,985

  12,955

  15,940

  More detailed information on the specific breeds used is not held centrally and could be obtained only at disproportionate cost.

  Propellants
  Mr. Keith Simpson
  To ask the Secretary of State for Defence if he will list the Ministry of Defence's overseas propellant suppliers. [115483]
  452W
  Mr. Ingram
  [holding answer 3 June 2003]Propellant, as a component of munitions, is procured through a Framework Partnering Agreement with RO Defence Ltd. (ROD), a British based subsidiary of BAE Systems. The selection of suppliers is a commercial matter for RO Defence and they currently utilise: Nitro Chemie AG (Germany) and Muiden Chemie (The Netherlands). Other sources of propellant used by manufacturers for Ministry of Defence contracts are, Nitro Chemie Wimmis (Switzerland), Nammo (Sweden) and General Dynamics (USA).

  Mr. Keith Simpson
  To ask the Secretary of State for Defence whether his Department plans to re-establish a UK-based propellant facility. [115958]

  Mr. Ingram
  [holding answer 3 June 2003]The Ministry of Defence has no current plans to re-establish a United Kingdom-based propellant facility. This is consistent with the MOD's belief, which has been endorsed by the House of Commons Defence Select Committee and the National Audit Office, that there are no strategic or defence reasons to retain an indigenous propellant manufacturing capability. Propellant as a component of ammunition is currently procured from RO Defence Ltd. under the terms of a Framework Partnering Agreement. The sourcing of such material is a commercial matter for RO Defence.

  RAF Church Fenton
  Mr. Willis
  To ask the Secretary of State for Defence if he will make a statement on contract negotiations at RAF Church Fenton; and when he expects the negotiations to end. [116749]

  Dr. Moonie
  The current Joint Elementary Flying Training School (JEFTS) contract which is held by Babcock HCS, is due to expire in July 2003. This includes some flying training at RAF Church Fenton.

  From July, the tasks under the current JEFTS contract will be met in two ways. The JEFTS flying at Barkston Heath, Cranwell and Middle Wallop will be re-brigaded under the title of the Defence EFT School, the supporting contractor again being Babcock HCS. The flying currently undertaken by JEFTS at RAF Church Fenton will be carried out under the Light Aircraft Flying Task contract, supported by Vosper Thorneycroft Aerospace, at University Air Squadron sites around the country, including the Yorkshire University Air Squadron site at RAF Church Fenton.

  The main contract negotiations have been completed, but an ongoing issue is the possible Transfer of Undertakings (Protection of Employment) (TUPE) liabilities in respect of the Babcock HCS employees at RAF Church Fenton. Due to the complexity of the issue, it is not possible to predict when these negotiations with both contractors will be complete.

  Reserve Forces
  Murrison
  To ask the Secretary of State for Defence if he will make a statement on health screening for reservists following their return from the Gulf to civilian life. [116357]
  453W
  Dr. Moonie
  As part of routine demobilization procedures, members of the reserve forces returning from any operation undergo a routine medical assessment prior to their release from full-time service. The assessment, which is carried out by medical staff, includes the completion of a health declaration by the individual, the listing of any exposures to environmental or industrial hazards, and a medical check including blood pressure measurement, urinalysis and audiometry. All personnel should be offered a consultation with a medical officer at the time of the assessment. Where medical concerns are identified that require further evaluation, medical staff will ensure that suitable arrangements are made. This may include passing information to the individual's civilian GP, having first obtained consent from the individual.

  I also refer the hon. Member to my Written Statement of 7 May 2003, Official Report, columns 34–36WS, announcing plans for research in to the physical and psychological health of personnel who deployed to the Gulf and that those concerned about possible exposure to depleted uranium are entitled to a urine test. These arrangements apply to reservists as well as regular personnel. I also announced that reservists who deployed and have concerns about their health generally can be referred by their civilian GP to the Medical Assessment Programme which we established following the 1990–91 Gulf conflict.

  Dr. Murrison
  To ask the Secretary of State for Defence pursuant to his answer of 21 May 2003,Official Report, column 786W, on reserve forces, what form the follow-up work with reservists will take. [116386]

  Dr. Moonie
  As part of the overall process of identifying lessons learned from all aspects of Operation TELIC, we will be interviewing many returning reservists to gauge their views of the mobilisation and demobilisation process. We will also be running a major survey of employers who have been affected by the call-out of reservists.

  Royal Air Force (Training)
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Defence if he will make a statement on the role of RAF Woodvale in the training of RAF recruits. [1166631]

  Dr. Moonie
  RAF Woodvale is the home to Manchester and Salford University Air Squadron (MASUAS), Liverpool University Air Squadron (LUAS) and No. 10 Air Experience Flight (AEF). Both University Air Squadrons at RAF Woodvale train undergraduate student pilots according to the Elementary Flying Training syllabus, which, during a student's time at university, provides them with general handling, instrument flying, formation and navigation. Ex-UAS student pilots are then able to enter the RAF at a stage where they can be streamed and selected for fast jet, helicopter or multi-engine aircraft. The AEF provides air experience for air cadet members of the Air Training Corps and RAF sections of the College Cadet Force.
  454W
  With effect from July 2003, RAF Woodvale will also train up to 17 Direct Entrant pilots to their streaming point, since the RAF element of the Joint Elementary Flying School contract is to be absorbed into the contract that covers UAS flying. This will be done within existing contracted flying hours.

  The UASs also provide general Service training for potential officers of all branches of the RAF.

  Royal Marines (Iraq)
  Dr. Julian Lewis
  To ask the Secretary of State for Defence if he will make a statement on the scheduled return to the UK of Royal Marines following the end of the Gulf conflict. [112259]

  Mr. Ingram
  The withdrawal of 3 Commando Brigade Royal Marines from the Gulf region was completed on 18 May, following an extremely successful operational tour. Royal Marine Commandos were among the first Coalition forces to enter Iraq, working with the United States Marines to secure the Al Faw peninsula, and in particular the key port of Umm Qasr. Following the completion of decisive combat operations, they were subsequently involved in stabilisation operations, and humanitarian tasks.

  Service Manning Targets
  Mr. Keetch
  To ask the Secretary of State for Defence what the baseline manpower overheads for manning targets in the(a) Navy, (b) Army and (c) RAF are; what the actual manpower overheads were in each service in 2002–03; and if he will make a statement. [116757]

  Dr. Moonie
  I presume that the hon. Member is referring to the trained manpower strength and trained requirement for each individual Service. Details for April 2002 and April 2003 are shown in the table:

  Trained requirement

  Trained strength

  shortfall

  April 2002

  Naval Service

  39,180

  37,490

  -1,690

  Army

  106,970

  100,420

  -6,560

  RAF

  49,990

  49,200

  -790

  April

  Naval Service

  38,510

  37,600

  -910

  Army

  106,980

  102,120

  -4,850

  RAF

  49,640

  48,900

  -750

  Note:

  Due to roundings the totals may not always equal the sum of the parts.

  All three Services are working hard to address the shortfalls so that the targets set out in the current Public Service Agreements can be met.

  Territorial Army
  Mr. Hoyle
  To ask the Secretary of State for Defence if he will make a statement on the function of the Territorial Army following the present military conflict in the Gulf; what assessment he has made of the future needs and role for the Territorial Army; what assessment he has made of the future role for the Territorial Army unit in Chorley; and what assessment he has made of the future role of the Territorial Army barracks in Chorley. [116396]
  455W
  Dr. Moonie
  As recently announced by my right hon. Friend the Secretary of State for Defence on 22 May 2003,Official Report, column 45–46WS, there is a continuing role for Reservists, including the Territorial Army (TA) in the Gulf and a requirement for a further 1,500 Reservists to support ongoing operations has now been confirmed. The TA will continue to support their regular counterparts on operations as envisaged by the Strategic Defence Review (SDR) and SDR New Chapter.

  No assessment has been made of the future role of the TA units in Chorley or the barracks itself. In accordance with SDR recommendations, however, a review of all TA sub-unit and detachment locations across the whole country is underway. It is too early to comment on the outcome of this review.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for Defence what proportion of(a) Territorial Army and (b) regular army personnel were sent to serve in Iraq. [116668]

  Dr. Moonie
  Approximately 24,000 Army personnel and 3,800 Territorial Army (TA) personnel were initially deployed in support of Operation TELIC in the Gulf. These figures represent approximately 24 per cent. and 10 per cent. of total trained Army and TA personnel respectively.

HOME DEPARTMENT

  Domestic Violence
  Margaret Moran
  To ask the Secretary of State for the Home Department what the cost is of undertaking a pilot scheme in a police authority in respect of police acting in third party orders in cases of domestic violence. [110670]

  Mr. Bob Ainsworth
  The group dealing with domestic violence perpetrators within the police service will meet for the first time on 25 June 2003. The Association of Chief Police Officers (ACPO) hope to publish guidance relating to police perpetrators later in the summer.

  I welcome the work being led by the ACPO in relation to domestic violence perpetrators in the police service and other domestic violence matters. There has been a real and positive shift in police responses to domestic violence incidents over the past few years and making

  Table A—The number of notifications, as reported to the Home Office, of ASBOs issued in England, from 1 April 1999 to 30 November 2002, by area and numbers breached

  Number of persons issued with ASBOs

  Number of persons breaching ASBOs"1,2

  Area

  1 April 1999 to31 May 20003

  1 June 2000 to 31 December 2001

  1 January 2002 to 30 November 20024

  Total

  1 June 2000 to 31 December 2001

  Cleveland MCC5

  1

  8

  2

  11

  2

  of which LGAs6

  Middlesbough Council

  7—

  0

  1

  1

  0

  Redcar and Cleveland Council

  7—

  1

  1

  2

  0

  GONE8

  9

  31

  19

  59

  11

  by MCC/police force area

  Cleveland

  1

  8

  2

  11

  2

  456W
  further improvements in the police handling on domestic violence cases will be an important element in our strategy to reduce domestic violence and protect victims. We will publish a consultation paper on that strategy shortly.

  Antisocial Behaviour
  Dr. Kumar
  To ask the Secretary of State for the Home Department how many(a) anti-social behaviour orders and (b) curfew orders have been made in (i) the Middlesbrough South and East Cleveland constituency (ii) the Government Office North East region and (iii) England since the commencement of the scheme; how many have been breached in each area; and if he will make a statement. [115546]

  Mr. Bob Ainsworth
  The information is as follows:

  (a) From 1 April 1999 to 31 May 2000 data on the number of Anti-Social Behaviour Orders (ASBOs) issued were collected by police force area. From 1 June 2000 official statistics on the number of ASBOs issued are based on quarterly returns from Magistrates' Courts Committees (MCCs). From copies of the orders we have been able to identify local authority areas involved.

  Available information on the number of notifications received by the Home Office of ASBOs issued by area from 1 April 1999 to 30 November 2002 (latest available) is given in Table A.

  Available information relating to breaches of antisocial behaviour orders in England is also given in Table A but covers the period 1 June 2000 to 31 December 2001 only. The analysis covers only those breaches by persons issued with ASBOs during this period and notified to the Home Office.

  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.

  (b) Table B shows the number of Curfew Orders with or without electronic monitoring made and those breached in the Teesside and Langbaurgh East Petty Sessional areas (part of the former and all of the latter fall within the Middlesbrough South and East Cleveland constituency), the three police force areas that fall within the Government Office Region of North East England, and England as a whole. Figures are given for 1995 to 2001.
  457W

  Table A—The number of notifications, as reported to the Home Office, of ASBOs issued in England, from 1 April 1999 to 30 November 2002, by area and numbers breached

  Number of persons issued with ASBOs

  Number of persons breaching ASBOs"1,2

  Area

  1 April 1999 to31 May 20003

  1 June 2000 to 31 December 2001

  1 January 2002 to 30 November 20024

  Total

  1 June 2000 to 31 December 2001

  Durham

  0

  13

  8

  21

  9

  Northumbria

  8

  10

  9

  27

  0

  Durham

  104

  421

  246

  771

  122

  1 The only breaches counted are for those persons issued with ASBOs between 1 June 2000 and 31 December and notified to the Home Office.

  2 Only counts breaches of orders once even if a person breached the same order on more than one occasion

  3 Data available by police force area only

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

  5 Magistrates' courts committee area in which the constituency of Middlesbrough South and East Cleveland is located

  6 Unitary Authorities of which parts make up the Middlesbrough South and Cleveland East constituency

  7 Not available

  8 Government Office North East region

  Table B—Number of persons given curfew orders and numbers breaching orders, 1992–2001

  Police Force Area

  1995

  1996

  1997

  1998

  1999

  2000

  2001

  Persons given curfew orders

  Cleveland

  —

  —

  —

  —

  —

  4

  31

  of which

  Teesside PSA1

  —

  —

  —

  —

  —

  3

  28

  Langbaurgh East PAS1

  —

  —

  —

  —

  —

  1

  GONE2 region

  —

  —

  —

  —

  2

  75

  157

  Cleveland

  —

  —

  —

  —

  —

  4

  31

  Durham

  —

  —

  —

  —

  1

  29

  26

  Northumbria

  —

  —

  —

  —

  1

  42

  100

  Total England

  5

  164

  426

  979

  1,568

  2,511

  3,688

  Persons breaching curfew orders

  Cleveland

  —

  1

  —

  —

  —

  —

  6

  of which

  Teesside PSA1

  —

  1

  —

  —

  —

  —

  5

  Langbaurgh East PSA1

  —

  —

  —

  —

  —

  —

  1

  GONE2 region

  1

  2

  —

  3

  2

  4

  11

  Cleveland

  —

  1

  —

  —

  —

  —

  6

  Durham

  —

  —

  —

  —

  1

  —

  —

  Northumbria

  1

  1

  —

  3

  1

  4

  5

  Total England

  10

  27

  62

  204

  280

  454

  722

  1 The constituency of Middlesbrough South and East Cleveland covers the Petty Sessional Area of Langbaurgh East and part of the PSA of Teesside.

  2 Government Office Region for North East England.

  Note:

  There are discrepancies in some areas between the number of orders given and number of breaches recorded, as reported to the Home Office, but it is not clear whether orders given have been under-recorded or whether breaches have been incorrectly classified.

  Asylum Seekers
  David Davis
  To ask the Secretary of State for the Home Department(1) how many asylum seekers there were in (a) Hull and (b) the East Riding of Yorkshire in each month since 1997; how long each application took to process; and how many applications were (i) successful and (ii) rejected;—blank;[97734]

  (2) how many asylum seekers housed in Hull and the East Riding have received financial support from the National Asylum Support Service; and what benefits were paid to asylum seekers prior to the introduction of the National Asylum Support Service in each quarter since 1997. [97733]
  458W
  Beverley Hughes
  The information is not available in the form requested.

  The availability of information on the location of asylum seekers in the UK is currently linked to the support the asylum seeker receives. Asylum seekers in the UK either receive support from the National Asylum Support Service (NASS), local authorities or the Department for Work and Pensions (DWP) or are supporting themselves.

  Information on outstanding asylum cases, initial decision outcomes and asylum case processing times relating to persons in particular areas of the UK is unavailable as are statistics regarding the location of asylum seekers not in receipt of support.
  459W
  NASS does not disperse asylum seekers to any areas in the East Riding of Yorkshire. The following table shows the number of asylum seekers (including dependants) accommodated by NASS in the Hull cluster area as at the end of each quarter since June 2000:1

  Date

  Number of asylumseekers (including dependants) supported in NASS accommmodation in the Hull cluster area

  As at end June 2000

  2

  As at end September 2000

  380

  As at end December 2000

  960

  As at end March 2001

  1,015

  As at end June 2001

  915

  As at end September 2001

  1,000

  As at end December 2001

  1,035

  As at end March 2002

  1,035

  As at end June 2002

  995

  As at end September 2002

  995

  1All figures have been rounded to the nearest five, figures between one and two are represented by a2.

  Figures exclude cases where support has been ceased.

  Additionally, some asylum seekers receive subsistence only support from NASS or are disbenefited cases2.Statistics on the location of these cases are currently only available at regional level. The following table shows the total number of subsistence only and disbenefited cases (including dependants) which were supported in the YorkshireHumberside region(which includes the East Riding of Yorkshire and Hull) as at the end of each quarter since December 2000:

  Date

  Number of asylum seekers (including dependants) receiving subsistence only support, or being supported as a disbenefited case, and staying in the Yorks & Humberside region

  As at end December 2000

  85

  As at end March 2001

  115

  As at end June 2001

  140

  As at end September 2001

  215

  As at end December 2001

  310

  As at end March 2002

  510

  As at end June 2002

  600

  As at end September 2002

  735

  2 Disbenefited cases are cases which were previously supported under the main UK. benefits system and have been moved onto NASS support. Some of these cases have remained in the original social services accommodation.

  From grant claims sent to the Home Office by local authorities, as at the end of September 2002, there were the following additional number of asylum seekers being supported by the local authorities in Hull and East Riding of Yorkshire:

  Local Authority

  Number of singles supported as at end of Sep 2002

  Number of families supported as at end of Sep 2002

  East Riding

  5

  0

  Hull

  35

  5

  460W
  In previous years, information is only available on the number of weeks' support paid for by local authorities rather than the number of asylum seekers actually supported.

  Prior to the introduction of NASS, asylum applicants claiming asylum on arrival were eligible to receive urgent case payments under income support arrangements. Payments equated to 90 per cent. of income support rates.

  Asylum seekers claiming asylum in country were eligible to receive support from their local authority and payments were made to meet their essential living needs.

  Statistics on the number of asylum seekers supported by NASS in each region are available on the Home Office's Immigration and Asylum Statistics website. Detailed figures will next be published on 28 February 2003 in the bulletin covering quarter four of 2002:

  http://www.homeoffice.gov.uk/rds/immigrationl.html.

  Child Rescue Alert
  Tim Loughton
  To ask the Secretary of State for the Home Department (1) what discussions he has held with Sussex police about continuing to work with the Community Alerts; [114722]

  (2) how many police officers in Sussex have registered with Child Rescue Alert;. [114977]

  (3) what estimate was made of the number of likely subscribers to the Phase 2 text message service of Child Rescue Alert, piloted by Sussex police; [114975]

  (4) how much money has been spent on publicising Child Rescue Alert by Sussex police. [114976]

  Mr. Bob Ainsworth
  Office officials have held discussions with both the Sussex Police and the Association of Chief Police Officers about various aspects of the Child Rescue pilot. The discussions have not addressed the arrangements between the force and organisations that have been contracted to help provide the service.

  I understand from the Chief Constable that every Sussex Police-owned mobile phone was registered at the beginning of the scheme, a total of 1,687 phones. There was also an internal publicity drive to encourage staff to register both private and family members' phones. This marketing drive also explored links with external community partners and consequently a substantial number of mobile phones owned by East Sussex County Council, Brighton and Hove Council and West Sussex County Council have been registered.

  I further understand that, on the basis that some 700,000 people in the county have mobile phones, the force estimated that approximately 300,000 people would register for the Phase two text message service. It conducted its largest ever leaflet distribution campaign, in conjunction with Neighbourhood Watch, which resulted in some 15,000 people registering initially. This number may since have increased.

  The Sussex Police estimate that they have spent approximately £19,000 on publicising the scheme between 25 September 2002 and 1 May 2003.

  Cleveland Police
  Dr. Kumar
  To ask the Secretary of State for the Home Department what the clear-up rate was for Cleveland police for(a) burglary of dwellings, (b) violence against the person, (c) vehicle crime, (d) robbery and (e) sexual offences in each year since 1996. [114293]

  Mr. Bob Ainsworth
  The requested information is given in the table.

  Clear-up/detection rates for Cleveland police

  Percentage

  Burglary in a dwelling

  Violence against in person

  Robbery

  Sexual offences

  19961

  18

  70

  134

  25

  69

  19971

  17

  67

  144

  25

  79

  1998–992

  11

  67

  95

  19

  80

  1999–20003

  11

  64

  76

  19

  84

  2000–01

  12

  67

  76

  17

  79

  2001–02

  12

  64

  76

  18

  82

  1 Crime statistics were recorded on a calendar year basis up to 1997 and on a financial year basis thereafter.

  2 Percentage cleared up/detected using the expanded coverage and revised counting rules for recorded crime, which came into effect on 1 April 1998.

  3 Revised guidance for recording detections was implemented on 1 April 1999.

  4 This figure is based on the offences of aggravated vehicle taking, theft from a vehicle, and theft of a motor vehicle.

  5 This figure is based on the offences included within 'note 4', plus vehicle interference/tampering, and criminal damage to a vehicle.

  6 This figure is based on the offences within 'note 5', plus racially aggravated criminal damage to a vehicle.

  There was a change in counting rules for recorded crime on 1 April 1998, which would have the tendency to increase the number of offences counted. Numbers of offences for years before and after this date, and figures calculated from them, may therefore not be directly comparable. There was also a change in counting rules for detections on 1 April 1999. The new instructions provide more precise and rigorous criteria for recording a detection, with the underlying emphasis on the successful result of a police investigation. Numbers of detections before and after this date are therefore not directly comparable.

  Drug-related Crime
  Mr. Mark Hoban
  To ask the Secretary of State for the Home Department pursuant to the Answer given to the hon. Member for Middlesbrough, South and Cleveland, East (Dr. Kumar), 9 May 2003,Official Report, column 641W, if he will make a statement on the results of research carried out by the Home Office into the proportion of crimes that are drug-related. [115938]

  Mr. Bob Ainsworth [holding answer 3 June 2003]
  The Answer given to my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) on 19 May 2003,Official Report, column 641W, gives details of the percentage of recorded crime figures that are specifically drug offences (such as possession). Whilst recorded crime figures include statistics on these drugs offences, they do not record whether other crimes, such as burglary or theft, are related to an offender's drug misuse.
  462W
  However, the Home Office sponsored New English and Welsh Arrestee Drug Abuse Monitoring (NEW-ADAM) research programme, which involved interviewing and drug testing those arrested by the police, provides an insight into the proportion of crimes that are drug related.

  Analysis of the data from the first eight sites in the survey, collected during 1999–2000, shows that 65 per cent. of arrestees tested positive for one or more illegal drug, with up to 29 per cent. testing positive for opiates (including heroin) and/or cocaine (including crack). Whilst users of both heroin and cocaine/crack represent just under one-quarter of all arrestees interviewed in NEW-ADAM, they were responsible for more than three-fifths of all the illegal income reported.

  Speed Cameras
  Mr. Liddell-Grainger
  To ask the Secretary of State for the Home Department what guidelines have been drawn up to regulate speed cameras used by partnership vehicles to Avon and Somerset. [115617]

  Mr. Bob Ainsworth
  All partnerships accepted into the Safety Camera scheme must comply with the rules of the scheme to qualify for payment of their costs from fixed penalty receipts.

  The rules state that all vehicles should be clearly marked as camera enforcement vehicles, and the camera operatives should wear fluorescent clothing and abide by all Health and Safety requirements.

  Enforcement should take place at accident hotspots, or at sites or routes with a history of speed related accidents. Camera warning and speed limit reminder signs must also be placed in advance of mobile speed enforcement taking place. Ideally, these should be placed at the beginning of a targeted route for mobile enforcement sites.

  Terrestrial Trunked Radio System
  Ms Walley
  To ask the Secretary of State for the Home Department (1) what assessment he has made of the health implications of the terrestrial trunked radio system; and what plans he has for an investigation into a health and safety study; [115069]

  (2) what advice is given to local planning authorities about the distance that TETRA masts should be sited from residential properties; if he will list locations where TETRA masts are sited; and if he will make a statement; [115071]

  (3) if he will make a statement on the safety aspects of the TETRA communication system used by the police, and if he will make a statement. [115070]

  Mr. Bob Ainsworth
  The advanced features and flexibility offered by the new digital radio communications service for the police will contribute significantly to officer and public safety. The service will provide high quality fully encrypted communications to prevent eavesdropping, and for the first time will allow officers to call for assistance in emergencies by the operation of a single key.
  463W
  Following the Stewart Report on mobile phones and health, we asked the National Radiological Protection Board (NRPB) to look at the health and safety aspects of the TETRA technology used by Airwave. Their report, prepared by the NRPB's independent Advisory Group on Non-Ionising Radiation, was published in July 2001. It concluded that, "Although areas of uncertainty remain about the biological effects of low level Radio Frequency radiation in general, including modulated signals, current evidence suggests that it is unlikely that the special features of the signals from TETRA mobile terminals and repeaters pose a hazard to health".

  The report recommended further research to address remaining areas of uncertainty. We are taking this forward with a comprehensive programme of work, which has found no adverse health effects so far. As part of this programme, the Home Office has commissioned a national health monitoring study of Airwave police users. Regular updates are available on the Home Office website http://www.homeoffice.gov.uk/docs/tetra.html.

  Advice to planning authorities about radio masts is contained in Planning Policy Guidance Note 8 issued by the Office of the Deputy Prime Minister (ODPM) and is supported by the ODPM Code of Best Practice on Mobile Phone Network Development. No minimal distance from TETRA masts residential properties is recommended. The rule is that international guidelines on energy levels received from the mast should be met in areas accessible to the public. Independent checks of Airwave base stations have shown that these energy levels are hundreds of times less than the guidelines. As the service rolls out the location of TETRA masts within the Airwave service will be available on the "Sitefinder" database managed by the Radiocommunications Agency.

  Vehicles (Crime) Act 2001
  Mr. McCabe
  To ask the Secretary of State for the Home Department what assessment he has made of the impact of the Vehicles (Crime) Act 2001 on recorded and actual vehicle crime; how many salvage operators have been registered under the Act; how many registrations have been rejected; and how many premises have been inspected by the police using their new powers. [114592]

  Mr. Bob Ainsworth
  It is too soon to make an assessment of the impact of the Vehicles (Crime) Act 2001 on vehicle crime. The provisions of the Act, and accompanying regulations, regulating the motor salvage industry took effect only on 21 October 2002; those to control the supply of number plates on 1 January and 1 March 2003; and those to implement the Vehicle Identity Check on 7 April 2003. The information sought about registrations of motor salvage operators and inspections of premises under the Act is not available centrally at present. We are in touch with the Association of Chief Police Officers and the Local Government Association about an appropriate monitoring regime.

  Victim Support Berkshire
  Jane Griffiths
  To ask the Secretary of State for the Home Department what support his Department provides to Victim Support Berkshire; and if he will make a statement. [116336]

  Mr. Bob Ainsworth
  The Home Office grant to Victim Support increased from £12.7 million in 1997–98 to £29.3 million in 2002–03, and has been further increased in the current year to £30 million.

  The allocation of the Home Office grant to local victim support schemes is the responsibility of the Victim Support Funding Panel, a sub-committee of the organisation's Board of Trustees. From October 2003, the allocation of funds will be based on a new funding formula which has been developed by the Victim Support National Office. This will enable funding allocations to be tied more closely to the workloads of local schemes.

  Victim Support advise that the allocation of Home Office grant to Victim Support Berkshire in 2003–04 is likely to be in the order of 246,000.

  Visas
  Mr. Brazier
  To ask the Secretary of State for the Home Department how many visas without restriction were granted in each of the last six months for which figures are available. [116058]

  Beverley Hughes
  [holding answer 3 June 2003]All visas have certain restrictions. Statistics on entry clearance applications granted worldwide in 2000, the latest available, are given in the table. Monthly information for this period is not available as monthly statistics for many posts were not collated centrally at the time. A requirement to produce statistics on a monthly basis for all posts was introduced in April 2002. Data for 2001 and 2002 will be published later this year.

  Entry clearance applications granted1 worldwide, United Kingdom, 2000

  Number of persons

  Granted for temporary purposes2

  1,424,880

  Granted for settlement3

  54,505

  1 Granted initially or on appeal.

  2 Nationals of certain countries currently need a visa to enter the United Kingdom regardless of the purpose of their journey.

  3 Includes applications for a certificate of entitlement to the right of abode.

  Young Prisoners
  Julie Morgan
  To ask the Secretary of State for the Home Department whether youth offending teams have responsibility for young prisoners who are also unaccompanied asylum seekers. [100284]

  Hilary Benn
  [holding answer 3 March 2003]Youth offending teams are responsible for the supervision of all children and young persons under 18 serving custodial sentences.

  Zimbabwe
  John Austin
  To ask the Secretary of State for the Home Department what(a) discussions have taken place with Interpol and (b) representations he has

  465W
  received concerning an award by Interpol to the Commissioner of Police for Zimbabwe; and if he will make a statement. [114989]

  Mr. Bob Ainsworth
  [holding answer 22 May 2003]No representations have been received and no discussions have taken place. The Political and Security Committee of the EU met on 16 May 2003 where it was agreed that the EU Presidency would write on behalf of the council to the Secretary General of Interpol setting out the EU concerns and asking them to consider the moral and political implications of this appointment. The UK fully supports this move.

  SCOTLAND

    Civil Service (People with Disabilities)
    Mr. Bercow
    To ask the Secretary of State for Scotland what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in the Department. [110527]

    Mrs. Liddell
    The Scotland Office, in conjunction with the Scottish Executive, has already undertaken a range of positive action measures to help meet targets of people with disabilities in senior posts in the Department. These include the increased use of open competitions and assessment centres to provide a wider pool of diverse applicants and the appointment of an outreach worker to increase numbers in our under-represented groups, including staff with disabilities. In addition, a varied programme of awareness raising initiatives is planned as part of the European Year of Disabled People, including seminars focusing on particular disabilities and a leaflet, issued to all staff, advising them of internal services and assistance available. Our annual disability self-declaration exercise will also take place later this month.

    Departmental Report
    Mr. Bercow
    To ask the Secretary of State for Scotland what the cost was of the publication of the 2001 Departmental Report. [112820]

    Mrs. Liddell
    The cost to the Scotland Office of producing the 2001 Departmental Report was £3,160. Other printing and publication costs are met by The Stationery Office Ltd. and do not fall to Government.

    Departmental Staff
    Mr. Bercow
    To ask the Secretary of State, for Scotland what assessment she has made of regional variations in staff turnover in her Department. [112760]

    Mrs. Liddell
    No assessment of regional variations in staff turnover has been made for my Department.

    Euro
    Norman Lamb
    To ask the Secretary of State for Scotland when she received the Treasury documents relating to the five economic tests and the 18 background studies; what discussions she has held with ministerial colleagues on the tests since receipt of the documents; when she expects to complete her analysis of the documents; and what representations(a) she
    466W
    and (b) departmental officials will make to other Departments before a decision is reached on the economic tests. [115382]

    Mrs. Liddell
    The Treasury's 18 supporting studies on EMU were sent to Cabinet Ministers on 16 May 2003. My right hon. Friends the Prime Minister and the Chancellor have held meetings with Cabinet Members. There was an initial discussion at Cabinet on 22 May 2003, which will be followed by a special Cabinet meeting on 5 June 2003. My right hon. Friend the Chancellor will make a statement to the House of Commons on 9 June 2003.

    Honours
    Mr. Pope
    To ask the Secretary of State for Scotland how many officials in her Department have received honours; and how many honours are held by her officials, broken down by category of honour. [111497]

    Mrs. Liddell
    The Scotland Office was established in its present form on 1 July 1999. Since that date, one member of staff (now retired) was appointed as a CBE. One recently retired member of staff and one current member of staff hold honours awarded before the Department was established: one at OBE and one at MBE.

    Public Service Agreements
    Mr. Bercow
    To ask the Secretary of State for Scotland what steps the Department has taken to publicise its Public Service Agreement targets; and at what cost to public funds. [114456]

    Mrs. Liddell
    My Department does not have a Public Service Agreement.

  CULTURE, MEDIA AND SPORT

    BBC Charter
    Mr. Bercow
    To ask the Secretary of State for Culture, Media and Sport what her policy is regarding the future of the BBC Charter. [114097]

    Tessa Jowell
    The current BBC Charter will expire on 31 December 2006. We will announce our approach to the review of the Charter in due course. However, we have made clear that the review will involve a comprehensive appraisal of the BBC's role in the digital age; that it will include an extensive process of industry and public consultation and parliamentary debate; and that OFCOM will make a full contribution.

    Cinemas
    Miss McIntosh
    To ask the Secretary of State for Culture, Media and Sport if she will make a statement on the future of small independent cinemas. [114867]

    Dr. Howells
    The Government are committed to ensuring that a wide variety of films is shown in cinemas across the UK. When it established the UK Film Council in April 2000 as the Government's leading strategic agency for film, one of its key objectives was to develop film culture by improving access to film.
    467W
    For this reason, the UK Film Council provides funding for independent regional cinema through its network of Regional Screen Agencies. Last year, £1.25 million was provided to support independent cinemas.

    In addition, the UK Film Council is currently finalising a cinema exhibition strategy to further support audiences and, where appropriate, cinema exhibitors. This strategy will be delivered using £18 million of Lottery funding, £15 million of which has been delegated to the Film Council from the Arts Council of England, and is aimed at ensuring that the widest range of UK audiences gain access to the broadest range of British and International cinema.

    The key components of the strategy are:
    a Cinema Exhibition Fund totalling £14 million for investment in a 'circuit' or network of specialised cinema screens, including an allocation for 'traditional' capital use such as refurbishment;
    a Digital Fund totalling £1 million for investment in non-theatrical exhibition, and a package of measures aimed at increasing the availability of soft-subtitled prints1 for the deaf or hard of hearing and audio description facilities for the blind or visually impaired; and
    three UK-wide funds, each of £1 million per annum:
    a Cinema Education Fund;
    a Specialised Print and Advertising (P&A) Fund; and
    a UK Film Distribution Programme.

    Through the Film Council and the Cinema Exhibitors' Association, the Government are made aware of the issues and concerns facing independent cinemas in the UK.

    1 "Soft" subtitling, as opposed to 'hard' subtitling that appears automatically on the screen, is stored on computer disc, which can be projected onto the screen when required using new sub-titling technologies equipment (such as DTS and Dolby).

    EU Committees
    Mr. Bercow
    To ask the Secretary of State for Culture, Media and Sport how many officials in the Department serve on EU committees or working parties. [116092]

    Mr. Caborn
    A total of five DCMS officials serve on the following European Union working groups:

    Audio Visual Working Group

    Working Group on Cultural Statistics

    Working Group on Audiovisual Statistics

    Working Group on Tourism Statistics.

    In addition, two of these officials, plus five others, serve on the following European Union advisory and management committees:

    Cultural Affairs Committee

    Culture 2000 management committee

    Television Without Frontiers Directive (Article 23(A)) Contact Committee

    Tourism Advisory Committee

    Advisory Committee on Cultural Goods

    Media Plus management committee.

    Therefore, a total of 10 DCMS officials serve on European Union committees and working groups.

    Freedom of Information Act
    Mr. Hoyle
    To ask the Secretary of State for Culture, Media and Sport if she will list the electronic document and electronic record management systems which have been procured by the public authorities listed in Parts I to V of Schedule 1 of the Freedom of Information Act 2000 for which she is responsible. [116393]

    Dr. Howells
    The British Library, English Heritage and National Maritime Museum all have purchased Tower TRIM. Other non-departmental public bodies are looking at options, including the use of existing systems, for meeting the requirements of the Freedom of Information Act 2000.

    Accommodation Grading
    Mr. Whittingdale
    To ask the Secretary of State for Culture, Media and Sport (1) if she will make it her policy to cancel the review of accommodation grading if consumer research does not support it; [115653]

    (2) what assessment she has made of the success of the current harmonised scheme for accommodation grading; [115644]

    (3) if she will place in the Library copies of the consumer research she has assessed in relation to her revised policy on accommodation grading systems; [115651]

    (4) what plans she has to research consumer attitudes to accommodation grading schemes in the UK; and what amount, broken down by project, is budgeted for such research. [115650]

    Dr. Howells
    Quality is the foundation of a successful and competitive tourism industry and must include a variety of good quality accommodation that meets visitor expectations, both in terms of facilities and service. We want to ensure that the National Quality Assurance Standards (NQAS) schemes: meet the needs of and are easily understood by visitors; attract a very high proportion of accommodation providers; and encourage continuous improvement in standards. There has been no change of tourism policy in this respect from what was published in Tomorrow's Tourism (1999).

    We have not conducted a formal assessment of the accommodation schemes but are determined to increase both industry take up and consumer recognition of the schemes. However, recent research by the (former) ETC has shown that membership of a quality grading scheme brings benefits to participants in terms of higher occupancy levels: 13 per cent. difference in higher occupancy levels between those who are members of the national, harmonised grading scheme and those who do not participate.

    We receive regular informal updates on consumer (and industry) views in correspondence and during visits in this country and abroad. We are confident that any research by VisitBritain into consumer attitudes towards accommodation schemes or views about the nature and detail of the current or proposed schemes will be adequately funded. VisitBritain will be assessing the requirements relating to consumer research and industry consultation over the coming months once confirmation has been made regarding the direction of the proposed changes. A final budget relating to this

    469W
    work is expected to be available in the autumn along with the final report. The research will be robustly conducted, involving other relevant bodies as appropriate, and properly analysed. We will, of course, take into account consumer views, as well as industry views, before reaching any decisions about the best way forward—this is what was done prior to the launch of the schemes for serviced accommodation in England, when they were harmonised with those of the AA and RAC in 1999.

    Mr. Whittingdale
    To ask the Secretary of State for Culture, Media and Sport (1) what weight she gave to the views of(a) domestic tourists and (b) international visitors when formulating her policy on accommodation grading schemes; [115646]

    (2) who will chair the review of accommodation grading; and if she will make a statement; [115645]

    (3) what input other bodies will have into research conducted into consumer attitudes to accommodation grading schemes; [115652]

    (4) what the terms of reference are for the review of accommodation grading schemes; when the review commenced; who has been invited to participate; and what timetable will be followed. [115647]

    Dr. Howells
    Discussion with senior industry representatives over the last year and a half has affirmed their commitment to the huge importance of quality, including the principle that establishments only of acceptable quality should be marketed via publicly funded e-tourism channels and in local authority brochures.

    The first part of the review of the accommodation grading schemes is being led jointly by the three National Tourist Boards in England, Scotland and Wales, who have engaged Alan Britten (former chairman of the English Tourism Council) to lead the review group, consult widely and report his findings to this Department this autumn. The group will examine the differences that exist between the schemes for hotels and guest accommodation in each country, with its main aim being to reach a view on whether common schemes are feasible and would be more readily understood by consumers.

    Good progress on common Great Britain schemes has already been made in respect of quality assurance schemes for non-serviced accommodation, for instance self-catering, Hostels and Campus accommodation. The national Boards have agreed that research and consultation in relation to the self-catering scheme should commence during the summer of 2003. This part of the review will also include consideration of the effectiveness of the symbols used to indicate scheme membership and how we could reduce the proliferation of signs and logos that are currently displayed. The review will consider consumer and industry views of the value of the quality assurance schemes, the scheme's effectiveness and value for money of scheme membership. We also wish to look at how we can increase the levels of participation in the schemes, especially hotels and guest houses.

    The second part of the review relates to England only and is being led by VisitBritain. It will look at the management of the schemes, covering issues such as:
    470W
    assessment, administration, recruitment of businesses, and promotion to consumers. We expect a report to be ready early in 2004

    Mr. Whittingdale
    To ask the Secretary of State for Culture, Media and Sport (1) what financial provision has been made to support the costs of further harmonisation of accommodation grading schemes, with particular reference to(a) property re-inspections and (b) production and distribution of new signage; [115649]

    (2) what estimate she has made of (a) the impact on business and (b) the cost to public funds of further changes to the accommodation grading system. [115648]

    Dr. Howells
    We are confident that any changes made to the current accommodation schemes, which will take three years to implement from the consumer perspective, will be cost-effective as well as increasing clarity and benefiting business. Any costs relating to inspections to any new standards will be minimal, as they will fit in with the established annual timetable.

    Replacement signage, if required, is in any case optional and should benefit business in view of the greater clarity we are aiming to achieve. VisitBritain has allocated £72,000 from within its annual allocation to take forward the two-past review referred to above—funding by the other National Tourist Boards is a matter for the devolved administrations.

    Libraries
    Mr. Wray
    To ask the Secretary of State for Culture, Media and Sport how many libraries have closed since 1997; what improvements have been made to libraries in this period; what internet and computer provisions have been made available at library sites; and if she will make a statement on her assessment of library services. [115168]

    Mr. Caborn
    The number of libraries closed since 1997 is not held centrally. However, the number of Total Service Points open 10 hours or more per week is contained in column 18 of the annual Chartered Institute of Public Finance and Accountancy Public Library Statistics for each of those years, copies of which are available in the House of Commons Library.

    The Government has encouraged improvements in planning, accountability and performance by English public library services through the introduction of Annual Library Plans (ALPs) in 1998, now superseded by Position Statements, and Public Library Standards on 1 April 2001.

    All but fewer than 1 per cent. of English Public Libraries are now connected to the internet through the £100 million lottery funded People's Network programme which has enabled library authorities to improve their ICT infrastructure and staff skills and to create innovative digital content.

    In February we launched Framework for the Future which sets out the Government's 10 year vision aimed at encouraging public library services in England fit for the needs of 21st century users. The document cites many exciting and innovative examples of how modern public libraries are developing new ways of meeting the needs of the communities they serve. A copy of this document

    471W
    is available in the House Library and may also be found at: www.culture.gov.uk. Public library provision in Scotland is the responsibility of the Scottish Executive.

    Licensing Bill
    Mr. Mark Field
    To ask the Secretary of State for Culture, Media and Sport how many(a) clauses and (b) schedules were (i) fully debated, (ii) partly debated and (iii) not debated during the Committee Stage of the Licensing Bill. [116750]

    Dr. Howells
    Of 198 clauses in the Licensing Bill as considered in Committee, 106 were debated in full. 88 were not debated. Of these, 51 were not debated because no amendments were tabled and the Committee agreed to the question that the clause stand part of the Bill without debate. Four clauses were partly debated. As a result of Sessional Order D (29 October 2002) and the Order of the Committee (1 and 3 April 2003), the opportunity for debate was lost for 37 clauses.

    Of eight schedules in the Licensing Bill as considered in Committee, five were debated in full. Three were not debated because no amendments were tabled and the Committee agreed to the question that the schedule be the nth schedule of the Bill without debate. No schedules were partly debated.

    Olympic Games
    Mr. Kevan Jones
    To ask the Secretary of State for Culture, Media and Sport if she will make a statement on the effects of a successful London Olympic bid on the levels of sports lottery funding available for projects in the North East. [116579]

    Mr. Caborn
    Preliminary assessments of the impact of Olympic Lottery games have been provided by Camelot, and reviewed by the National Lottery Commission. These estimates suggest that any negative impact on income to the existing good causes would be small—four per cent. for the remainder of the Camelot licence period, until 2009. It is possible that should additional funding be required the impact may rise to 11 per cent. between 2009–12. However, Olympic Lottery games have the potential to invigorate interest in the Lottery in general and in that way may benefit all the existing good causes.

    Decisions on lottery funding for specific projects in the North East and across the country will remain a matter for the distributing bodies, in the case of sport for Sport England.
    472W
    Mr. Kevan Jones
    To ask the Secretary of State for Culture, Media and Sport what assessment she has made of the need for an Olympic size swimming pool for the North East of England; and if she will make a statement. [116582]

    Mr. Caborn
    In December 2001 Sport England made an assessment of swimming pool provision in the North East using their Facilities Planning Model. The Model provides an assessment of the relationship between the level of supply of pools required to meet the estimated demand from the population in a given area in the peak period.
    Analysis of the results found that the current supply of swimming pools could generally meet the existing demand from residents.

    The Amateur Swimming Association published their facilities strategy in December 2002, and highlighted the strategic need for one 50m community pool in each of Sport England's nine regions. At present the North East does not have a 50m pool, but I understand there are two Lottery proposals currently being considered for such a facility by Sport England.

    Sustainable Development
    Mr. Horam
    To ask the Secretary of State for Culture, Media and Sport which United Kingdom commitments arising from the World Summit on Sustainable Development(a) have been incorporated into the Department's existing delivery plan for Service Delivery Agreements and (b) will be incorporated in its delivery plan for Service Delivery Agreements in advance of the 2004 Spending Review. [113886]

    Dr. Howells
    This Department has not incorporated any United Kingdom commitments arising from the World Summit on Sustainable Development into its current delivery plans for their Service Delivery Agreements, and does not foresee including any commitments in future delivery plans for Service Delivery Agreements.

  LORD CHANCELLOR'S DEPARTMENT

    Ms Janet Hughes
    Mr. Lidington
    To ask the Parliamentary Secretary, Lord Chancellor's Department when the Administrative Court Office issued the writ of fiat facias that was sealed on 5 November 2002 in the case of Ms Janet Hughes. [107741]

    Yvette Cooper
    The writ was issued by the Administrative Court Office on 5 November 2002 on the application of the Department for Environment, Food and Rural Affairs (DEFRA).

  DEPUTY PRIME MINISTER

    Green Belt
    Mr. Wray
    To ask the Deputy Prime Minister which cities have green belts; how large they were in 1997; what area they cover now; and what plans he has to enlarge green belt land. [115154]

    Mr. McNulty
    In 1997, the area covered by the 14 green belts in England was:

    Hectares

    Tyne and Wear

    53,000

    York

    35,400

    South and West Yorkshire

    251,300

    North West

    249,500

    Stoke-on-Trent

    44,100

    Nottingham and Derby

    62,000

    Burton and Swadlincote

    700

    West Midlands

    229,800

    Cambridge

    26,700

    Gloucester and Cheltenham

    7,000

    Oxford

    35,000

    London

    514,300

    Avon

    68,400

    SW Hampshire and SE Dorset

    82,300

    Total

    1,649,500

    The Government remains committed to the protection of green belts. Since 1997, over 30,000 hectares has been added to the green belt. Our objective is to continue to maintain or increase the area of green belt land in each English region. The general extent of green belt will continue to be a matter for Regional Planning Guidance, with local planning authorities setting the precise boundaries.

    Asylum Seekers
    David Davis
    To ask the Deputy Prime Minister how many asylum seekers were housed by the local authority in(a) the East Riding of Yorkshire and (b) Hull in each month since 1997. [97735]

    Beverley Hughes
    I have been asked to reply.

    The information is not available in the form requested.

    The availability of information on the location of asylum seekers in the UK is currently linked to the support the asylum seeker receives. Asylum seekers in the UK either receive support from the National Asylum Support Service (NASS), local authorities or the Department for Work and Pensions (DWP) or are supporting themselves.

    Information on outstanding asylum cases, initial decision outcomes and asylum case processing times relating to persons in particular areas of the UK is unavailable as are statistics regarding the location of asylum seekers not in receipt of support.

    NASS does not disperse asylum seekers to any areas in the East Riding of Yorkshire. The following table shows the number of asylum seekers (including
    474W
    dependants) accommodated by NASS in the Hull cluster area as at the end of each quarter since June 2000:1

    Date

    Number of asylum seekers (including dependants) supported in NASS accommodation in the Hull cluster area

    As at end June 2000

    2

    As at end September 2000

    380

    As at end December 2000

    960

    As at end March 2001

    1,015

    As at end June 2001

    915

    As at end September 2001

    1,000

    As at end December 2001

    1,035

    As at end March 2002

    1,035

    As at end June 2002

    995

    As at end September 2002

    995

    1 All figures have been rounded to the nearest five, figures between one and two are represented by a2.

    Figures exclude cases where support has been ceased.

    Additionally, some asylum seekers receive subsistence only support from NASS or are disbenefited cases2. Statistics on the location of these cases are currently only available at regional level. The following table shows the total number of subsistence only and disbenefited cases (including dependants) which were supported in the Yorkshire & Humberside region (which includes the East Riding of Yorkshire and Hull) as at the end of each quarter since December 2000:

    Date

    Number of asylum seekers (including dependants) receiving subsistence only support, or being supported as a disbenefited case, and staying in the Yorks and Humberside region

    As at end December 2000

    85

    As at end March 2001

    115

    As at end June 2001

    140

    As at end September2001

    215

    As at end December 2001

    310

    As at end March 2002

    510

    As at end June 2002

    600

    As at end September 2002

    735

    2 Disbenefited cases are cases which were previously supported under the main UK. Benefits system and have been moved onto NASS support. Some of these cases have remained in the original social services accommodation.

    From grant claims sent to the Home Office by local authorities, as at the end of September 2002, there were the following additional number of asylum seekers being supported by the local authorities in Hull and East Riding of Yorkshire.

    Local Authority

    Number of singles supported as at end of Sep 2002

    Number of families supported as at end of Sep 2002

    East Riding

    5

    0

    Hull

    35

    5

    475W
    In previous years, information is only available on the number of weeks' support paid for by local authorities rather than the number of asylum seekers actually supported.

    Prior to the introduction of NASS, asylum applicants claiming asylum on arrival were eligible to receive urgent case payments under income support arrangements. Payments equated to 90 per cent. of income support rates.

    Asylum seekers claiming asylum in country were eligible to receive support from their local authority and payments were made to meet their essential living needs.

    Statistics on the number of asylum seekers supported by NASS in each region are available on the Home Office's Immigration and Asylum Statistics website. Detailed figures will next be published on 28 February 2003 in the bulletin covering quarter four of 2002:

    http://www.homeoffice.gov.uk/rd s/immigration1.html.

    Audit Commission
    Mr. Pickles
    To ask the Deputy Prime Minister how many mobile phones or pagers owned by the Audit Commission have been lost by its staff since 1997. [115501]

    Mr. Leslie
    Information on the numbers of Audit Commission-owned mobile phones and pagers which have been lost or stolen is not available prior to 2001–02; since then the Commission has maintained a register to record all lost items, and no mobile phones or pagers have yet been recorded as lost.

    Mr. Pickles
    To ask the Deputy Prime Minister how many times Audit Commission staff have travelled abroad at public expense since 1997; what countries they visited; and what the total cost of each visit was. [115503]

    Mr. Leslie
    Information on the number of visits abroad by Audit Commission staff and the cost of each visit is not collected separately. Foreign travel is seldom undertaken by Commission staff. When it is, it is only for specific Audit Commission business purposes. Most

    Homeless households housed by local authorities in Bed and Breakfast accommodation (including shared facility annexes) as at 31 December 2002

    All households

    Households with dependent children

    Total (in April 2001)

    Homeless in bed and breakfast

    Rate per thousand

    Total (in April 2001)

    Homeless in bed and breakfast1

    Rate per thousand

    North East

    1,066,000

    90

    0.08

    318,000

    20

    0.06

    NorthWest

    2,813,000

    70

    0.02

    856,000

    20

    0.02

    Yorkshire and the Humber

    2,065,000

    410

    0.20

    618,000

    100

    0.16

    East Midlands

    1,732,000

    190

    0.11

    514,000

    100

    0.19

    West Midlands

    2,154,000

    80

    0.04

    662,000

    40

    0.06

    East

    2,232,000

    750

    0.34

    654,000

    320

    0.49

    London2

    3,016,000

    8,140

    2.70

    873,000

    3,950

    4.52

    South East2

    3,287,000

    1,340

    0.41

    960,000

    560

    0.58

    South West2

    2,086,000

    1,550

    0.74

    570,000

    640

    1.12

    England

    20,451,000

    12,620

    0.62

    6,023,000

    5,740

    0.95

    1 The count of homeless households also includes those with an expectant mother, but no dependent children.

    2 As figures for homeless households in B&B have been updated to reflect late returns and revisions, they differ very slightly from those published in the Office of the Deputy Prime Minister 's Statistical Release (Supplementary Tables) of 13 March 2003.

    Source:

    The Office of the Deputy Prime Minister PIE housing activity return (quarterly); 2001 Census
    476W
    overseas travel is undertaken at the request and at the expense of host organisations who are keen for the Commission to share its knowledge and experience, mainly through conferences and symposiums.

    Award Schemes
    Annabelle Ewing
    To ask the Deputy Prime Minister if he will list the award schemes in(a) 2001 and (b) 2002 promoted by the Department; what their scope was; when the relevant participating organisations are scheduled to be sent results; and whether other parties will be given notification of the results at the same time. [102050]

    Mr. Leslie [pursuant to his answer, 17 March 2003, Official Report, c. 607W]
    The Neighbourhood Warden Achievement Awards has been running since 2001. The awards cover 10 categories and are open to all Neighbourhood Wardens. The awards are launched in May/June and applicants have until the beginning of September to send in their nominations. The judging panel is comprised of representatives from the Neighbourhood Renewal Unit and the Government Offices. All applicants are notified in writing in October. The winners are presented with a trophy and £500 to spend on their neighbourhood warden schemes at the annual Neighbourhood Wardens Conference in November.

    Bed and Breakfast Accommodation
    Dr. Ashok Kumar
    To ask the Deputy Prime Minister what percentage of (a) households and (b) households with children are living in bed and breakfast and similar temporary accommodation in (i) England and (ii) each region. [114297]

    Mrs. Roche
    Latest information reported on the number of homeless households being accommodated by local authorities in bed and breakfast hotels, including annexes where main facilities are shared is shown in the following table. These are expressed as a rate per thousand of all households as identified in the 2001 Census.

    Departmental Invoices
    Mr. Pickles
    To ask the Deputy Prime Minister what percentage of undisputed invoices were paid in 30 days by(a) the Audit Commission and (b) the average local authority in England in the last year for which figures are available. [115492]

    Mr. Leslie
    83 per cent of the undisputed bills received by the Audit Commission in 2001–02 were paid within 30 days. For 2001–02 the average percentage of invoices for commercial goods and services that were paid by English local authorities within mutually agreed

    Business Area

    Project

    Consultancy

    Service

    Neighbourhood Renewal

    Renewal net

    PA Consulting

    Project development

    Housing and

    HEMS

    Capita Business Services

    Feasibility study and business case

    Employment Mobility

    HEMS

    Bird and Bird

    Legal advice

    Service

    Local Authority Housing

    GASP3

    HEDRA

    Project management

    GASP3

    Methods Applications

    Quality assessment

    Local e-Government

    e-voting pilots

    Actica

    Quality assessment 2002 and 2003

    OGC

    Procurement support

    Bird and Bird

    Legal advice

    QinetiQ

    Quality assessment 2003

    Echelon

    Quality assessment 2003

    CESG

    Security standards development

    Scope

    Accessibility standards development

    Pathfinder projects

    Vantagepoint

    Project dissemination

    Implementing e-Government (IEG) statement process

    Public sector strategies

    Process development and assessment

    Planning

    Planning Portal

    HEDRA

    Strategic direction

    Opta

    Marketing and business development

    Cap Gemini Ernst and Young

    XML schema development

    QI Consultants

    Technical design advice

    Vega

    Project management

    Airtight

    Technical assurance

    Usability Company

    Usability testing programme development

    Buffalo

    Design and marketing advice

    Media Lounge

    Data management advice

    Proactive Plus

    Market research advice and services

    Design @ Large

    Design and printing advice

    Brian Fowler Consulting

    Team building and development

    Planning casework

    HEDRA

    Strategic direction

    Ringwood software

    Records and document management

    Mott MacDonald

    Business continuity planning

    Charlton Communications

    Design and marketing advice

    National Computer Centre

    IT systems security

    Paston Consultancy

    Programme and project quality assurance

    Supporting People

    SPINTLs

    System development

    TDAPM

    Support system development

    For the Office of the Deputy Prime Minister Executive Agencies, the details are as follows:

    Business Area/Project

    Consultancy

    Service

    Fire Service College

    MDC

    e-training and development pilot modules

    The Rent Service

    "Fair Rent" applications

    Parity

    Functional specification development

    Market Rental evidence

    Parity

    Functional specification development

    Staff Profiles
    Mr. Pickles
    To ask the Deputy Prime Minister what percentage of(a) the Audit Commission staff, (b) local authority staff in England and (c) the economically
    478W
    terms or, if such terms did not exist, within 30 days of such invoices being received by the authority, was 88 per cent.

    E-government
    Brian Cotter
    To ask the Deputy Prime Minister if he will list by project the consultancies(a) his Department and (b) its non-departmental public bodies have used on e-government projects since 1st January 2001. [115231]

    Mr. Leslie
    Since 1 January 2001 the following consultancies have been used to provide advice on e-government to the Office of the Deputy Prime Minister:

    active population in England (i) are from ethnic minorities and (ii) people with disabilities. [115488]

    Mr. Leslie
    The information requested is in the following table.

    Percentage from ethnic minority backgrounds

    Percentage with disabilities

    Audit Commission staff (2001/02)

    7.7

    3.0

    Local authority staff (average figures from best value performance indicators 2001/02)

    3.2

    2.4

    Economically active population in England (figures from February 2003 Quarterly Labour Force Survey)

    7.8

    13.2

    Official Residences
    Mr. Pickles
    To ask the Deputy Prime Minister on how many occasions his official residences have been used for(a) charitable and (b) other fund-raising events since May 1997; what charges were made for such events; and what was made of (i) catering and (ii) other facilities provided by the residences. [113542]

    Mr. Leslie
    My right hon. Friend the Deputy Prime Minister has held no such events at his official residences.

    Mr. Pickles
    To ask the Deputy Prime Minister what rules govern the use of his official residences for non-official purposes. [113544]

    Mr. Leslie
    The rules governing the use of Ministers' official residences are set out in the Ministerial Code of Conduct.

    Overseas Travel
    Mr. Pickles
    To ask the Deputy Prime Minister how much his Department, his Department's agencies and non-departmental public bodies spent on overseas travel, overseas accommodation and other associated expenses in each year since 1997. [104182]

    Mr. Leslie
    I refer the hon. Member to the answer given by my hon. Friend the Member for Paisley, South (Mr. Alexander) to the hon. Member for Yeovil on 22 January 2003,Official Report, column 334W. Figures for the Office of the Deputy Prime Minister, its agencies and non-departmental public bodies are not held centrally and could only be provided at disproportionate cost.

    Retirements
    Mr. Pickles
    To ask the Deputy Prime Minister how many(a) early retirements and (b) ill-health retirements there were as a percentage of the total workforce in (i) the Audit Commission and (ii) the average local authority in England in the last year for which figures are available. [115496]

    Mr. Leslie
    During the year to 31 October 2002 (the end of the Audit Commission's last complete financial year), the percentage of Commission staff who retired early was 0.1 per cent. of staff employed. There were no retirements on the grounds of ill-health. Between 1 April 2001 and 31 March 2002 the average percentages of staff of English local authorities retiring early and because of ill-health were 0.7 per cent. and 0.5 per cent. respectively.

    Senior Management (Women)
    Mr. Pickles
    To ask the Deputy Prime Minister what percentage of senior management posts are filled by women in(a) the Audit Commission and (b) the average local authority in England. [115493]

    Mr. Leslie
    Of the 125 (5 per cent.) most highly paid posts within the Audit Commission in 2001-02, 27.2 per cent. were filled by female members of staff. The average percentage of the posts in the top three management tiers of English local authorities in 2001–02 which were filled by women was 24 per cent.

  PRIME MINISTER

    Iraq
    Paul Flynn
    To ask the Prime Minister what evidence he has evaluated that Iraq had weapons of mass destruction in(a) 2002 and (b) 2003 which represented a present threat to Britain; and if he will make a statement. [115565]

    The Prime Minister
    I refer my hon. Friend to the answers I gave at Prime Minister's Questions on 4 June 2003,Official Report, columns 146–56.

  WORK AND PENSIONS

    Term-time Working
    John Cryer
    To ask the Secretary of State for Work and Pensions whether term-time workers in education are deemed unemployed and able to claim jobseeker's allowance during unpaid holidays, for the purposes of calculation of their hourly rate. [116693]

    Malcolm Wicks
    Jobseeker's Allowance is paid to support people who are available for and actively seeking employment and who are not engaged in remunerative work of 16 hours or more a week. For people who have regular breaks in their employment, like term-time workers, whether or not they are engaged in remunerative work depends on the average number of paid hours that they work each week. The average is calculated over the whole cycle of their work—which for term-time workers is the full year, including both terms and holidays. If this average is under 16 hours a week, term-time workers may be entitled to Jobseeker's Allowance, provided they meet the other conditions for entitlement.

    John Cryer
    To ask the Secretary of State for Work and Pensions what progress has been made with the review of term-time working; and if he will make a statement. [116689]

    Malcolm Wicks
    Our view is that the most appropriate form of help for low-paid term-time workers is through in-work support. The introduction of the Working Tax Credit in April has improved and extended the provision of in-work support, and there are specific provisions to ensure that term-time workers 1 pattern of work is taken into account for the Working Tax Credit.

    Adult Education
    Paul Holmes
    To ask the Secretary of State for Work and Pensions(1) how many people gained a first Level 2 qualification under Work Based Learning for Adults in each year since 1997; and if he will make a statement; [114470]

    (2) how many people entered Work-Based Learning for Adults without a first Level 2 qualification in each year since 1997; and if he will make a statement. [114479]

    Mr. Nicholas Brown
    The information requested is not available. However, a Training and Enterprise Council survey of leavers showed that, prior to April 2001, around 47 per cent. of people who responded gained a full or part qualification.

    Benefit Fraud
    Mr. Heald
    To ask the Secretary of State for Work and Pensions what system is in place for making decisions as to whether allegations of benefit fraud should be investigated; and if he will make a statement. [113492]

    Malcolm Wicks
    All allegations of benefit fraud, from whatever source, are sent to Referral Managers located in each regional Operational Intelligence Unit. An unbiased risk scoring system is applied for prioritising referrals made to the Department's investigators. Cases that are not investigated as potential benefit fraud are referred to other staff to consider whether other, non-investigative, interventions are required.

    Benefits Sanctions
    Mr. Barnes
    To ask the Secretary of State for Work and Pensions if he will make it his policy that anyone facing a benefits sanction for breach of labour market conditions or the New Deal rule will initially be sent a warning letter giving contact details for local advice agencies. [113934]

    Malcolm Wicks [holding answer 19 May 2003
    Before a sanction is imposed, a Jobseeker's Allowance recipient is notified that a doubt has arisen on their claim. They are also asked if they wish to make a statement giving the grounds for their actions which caused the doubt to be raised. We have no plans to change these arrangements but keep them under review.

    Child Support
    Mr. Boswell
    To ask the Secretary of State for Work and Pensions in how many cases assessments for child support have been suspended because the absent partner is habitually resident in another EU country; in how many of such cases the absent partner retains a material connection with the United Kingdom; and if he will make a statement. [115083]

    Malcolm Wicks
    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 Mr. Doug Smith to Mr. Boswell, dated 3 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 in how many cases assessments for child support have been suspended because the absent partner is habitually resident in another EU country; in how many of such cases the absent partner retains a material connection with the United Kingdom; and if he will make a statement.
    I do not have the information to answer this fully. I do however have some relevant information in relation to non-resident parents whose cases were suspended as they were living abroad. As at 31st March there were 480 cases suspended. I am unable to determine how many of those cases retained a material connection with the United Kingdom, as we do not collect this information.

    Identity Fraud
    Mr. Webb
    To ask the Secretary of State for Work and Pensions how many national insurance accounts with false identities have been monitored by the Department 482W
    in each of the last 10 years; and of those, how many cases were referred from the national insurance recording system. [116727]

    Malcolm Wicks
    The National Identity Fraud Unit (NIFU) flags on the Departmental Central Index and the National Insurance Recording System all accounts where it can be proven that the application for a National Insurance Number was made using false identity documentation.

    The total number of false identity flags that are held on Departmental records to date is 1,138. Figures cannot be broken down specifically for each year.

    Jobseeker's Allowance
    Mr. Cousins
    To ask the Secretary of State for Work and Pensions what the average processing time is of a new claim for jobseeker's allowance between first contact and payment in each(a) jobcentre area and (b) employment region. [113064]

    Malcolm Wicks
    The average national processing time for a new claim to Jobseeker's Allowance is 10.14 days against a target of 12 days. Information on the average processing time by District and Region has been placed in the Library.

    Pension Service
    Annabelle Ewing
    To ask the Secretary of State for Work and Pensions(1) how many face-to-face meetings were requested by pensioners in Perth constituency in their dealings with the Pension Service in Dundee in each year since 1997; how many requests were granted; how many have taken place at the home of the pensioner; and what record is kept of such requests; [115556]

    (2) how many (a) full-time and (b) part-time staff are employed at the Dundee Pension Centre, broken down (i) by (A) managerial and (B) non-managerial posts and (ii) by civil service grades; [115557]

    (3) on what occasions since November 2002 staffing levels in Dundee Pension Centre have been increased to cover busy periods and by what amount; [115558]

    (4) what the criteria employed by the Pension Centre based in Dundee are when referring pensioners to the Pension Service based in Newcastle; and in what percentage of cases such a referral has been made since November 2002. [115559]

    Maria Eagle
    The matters raised are the responsibility of Alexis Cleveland, chief executive of The Pension Service. She will write to the hon. Member.

    Letter from C. MacKinnon to Annabelle Ewing, dated 3 June 2003:
    The Secretary of State for Work and Pensions has asked Alexis Cleveland to respond to the following parliamentary questions relating to Dundee Pension Centre. Due to annual leave I am replying, on her behalf.

    1. How many face-to-face meetings were requested by pensioners in Perth constituency in their dealings with the pension service in Dundee in each year since 1997; how many requests were granted: how many have taken place at the home of the pensioner; and what record is kept of such requests.

    483W

    2. How many (a) full-time and (b) part-time staff are employed at the Dundee Pension Centre broken down (i) by (A) managerial and (B) non-managerial posts and (ii) by civil service grades.

    3. On what occasions since November 2002 have staffing levels in Dundee Pension Centre been increased to cover busy periods and by what amount.

    4. What the criteria employed by the Pension Centre based in Dundee are when referring pensioners and the pension service based in Newcastle; and in what percentage of cases has such a referral been made since November 2002.

    I am unable to answer fully all of these questions as we either do not gather the data or do not retain it over lengthy time periods. I have provided answers where possible and where not have explained the context or reason.
    The Pension Service was launched in April 2002 and began moving work to Dundee Pension Centre on 20 April 2002.
    The Dundee Pension Centre does not keep records of the number of face-to-face meetings specifically requested by pensioners. General records of referrals for visit are kept for 3 months and then destroyed but it is not possible to distinguish from these whether the visit was requested at the instigation of the customer, or by us.
    There has been a staged programme of recruitment at Dundee Pension Centre in line with the movement of workloads from exporting sites. I have set out the information requested on staffing in the annex attached.
    Between February and October 2002, there were 432 staff recruited, with an additional 65 new staff recruited between April and May 2003. This additional recruitment is to support anticipated additional work to deliver Pension Credit.
    The Dundee Pension Centre processes all claims for Retirement Pension from customers living in Perth Constituency, amongst others. Where a customer wishes their Retirement Pension to be paid by direct payment into their hank account, their account is maintained by our centre in Newcastle. Information is not available about the number of cases dealt with by Dundee Pension Centre that have requested direct payment of Retirement Pension. Nationally, fifty per cent of pensioners currently have their benefit paid direct into a bank account.
    I am sorry that I have been unable to answer all your questions fully but hope that what I have been able to provide assists you.

    Dundee Pension Centre Staffing Levels—Managerial

    Substantive Grade

    Status

    Total

    Unified Grade 6

    Full time

    1

    Senior Executive Officer

    Full time

    3

    Higher Executive Officer (HEO)

    Full time

    10

    Executive Officer (EO)

    Full time

    70

    EO

    Full time/part year

    1

    Total full-time managerial staff

    85

    HEO

    Part time

    1

    EO

    Part time

    6

    EO

    Part time/part year

    3

    Total part-time managerial staff

    10

    Total managerial staff

    95

    Dundee Pension Centre Staffing Levels—Non-managerial

    Substantive grade

    Status

    Total

    Adjudication Officer (AO)

    Full time

    366

    Administrative Assistant (AA)

    Full time

    27

    AA Casual

    Full time

    40

    Total full-time non-managerial staff

    433

    AO

    Part time

    37

    AO

    Part time/part year

    3

    Total part-time non-managerial staff

    40

    Total non-managerial staff

    473

    Pensions Appeals
    Mrs. Lait
    To ask the Secretary of State for Work and Pensions how many cases at Pensions Appeal Tribunal by wives claiming an increased state pension because their husband has reached 65 have(a) failed and (b) succeeded in each year since 1997; and in how many cases succeeding at Tribunal payments were not fully backdated. [113851]

    Maria Eagle
    This is a matter for Christina Townsend, Chief Executive of the Appeals Service. She will write to the hon. Member.

    Letter from Christina Townsend to Mrs. Lait dated, 4 June 2003:
    The Secretary of State has asked me to respond to your question regarding the number of appeals in respect of wives claiming increased state pension because their husband has reached 65 in each year since 1997, and how many successful cases were not fully backdated.
    No information is available on the number of appeals where the issue was solely an increase of state pension or on how many successful cases were not fully backdated. However, the attached table shows the total number of Retirement Pension appeals cleared, as well as how many had the original decision upheld and how many were found in favour of the appellant. We began collecting information for the first full year in 1998 so no information is available for 1997.
    I hope this reply is helpful

    Table 1

    Retirement pension appeals cleared in the calendar years shown, and wheteher original decision upheld or found in favour of the appellant

    Appeals cleared

    Decision upheld

    Found in favour

    1998

    1,270

    1,115

    140

    1999

    1,385

    1,210

    160

    2000

    965

    815

    135

    2001

    1,130

    60

    55

    2002

    1,170

    1,010

    150

    Notes:

    All figures are subject to change as more up to date data becomes available. Figures for the latest months may rise significantly as information feeds through to the Appeals Service. Figures are rounded to the nearest five.

    Source:

    100 per cent. download of the Generic Appeals Processing System.

    Widowers' Pensions
    Mr. Ben Chapman
    To ask the Secretary of State for Work and Pensions (1) if he will make a statement on the factors underlying the Government's decision not to make a statement on widowers' pensions to the European Court of Human Rights on 15 May; [116294]

    (2) what plans the Government has to settle widowers' claims to benefits predating 9 April 2001. [116808]

    Malcolm Wicks
    Before April 2001, there was no statutory basis to make payments of widow's benefits to men. The Government, in introducing its reform of support in bereavement from April 2001, said, following earlier findings by the European Court of Human Rights (ECtHR) that similar cases were admissible, that its obligation was to future widowers. The reforms of 2001 met that obligation and went further by making the new Widowed Parent's Allowance available to existing widowers from its introduction.
    485W
    In June 2002, the European Court of Human Rights found that the UK Government had violated the Convention in respect of Mr Kevin Willis by not paying him the Widowed Mother's Allowance and Widow's Payment that he would have been entitled to h.ad he been a woman in the same circumstances. The Court ordered a payment equivalent to the benefit that he would have received had he been a woman and an amount in respect of interest. The Government is not contesting that judgement.

    The Court did not consider the question of widow's pension and litigation remains before the domestic and Strasbourg Courts. The Court of Appeal heard arguments in the domestic cases during week commencing 7 October 2002 and judgment was reserved. The European Court of Human Rights decided to adjourn further hearings of two applications by widowers concerning widow's pension until the completion of the domestic litigation.

    There are important matters to be settled in both jurisdictions that will affect the Government's decisions in dealing with all the widowers affected. The Government is continuing to respond to the European Court of Human Rightsl requests for written observations on individual applications from widowers but, until the litigation is resolved, the Government cannot speculate about the outcomes of these cases or the decisions that it may take in the light of them.

  HEALTH

    Brain Removal
    Harry Cohen
    To ask the Secretary of State for Health which categories of people have had their brains removed from their bodies by authorities in the last 10 years; which authorities have the power to undertake removal; what guidelines apply to each authority in relation to this activity; and if he will make a statement. [116704]

    Mr. Lammy
    Under the Human Tissue Act 1961, organs and tissue may be taken and used for medical purposes after a post-mortem examination by a national health service pathologist if the person who has died authorised this prior to death. Where the deceased has not expressed a view, relatives may authorise such taking and use of organs and tissue.

    Under the Coroners Act 1988 and Coroners Rules 1984, a coroner undertaking a coroner's post mortem examination may remove and retain any organs or tissue that he/she deems relevant to the cause of death on his/her own authority alone. However, any organ or tissue removed in such cases may not be used for any other purpose unless separate authorisation is obtained.

    Under the Anatomy Act 1984 and Anatomy Regulations 1988, organs and tissue, including brains and brain tissue, may be removed for anatomical examination when a person has bequeathed his or her body for this purpose.

    In terms of the legal implications, the brain is no different from any other part of the human body in respect of the above.
    486W
    Following extensive consultation last year, comprehensive new guidance on the taking and use of organs and tissue following post-mortem examination was published on 25 April 2003. This has been placed in the Library. New legislation is also in preparation. This will be brought forward as soon as parliamentary time allows

    Data about the categories of people from whom any organs or tissues have been removed are not collated or held centrally. However, the Report of a Census of Organs and Tissues Retained by Pathology Services in England, published by the Chief Medical Officer in 2000, may be of interest.

    Hospital Car Parks
    Paul Holmes
    To ask the Secretary of State for Health if he will make a statement on the provision of disabled parking spaces in hospital car parks. [114498]

    Mr. Hutton
    NHS Estates, an executive agency of the Department of Health, provides advice and guidance to the National Health Service, principally through a series of technical manuals and design publications. These represent best practice and, through their adoption, NHS trusts and health authorities should comply with current legislation affecting disabled people.

    NHS Estates guidance document, Car Parking (1999—Health Facilities Note 21) suggests an overall proportion of disabled parking spaces for healthcare premises, whilst accepting that the number and different types of spaces will be dependent on the range of healthcare services and facilities provided.

    The Department also issued Doubly Disabled—Equality for Disabled People in the new NHS—Access to Services (1999). This guidance gives advice on access for disabled people including 'Transport, cars and parking'. To help underpin this process, an access audit toolkit was developed and made available to all NHS bodies in 1999.

    Agenda for Change
    Mr. Blunt
    To ask the Secretary of State for Health what average change in pay he expects for speech and language therapists in real terms over three years under Agenda for Change; and what proportion of these posts in the NHS are held by women. [114781]

    Mr. Hutton [holding answer 21 May 2003]
    The Agenda for Change proposals include a 10 per cent. uplift to basic pay for all staff groups over the three years from April 2003 to March 2006 and a further estimated increase of 2.5 per cent. in basic pay on average. The changes in pay (over and above 10 per cent.) for specific groups, such as speech and language therapists, will depend on decisions made locally about which national job profile matches a particular post or, where there is no match with a national profile, on a local job evaluation. 97.3 per cent. of the qualified speech and language therapist workforce is female.

    Source:
    Department of Health Non-medical Workforce Census, September 2001.
    487W
    Mr. Blunt
    To ask the Secretary of State for Health whether the implementation of Agenda for Change is conditional upon the results of a ballot of NHS staff; and what account will be taken of the results of consultation with NHS staff in deciding whether Agenda for Change will be rolled out nationally in October 2004. [114782]

    Mr. Hutton
    Agenda for Change has been negotiated by staff and management sides working in partnership. Staff side organisations are consulting their members about Agenda for Change and the majority of these organisations have now announced their results. We expect that a decision about implementation will be made jointly by the United Kingdom health departments, unions and employer representatives once consultation is complete. If this decision is positive, then we will move to the early implementation phase. Where there is evidence from the early implementer sites that the success criteria in the proposed agreement are not being sufficiently met, the appropriate action would be discussed before national roll-out in the new NHS Staff Council. All the nationally recognised staff organisations will be represented on the proposed NHS Staff Council.

    Ambulatory Oxygen Services
    Tony Wright
    To ask the Secretary of State for Health if he will make a statement on ambulatory oxygen services. [116636]

    Mr. Lammy
    I refer my hon. Friend to the reply I gave my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) on 3 June 2003.

    Aneurisms
    Mr. Gibb
    To ask the Secretary of State for Health what his policy is regarding screening for aneurisms; and if he will make a statement. [115249]

    Ms Blears
    The United Kingdom national screening committee makes recommendations to Ministers on all aspects of screening programmes. It is currently considering the resource costs and work force implications of implementing a screening programme, following the publication of a multi-centre study funded by the Medical Research Council last year. Until these recommendations are received, screening should not be started.

    Aspirin
    Mr. Martlew
    To ask the Secretary of State for Health what his policy is on the regular use of aspirin to tackle heart disease; and if he will make a statement. [115732]

    Ms Blears
    The national service framework, based on the advice of an expert group of clinicians, stated that patients at high risk of heart disease or heart attack should take a low dose of aspirin every day, unless other medical considerations made this inadvisable.

    The National Institute for Clinical Excellence is considering clopidogrel in combination with aspirin in the treatment of non ST-segment elevation acute coronary syndromes. The outcome of this work is not expected until 2004.

    Biological Attacksts
    Mrs. Calton
    To ask the Secretary of State for Health what information, preparation and guidance have been provided to tertiary centres on infectious and communicable diseases in the event of a biological attack. [99351]

    Mr. Hutton
    Comprehensive guidance, to ensure that the National Health Service is prepared to respond to major incidents or terrorist attacks, was first issued in November 1998, and was entitled Planning for major incidents: the NHS guidance.

    The Health Protection Agency (HPA) (formerly the Public Health Laboratory Service (PHLS)) has for many years undertaken surveillance of biological agents on the Department's behalf. The approach taken has been to build on the public health need to have in place clinical and laboratory based surveillance for the most likely agents that could be used in a biological attack. This work resulted in the document published by the Department in March 2000, Deliberate release of biological and chemical agents.

    In October 2001 a further package of guidance on the deliberate release of anthrax, smallpox, plague, botulism and the approach to dealing with a chemical, biological or radiological deliberate release was issued. Complementary operational guidance for clinicians, including general practitioners (GPs), was placed on the then PHLS's (now the HPA's) website. These are regularly updated.

    In December 2002, the Department published Interim guidelines for smallpox response and management in the post eradication era on the departmental website. All such guidance is available on the Department's website at www.doh.gov.uk/epcu/cbr/intro.htm with links to complementary guidance on the HPA's website.

    The information and guidance provided by the Department to the NHS is, of course, accessible to the whole NHS.

    Blood
    Mr. Amess
    To ask the Secretary of State for Health if he will make a statement on the Government's policy in using US-sourced, virally inactivated fresh frozen plasma for transfusion patients. [115756]

    Ms Blears
    The Government announced on 15 August 2002 that fresh frozen plasma (FFP) will be obtained from the United States for new-born babies and children born after 1 January 1996 as an added precaution against the theoretical risk of vCJD transmission. This announcement is in line with advice from the United Kingdom expert advisory committee on Microbiological Safety of Blood and Tissues for Transplantation, and is designed to protect the most vulnerable group who will not have been exposed to BSE through the food chain.

    The US FFP will be obtained after screening out high risk donors and then further testing every unit for the presence of HIV, hepatitis B and hepatitis C. As an added precaution, the US FFP will also be subject to treatment with methylene blue to further reduce the risk of transmission of blood borne viruses.
    489W
    The National Blood Service is currently involved in negotiating for supplies of FFP for this group of patients and plans to have it available later this year. A commercially produced FFP product, sourced from the US, is also available for the national health service to purchase.

    Cancer
    Mr. Paterson
    To ask the Secretary of State for Health (1) what steps he is taking to increase detection rates for(a) cancer of the bowel and (b) cancer of the colon; [116344]

    (2) what the detection rate is for (a) cancer of the bowel, (b) cancer of the colon and (c) all other cancers. [116343]

    Ms Blears
    Detection rates for cancer are not collected centrally. In 1999, 28,4511 cases of colorectal (colon and rectum) cancer were diagnosed. The total number of all cases of cancer diagnosed in 1999 was 221,064.

    In a speech to the Britain Against Cancer Conference on 5 November 2002, my right hon. Friend, the Secretary of State for Health reaffirmed his commitment to introduce a national screening programme for bowel cancer and to improve services for symptomatic patients. To take this work forward, the National Cancer Director launched the national health service bowel cancer programme on 4 February 2003. The programme has three main strands: developing a national screening programme, streamlining the patient pathway for symptomatic patients, and improving treatment.

    This work will be underpinned by expansion and modernisation of the work force, and a communications strategy for professionals and the general public.
    1 Office for National Statistics Bulletin, September 2002.

    Diana Organ
    To ask the Secretary of State for Health how much has been allocated to cancer services in the 2003–06 Local Delivery Plan for the Avon, Gloucester and Wiltshire Strategic Health Authority Area. [1158441

    Ms Blears
    The information is shown in the table.

    £ millions

    Cancer service allocation

    2003–04

    1.1

    2004–05

    1.5

    2005–06

    1.2

    These figures are dependent on the strategic health authority's NHS Bank application.

    Carers
    Mr. Blizzard
    To ask the Secretary of State for Health what progress has been made in implementing the requirement for general practitioners to identify carers on their patient lists and inform them of services available to carers. [115906]

    Mr. Hutton
    General practitioner's computer systems are required to include a field where the details of carers are entered. More than 98 per cent. of GPs already have 490W
    access to a desktop computer, which means that they will be prompted for carer details as part of the registration details of patients.

    In addition, the new GP contract, which is currently under consideration, aims to resource and reward GPs on the basis of how well they care for their patients rather than simply the number of patients they treat. One of the quality standards is that, "the practice has a protocol for the identification of carers and a mechanism for the referral of carers for social services assessment".

    Childhood Dyspraxia
    Mr. Evans
    To ask the Secretary of State for Health what the size is of the waiting list for childhood dyspraxia in each trust in England. [116113]

    Mr. Hutton
    Information on the waiting list for childhood dyspraxia is not collected centrally. Information is collected at consultant main specialty level. This can be found on the Department's website at www.doh.gov.uk/waitingtimes.

    Diagnostic Testing
    Mr. Wray
    To ask the Secretary of State for Health how much investment has gone into laboratory diagnostic testing since 1997; what assessment has been made of whether clinical diagnostics can cut down the costs of treatment on the NHS; and if he will make a statement on the benefits to be gained from early diagnosis of illnesses. [114701]

    Mr. Hutton
    During the period 1999–2000 and 2001–02, the Department of Health invested 28 million capital through its pathology modernisation programme in National Health Service pathology services. Extra resources for the NHS were announced in the 2002 Budget, with an annual average increase of 7.4 per cent, above inflation—the largest ever sustained increase in NHS funding—over the five years from 2003–04 to 2007–08. As part of this, we are investing £54 million capital and £9.1 million revenue specifically in pathology services over the three year period from 2003£04 to 2005£06.

    It is clear that early diagnosis can benefit patients. For example, screening for early detection of diabetic retinopathy and laser therapy is effective in preventing visual impairment. Similarly, cancer screening is an important way to detect abnormalities at an early stage, allowing treatment when the cancer is most likely to be curable. We also recognise the benefits of early diagnosis for coronary heart disease in primary care and this approach is supported in the national service framework.

    Digital Hearing Aids
    John Cryer
    To ask the Secretary of State for Health (I) what directions he has issued to hospital trusts involved in the first and second waves of the hearing aids modernisation project on ensuring audiology patients have access to digital hearings; [116688]

    (2) what his policy is on using age as a criterion for access to digital hearing aids under the hearing aids modernisation project; [116687]
    491W
    (3) if he will make a statement on progress with fitting digital hearing aids for analogue hearing aid users within first wave sites of the hearing aids modernisation project; [116685]

    (4) whether first wave sites involved in the digital hearing aids modernisation project started fitting digital hearing aids to new patients before dealing with existing patients. [116684]

    Jacqui Smith
    We have no evidence of audiology departments discriminating against any age group in the fitting of digital hearing aids. Such discrimination would not be acceptable.

    Most first wave sites fitted new patients when they were first modernised and then extended this to include review patients. However, this is a matter for local discretion and some current sites are fitting both new and review patients concurrently from the start. The Royal National Institute for the Deaf has issued guidelines to audiologists in sites taking part in the modernising hearing aid services (MHAS) project. These guidelines advise that patients who have received National Health Services analogue hearing aids in the last three years should not be renewed for a digital aid unless there are clinical reasons why it is particularly appropriate to fit such an aid. The guidelines suggest that patients should be assessed for digital aids if there has been significant deterioration in their hearing since the last assessment, or if the patient has been persistently dissatisfied with the performance of the analogue aid. 83,397 hearing aids had been fitted as part of the modernisation project by the end of March 2003. The cost of finding out how many of those were fitted to patients who already had analogue aids would be disproportionate, and the information is not collected centrally.

    General Dental Service: Average cost of course of dental treatment for patients aged 65 and over, 1997–98 to 2002–03

    £

    Average cost

    1997–98

    1998–99

    1999–2000

    2000–01

    2001–02

    April to September 2002

    October 2002 to March 2003

    Shropshire HA

    28.8

    28.5

    29.9

    31.1

    31.8

    32.1

    1—

    Shropshire County PCT

    1—

    1—

    1—

    1—

    1—

    1—

    32.0

    Telfore and wrekin PCT

    1—

    1—

    1—

    1—

    1—

    1—

    33.8

    England

    34.8

    35.2

    35.8

    36.2

    36.7

    37.4

    37.0

    1 Data is not available

    Emergency Contraception
    Harry Cohen
    To ask the Secretary of State for Health what funding is available in this financial year to develop further pharmacy schemes for the supply of emergency contraception; how the programme will be taken forward; and if he will make a statement. [116746]

    Ms Blears
    The Department is currently gathering reports from the 15 areas that received one-off funding in 200–02 to establish pharmacy schemes. Once these reports have been considered the Department plans to disseminate the main findings to the field. We are also

    Doctors
    Mr. Nigel Evans
    To ask the Secretary of State for Health how many doctors there are per 100 beds in each NHS trust in England. [112059]

    Mr. Hutton
    Information on the number of medical and dental staff per 100 beds in National Health Service trusts within acute and acute teaching clusters, has been placed in the Library. Community trust data has been excluded because the services provided by such trusts are largely non-bed based.

    Elderly People
    Mr. Paul Marsden
    To ask the Secretary of State for Health what the average cost of dental treatment was for people over the age of 65 in(a) Shrewsbury and Atcham, (b) Shropshire and (c) England in each year since 1997. [114761]

    Mr. Lammy
    The average cost of a course of dental treatment in the general dental service (GDS) for people 65 years of age and over in Shropshire health authority (HA) area, Shropshire County Primary Care Trust (PCT) area. Telford and Wrekin PCT area and England in 1997–98 to 2002–03 is shown in the table. These costs are for the payment to the dentist and include the patient charge where applicable. Dentists receive other payments, such as continuing care payments for registered patients of 63.7 pence per month for patients aged 65 and over in 2002–03 and commitment payments which depend on the amount of GDS work done.

    Shropshire County PCT, Telford and Wrekin PCT and Shropshire HA are the administrative health authorities for the Shropshire area that includes Shrewsbury and Atcham.

    The responsibility for the delivery of local dental services transferred from HAs to PCTs on 1 October 2002.

    planning to develop best practice guidance on training pharmacists in the supply of emergency contraception under a patient group direction.

    Funding for pharmacy schemes is a matter for primary care trusts. Central funding to support the implementation of local teenage pregnancy strategies has increased by 50 per cent. this year, 2003–04, to £24 million. If a local need to improve early access to emergency contraception is indicated, some areas may choose to use some of this funding to develop pharmacy schemes. In addition the document Effective Commissioning of Sexual Health and HIV Services

    493W
    advises that open access to emergency contraception for women of all ages should be maintained over weekends and public holidays.

    Energy Efficiency
    Mr. Roger Williams
    To ask the Secretary of State for Health what targets his Department has for improving energy efficiency; and how he intends to achieve these targets. [116651]

    Ms Blears
    I refer the hon. Member to the reply I gave to the hon. Member for Cheadle (Mrs. Calton) on 29 May 2003.

    Euro
    Norman Lamb
    To ask the Secretary of State for Health when he received the Treasury documents relating to the five economic tests and the 18 background studies; what discussions he has held with ministerial colleagues on the tests since receipt of the documents; when he expects to complete his analysis of the documents; and what representations(a) he and (b) departmental officials will make to other Departments before a decision is reached on the economic tests. [115388]

    Mr. Hutton
    Her Majesty's Treasury's 18 supporting studies on European Monetary Union were sent to Cabinet Ministers on 16 May 2003. My right hon. Friends, the Prime Minister and the Chancellor of the Exchequer, are holding meetings with Cabinet Members. There was an initial discussion at Cabinet on 22 May 2003. This will be followed by a special Cabinet meeting on 5 June 2003. My right hon. Friend, the Chancellor of the Exchequer, will make a statement to the House on 9 June 2003.

    Foundation Hospitals
    Mr. Dobson
    To ask the Secretary of State for Health what the underlying deficit is of each of the hospital trusts which he has authorised to proceed with application for foundation status. [114387]

    Mr. Hutton
    [holding answer 19 May 2003]The information requested is shown in the table.

    £000

    NHS Foundation trust Applicants

    2001–02 Income and Expenditure Reserve Cumulative Surplus/Deficit)

    Addenbrooke's NHS Trust

    4,379

    Aintree Hospitals NHS Trust

    (8,586)

    Basildon and Thurrock General Hospital NHS Trust

    3,817

    Bradford Hospitals NHS Trust

    (15,099)

    Calderdale and Huddersfield NHS Trust

    222

    City Hospitals Sunderland NHS Trust

    2,152

    Countess of Chester Hospital NHS Trust

    950

    Doncaster and Bassetlaw Hospitals NHS

    Trust

    329

    Essex Rivers Healthcare NHS Trust

    8,065

    Guy's and St. Thomas' NHS Trust

    (3,897)

    Homerton University Hospital NHS Trust

    (428)

    King's College Hospital NHS Trust

    (561)

    Moorfields Eye Hospital NHS Trusth

    1,857

    Newcastle Upon Tyne Hospitals NHS Trust

    6,199

    North Tees and Hartlepool NHS Trust

    1,020

    Nuffield Orthopaedic NHS Trust

    (2,753)

    Papworth Hospital NHS Trust

    1,844

    Peterborough Hospitals NHS Trusth

    2,318

    Rotherham General Hospitals NE-IS Trust

    29

    494W

    £000

    NHS Foundation trust Applicants

    2001–02 Income and Expenditure Reserve Cumulative Surplus/Deficit)

    Royal Devon and Exeter Healthcare NHS Trust

    3,407

    Sheffield Teaching Hospitals NHS Trust

    479

    Southern Derbyshire Acute Hospitals NHS Trust

    335

    Stockport NHS Trust

    276

    The Queen Victoria Hospital NHS Trust

    1,082

    The Royal Marsden Hospital NHS Trust

    5,939

    University College London Hospital NHS Trust

    774

    University Hospital Birmingham NHS Trust

    1,106

    Walsall Hospitals NHS Trust

    5,851

    Total

    21,106

    Gloucestershire Hospitals NHS Trust, was created on 1 April 2003 and therefore is nit in the table

    Source:

    NHS Trust Audited Summarisation Schedules 2001–2002

    Mrs. Calton
    To ask the Secretary of State for Health if he will list the hospitals which have been given leave to apply for foundation status, and the constituencies within which each is situated. [115177]

    Mr. Hutton
    Information listing the National Health Service trusts, the hospitals which from each trust and the constituencies they are situated in, which have been give leave to apply for foundation trust status, has been placed in the Library.

    Tony Wright
    To ask the Secretary of State for Health if he will introduce random selection as a method of choosing people to sit on the boards of foundation hospitals. [115681]

    Mr. Hutton
    Subject to Parliamentary approval, the Health and Social Care (Community Health and Standards) Bill will provide for applicants for National Health Service foundation trust status to determine the detail of their constitutional arrangements including arrangements for election to the board of governors.

    General Practitioners
    Brian Cotter
    To ask the Secretary of State for Health if he will estimate the average change in income arising from the proposed GP contract for GP practices which do not qualify for the proposed minimum practice income guarantee; and if he will make a statement. [115232]

    Mr. Hutton
    [holding answer 22 May 2003]The new contract for general medical services negotiated between the General Practitioners Committee of the British Medical Association and the NHS Confederation provides for an unprecedented level of additional investment in primary care services. If the contract is accepted, overall investment in England would rise by 33 per cent, over the next three years.

    The minimum practice income guarantee is designed to ensure that no practice loses out from the new allocation formula, providing they achieve a minimum level of quality. Practices that gain from the allocation formula will not receive a minimum practice income guarantee and will have their global sum allocation determined by the formula. Most practices will see a substantial rise in gross income. The average increase will depend on what services general practitioner practices provide and the level of quality they achieve.
    495W
    Mr Liddell-Grainger
    To ask the Secretary of State for Health how many GPs are training in Somerset in 2002–03. [115416]

    Ms Blears
    The September 2002 national health service work force censuses will be published shortly. The table shows the number of GP Registrars nationally and in Somerset health authority in September 2001 and March 2002.

    GP Registrars (GPs in training) within Somerset health authority Septmber 2001 to March 2002

    Numbers (headcount)

    20011

    20022

    England

    1,883

    1,908

    of which:

    Somerset health authority (QD5)

    28

    25

    1 Data as at 30 September 2001.

    2 Data as at 31 March 2002.

    Source:

    Department of Health General and Personal Medical Services Statistics.

    Harry Cohen
    To ask the Secretary of State for Health what advice he issues to General Practitioners on the(a) diagnosis of medical conditions and (b) issuing of prescriptions by telephone, and if he will make a statement. [115471]

    Mr. Hutton
    The Department has not issued any advice on the diagnosis of medical conditions or the issue of prescriptions by telephone to general practitioners.

    Hospices
    Mr. Hancock
    To ask the Secretary of State for Health if he will make a statement on the contribution of hospices to the work of the NHS. [116070]

    Ms Blears
    We greatly appreciate the excellent work done by all hospices in supporting people who are suffering from terminal or life threatening illnesses. Indeed, the voluntary hospice movement in the United Kingdom is considered a world leader in palliative care.

    In the NHS Cancer Plan published in September 2000, we pledged that the National Health Service contribution to the costs of specialist palliative care, including hospices, would increase by £50 million by 2004 to help tackle inequalities in access to specialist palliative care and to enable the NHS to make a realistic contribution to the costs hospices incur in providing agreed levels of services.

    We have set up a central budget of £50 million per annum for specialist palliative care for three years from 2003–04. This represents an increase of nearly 40 per cent. in NHS funding for specialist palliative care services over 2000 levels.

    Mr. Hoyle
    To ask the Secretary of State for Health if he will make a statement on funding given to hospices through the NHS; how much funding from the NHS will be given to children's hospices in 2003–04; and how much funding from the NHS will be given to(a) Derian House and (b) Catherine's Hospice in 2003–04. [116397]
    496W
    Ms Blears
    Primary care trusts have a pivotal role in assessing the extent of health care needs within their catchment area and funding service provision, including adult hospice and children's hospice services. The level of funding agreed is a matter for local discussion.

    A central budget of an additional £50 million per annum for specialist palliative care, including hospices, has been set up for the three years beginning 2003–04. This funding is specifically to meet the commitments and aims set out in the NHS Cancer Plan. The extra £50 million represents an increase of about 38 per cent. in the amount of National Health Service funding being put into adult specialist palliative care over 2000 levels and means that the pledge in the NHS Cancer Plan will be more than met. Allocation from this £50 million to local cancer networks will be made once network investment plans have been approved by the joint NHS/voluntary sector group—National Partnership Group.

    During 2002–03,Chorley and South Ribble Primary Care Trust provided £472,000 to St. Catherine's Hospice and £11,000 to Derian House. These amounts will be uplifted to reflect inflation during 2003–04 prior to any further allocation which may be made from the £50 million.

    Hospital Financing
    Lynne Jones
    To ask the Secretary of State for Health what assessment he has made of the difference in revenue implications for an NHS trust that accesses public capital through the Department and strategic health authorities and a foundation trust that accesses capital via loans they will be expected to repay. [116290]

    Mr. Hutton
    Borrowing by national health service foundation trusts will not affect the amount of total capital available to the NHS. The amount of total capital available is agreed through the Spending Review process.

    Hospital Trusts
    Tim Loughton
    To ask the Secretary of State for Health when he plans to publish the results of star ratings for hospital mists. [116456]

    Mr. Hutton
    The next set of national health service performance (star) ratings will be published by the Commission for Health Improvement, the independent regulator for NHS performance, later this summer.

    Tim Loughton
    To ask the Secretary of State for Health which hospital trusts have appealed against their provisional star rating assessments. [116457]

    Mr. Hutton
    National health service trusts are not being given a provisional star rating assessment in advance of the NHS Performance Ratings publication.

    In-patient Episodes
    Tim Loughton
    To ask the Secretary of State for Health how many hospital in-patient episodes lasted longer than(a) 6 weeks and (b) 13 weeks in the last year for which figures are available. [109941]
    497W
    Mr. Hutton
    There were a total 12,357,320 finished hospital in-patient consultant episodes in National Health Service hospitals in England in 2001–02. Of these, 195,762 lasted more than six weeks of which 55,347 lasted more than 13 weeks.Note:
    Figures given above have not been adjusted for shortfalls in data.

    Medical Students
    Mr. Goodman
    To ask the Secretary of State for Health whether the admission of students to medical schools can be restricted on the grounds of their views on(a) abortion and (b) euthanasia; and if he will make a statement. [115763]

    Mr. Hutton
    [holding answer 3 June 2003]Whilst the Government sets the target intake to medical school, all aspects of selection and admission are the responsibility of individual universities and medical schools. The Department of Health supports the Council of Heads of Medical Schools' (CHMS) 1999 statement of nine "Guiding Principles for the Admission of Medical Students", in which it commends to all the United Kingdom's medical schools good practice in equal opportunities. The principles stress that selection procedures for medical students must be transparent and involve procedures that respect obligations under the Race Relations Act and offer equality of opportunity.

    Medicines Control Agency
    Mr. Tyler
    To ask the Secretary of State for Health what the purpose was in renaming the Medical Control Agency; and whether this represents a change in remit. [114519]

    Mr. Hutton [holding answer 20 May 2003]
    The Secretary of State decided to merge the Medicines Control Agency and the Medical Devices Agency in June 2002. The merged agency is called the Medicines and Healthcare products Regulatory Agency (MHRA) and came into being on 1 April 2003.

    Most European Union member states have combined the competent authorities which manage the regulation of these sectors, as has the United States. An increasing number of products cross the borderline between medicines and devices.

    The combined remit of the MHRA remains the regulation of medicines and medical devices and there has been no change in the legislation which underpins the regulation in these sectors as a result of the merger.

    Mental Health
    Mr. Drew
    To ask the Secretary of State for Health if he will make a statement on the recent National Institute for Clinical Excellence reviews of schizophrenia and electro-convulsive therapy; and what impact the recommendations contained will have on policy towards mental health. [115138]

    Ms Blears
    The National Institute for Clinical Excellence (NICE) has within the last 12 months published technology appraisal guidance on the use of atypical anti-psychotics in schizophrenia and on the use of electro-convulsive therapy, as well as a clinical 498W
    guideline on the treatment and management of schizophrenia in primary and secondary care. We welcome this guidance from NICE, which will assist in the on-going programme of mental health service modernisation.

    Miss McIntosh
    To ask the Secretary of State for Health how much the national health service plans to invest in research into the benefits of alternatives to medication in the treatment of mental ill health in the next five years. [115377]

    Ms Blears
    There are many different approaches to treatment and care for people with mental health problems, including approaches such as assertive outreach; self-help; individual and family approaches to psychological therapy. Information about the levels of investment in research in all these areas, and a list of future priorities is available on the Department of Health website at ww.doh.gov.uk/research/.

    MMR Vaccine
    Mr. Paterson
    To ask the Secretary of State for Health how many children in England received the MMR vaccine in each of the last five years. [116345]

    Ms Blears
    Information about immunisation rates for MMR for children by their second birthday and by their fifth birthday for the last five years is shown in the table.

    Percentage of children immunized against MMR

    By their 5th birthday1

    By their 2nd birthday

    First dose

    First and second dose

    1997–98

    90.8

    —

    —

    1998–99

    88.3

    —

    —

    1999–2000

    87.6

    93.0

    76.0

    2000–01

    87.4

    91.9

    74.8

    2001–02

    84.1

    90.8

    74.0

    1 Information about uptake at age five was collected for the first time in 1999–2000.

    Source:

    Department of Health, Statistics Division SD3G, COVER data.

    Mumps Vaccine
    Mrs. May
    To ask the Secretary of State for Health how many children are on the waiting list to receive the mumps vaccine; and at the current rate of entry of the vaccine into the UK, how long he estimates it will take to clear the backlog. [115221]

    Ms Blears
    This vaccine is not recommended as a part of the childhood schedule, MMR is the licensed vaccine provided for this purpose. The only waiting lists are at private clinics and therefore the information is not collected by the Department of Health.

    National Institute for Clinical Excellence
    Mr. Drew
    To ask the Secretary of State for Health if he will list investigations undertaken by the National Institute for Clinical Excellence on(a) medicines and (b) good practice procedures. [116445]

    Mr. Lammy
    To date, the National Institute for Clinical Excellence (NICE) has issued 62 pieces of guidance on health technologies (including drugs, medical devices and diagnostic procedures) and eight
    499W
    clinical guidelines which contain recommendations for the treatment of specific conditions. A full list of publications can be obtained from the NICE website at www.nice.org.uk.

    NHS Appointments
    Chris Grayling
    To ask the Secretary of State for Health what his policy is on charging overseas applicants for NHS posts for conversion training to enable them to join the NHS. [113267]

    Mr. Hutton
    The code of practice for National Health Service employers involved in the international recruitment of healthcare professionals published in 2001 stipulates that no fee should be charged by NHS employers to international applicants undergoing a supervised practice placement.

    Details of the code of practice can be found on the Department's website at www.doh.qov.uk/international-recruitment.

    NHS Dentists
    Mr. Paterson
    To ask the Secretary of State for Health what percentage of children of school age are registered with an NHS dentist in(a) North Shropshire, (b) the West Midlands and (c) England. [116341]

    Mr. Lammy
    The table shows the estimated percentages of children aged between five and 16 years who are registered with a general dental service (GDS) dentist at 13 April 2003 in Shropshire Primary Care Trust (PCT) areas, West Midlands Strategic Health Authority (SHA) areas and England.

    General Dental Service: Percentage of children aged five to 16 registered with a GDS dentist, 13 April 2003

    PCT/SHA

    Percentage of children aged five to 16 registered with a GDS dentist

    Shropshire County PCT

    75.0

    Telford and Wrekin PCT

    80.3

    Shropshire and Staffordshire SHA

    72.2

    Birmingham and the Black Country SHA

    64.2

    Coventry, Warwickshire, Herefordshire and

    Worcestershire SHA

    72.5

    England

    71.9

    Note:

    The population data for SHAs are based on ONS supplied local authority population. For PCTs the population data are based on GP registered patients constrained ONS resident populations.

    Estimates have been used for 15 and 16 year olds in PCTs.

    Registrations lapse if patients do not return to their dentist within 15 months and so the registration figures exclude patients who have not been to their CDS dentist within the past 15 months. Also excluded from the figures are patients who receive dental treatment from other national health service dental services, including dental access centres.

    NHS Direct
    Dr. Evan Harris
    To ask the Secretary of State for Health pursuant to his Answer of 6th May, Official Report, column 662W, on NHS Direct, what reference is made in the review to past(a) successes and (b) failures of NHS Direct. [113344]
    500W
    Mr. Lammy
    Paragraph 58 of the NHS Direct strategy document highlights the key issues identified by the NHS Direct organisational review as needing to be addressed in developing a future organisation model for the service.

    Dr. Evan Harris
    To ask the Secretary of State for Health pursuant to his answer of 12 May 2003,Official Report, column 107W, on NHS Direct, when the National Patients Database will be established; and if he will make a statement on patient confidentiality in relation to this database. [115511]

    Mr. Lammy
    A NHS Direct national patient database will be created for the service by summer 2004 and will permit nurses to handle calls seamlessly from other parts of the country. NHS Direct aims to meet the best standards of patient confidentiality concurrent with promoting continuity and safety of care for the caller. Everyone working for the national health service is under a legal duty of confidence. Information concerning users and their families given to professionals in confidence for a particular purpose should not be used for other purposes or disclosed to a third party without the consent of the individual(s) concerned.

    Dr. Cable
    To ask the Secretary of State for Health what percentage of calls to NHS Direct were answered(a) within one minute, (b) within two minutes and (c) within four minutes in the most recent quarter for which figures are available; and what the target is for response times at the end of 2003. [114291]

    Mr. Lammy
    Information is not collected centrally in the form requested. NHS Direct is working towards answering 90 per cent. of calls within 30 seconds. The table sets out performance for the past six months:

    Month

    Percentage of calls answered in less than 30 seconds

    October

    63

    November

    60

    December

    62

    January

    70

    February

    61

    March

    57

    NHS Employees (Gulf)
    Mr. Chope
    To ask the Secretary of State for Health how many NHS(a) doctors and (b) nurses are serving with the Territorial Army in the Gulf. [114557]

    Mr. Hutton
    As at 20 May, there were some 195 national health service nurses and 45 NHS doctors serving with the Territorial Army in the Gulf.

    Obesity
    Nick Harvey
    To ask the Secretary of State for Health what estimate he has made of levels of(a) obesity and (b) youth obesity; and what research he has evaluated on levels in other European countries. [114805]

    Ms Blears
    Trends in overweight and obesity in England are measured yearly through the Health Survey for England. The latest figures for 2001 showed that
    501W
    21 per cent. of men and 23.5 per cent. of women are obese. The survey also showed that 8.5 per cent. of six year olds and 15 per cent. of 15 year olds are obese.

    A European Union survey by the Institute of European Food Studies, 1999, showed that the United Kingdom has the highest rate of self-reported obesity in the EU, but measurement-based sources, such as the Danish MONICA studies, show the prevalence of obesity in the UK to be below the EU average.

    Osteopaths
    Mr. Gale
    To ask the Secretary of State for Health what estimate he has made of the number of conditionally registered osteopaths awaiting confirmation of full registration on 9 May 2003. [115758]

    Mr. Hutton
    [holding answer 3 June 2003]There were no conditionally registered osteopaths awaiting confirmation of full registration on 9 May 2003. Since the opening of the General Osteopathic Council's register in 1998, 1,142 osteopaths have been converted from conditional to full registration.

    Overseas Treatment
    Tim Loughton
    To ask the Secretary of State for Health how many NHS patients have been treated in continental Europe so far this year; what the treatment was for; and at what cost. [114723]

    Mr. Hutton
    To date, a total of 209 patients have been treated abroad in 2003 as part of the overseas treatment and cardiac choice programmes. Of these, 207 patients were referred to France for orthopaedic procedures and two patients were referred to Belgium for cardiac procedures.

    A procurement process identifying spare capacity abroad is currently active, so the costs of specific procedures abroad are commercially sensitive. However, prices are comparable to spot purchasing in the United Kingdom private sector.

    Tim Loughton
    To ask the Secretary of State for Health on what occasions private planes were chartered to transport NHS patients for treatment in continental European hospitals; and at what cost. [114724]

    Mr. Hutton
    Since the pilot, 247 patients have been referred abroad as part of the overseas treatment programme. Patients have travelled using a number of different modes of transport, including ambulance, Eurostar and air charter. Air charter is only used where the numbers to be transported make the option cost effective. Air charter has been used on five occasions to transport 122 patients from Plymouth National Health Service Trust and the Royal United Hospital in Bath to hospitals in St. Etienne, France. Spare capacity was made available to the patient's relatives, at no cost to the NHS. The precise costs of the air charter are subject to commercial confidentiality; the cost per patient for the air charter compared well with the cost of the equivalent commercial flights.

    Physiotherapy Training
    Tom Levitt
    To ask the Secretary of State for Health how many people completed their training as a physiotherapist in each of the last three years. [116741]
    502W
    Mr. Hutton
    The information requested is not collected centrally. The Department of Health holds information on the number of training places for physiotherapy, but not the number who complete training. Information on the number of training places for physiotherapists in each of the last six years is shown in the table.

    Training Commissions for Physiotherapy

    Headcount

    1996–97

    1,093

    1997–98

    1,204

    1998–99

    1,344

    1999–2000

    1,346

    2000–01

    1,473

    2001–02

    1,780

    Between 1997–98 and 2001–02, the number of training places for physiotherapists has increased by 580. This represents a 48 per cent. increase.

    Prescription Pricing Authority
    Mr. Todd
    To ask the Secretary of State for Health (1) what the cost was to the NHS in 1990 values of the Prescription Pricing Authority in each year from 1990–91 to 2002–03; [115693]

    (2) how much was paid to the Prescription Pricing Authority for each prescription dispensed in each year since 1990–91, in 1990 values. [115692]

    Mr. Lammy
    The cost to the national health service in 1990–91 values of the Prescription Pricing Authority (PPA) and the cost of dispensing each prescription is shown in the table.

    Cost of the PPA in 1990–91 values (£000s)

    Cost of dispensing each prescription item in 1990–91 values (£s)

    2002–03

    46,626

    0.07

    2001–02

    45,777

    0.08

    2000–01

    43,438

    0.08

    1999–00

    36,969

    0.07

    1998–99

    34,488

    0.06

    1997–98

    32,295

    0.06

    1996–97

    33,912

    0.07

    1995–96

    34,946

    0.07

    1994–95

    39,709

    0.08

    1993–94

    38,992

    0.09

    1992–93

    35,169

    0.08

    1991–92

    27,631

    0.07

    1990–91

    37,772

    0.09

    Notes:

    The figures in column 1 represent the joint revenue and capital cost and vary according to what is required of the PPA in any year.

    The figures in column 2 have been calculated on the basis that the entire cost of PPA has been used for processing prescriptions.

    Primary Care Trusts
    Mr. Blizzard
    To ask the Secretary of State for Health which primary care trusts have been the subject of non-routine review carried out by a strategic health authority since they were established. [115907]
    503W
    Mr. Hutton
    This information is not centrally collected.

    Public Service Agreements
    Mr. Bercow
    To ask the Secretary of State for Health what steps the Department has taken to publicise its Public Service Agreement targets; and at what cost to public funds. [114453]

    Mr. Lammy
    Information on public service agreement targets is published on the Department's website and included in routine publications such as departmental reports, which involves no significant extra cost.

    Organisation

    Number of civil servants

    Grade of civil servant

    Local Councils

    11/1/6

    IP4 (Grade 6/70 IP3 (HEO/SEO) IP2 (EO)

    National Health Service

    7/54/20/9

    Senior Civil Servant IP4 (Grade 6/7) IP3 (HEO/SEO)IP2(EO)

    Other Government Departments

    9/3/3/2

    IP4 (Grade 6/7) IP3 (HEO/SEO) IP2 (EO) IPI (AA/AO)

    Non-Departmental public bodies

    8/2

    IP4 (Grade 6/7) IP2 (EO)

    European Departmental public bodies

    8/2

    IP4 (Grade 6/7)

    Ministere des Affaires Sociales—Paris

    1

    IP4 (grade 6/7)

    National Radiological Protection Board

    1

    IP4 (Grade 6/7)

    Skills for Health (Health for Works UK)

    2

    IP4 (Grade 6/7)

    Learning Skills Council

    1

    IP3 (HEO/SEO)

    Ministry of Health (Greece)

    1

    IP2 (EO)

    Big Brothers and Sisters

    1

    IP3 (HEO/SEO

    NHS Confederation

    2

    IP4 (Grade 6/7)

    Healthwork UK

    1

    IP4 (Grade 6/7)

    Barclays Bank

    1

    IP2 (EO)

    University College

    1

    IP2 (EO/)

    University of Leeds

    1

    IP3 (HEO/SEO)

    Public Guardianship Office

    1

    IP4 (Grade 6/7)

    British Red Cross Society

    1

    Senior Civil Servant

    World Health Organisation

    1

    Senior Civil Servant

    St. Michael's Hospice, Hastings

    1

    IP2 (EO)

    Association for Residential Care

    1

    IP3 (HEO/SEO)

    MORI

    1

    IP2 (EO)

    Golden Lane Housing

    1

    IP4 (Grade 6/7)

    Skills for People

    1

    IP4 (Grade 6/7)

    National Institute for Adult and Continuing Education (NIACE)

    1

    IP4 (Grade 6/7)

    Human Fertilisation and Embryology Authority

    1

    IP4 (Grade 6/7)

    Trust for the Study of Adolescence

    1

    IP4 (Grade 6/7)

    Drugscope

    1

    IP3 (HEO/SEO)

    National Children's Bureau

    1

    IP3 (HEO/SEO)

    Health Advisory Service

    1

    IP3 (HEO/SEO)

    Sport England

    1

    IP4 (Grade 6/7)

    Security Incidents
    Dr. Evan Harris
    To ask the Secretary of State for Health pursuant to his Answer of 6 May,Official Report, column 665W, on security incidents, what definition of security incident is used in the figures provided; what the changes to the reporting procedures were; and where the acknowledgement was made that the level of recorded incidents was likely to rise in the short term. [114883]

    Mr. Hutton
    Up until March 2003 security incidents were reported to NHS Estates and the definition of a security incident used in the figures referred to was as follows:"the total number of security and deliberate violent incidents recorded by the organisation site for the reporting period. These include assaults on staff and client to client, and any incident requiring intervention by security personnel or police attendance".

    No changes to the reporting procedure have been made since this system was introduced in 1999. Acknowledgement that the level of recorded incidents

    Secondments
    Dr. Cable
    To ask the Secretary of State for Health pursuant to his Answer of 28th April, Official Report, column 293W, on secondments, if he will list the organisations to which civil servants in his Department have been seconded since 2001 in(a) the private sector, (b) NGOs and (c) other, stating in each case the number of civil servants seconded to that organisation and their grade. [114142]

    Mr. Lammy
    The organisations to which civil servants in the Department of Health have been seconded since 2001 are shown in the following table.

    was likely to rise in the short-term was included in Health Service Circular 1999/229 (October 1999).

    On 1 April 2003, the National Health Service Counter Fraud and Security Management Service was launched with the responsibility of, in respect of security management, protecting the NHS—by delivering an environment for those who use or work in the NHS which is properly secure so that the highest possible standard of clinical care can be made available.

    Sexual Health
    Mr. Paul Marsden
    To ask the Secretary of State for Health what steps are being taken to reduce the incidence of sexually transmitted diseases. [115075]

    Ms Blears
    We are taking a number of steps to reduce the incidence of sexually transmitted infections (STIs). The Department has:Developed the first ever Sexual Health and HIV Strategy, which was published in July 2001. An implementation action plan was published in June 2002.

    505W
    Launched a £4 million public information campaign, the "sex lottery", in December 2002. This promotes messages around safer sex and the use of condoms in a relevant and realistic way.
    Invested £5 million last year and £10 million this year to improve access to genito-urinary medicine services and reduce waiting times.
    Selected 10 areas to take forward the first phase of a national chlamydia screening programme. We will be calling for bids for inclusion in the second phase of the programme shortly.
    Established an independent advisory group on sexual health, which met for the first time in May. The group will provide advice to the Government and monitor progress on the implementation of the Sexual Health and HIV Strategy including any further action necessary to achieve the strategy's aims. These include reducing the transmission of HIV and STIs and reducing the prevalence of undiagnosed HIV and STIs.

    These measures, together with others in our national strategy, should start to reduce new transmissions and subsequent complications and improve access to services.

    Biodefence
    Mr. Cameron
    To ask the Secretary of State for Health what funding is available within his Department for(a) routine testing for (i) anthrax, (ii) botulism, (iii) staphylococcus enterotoxin B, (iv) ricin, (v) plague and (vi) smallpox and (b) research into biodefence. [109288]

    Mr. Hutton
    Funding for all routine testing for anthrax, botulism, staphylococcus enterotoxin B and plague is covered within the overall funding of diagnostic testing services across the National Health Service and is not separately identified. Routine testing for smallpox is not undertaken as this disease has been eradicated. Testing for Ricin is not undertaken within the NHS and is only undertaken at DSTL Porton Down.

    Research into biodefence is co-ordinated across Government by the Home Office as part of its overall chemical, biological, radiological and nuclear programme. The Department of Health has funded a number of research projects from within its existing overall research programme to help plan the responses required in the event of a bioterrorist incident. The Department also provided funding of £2.4 million revenue and £8 million capital in 2002–03 for a strategic response capability at the Health Protection Agency Porton Down, formerly the Centre for Applied Microbiological Research. This response capability includes biodefence research.

    Urban Animals
    Mr. Burstow
    To ask the Secretary of State for Health what assessment he has made of the impact on public health of the change in numbers of(a) pigeons, (b) rats and (c) urban foxes in each of the last five years for which figures are available. [110151]

    Ms Blears
    The data on the species identified are not available. The abundance of pigeons, rats and urban foxes has not been brought to the attention of the UK Zoonoses Group or the previous Zoonoses Group for England as a national public health issue.

    Waiting Times
    David Davis
    To ask the Secretary of State for Health how many patients admitted to accident and emergency departments waited more than 12 hours before being treated in each of the last two quarters for which figures are available; and what the average waiting time for patients waiting more than 12 hours is. [116735]

    Mr. Lammy
    Information is not collected on how long patients wait in Accident and Emergency before being treated or the average waiting time for patients in A&E.

    Information is collected and published on total time spent in A&E from arrival to admission, transfer or discharge and on waiting times in A&E following a decision to admit patients to a hospital ward. The available information for the last two quarters is shown in the table.

    Percentage of patients who spent less than four hours in A&E from arrival to admission, transfer or discharge

    Number of patients not placed in a bed in a ward within four hours of a decision to admit

    July to September 2002

    77

    56,581

    October to December 2003

    78

    67,231

    Source:

    Department of Health form QMAE

    World Summit on Sustainable Development
    Mr. Horam
    To ask the Secretary of State for Health which United Kingdom commitments arising from the World Summit on Sustainable Development(a) have been incorporated into the Department's existing delivery plan for Service Delivery Agreements and (b) will be incorporated in its delivery plan for Service Delivery Agreements in advance of the 2004 Spending Review. [113942]

    Ms Blears
    [holding answer 22 May 2003]The Government has made clear its commitment to implementing what was agreed at the World Summit on Sustainable Development (WSSD) in Johannesburg. Details of those Departments with lead responsibility for taking this forward is available in the Library.

    The Department of Health does not have a lead responsibility in relation to WSSD. Although there is no major direct health interest, poor water quality and sanitation, for example, are recognised causes of ill health and disease. Therefore, we are continuing to work with other Government Departments to ensure that, where appropriate, health and health care issues are included in the effective delivery of the UK commitments made in Johannesburg.

    The Department is represented on the Government's new Sustainable Development Task Force announced by my right hon. Friend, the Secretary of State for the Environment, Food and Rural Affairs in February 2003. The task force will play an important part in the review of the Government's Sustainable Development Strategy, which will take into account World Summit outcomes.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Veterinary Medicines Directorate
  The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley)
  I have set VMD the following performance targets for 2003–04:To process Marketing Authorisations quickly and efficiently with decisions based on sound, high quality science;
  To develop and implement an effective and evidence-based policy on the regulation of veterinary medicines, under-pinned by good science, and to provide timely advice on these matters to Ministers;
  To ensure effective post-authorisation surveillance and controls on the manufacture, distribution and use of authorised medicines and effective deterrents to illegal use of unauthorised medicines;
  Cost-effective service at all levels of VMD;
  To contribute effectively to the Developing DEFRA programme;
  To ensure the strategic skills are in place to achieve the objectives set for VMD.

  Performance Targets
  The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley)
  The Department carried out a review of its five-science based agencies in 2002. It was published on 17 December. Copies of the report are available on http://www.defra.gov.uk/agency_review/index.asp.

  One of the review's recommendations was that improvements to the performance management arrangements for VLA, CEFAS and CSL should be introduced from 2003–04 including agreed outcomes, with output targets as measurable indicators for meeting those outcomes.

  I have set the Veterinary Laboratories Agency, the Centre for Environment Fisheries and Aquaculture Science and the Central Science Laboratory the following agreed outcomes and performance targets for 2003–2004:

  VLA

  Cost effective and efficient science businesses
  Achieve full cost recovery
  Maintain the ratio of overheads against turnover.
  Achieve £525K procurement savings.

  Outward looking and collaborative organisations
  Prepare an annual report on their collaborative work.
  6WS
  Provision of R&D and science services of the required quality
  Maintain current third party accreditations
  Make satisfactory progress towards meeting the deadline of June 2004 for compliance with the DEFRA policy for Quality Assurance for Research.

  Provision of a high standard of service to the satisfaction of customers
  Meet 85 per cent. of ROAME1 milestones.
  Meet 95 per cent. published turnaround time for export tests.
  Achieve a customer satisfaction score of 75 per cent. CEFAS

  Cost effective and efficient science businesses
  To achieve savings by ensuring that support function costs grow more slowly than income.
  To recover from government departments and agencies and external customers the full economic costs of the Agency's services
  To manage the agency in an effective manner including pursuit of commercial exploitation of research outputs

  Outward looking and collaborative organizations
  To prepare an annual report on their collaborative work.

  Provision of R&D and science services of the required quality
  To maintain a high standard of excellence, based on indicators of scientific and technical quality.
  Make satisfactory progress towards meeting the deadline of June 2004 for compliance with the DEFRA policy for Quality Assurance for Research.

  Provision of a high standard of service to the satisfaction of customers
  To give satisfaction to customers in the way that outputs are provided, taking account of the relevance, timeliness and value for money of outputs and the achievement of ROAME1 milestones.

  CSL

  Cost effective and efficient science businesses
  To recover the full economic costs of operation on a resource accounting basis, recognising the normal costs of operation
  To deliver the efficiency targets set out in the Business Plan.
  To manage the agency in an effective manner, including delivery of e-government and commercial exploitation of research outputs

  Outward looking and collaborative organisations
  To prepare an annual report on their collaborative work.

  Provision of R&D and science services of the required quality
  To make satisfactory progress with the action plan for enhancing science quality resulting from the 2001–02 Science Audit
  Make satisfactory progress towards meeting the deadline of June 2004 for compliance with the DEFRA policy for Quality Assurance for Research.
  7WS
  Provision of a high standard of service to the satisfaction of customers
  To achieve a minimum of 90 per cent. of project milestones in commissioned projects which support the "Developing DEFRA" objectives To achieve a mean score of 4.2 on a scale of 0 to 5 for the assessment of customer satisfaction using the revised methodology
  1Rationale, Objectives, Appraisal, Monitoring and Evaluation statement—an integrated approach to programme/project management

DEFENCE

  Gurkha Married Accompanied Service Review
  The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie)
  The Government are acutely aware of the need to ensure that we have fair and appropriate terms and conditions of service for Gurkha personnel. The current arrangements stem from the 1947 Tripartite Agreement (TPA) between the Governments of UK, Nepal and India. One of the aims of this Agreement was to safeguard the cultural, religious and ethnic heritage of Gurkha soldiers in accordance with the wishes of the Nepalese Government. It also linked British Gurkha Terms and Conditions of Service to arrangements in the Indian Army.

  The Government recognise, of course, that not all the principles that underpinned the TPA in 1947 apply today. It is for this reason that successive Governments have regarded the TPA as having a degree of flexibility. This has enabled significant enhancements to be made to Gurkha conditions of service, particularly to Gurkha pay and pension arrangements. Indeed, Gurkha in-service remuneration is now in line with that of British personnel and Gurkha pensions, which were reviewed and at least doubled in April 2000, now compare favourably to professional salaries in Nepal, where all Gurkhas are discharged. Importantly, Gurkhas continue to be paid an immediate pension after only 15 years' service, whereas the vast majority of British personnel receive a preserved pension, payable at the age of sixty.

  The Government are satisfied, therefore, that these key elements of Gurkha terms anti conditions of service are tailored to the needs of Gurkhas in 2003 and in particular that the difference between the pension schemes is both necessary and proportionate.

  Gurkha accompanied service provisions, however, have not been reviewed since the Brigade's withdrawal from Hong Kong in 1997. It was decided at that time that married accompanied service should be introduced in the UK, but that, in accordance with the TPA, it should continue to be capped at 25 per cent. of Brigade strength. In practice, this means that family married quarters are provided for all Gurkhas holding the rank of Colour Sergeant or above. Below that rank, Gurkhas are entitled to one accompanied tour of around 3 years.

  The Government are well aware of the problems these restrictions cause, although there are important contemporary factors that influence our current practice. These relate to the impact that any change in policy could have on the deployability and effectiveness
  8WS
  of the Brigade as well as the need to maintain links between Gurkhas and their home country. These links were of importance to the Nepalese Government when they agreed to the transfer of Gurkha units into the British Army in 1947 and remain so to this day. Our bilateral relations with Nepal are highly valued and we take our obligations to the Nepalese Government very seriously.

  It is important, therefore, that we strike the right balance between the aspirations and needs of our Gurkha soldiers and the effectiveness and employability of the Brigade as a whole. With this in mind, I have asked Officials, in consultation with the Brigade of Gurkhas, to undertake a thorough review of Gurkha married accompanied service arrangements. In so doing we will, of course, consult the Nepalese Government. We will also consider the implications for the Garrison Estate in Brunei, given that at any one time nearly a quarter of the Brigade is stationed there, and address the education and welfare implications of any increase in the number of Gurkha families based in the UK.

  I hope to be in a position to announce my findings to the House by the end of the year.

  Naval Recruiting and Training Agency: Key Targets
  The Minister of State, Ministry of Defence (Mr. Adam Ingram)
  Subsequent to a proposal by the Agency's Owner, the Second Sea Lord and Commander-in-Chief Naval Home Command, I have today set the 2003–04 key targets for the Naval Recruiting and Training Agency, as follows:To deliver RN personnel to the trained strength (or to other training organisations), to the required quality standard, within 5 per cent. variance from the tasked requirement.
  To deliver RM recruits to within 2 per cent. variance from the tasked requirement.
  To maintain success rates of 95 per cent. in career training (including targeted employment modules) and 97 per cent. in examined pre-joining training.
  To increase the trained strength of the RNR to 2200 by 31 March 2004.
  To reduce the average cost of the trained recruit to 98 per cent. of the 2001–02 baseline figure.
  To achieve net benefits of £15 million in financial year 2003–04 from the partnering arrangement with Flagship Training Limited.

  Merlin MK1 Helicopters
  The Minister of State, Ministry of Defence (Mr. Adam Ingram)
  I am pleased to announce the start of an Assessment Phase (AP) to be led by Lockheed Martin UK Ltd., with Westland Helicopters Ltd. as strategic sub-contractor, to determine how best to sustain the capability of the Royal Navy's Merlin Mk1 helicopters for future operations. Merlin Mk1 already delivers a quantum leap in capability over the aircraft it succeeded, the Sea King Mk6, and is recognised as crucial across the spectrum of maritime operations. We anticipate an upgraded aircraft entering service towards the end of the decade, building on significant operational experience and technological advances to ensure that the full potential of this versatile and capable aircraft is realised and that it continues to meet our security challenges for decades to come. The AP, costing
  9WS
  £18 million, will investigate the most cost effective way to sustain this world beating capability and the scope for enhancements to broaden the utility and versatility of the aircraft. The partnering of Lockheed Martin as prime contractor with the world class manufacturing skills of Westland as strategic sub-contractor is believed to offer the lowest risk to the Ministry of Defence. The AP is planned to complete at the end of 2004 after which a decision will be made on the scope and programme for the Demonstration and Manufacture Phase.

  HMS Dryad
  The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie)
  On 19 July 2001,Official Report, columns 334–35W, my right hon. Friend the Minister of State for the Armed Forces advised the House that, in parallel with the work being undertaken on the Defence Training Review, the Royal Navy was conducting a comprehensive review of its training estate. Fundamental to this review was the creation of an integrated maritime warfare school, which would deliver all maritime warfare training on a single site at HMS Collingwood, near Fareham. Once the maritime warfare school was established, HMS Dryad, near Portsmouth, would be surplus to requirement and would close. It was envisaged that the transfer to HMS Collingwood would be completed, at the latest, by 2011.

  I am pleased to announce that an accelerated programme will allow the collocation to HMS Collingwood and the decommissioning of HMS Dryad, to be achieved by 2004. A small enclave, housing operations room simulators which are complex to remove, will remain on the site until the simulators are relocated or replaced, with an expectation that the site will be handed over to Defence Estates by 2007 for disposal in accordance with normal procedures.

  I have recommended that the proposals for the final closure programme are now put to the MOD Trades Unions for consultation in the normal way.

HOME DEPARTMENT

  Death Certification and Coroner Services
  The Parliamentary Under-Secretary of State for the Home Department (Paul Goggins)
  Today I am publishing and placing in the Library the report of the fundamental review of death certification and coroner services. This comprehensive and thoughtful report is the work of an independent review group chaired by Tom Luce, formerly of the Department of Health.

  I am very grateful to Tom Luce and his colleagues for delivering such a wide-ranging and careful report. In their comprehensive analysis of this complex and difficult area, they have consulted very widely, taking into account the views of families, interest groups, and the many professions and organisations that work in this field. This is not an easy topic, nor is it an area where there are simple answers. A careful balance is required between the requirement to investigate deaths that are a matter of legitimate public concern, and the need to respect the private grief of individual families. This report recommends some very significant changes and improvements to the way in which deaths are currently
  10WS
  investigated and certified. It also highlights the good work being done by many of those working in this long neglected public service.

  We do not intend to respond to the detailed proposals in the Luce Report at this stage. This is because we need to consider them alongside the Second Report of the Shipman Inquiry, chaired by Dame Janet Smith, which will focus on death and cremation certification, and police investigation.

  I am pleased to announce that Tom Luce has agreed to do some further work on the links between the two reports. Once that has been completed, we will be able to announce plans for taking this work forward.

  Race Relations Act
  The Minister for Citizenship and Immigration (Beverley Hughes)
  I have made a new authorisation under section 19D of the Race Relations Act 1976 (as amended) to allow a certain proportion of the permits issued under the new Sectors Based Schemes in the hospitality and food processing sectors to be available for issue only to nationals of countries who are due to accede to the European Union on 1 May 2004.

  This reflects the Government's commitment to these countries to give greater access to the UK labour markets in the period leading up to the date of their accession to the European Union.

  A copy of the new authorisation, which came into force on 30 May, has been placed in the Libraries of both Houses.

  Golden Jubilee Awards
  The Secretary of State for the Home Department (Mr. David Blunkett)
  I am pleased to report that the first of the Queen's Golden Jubilee Awards for voluntary service by groups in the community were announced on Monday 2 June.

  This prestigious new annual Award for groups of volunteers has been given this year to 200 groups whose outstanding voluntary activity has enhanced and improved the quality of life and opportunity for others in the community. The Government actively support the work of the voluntary and community sector and are encouraging more people to participate in community activity. This Award will give some of those people the recognition they richly deserve. The details of the winning groups are as follows:

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  East Midlands

  1

  Age Concern Spalding District

  helping the elderly of Spalding and Pinchbeck and giving respite to their carers.

  2

  The Ashfield Environmental Project

  providing free services to the elderly, infirm or disabled, including gardening and horticultural training opportunities.

  3

  Bakewell & Eyam Community Transport

  providing transport for those who have no car, or cannot use public transport.

  11WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  4

  The Buxton Mountain Rescue Team

  preventing loss of life or injury by undertaking mountain rescue operations.

  5

  Coping with Cancer in Leicestershire & Rutland

  providing information and practical and emotional support to people affected by cancer.

  6

  Derbyshire Gypsy Liaison Group

  supporting Gypsies and promoting understanding of their culture.

  7

  The Lincoln MS Therapy Centre

  providing support, therapy, advice and friendship to Ms suffers, their family and friends.

  8

  The Muslim Khatri Association

  providing social and recreational activities, advancing education and relieving poverty in Leicester.

  9

  The Nottinghamshire Bereavement Trust

  comforting and helping the bereaved and assisting to develop Children's Gardens in major local cemeteries.

  10

  The Green Health Partnership Volunteers

  providing practical conservation activities involving people with mental ill-health to benefit both them and the environment in Derbyshire.

  11

  The Pet Shop Girls Charitable Trust

  undertaking fund-raising and other events for the local community of Ollerton and District.

  12

  Wellingborough Prison Visitors Centre Volunteers

  providing practical and emotional support for visitors to Wellingborough Prison.

  East of England

  13

  1220 (March) Squadron— Air Training Corps

  promoting interest in aviation, training and development and community service for young people.

  14

  The Aylsham and District Care Trust

  strengthening the community through the development and co- ordination of voluntary care services and social activity.

  15

  Connect Club Welwyn and Hatfield (WOT-NOTS Project)

  preserving, protecting and promoting the mental health of local residents.

  16

  Dunstable and District Disabled Sports

  providing sports and other activities for disabled people.

  17

  The Garboldisham Village Hall Management Committee

  providing and maintaining the village hall for recreational, cultural, educational and sporting activities.

  18

  The Gunton Woodland Community Project

  providing, maintaining and regenerating a safe, accessible and pleasant woodland environment for the public.

  19

  Harlow Well Women Centre

  providing an accessible centre for women with professional counselling, advice, support and information.

  20

  Hospice at Home Volunteers

  befriending and supporting those suffering from life-threatening illness, their families and carers.

  21

  Jimmy's Night Shelter

  providing accommodation for rough sleepers in Cambridge, helping them move into suitable accommodation and raising awareness.

  22

  Senior Stop

  providing a meeting place and advice for older people in Peterborough.

  23

  SNAP Special Needs and Parents

  supporting parents and carers of children with any special need or disability in Essex.

  24

  The Magdalene Group

  running a drop-in centre, giving support and providing activities for people working in prostitution in Norwich.

  25

  The Mount Bovingdon Visitors Centre Association

  providing a safe, comfortable environment and support for visitors to the prison.

  26

  The Redbourn Care Group

  recruiting and organising volunteers to provide caring services to those who need assistance.

  12WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  27

  The Woolverstone Project

  providing sailing opportunities for those with physical or mental disabilities in East Anglia.

  28

  Watford Mosque and Welfare Association

  catering for the religious, social welfare and cultural requirements of the Muslim Community.

  Guernsey

  29

  Guernsey Welfare Service Limited

  providing food, clothing and fuel vouchers to people on low incomes in the community.

  30

  WRVS Alderney

  meeting the needs of the elderly and those less able to help themselves.

  Isle of Man

  31

  The Volunteers of Hospice Care, Isle of Man

  supporting and enabling hospice services for the people.

  Jersey

  32

  Honorary Police of Jersey

  providing community policing and contributing to the administration of the justice system.

  London

  33

  Aldgate Advice Centre Volunteers

  assisting and befriending rough sleepers and homeless people.

  34

  The Barnet Retired and Senior Volunteer Programme

  harnessing the expertise and skills of volunteers over 50.

  35

  Body and Soul

  supporting those living with and affected by HIV and AIDS, across London.

  36

  Harlesden Environmental Action Residents and Traders

  creating a cleaner, safer and healthier environment for the community.

  37

  Homeless Action in Barnet

  meeting the needs of homeless people and asylum seekers.

  38

  Kith and Kids

  empowering and socially including families in North London where one or more members has a disability.

  39

  The Lambeth Summer Projects Trust

  providing educational and recreational holiday activities to reduce the potential for young people to commit crime.

  40

  MERU

  providing free specialist equipment for disabled children in South London and the surrounding area.

  41

  Nubian Life

  reasserting the dignity of African and Caribbean Elders by providing for their health, psychological and cultural needs.

  42

  Redbridge Night Shelter

  alleviating the effects of poverty by providing cold weather shelter to homeless adults.

  43

  Alzheimer's Society (Enfield Branch)

  supporting carers of people with dementia.

  44

  The Arab Group in Hounslow and Suburbs

  supporting the Arab community with an advice service and social activities.

  45

  The Centre for Filipinos

  responding to the needs of Filipinos in the UK and enabling them to participate fully in society.

  46

  The Greenwich Chinese Community School

  advancing education within the Chinese community, understanding Chinese culture and encouraging mutual aid.

  47

  The Muslim Women's Welfare Association

  providing help and advice to Asian women in Waltham Forest.

  48

  The Neutral Ground Child Contact Centre

  running a support centre in Abbey Wood, where children of separated families can meet estranged parents.

  49

  The Nightshelter Volunteers

  providing shelter for homeless people in Newham throughout the winter.

  50

  The Sikh Community Care Project

  developing and facilitating community initiatives in Waltham Forest, particularly for the Sikh community.

  13WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  51

  The XL Project

  working with and supporting schools, families and communities in South London.

  52

  Wandsworth Community Transport

  enabling and helping individuals with mobility problems to access facilities in Wandsworth town centre through its shop mobility project

  North East

  53

  Ferryhill Town Youth

  bringing together young people through sporting and other activities.

  54

  Grange Road Methodist Church Resource Centre

  providing recreational, leisure and educational activities for people of Hartlepool.

  55

  Quaking Houses Village Hall Association

  providing facilities and activities for the community of Stanley.

  56

  Stepney Bank Stables

  educating and motivating young people from inner-city area and adults with learning difficulties.

  57

  The Gateshead Visible Ethnic Minorities Support Group

  supporting ethnic minority communities and promoting multi- cultural events.

  58

  The Northumberland Family Camping Group

  providing low-cost family holidays.

  59

  The Scotswood Family Drug Support Group

  providing support and advice to families of drug misusers in Scotswood.

  60

  West Harton Churches Action Station Limited

  providing advice and education facilities to South Tyneside residents.

  North West

  61

  Acorn Venture Urban Farm

  enabling disabled people in Kirkby to become involved in farming and giving young people opportunities to work with animals.

  62

  Advocacy in Wirral

  providing support and advocacy to people experiencing mental health problems.

  63

  CancerCare (North Lancashire and South Lakeland)

  providing support, therapy, counselling and practical help for cancer patients and their families.

  64

  Chorlton Good Neighbours

  offering support, practical help and friendship to those in need in Chorlton.

  65

  Delamere Toy and Tape Library

  providing toys and equipment for children up to 8 years and for individuals with special needs.

  66

  East Cheshire Hospice Volunteers

  transporting patients, helping in Day Care and helping bereavement counsellors and receptionists.

  67

  Friends for Leisure

  enabling young people with learning, sensory and physical disabilities in Macclesfield to participate in mainstream leisure activities.

  68

  Halton Child Contact Centre

  helping children in Runcorn and Widnes in family breakdown to continue or re-establish contact with their non-resident parent or other family members.

  69

  Keswick (Calvert Trust) RDA Helpers Group

  providing disabled people opportunities to ride and carriage drive to benefit their health and well being.

  70

  Knutsford and District Good Neighbours

  providing transport for patients and providing practical assistance to elderly, disabled and housebound people.

  71

  MOSAC

  providing support, education and advice to parents of abused children in Blackpool, Wyre and Fylde.

  72

  One Voice/Team 2000

  improving lives of local residents through urban regeneration, crime prevention and educating young people in community citizenship.

  14WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  73

  Rochdale Childer

  providing help and assistance for any Rochdale child in need.

  74

  South Lakeland Voluntary Society for the Blind

  providing practical support, information, advice and social activities to local people with sight problems.

  75

  St Rocco's Hospice Volunteers

  providing practical help and emotional support, transporting patients and helping with hospice events and fundraising.

  76

  The Blackbrook Group and Residents

  promoting community fire safety through young people in Warrington working with the Fire Service.

  77

  The Blackburn Breast Care Support Group

  providing support for women who have suffered from or have concerns about breast cancer.

  78

  The Friday Club

  providing holidays and social activities for adults with learning disabilities in Warrington and giving respite to their carers.

  79

  The Littleborough Coach House Trust

  maintaining a historic listed building for use by local groups and societies.

  80

  The Open Door

  providing facilities and resources to improve the quality of life for residents of Benchill and to regenerate the area.

  81

  The Salford Link Project

  providing links between ethnic communities and statutory and voluntary organizations, including promotion of advice and education programmes.

  82

  The Standish Friendly Visiting Group

  befriending elderly and housebound people and those living alone and arranging outings to places of interest.

  83

  The Volunteers of Drugline—Lancashire

  supporting people affected by drug use, directly or indirectly, by providing counselling and a telephone helpline.

  84

  Wirral and Chester Riding for the Disabled

  providing practical facilities for people with physical or learning difficulties to enjoy horse riding.

  Northern Ireland

  85

  Broughshane and District Community Association

  enhancing the sense of community ownership and responsibility.

  86

  Lynn Social Club

  providing meals on wheels and organizing social and recreational activities for the community of Larne.

  87

  Newtownstewart Development Association

  promoting economic development through tourism and employment regeneration and providing social and recreational facilities.

  88

  St John Ambulance HQ Transport Division

  providing a volunteer first aid and ambulance service for the community of Northern Ireland.

  89

  The Lack Women's Group

  providing recreational classes and training for local women in Lack.

  90

  Samiritans—Belfast Branch

  providing a 24 hour confidential emotional support service for people experiencing distress or despair.

  91

  The Walkway Women's Group & EBCEC

  providing educational, arts and environment opportunities for local women in Belfast

  92

  Voluntary Service Bureau

  providing advice and practical fitting of security devices to older and vulnerable people.

  Scotland

  93

  Arran Lifeline

  providing and servicing a telephone activated push button service in elderly and disabled peoples homes.

  15WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  94

  Canine Concern Scotland Trust—Therapet Scheme— Aberdeen

  providing 'Therapy Dogs' for people in hospitals, hospices and residential and nursing homes to help those devoid of animal contact.

  95

  Central Gurdware Singh Sabha, Glasgow

  managing a Sikh community place of worship and providing activities to promote Sikh culture.

  96

  Churches Action for the Homeless

  running a day centre, accommodation and training centre for the homeless or those at risk of homelessness in Perth and district.

  97

  Drug Initiative Group— Forfar

  running a café facility for young people and offering an alternative to drug use and misuse.

  98

  Eighteen and Under

  providing information and support to young people in Dundee who have been abused and researching ways of preventing abuse.

  99

  Fife Christian Counselling Centre

  providing support and counselling to members of the community.

  100

  Focus Youth Project Management Committee

  overseeing the running of the Youth Project in Viewpark.

  101

  Glasgow Association of Family Support Groups

  promoting the development of groups to support and advise parents of drug abusers.

  102

  Home Basics

  collecting and refurbishing donated furniture and household goods for disadvantaged people in Tweeddale.

  103

  Inverclyde Peace Initiative

  promoting conflict resolution within the community to make it cohesive and sustainable.

  104

  Islay Disabled Endeavours and Actions

  providing care, advocacy, craft working, training and health supervision for individuals with special needs.

  105

  Lanarkshire Cancer Care Trust (The Volunteer Driver Service

  providing, a personal hospital transport service for cancer suffers.

  106

  McSence Limited

  creating sustainable community owned and run business, employing and training unemployed people of Dalkeith.

  107

  Portlethen & District Community Ambulance Association

  providing transport for those unable to attend church, social or health facilities.

  108

  Red Star Athletics Club

  providing sporting, recreational and social opportunities for people with disabilities in Glasgow.

  109

  Roseberry Centre

  providing support, advisory and counselling services to people with dementia and their families in and around Livingston.

  110

  The Drop In

  providing social activities, meals and advice for pensioners in Irvine.

  111

  The Hit Squad

  improving the environement in Dawson by enabling elderly and infirm residents to undertake low maintenance gardening and run a community allotment.

  112

  The Moorpark Community Association

  providing social and educational opportunities and raising funds to improve the local environment.

  South East

  113

  777 Conservation Group

  conserving the environment of Buckinghamshire for the benefit of the public.

  114

  A New Start For Netherfield Partnership Board

  attracting and administering funds to transform Netherfield.

  115

  Berinsfield Information and Volunteer Centre

  providing advisory services for local people.

  16WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  116

  CHAIN

  providing practical help and information for the people of Hungerford.

  117

  Epsom & Ewell Phab

  integrating young people with and without physical disabilities.

  118

  Fleet Pond Society

  promoting the preservation and maintenance of the Fleet Pond Nature Reserve.

  119

  Florence Nightingale House Volunteers

  enhancing the quality of hospice patients care.

  120

  Folkestone Rainbow Centre

  supporting the community's needs physically, spiritually and emotionally.

  121

  Gatehouse

  a café for homeless people in Oxford.

  122

  Hampshire Association for the Care of the Blind

  supporting Hampshire people who have lost their sight.

  123

  Havant Area Bereavement Care Group

  providing help and comfort to bereaved people.

  124

  Katharine House Hospice

  enhancing the lives of hospice patients and their families.

  125

  Maidenhead Multiple Sclerosis Society

  providing a social venue and outings for MS patients.

  126

  Mytchett Community Association

  providing a community centre and playing fields to improve the quality of peoples lives.

  127

  Oxford Samaritans

  offering year round confidential and emotional support for suicidal or desparate people

  128

  Penrose Club for Adults with Special Needs

  providing leisure activities in Surrey and encouraging the independence of it members.

  129

  Phyllis Tuckwell Hospice Volunteers

  providing specialist activities and practical support for hospice patients.

  130

  SEBEV Search and Rescue

  assisting the authorities in the Thames Valley area, following reports of lost or missing persons.

  131

  Tandem

  providing a transport service and a weekly club for elderly and disabled people in Midhurst and Petworth.

  132

  The Leatherhead Swans Club

  helping to provide recreation and leisure facilities for disabled people.

  133

  The V Team

  enabling people in Maidstone who are ill or have support needs to be successful volunteers.

  134

  The Wire

  providing programmes to enhance the lives of the people of Wick

  135

  Working Hospice Volunteer Team

  helping to provide care for patients and their families

  136

  Wokingham and West Berkshire Mind

  providing support for mental health service users and carers.

  South West

  137

  Blackdown Support Group

  supplementing health and social services in the Blackdown Hills by providing care and support services.

  138

  Burnham & Highbridge Stroke Club

  a social club providing companionship and activities for people who have suffered strokes.

  139

  Cheltenham and District Sports Association for the Disabled

  providing swimming instruction and sailing opportunities for disabled people.

  140

  Downderry and District Community Bus Association

  providing accessible and inexpensive transport for all local residents and holiday-makers.

  141

  Gloucestershire Chinese Women's Guild

  providing services for socially excluded and isolated Chinese women and their families.

  142

  North Devon Display Gymnastics Club

  providing gymnastics and coaching opportunities for the people of North Devon.

  17WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  143

  Plymouth Musical Activities Club

  providing opportunities for young people to learn and perform music to support charitable organizations.

  144

  St Keverne Youth Band

  providing young people with the opportunity to play musical instruments and perform.

  145

  Swindon Children's Scrapstore

  promoting recycling by collecting useable waste and donating it to community orgainsations.

  146

  Talaton Village Community Shop & Post Office

  providing service to the community and a focal point for village needs.

  147

  The Beacon Community Regeneration Partnership

  regenerating areas of Falmouth, alleviating disadvantages and social exclusion, and providing support services.

  148

  The Sheltered Work Opportunities Project

  providing horticultural work opportunities for people suffering from mental health problems in Bournemouth.

  149

  The Southmead Project Limited

  providing education, training, and counselling for individuals and families affected by drug misuse and historic abuse.

  150

  The St James Priory Project

  supporting homeless people in Bristol with addition problems and facilitating their reintegration into society.

  151

  Trussell Trust

  providing food for people in crisis in Wiltshire and augmenting the work of other statutory and voluntary organisations.

  152

  Thorncombe First Responders

  pioneers of community life support between a '999' emergency call and the arrival of ambulance.

  Wales

  153

  Aberfan and Merthyr Vale Youth and Community Project

  providing activities for young and unemployed people.

  154

  Bush and Park Tenants and Residents Association

  improving the lives of estate residents.

  155

  Grangetown Community Concern

  acting as an umbrella group for other voluntary organisations.

  156

  Gwynedd Hospice at Home

  enabling patients to use day Hospice facilities, and supporting Hospice Nurses.

  157

  North Wales Superkids

  providing family holidays and gifts for needy children and young people.

  158

  Ogmore Centre Trust

  providing residential courses for young people and a community life- long learning facility for rural residents.

  159

  Perthcelyn Tenants and Residents Association

  organising social activities and learning opportunities for residents of the Perthcelyn estate.

  160

  Swansea Old People's Welfare

  operating four day centres for elderly and housebound people

  161

  The Clwyd Special Riding Trust

  enabling people with special needs to ride or carriage drive.

  162

  The Muslim Welfare Association of Vale of Glamorgan

  promoting education, art and culture among the ethnic minority community.

  163

  Treasure Trove

  providing a residential project for young people aged 16 to 25 years both with and without physical disabilities.

  164

  Tyddyn Bach Trust

  caring for and supporting those affected by HIV and Aids, and their families and carers in the UK.

  West Midlands

  165

  Harborne Carnival Association

  promoting and organising an annual carnival to improve community spirit and support local charities.

  18WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  166

  OSCA

  providing volunteers to support and represent people with learning difficulties throughout Shropshire.

  167

  Perry Hall Community Association

  providing entertainment, holidays and exercise for residents of Perry Barr, Birmingham.

  168

  Pershore Pathfinders

  providing social activities for blind and partially sighted people.

  169

  Rock Community Bus

  providing educational, leisure and play activities to socially and economically disadvantaged communities in Birmingham.

  170

  S.H.A.R.P. Peer Education

  informing young people in Sandwell and Dudley of the dangers of leaving home unplanned and how to access support.

  171

  The Shifnal Millennium Sensory Garden Committee

  creating and maintaining a sensory garden for the community, especially elderly and disabled people.

  172

  St Michael's Hospice

  providing specialist palliative care for people form Herefordshire and surrounding counties and support for family and friends.

  173

  Stepping Stones Support Limited

  providing support, advice and information to women experiencing domestic violence in Walsall.

  174

  Age Concern Stourbridge

  providing services for the elderly including day care facilities and transport

  175

  T.S. Sutton Coldfield

  guiding young people towards responsible and confident adulthood by encouraging personal attributes and conduct.

  176

  The Asian Blind Association

  providing advice and counselling for blind and partially sighted people, and their carers, in Coventry.

  177

  The Rose Staner Friendship Club

  offering friendship and support to elderly visually impaired people living alone in Coventry.

  178

  The Royal Orthopaedic Hospital League of Friends Volunteers

  providing support to patients, hospital management and staff.

  179

  The Stonehouse Gang

  providing activities for pre-school and school children, youths and senior citizens in Selly Oak.

  180

  Watch Limited

  a community-led organisation, working to improve the quality of life for people in Hillfields.

  181

  Wetton and Alstonefield Community First Responders

  providing emergency medical aid in response to '999' calls from remote areas.

  182

  The Wolverhampton Asian Women and Diabetes Group

  providing support and information about diabetes to Asian women.

  183

  Wolverhampton Support for Deafened People

  providing a battery and repair service for hearing aid users.

  184

  The Wolverhampton Urdu Centre

  providing information, advice and linguistic services in Asian languages.

  Yorkshire and the Humber

  185

  The Crosby Community Association

  running a drop-in centre, neighbourhood watches, children's groups and an outreach service.

  186

  FLAG

  providing support and respite care to families of children with disabilities.

  187

  Friend to Friend

  providing activities for the elderly people of Holme Valley.

  188

  Hornsea Inshore Rescue

  rescuing those in difficulties at sea and promoting water safety.

  189

  Manor Young People's Health Project

  educating and advising the young in Sheffield on health issues.

  19WS

  Winners of the Queen's Golden Jubilee Award for voluntary service by groups in the community 2003

  Voluntary Group

  Activity Description

  190

  Sheffield Cathedral Breakfast & Archer Projects

  supporting the homeless by providing education, breakfasts, shower and laundry facilities.

  191

  The Community Care Association-Stockesley

  promoting voluntary action and developing projects with service users and carers.

  192

  The British Fishermen's Association

  achieved compensation for distant water trawler men in Hull.

  193

  The Friends of Paces

  supporting the local community of Sheffield and children with cerebral palsy by generating funds.

  194

  The Goodwill Motorists' Friendship Group

  organising year-round, fun-filled gatherings for housebound (infirm, blind and/or bereaved) people, sponsored and entertained by groups in North East Lincolnshire.

  195

  The Junction

  providing support, education and advice to people in Harrogate with a wide range of special needs.

  196

  The Longhill Link Up Trust

  providing services and activities for those living on the Longhill Housing Estate.

  197

  The Manor Farm, Monkswood, Thorogate Community Centre

  maintaining the community centre and providing activities for the local people.

  198

  The Safe Anchor Trust

  giving special needs groups free access to waterways, and maintaining the canal environment in West Yorkshire.

  199

  Upper Wharfedale Fell Rescue Association

  providing a rescue service for people and animals above and below ground in the Yorkshire Dales.

  200

  York Students in Schools

  introducing students from the University of York to Classrooms in York to help teachers and children.

DEPUTY PRIME MINISTER

  Local Government Bill
  The Minister for Local Government and the Regions (Mr. Nick Raynsford)
  I can confirm that a note on the policy intent with regard to clause 71 of the Local Government Bill was available in the House Libraries on 29 May 2003 in advance of Committee consideration of the Bill in another place. Copies were also sent to Baroness Hanham and Baroness Hamwee. In addition, copies of the revised draft regulations for Part 1 of the Bill and the first draft of the regulations with regard to the 2004 local government elections provisions of the Bill, together with the draft guidance for the new charging provisions currently out to consultation.

  Firefighters' Dispute
  The Deputy Prime Minister (Mr. John Prescott)
  The Fire Brigades' Union Executive Council and the National Employers have reached an agreement which will be put to a recall conference on 12 June. As a result I am pleased to announce that the Armed Forces personnel deployed on firefighting duties have been stood down during the run up to the conference.

TREASURY

  Container Security Initiative
  The Economic Secretary to the Treasury (John Healey)
  On 9 December 2002, HM Customs and Excise and the US Customs Service signed a Declaration of Principles to implement the US Container Security Initiative (CSI) in the UK.

  CSI is an important intelligence sharing partnership designed to make the movement of terrorist material, in sea containers to the US, more difficult.

  Guidelines on the practical operation of CSI have been agreed between the two services and four US Customs and Border Protection Agency officers will, this week, commence work at the UK's largest sea container port of Felixstowe.

NORTHERN IRELAND

  Quinqennial Review
  The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Desmond Browne)
  Stage One of the Quinqennial Review of the Northern Ireland Health and Social Services Estates Agency has been completed. The report has been made available to the House of Commons and the Northern Ireland Assembly's Libraries and on the Department of Health Social Services and Public Safety's website.

  The purpose of Stage One was to establish whether there was a continuing need for the services provided by the Northern Ireland Health and Social Services Estates Agency and, if so, to consider a range of options for delivering those services.

  The views of a wide range of stakeholders and interest groups including some from outside Northern Ireland were considered. These included Northern Ireland Public Service Alliance (NIPSA) and HPSS Boards Trusts and Agencies, political parties and Northern Ireland Local Government Association (NILGA). Various options for delivering the services—such as privatisation, contracting out/market testing, merger with another public body or reallocation of services to another public body—were considered. The review concluded that there was a continuing need for the services provided by the Northern Ireland Health and Social Services Estates Agency and that agency status remained the best value for money option for delivering them.

  Stage Two of the review, which will begin shortly, will examine how the agency operates and make recommendations for how delivery of its services might be improved. I will inform the House of the outcome in due course.

TRANSPORT

  London Underground
  The Secretary of State for Transport (Mr. Alistair Darling)
  I intend, subject to the passage of the Railways and Transport Safety Bill currently before Parliament, to transfer London Underground to Transport for London on or about 15 July 2003.
  21WS
  In my written statement of 4 February 2003 I said that the Government, Transport for London and the Mayor had agreed to work together to secure the transfer of the London Underground to TfL as soon as possible after the completion of the London Underground Public Private Partnerships (PPP). I also said that I would continue with the proposed amendments to the Greater London Authority Act 1999 as set out in the Railways and Transport Safety Bill. These amendments will ensure that the operation of London Underground's contracts is not affected when they are transferred from one body to another. In order to achieve this, the amendments in the Railways and Transport Safety Bill must be in force before the relevant provisions in the contracts transfer to TfL.

  The remaining London Underground PPP contracts came into effect on 4 April 2003. The Railways and Transport Safety Bill has so far made good progress through Parliament. It is now in everyone's interest to set a target date to ensure an early and orderly transfer of London Underground. Subject to the continued good progress of the Railways and Transport Safety Bill through the House, I therefore intend to transfer London Underground to Transport for London on or about 15 July.

  Transfer of London Underground to Transport for London will give effect to the policy originally set out in the Greater London Authority Act, and enable the investment that has already begun under the PPP to continue under the framework envisaged by the Act.

TRADE AND INDUSTRY

  Insolvency Service Performance Targets 2003–04
  The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson)
  I am pleased to announce that in the light of a strong performance outturn by the Insolvency Service in 2002–03 I have been able to reconsider the targets set for the current year.

  On the basis of an expected outturn of 83 per cent. in the User Satisfaction Index I set the agency a target for 2003–04 of a satisfaction level of 84 per cent. I am pleased to report that the final outturn for 2002–03 was in fact 85 per cent. and I have therefore increased the target for 2003–04 to 86 per cent.

  Similarly in the disqualification area, on the basis that the outturn for the average time taken to conclude disqualification proceedings would be 25.4 months I set the agency a target of 25 months for the current year. In fact the outturn was 24.3 months and I have therefore set the agency a target of 24 months for the current year. Also in the disqualification area the projected achievement against the percentage of cases concluded within 24 and 30 months was 43 per cent. and 82 per cent. respectively and I therefore set targets for this year of 45 per cent. and 84 per cent. In fact performance was 58 per cent. and 84 per cent. and I have therefore set increased targets of 60 per cent. and 85 per cent.
  22WS
  Finally 81 per cent. of redundancy claims were actioned within six weeks against a target of 80 per cent. and I have therefore set a new target of 82 per cent. for the current year.

FOREIGN AND COMMONWEALTH AFFAIRS

  Cyprus
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
  The search for a comprehensive settlement to the Cyprus Problem has been and remains a high priority for the Government. For seven years, our contribution has been led with great distinction by Lord Hannay as Special Representative for Cyprus. But in the light of recent developments, we have been reviewing the arrangements for ensuring an active British input into Cyprus diplomacy.

  My right hon. Friend the Prime Minister and I have therefore accepted Lord Hannay's recommendation that his term should end with effect from the date of this announcement, and I have decided, for the time being at least, not to make any further appointment of this kind. Lord Hannay has worked with enormous professionalism and dedication, in support of the United Nations, to bring peace, security and prosperity to Cyprus in the form of a comprehensive settlement to enable a reunited Cyprus to join the European Union in 2004. Lord Hannay's support and advice during his time as Special Representative—invaluable here in London, but also singled out for praise by the UN Secretary-General and many of our international partners—have brought this country great credit.

  The UN process culminated in the second revision of the Plan which the UN Secretary-General presented to the parties on 26 February, and in negotiations which reached a climax in The Hague on 11 March this year. For reasons set out in the subsequent report by the UN Secretary-General and endorsed in UN Security Council Resolution 1475, this final effort ended in failure, for which the Turkish Cypriot leader, Mr Denktash, bore the prime responsibility. It is the British Government's firm view that the Annan Plan remains the best way forward. We also concur with the Secretary-General's judgement that he should not take a new initiative unless and until he is given solid reason by all the parties to believe that the political will necessary for a successful outcome exists and that they are prepared to commit to finalising the Plan by a specific date and to putting it to separate simultaneous referenda on a date soon thereafter.

  The House will understand that this announcement in no way indicates a weakening of the Government's determination to work with others under the aegis of the UN to find a solution to the Cyprus Problem. Should events again make it appropriate for a Special Representative to be appointed, the Government will not hesitate to do so.

HEALTH

  NHS
  The Parliamentary Under-Secretary of State for Health (Mr. David Lammy)
  The system of patient and public involvement in the National Health Service that will be in place from 1 September provides far greater support for patients than ever before.

  By 1 September the programme of work to set up patients' forums will be well under way and the support for them will be in place to provide. a one-stop shop for information and advice; the Commission for Patient and Public Involvement in Health (CPPIH) will be representing the patients voice nationally; local authority overview and scrutiny committees will be scrutinising the NHS; the NHS itself will be carrying out its new duty to involve and consult the public; there will be independent support for complainants; there will be support for patients from PALS (Patient Advice and Liaison Service) in almost all trusts; there will be a national help line set up by CPPIH that will provide advice, information and signposting for the public about where to get advice and support; and there will be monitoring of the NHS by the Commission for Health Improvement and by Patient Environment Action Teams.

  The Government have been consistent in their drive to ensure accessible and informed support for patients; provide for the independent scrutiny by democratically elected representatives; and, ensure that the views and experiences of patients are fed into decisions affecting their health and health services. Massive progress has already been made.

  We have listened to Parliamentarians and other stakeholders, including the CPPIH, and we are responding positively to comments around the specific issue of independent monitoring of the NHS during the transition period.

  We have therefore decided to make the position absolutely unassailable by retaining Community Health Councils to continue their monitoring function until 1 December, at which point all patient forums will be in place to take up this role. Sharon Grant, Chair of CPPIH, has stated that this decision allows an important breathing space to help ensure a smooth handover to the new system of Patient and Public Involvement Forums in December.

  All CHC staff and members have been sent a letter advising them of the change of arrangements.

WORK AND PENSIONS

  Basingstoke and Deane Borough Council
  The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks)
  On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the Benefit Fraud Inspectorate (BFI) inspection report on Basingstoke and Deane Borough Council was published on Wednesday 28 May 2003 and copies of the report have been placed in the Library.

  In its response to the Housing Green Paper of November 2000, the Department for Work and Pensions developed a performance framework for housing benefits. The Performance Standards for housing benefit allow local authorities to make a comprehensive self-assessment of whether they deliver benefit effectively and securely. They are standards the Department for Work and Pensions aspires to and expects local authorities to achieve in time.

  The BFI inspected Basingstoke and Deane Borough Council against the Performance Standards. The report finds that the council is not at Standard for any of the seven functional areas of the Performance Standards—strategic management, customer services, processing of claims, working with landlords, internal security, counter-fraud, and overpayments.

  The report finds a number of weaknesses in the council's procedures and performance. A focus on paying benefit quickly, due to the council's strategy to support vulnerable people, meant that benefit had been paid without the necessary controls in place. The emphasis on paying benefit quickly has caused poor adherence to the Verification Framework, adopted by the council in April 1999.

  The quality of the council's counter-fraud activity was inconsistent and in some instances did not adhere to legal requirements. The council's Housing Benefit debt was not being managed, and the council did not use all of the recovery methods available to it.

  The report finds some clear strengths in the customer services offered by the council which had developed good working relationships with its major landlords and Housing Associations.

  In 2001–02, Basingstoke and Deane Borough Council administered approximately £22 million in housing benefits, approximately 22 per cent. of its total gross revenue expenditure.

  The report makes recommendations to help the council address weaknesses and to further improve the administration of Housing Benefit and Council Tax Benefit, as well as counter-fraud activities.

  My right hon. Friend the Secretary of State is now considering the report and will be asking the council for its proposals in response to the findings and recommendations of the BFI.

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

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before public business begins, I take the opportunity to inform the House that I shall be undertaking a ministerial visit to Manchester on Wednesday. 11th June, when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

Middle East: Destruction of Palestinian Homes and Property
2.36 p.m.
Lord Hyltonasked Her Majesty's Government:
Whether they are discussing with the Government of Israel the destruction of Palestinian houses and olive trees since 1967 and the prohibition on the building of rainwater reservoirs in the Occupied Territories.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, we recognise Israel's right to ensure the security of its citizens, but its actions must fall within international law. We deplore the destruction of Palestinian infrastructure and we have asked Israel to cease such activity. Furthermore, steps should not be taken which prevent access to fresh water.
We repeatedly urge both Israel and the Palestinian Authority to implement UNSCR 1435, which includes a call for a stop to the destruction of Palestinian infrastructure. The road map offers a mechanism to help achieve this.
Lord Hylton: My Lords, I thank the noble Baroness for that positive reply. Do the Government agree that the loss of so many homes and so many olive trees, together with recent disproportionate Palestinian casualties, damages the atmosphere for essential negotiations? Will the Government draw attention to the positive points in the Alexandria Declaration and will they seek the support of the parliamentary and other leaders of all the relevant countries for a final agreement that will end the occupation and create two viable states?
Baroness Symons of Vernham Dean: My Lords, of course there has been a substantial loss of homes. According to figures from the United Nations Relief and Works Agency, between September 2000 and
1314
April 2003, as many as 12,737 people saw their homes demolished in Gaza and the West Bank. In itself that figure suggests the dimensions of the problem.
However, today of all days, I think that we should be looking at the positive. The noble Lord is quite right to say that we need to seek the widest possible support both in this country and from friends overseas for an agreement based on the two-state solution. I am delighted that the meeting in Aqaba today appears to have gone well; that we have the personal commitment of President Bush on seeing the road map through; that Mahmoud Abbas and Mr Sharon have met today and discussed these issues; and of course the welcome given yesterday to the road map by Arab leaders in Sharmel-Sheikh is another positive indication. So, while acknowledging all that has gone wrong in the past, let us now look at the positive indicators for the future.
Baroness Uddin: My Lords, I agree with my noble friend that we should welcome today's developments. President Bush has begun his significant journey towards achieving an outcome for the road map. However, what are our Government suggesting by way of aid for the Palestinians, in particular to compensate them in some form for the regular destruction of the past 18 months? People need to live and have something to do in stable economic conditions and so forth. What are the plans of our Government to make available humanitarian and other forms of aid?
Baroness Symons of Vernham Dean: My Lords, while thanking my noble friend for her remarks, perhaps I may say to her that of course this journey did not begin today. It began last year when the President of the United States and the Crown Prince of Saudi Arabia supported a two-state solution. It is important to acknowledge that what we have seen today is another significant signpost on what will continue to be a very long road.
Food aid has been given by a wide range of donors, including the United Kingdom. The largest contributor is UNWRA, which last year distributed food to the value of some 21 million US dollars, and the United Kingdom plays its part in supporting that. I hope and believe that the Government will now take an active role in supporting the three phases of the road map, doing so in conjunction with the other members of the quartet, as well as through the European Union. For myself, I shall be very interested in any initiatives that we can take on the trade front.
Lord Wallace of Saltaire: My Lords, one of the most useful steps forward over the past few days has been the admission by the Israeli Prime Minister that Israel is in effect the occupying power in the West Bank and Gaza. Therefore, from now on, can we ensure that the Israeli Government recognise the full responsibilities of occupying powers towards those who are under occupation?
Baroness Symons of Vernham Dean: My Lords, at the moment we must be very careful to offer every

1315
possible encouragement to both sides to do everything they can to lower the temperature in the region and to stop the violence. I believe that, today, Mr Sharon has been talking about the possibility of the unauthorised outposts being removed. Of course that is not quite the same thing as the settlements, but at least it is a step in the right direction. We must be careful about pinning people down on the exact nature of what we mean by an occupying force and precisely what is expected that goes outside the terms of what is laid down in the road map. This road map stands the best chance of success if we all muster around what it actually says and do our best with good will to help both sides make it a success.
Lord Turnberg: My Lords—
Lord Wright of Richmond: My Lords—
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, I think that we should hear from the noble Lord, Lord Wright.
Lord Wright of Richmond: My Lords, is the Minister aware that most of the destruction of olive trees and orchards since 1967 has been carried out on the pretext that the trees concealed snipers in the vicinity of the illegal settlements?
In welcoming the positive news from Sharm el-Sheikh and welcoming in particular a statement attributed to the Speaker of the Knesset in today's Financial Times that Prime Minister Sharon has a plan to withdraw from 17 of the 150 settlements in the West Bank, is the Minister aware of a report in the Guardian on 27th May stating that Mr Sharon had assured one of his party's parliamentarians that,
"the government would continue to expand Jewish settlements in the occupied territories"—
and that—
"the Road Map certainly allows the unlimited building for your children and grandchildren, and I hope even for your great-grandchildren"?.
Do the Government agree with this interpretation of the road map?
Baroness Symons of Vernham Dean: No, my Lords, the Government do not agree with that interpretation of the road map, but I urge the noble Lord again to act with caution regarding reported statements in newspapers at a very difficult time. Those statements were attributed to 17th May. It is now 4th June, and a rather different note has been struck today in Aqaba. We should take the words of those from the Palestinian Authority and the Israeli Government who have travelled a long and difficult path to get to Aqaba today. We should give them every encouragement in what they are trying to do to find a peaceful settlement. Although I understand that there will be scepticism and that people want to go back to things that have
1316
been said in the past or the very recent past, it is important to concentrate on what the road map says and to do everything we can to rally round it.
Lord Howell of Guildford: My Lords—
Lord Williams of Mostyn: My Lords, I am very sorry, but we are in the ninth minute now.

Northern Cyprus
2.45 p.m.
Lord Faulkner of Worcesterasked Her Majesty's Government:
What legal advice they are offering to British citizens who have bought, or are contemplating buying, property in the Turkish-occupied area of northern Cyprus, following the recent opening of the border between the Greek-Cypriot and Turkish-Cypriot areas.
Baroness Symons of Vernham Dean: My Lords, we cannot offer legal advice to British citizens who have purchased, or who are contemplating purchasing, property in the north of Cyprus. We recommend that before purchasing, British citizens appraise themselves fully of the situation created by the non-recognition of the "Turkish Republic of Northern Cyprus" and the possibility of a future political settlement in Cyprus, and seek their own legal advice. We believe that issues concerning property already purchased in the north can be resolved only through a comprehensive settlement in Cyprus.
Lord Faulkner of Worcester: My Lords, I thank my noble friend for that reply. She will be aware that since the buffer zone was opened, large numbers of Greek Cypriots have visited their former properties in the Turkish-occupied part of the country which have been bought by British citizens. There have been some interesting encounters with the Britons, who bought the properties after the invasion of 1974. Does my noble friend recognise that the restoration of properties to their former owners, or at least a payment of fair compensation to them, whether Greek Cypriots in the north or Turkish Cypriots in the south, must be an essential part of any long-term settlement to the problems of Cyprus, and that people who bought their properties in dubious circumstances, largely against the advice of the British High Commission and others in the European Union, must not be allowed to frustrate that process?
Baroness Symons of Vernham Dean: My Lords, I am of course aware that there have been a number of difficult encounters, but my noble friend Lord Faulkner puts his finger on the nub of the issue. We do not yet have a final settlement on Cyprus, try as we and the United Nations have to find one. The question of the legality of ownership is one for the courts. I do not know what the rule of law may be in a final settlement, but whatever it may be, it should of course be upheld.

1317
This is a complex legal question, and I suggest that the best way forward is to wait for a final settlement and then see these issues resolved appropriately by the courts.
Lord Kilclooney: My Lords, I declare an interest as chairman of the all-party group, the Friends of Northern Cyprus. Is the Minister aware that northern Cyprus is becoming one of the most popular areas in the Mediterranean for British people to buy homes? Is she aware that of the 1,000 homes bought by foreigners in northern Cyprus last year, 95 per cent were bought by United Kingdom citizens? Is she aware that the while the Church of England may be closing churches in England, there is a scheme out to contract to double the size of the Anglican Church in Kyrenia? With the positive news that Turkish Cypriots now invite Greek Cypriots into northern Cyprus and Greek Cypriots are allowing Turkish Cypriots into southern Cyprus, why, after 30 years, have Her Majesty's Government banned British citizens in northern Cyprus moving into their own sovereign base? This has caused a lot of resentment.
Baroness Symons of Vernham Dean: My Lords, I very much welcome the relaxation on the restrictions of freedom of movement across the green line. I do not think, however, that that is any substitute for a comprehensive settlement on the basis of the UN plan. I hope that the advice of the British High Commission—that anybody seeking to buy property in northern Cyprus does so on the basis of sound legal advice—is taken.
The noble Lord raises the point of what is happening in the sovereign bases. Any person who has entered the island of Cyprus through an unrecognised port of entry is considered an illegal immigrant by the government of the Republic of Cyprus. The fact is that people are being checked if they wish to enter the eastern sovereign base. That is because there is much more traffic across the green line. The government of Cyprus view those who have come in through some of the unauthorised ports as illegal entrants. That is the basis of the increased activity to which the noble Lord refers, as those going into the sovereign bases are being checked. I hope I have made that point clear, because it is an important issue and has raised a certain amount of tension.
Lord Howell of Guildford: My Lords, the Minister is, of course, right that the outcome of this advice clearly depends on the nature of an eventual settlement. Can she bring us up to date with what the prospects are? I think that the Secretary-General of the United Nations rather gloomily said he felt it was the end of the road when the last set of negotiations came to a dead stop. But the offer is still on the table and the ideas are still there. What plans do Her Majesty's Government have for trying to revive the hope that seemed so strong a few months ago that some new kind
1318
of confederation or arrangement could be achieved and the problems of Cyprus at last be brought to an end?
Baroness Symons of Vernham Dean: My Lords, it is only a short while since the UN plans sadly came to grief. I cannot answer the question as the noble Lord would wish me to without making reference to the fact that I have today answered a Question from my noble friend Lady David on this matter. The Prime Minister and the Foreign Secretary have accepted the recommendation of the noble Lord, Lord Hannay, that his term should end with effect from today, in the role that he has undertaken in Cyprus. The noble Lord, Lord Howell of Guildford, might have cause to chide me gently afterwards if I did not make that clear to him in answering the question.
We take the view, as does the UN Secretary-General, that the UN should not take any new initiatives until the Secretary-General is given reason by all parties to believe that there really is a political will to solve the problem in Cyprus. We all know that an enormous amount of energy has been devoted to the issue in the past few years, not least by the noble Lord, Lord Hannay. I am sorry that he is not in his place, because he deserves a great deal of praise and thanks from all sides of your Lordships' House for the work that he has undertaken. However, the fact is that until there is a real political will on all sides to solve the problem, we are unlikely to see much movement.
Lord Lester of Herne Hill: My Lords—
Lord Maginnis of Drumglass: My Lords, is it not the fact that the decision by President Denktash—
Lord Williams of Mostyn: My Lords, I believe that it is the turn of the Liberal Democrats.
Lord Lester of Herne Hill: My Lords, I am grateful. Reverting to the Question asked by the noble Lord, Lord Hylton, is the Minister aware that the European Court of Human Rights gave very valuable advice on the question? It made it quite clear that the Republic of Turkey is responsible for any breaches of the human rights convention, including the right to property, in the TRNC in northern Cyprus. Is it not the position that, if British citizens are victims of breaches by the TRNC in northern Cyprus, Turkey will be responsible? On the other hand, if they were the victims of breaches in the Greek-occupied part, the Cyprus Government would be responsible. There are complete remedies already under the European convention.
Baroness Symons of Vernham Dean: My Lords, I believe that the noble Lord misspoke when he referred to the Question of the noble Lord, Lord Hylton, which was on Israel and the Palestinian Authority. We are discussing the Question of the noble Lord, Lord Faulkner.
In general terms, I agree with the noble Lord, Lord Lester. However, I am anxious to avoid providing an absolute blueprint for what may be

1319
difficult questions of property ownership in all circumstances. The fact is that property ownership may happen in a wide variety of circumstances. Speaking from the Dispatch Box, I must be careful about sounding prescriptive about the way in which this issue may be resolved. However, in general terms, of course I can agree with what the noble Lord, Lord Lester, has said.

School Playing Fields
2.53 p.m.
Lord Monro of Langholmasked Her Majesty's Government:
How many school playing fields have been sold in 1998, 1999, 2000 and 2001 respectively; and what percentage of applications that represents in each year.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, between October and December 1998, the Government approved seven applications to sell school playing fields larger than a school sports pitch. Forty-two applications were approved in 1999, 32 in 2000, and 22 in 2001. Applications are scrutinised very carefully and can take several months to assess. As applications made in one year may not be determined until the following year, it is not possible to say what percentage of applications these approvals represent in each year.
Lord Monro of Langholm: My Lords, I am grateful to the Minister for her reply, although it is somewhat complicated by the dates overlapping. Is she aware that the figures that I received from the National Playing Fields Association this week for all playing fields showed that, over the four years, 3,809 applications had been made and the majority were approved. Why does not the playing fields monitoring group set up by the Minister publish its figures regularly? What has happened to the Minister's promise to reduce sales when they are manifestly increasing?
Baroness Ashton of Upholland: My Lords, I can say to the noble Lord that they are manifestly not increasing. The National Playing Fields Association is represented on the group that gives advice to myself as a Minister on behalf of the Secretary of State and takes forward the approvals. I am clear about the figures that I stated for the applications. I am also clear that noble Lords will be aware that other pieces of land are sold off that are not school playing fields. They are small bits of land that could not be used in any circumstances for sport.
I fear that some of the figures that are put into the public arena are adding up different figures from different parts of our environment and coming up with a total. The figures that I gave the noble Lord are correct.
Lord Hunt of Kings Heath: My Lords, would my noble friend agree that, while it is important to have
1320
enough playing fields, it is equally important that those playing fields are actually used? Is she aware that many schools still deny the benefit of competitive team sports? Will she tell me what her department is doing to get the right message across to them?
Baroness Ashton of Upholland: My Lords, it is a delight to have a question from my noble friend. There is no doubt that we wish to encourage all schools to have the right level of competitive team sports as part of a PE and sports strategy. Noble Lords will have heard me speak before about the need to ensure that our children are given the opportunity to have two hours of PE and sport per week to enable that figure to be at 75 per cent. That is part of ensuring that children have a healthy lifestyle and develop the possibilities of having a sport or physical activity that they can continue with for life and which can keep them healthy. That also ensures that we develop the competitive spirit that is necessary and relevant and that we find competitive athletes for the future.
Lord Sutherland of Houndwood: My Lords, will the Minister reassure us that moneys raised from such proceeds of sales will be retained in the educational budget? Especially if the moneys are under the command of local authorities, can we be reassured that they will be used for suitable school purposes—whether gymnasiums, books or musical instruments?
Baroness Ashton of Upholland: My Lords, I am able to give the noble Lord that reassurance by giving an example of what has happened in the applications this year. Half of the 22 in 2002 were in school sites that had already closed; quite a number of the playing field application sales that I have received are from schools that have closed during the past 10 years. From the proceeds from the 11 playing fields sold from schools that were still in operation, we have built four new sports halls, two new all-weather pitches, better quality grass pitches, two new schools and much improved classroom and other facilities. From the 11 that came from schools that were closed, we have built three new sports halls, three new schools and a new autism unit.
Lord Addington: My Lords, the Minister has given us figures showing a decreasing number of sales. However, could she go a little wider and tell us what consideration has been given to the number of playing fields sold off by the NHS in that period, for example—or by any other government body? They are still basically playing fields and must be seen as a whole, not as individual units.
Baroness Ashton of Upholland: My Lords, I cannot answer for the NHS from the Dispatch Box at this time. However, we are keen throughout government to ensure that facilities exist for community activities and sport. Part of the work that is done on the school playing fields side is to ensure that the use to which the playing fields that have been sold could be put does not include community use. In other words, we must

1321
ensure that neither the community nor the school itself nor other schools lose the benefit. That is a consistent criteria that operates.
It is refreshing to see that a large number of applications enable schools to provide better facilities indoor and outdoor, such as all-weather pitches, which then become used by the community. That is a very important part of this matter.
Lord Davies of Coity: My Lords—
Baroness Billingham: My Lords—
Lord Williams of Mostyn: My Lords, it must be one of them. The noble Baroness, Lady Billingham, can go first.
Baroness Billingham: My Lords, perhaps I may return to the original Question. Is it not the case that the Government have, for the very first time, published an audited account of the number of' school playing fields that have been sold? That answers the original Question. Furthermore, the National Playing Fields Association is delighted with that and has congratulated the Government on reducing the sale of playing fields, which, in the previous administration, was far greater than it is today.
Baroness Ashton of Upholland: My Lords, my answer to that would be yes. We have produced a report which I believe is in the Library of the House; I shall confirm that to noble Lords. I should also be delighted to send noble Lords who participated in this Question a copy of the details we have published. The National Playing Fields Association is an important part of the group that advises me on behalf of the Secretary of State. I have met them and am delighted with the work that they do in helping us to ensure that our children have the facilities they need.
Baroness Seccombe: My Lords, the noble Lord—
Lord Williams of Mostyn: My Lords, I am awfully sorry, but again we are well over time.

House of Lords: Thursday Sitting Times
3 p.m.
Lord Carterasked the Chairman of Committees:
When the Procedure Committee will discuss the arrangements for Thursday sittings.
The Chairman of Committees (Lord Brabazon of Tara): My Lords, in July last year the Procedure Committee put forward a set of proposals arising from the report of the Leader's Group on the working practices of the House. Those proposals, which included changes to Thursday sittings, were agreed to by the House for a trial period of two Sessions. So the
1322
Procedure Committee may be expected to review the arrangements towards the end of that period unless further proposals are presented to it before then.
Lord Carter: My Lords, I thank the noble Lord for that Answer. I would be the first to agree that a number of the changes that we made—the 10 o'clock finish, the use of Grand Committee, carryover, and so on—should be given time to work through. However, the change on Thursday was a stand-alone change not related to those other changes. May I remind the House that the questionnaire issued by the Leader's Group on working practices revealed substantial support for an early start and an early finish on Thursdays? It is the one-and-a-half-hour break between 1.30 and 3 p.m., with the consequential disruption of business, that is proving so unpopular.
Question Time is certainly not the right time to discuss all the alternatives. May I suggest that when the Procedure Committee considers the matter, as I hope it will in the near future, it should consider all the alternative scenarios for Thursdays and present them in a questionnaire in order to see which one has the support of a majority of the House?
The Chairman of Committees: My Lords, I am grateful to the noble Lord for his Question. I am certainly conscious that the present arrangements for Thursdays do not attract universal favour. I did a canvass myself of the Panel of Deputy Chairmen, a reasonably representative cross-section of Members of this House, and not one of them liked the current Thursday arrangements. Most prefer the pre-Recess Thursday arrangements whereby the House meets at 11 o'clock for Questions and goes straight through to about half past seven. A minority wish to return to the old 3 p.m. sitting but I do not believe that that finds much favour.
Lord Renton: My Lords, will the noble Lord remind the Procedure Committee that membership of your Lordships' House is not a whole-time occupation and that many noble Lords and noble Baronesses have experience and expertise acquired from their other occupations which are of great value in this House? Will he therefore tell the Procedure Committee that having to sit on Thursday mornings deprives Members of the opportunity to carry on those valuable outside activities?
The Chairman of Committees: My Lords, it is not for me to tell the Procedure Committee anything and I would not dream of doing so. I am the servant of the Procedure Committee. This issue was of course debated last July when the changes took place. A vote was very much in favour of sitting at 11 o'clock in the morning. The issue seems to be not so much the sitting at 11 o'clock on Thursdays but whether the lunch break should take place or not.
Baroness Lockwood: My Lords, although 1 do not usually disagree with the noble Lord, Lord Renton, is it not a fact that because noble Lords have outside commitments, having to waste an hour and a half in

1323
the middle of the day makes them feel very deprived of useful service? They could usefully fill up that time. Is there not also a conflict between those who are London-based and those based in different parts of the country who have no alternative but to do their other work on Fridays?
The Chairman of Committees: My Lords, the noble Baroness is of course right. As I said, I do not think that there is a particular argument about rising at around 7.30 p.m. on Thursdays; that seems pretty popular with most people. It is a question, as I say, of the one-and-a-half-hour break in the middle of the day. The noble Lord, Lord Carter, suggests that the Procedure Committee should perhaps issue a questionnaire to your Lordships, as happened previously on this issue. I think that that is a very good suggestion. The next meeting of the Procedure Committee is on Monday. I do not think that it will be possible to have a substantive discussion of the issue then, but we could certainly do so at a future meeting of the committee and could indeed issue a questionnaire.
Lady Saltoun of Abernethy: My Lords, what is the point of the House rising at seven o'clock on Thursdays in order to enable Peers who live a long way away to get home on Thursday evening when the House is going to sit on Friday at 11 o'clock?
The Chairman of Committees: It is my guess, my Lords, that not all noble Lords feel it necessary to come in on Friday. Too many do tomorrow.
Lord Cope of Berkeley: My Lords, is the Chairman of Committees aware that I agree with the noble Lord, Lord Carter, that this matter is separate from the other aspects of the changes introduced last year and could be considered separately by the Procedure Committee? It is very clear to me that a large number of noble Lords would like to have the matter reviewed. There is slightly less agreement about exactly what should happen, but many would like at least a review.
This is not the only change that is proving less than popular. The 10 o'clock rule, for example, seems to be proving very unpopular with the Government. I speak as one who was here until 20 minutes to one this morning.
The Chairman of Committees: So was I, my Lords.
Lord Grocott: So were the Government.
The Chairman of Committees: Indeed, my Lords. Certain elements in the package clearly go together. For example, the 10 o'clock rising goes together with more Grand Committees—it is a pity that the 10 o'clock rising tends to slip—and pre-legislative scrutiny goes with carryover. However, I agree with
1324
the noble Lord, Lord Cope, that it could certainly be argued that Thursday sittings can be seen as a standalone issue.
Lord Wallace of Saltaire: My Lords, does the Chairman of Committees recognise that in one major respect the Deputy Chairmen of Committees are not representative of the full cross-section of the House? Without exception, I think, they are all retired. The substantial proportion of the Members of this House who are still earning their living care about this remaining a part-time House. For that reason we welcome in particular the greater use of Grand Committees and very much hope that that part of the reform will be pursued with vigour.
The Chairman of Committees: My Lords, I take issue with the noble Lord's assertion that the Deputy Chairmen on the whole are retired. I would say that they are not more retired than many other Members of this House. This Question is not about the use of Grand Committees—that is just one element of the package—but about the Thursday sittings. I think that the mood of the House is fairly straight on that.

Genetically Modified Crops
3.8 p.m.
Baroness Miller of Chilthorne Domerasked Her Majesty's Government:
What evidence the public will have so that they may form an opinion as to the environmental impact of genetically modified crops and what account the Government will take of that opinion when deciding whether to authorise commercial growing of those crops.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, in relation to the public debate on GM, the information packs and the "GM Nation" website contain information on the environmental impact, and the public's views will feed into the report being prepared by the independent steering board. More specifically, each application for commercial cultivation of a GM crop must include an environmental risk assessment and all applications are subject to public scrutiny through two periods of public consultation. The application and public comments are considered by all EU member states and a collective decision taken.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for his reply. However, does he not think it ridiculous that the Government are expecting the public to form an opinion just before publication in July of field trial results which may have some scientific value? Would it not have been better to publish the field trial results and then to ask the public for their opinion? Is he not also very disappointed that the next round of public involvement—the launch of the public debate—will be a closed session, access to

1325
which can be gained only by invitation and ticket, I believe? So even if genuine members of the public were interested, they would be unable to attend those events. Will he consider a debate in your Lordships' House to discuss the conduct of this public debate?
Lord Whitty: My Lords, that final point is not a matter for me. On the public debate, most of the sessions would be ticket based but would be available by application so anyone can be party to the debate. We anticipate a widespread debate. That is in the hands of an independent steering board, not those of the Government; that is contrary to some comments in the media. As to timing, the noble Baroness misunderstands the situation. The public debate will cover all aspects of GM and the future use of GM technology in a number of applications and a number of ways, whereas the decision on the cultivation of field crops is a particular decision that depends on the outcome of those trials. One is not dependent on the other.
Lord Livsey of Talgarth: My Lords, will the Minister explain how Ministers in another place have assisted in the process of achieving an objective opinion on GM crops when they have just appointed two new members to the Agriculture and Environment Biotechnology Commission. which is the Government's strategic adviser on those matters? They are Dr David Buckeridge of Advanta Seeds and Dr Paul Rylott, the UK head of bioscience for Bayer CropScience. Both are strong lobbyists in favour of GM crops. How will he ensure objectivity in this debate with that happening?
Lord Whitty: My Lords, appointments to that committee, as with other committees, cover a wide range of' interests. It would clearly be absurd if such committees excluded people with industrial and scientific experience in the area under examination. If the noble Lord, Lord Livsey, examines the full list of members, he will see that many have opinions that differ from those two views. That is the nature of the debate—there is a wide range of views on this debate, which is precisely why the Government want the public to engage more widely on all aspects of the issue.
Lord Haskel: My Lords, does my noble friend agree that scientists wear many hats? They can be independent and objective. The suggestion that they are influenced by other considerations is rather demeaning towards our scientists.
Lord Whitty: My Lords, it is certainly the case that many of our best scientists have at various points in their career been dependent, in terms of employment, research and so on, on the private sector. That does not in any way disqualify their objective scientific judgment.
Lord Pearson of Rannoch: My Lords, when the Government decide whether to authorise the commercial growing of such crops, will they have to
1326
consult the European Union in Brussels? If so, what would be the influence of the European Union's decision?
Lord Whitty: My Lords, in terms of new cultivations of crops or new products, there was a European-wide system of application. Some of that has been delayed as a result of the de facto moratorium on giving new approvals. New proposals must be dealt with through a European system on which every member state must take a view, after which there is a collective decision. Applications for new crops or new imports go through a European process.
The Countess of Mar: My Lords, the Minister must be aware of the criticism in the media about the first public consultation exercise that took place yesterday. He said that that was organised by an independent organisation. In view of that criticism and the failure of the people organising it to be absolutely clear about the venue, time and date of the consultation exercise, would he kindly convey to the people organising it the intense dissatisfaction of many people who are concerned about GMOs on one side or the other—it is not just the antis who are complaining—about the failure of this exercise to be a proper consultation exercise rather than a cosmetic exercise?
Lord Whitty: My Lords, as the noble Countess herself said, this was the first occasion—the beginning of the public debate. There will be a number of such events. It is in the nature of such events that those with strong views on the issue wish to put their view on the record at an early stage. That certainly happened yesterday. However, I do not believe that that in any way undermines the credibility of the exercise as a whole. It is very important that the Government maintain an arm's length relationship with those who are organising the debate in order to make it absolutely clear that this is not a debate that the Government are attempting to steer. It would therefore not be incumbent on me to pass on such comments to the steering committee.
Baroness Thornton: My Lords—
Lord Mackie of Benshie: My Lords, can we be sure that when—
Noble Lords: This side!
Baroness Thornton: My Lords, will my noble friend the Minister assure the House about the independence of the consultation? I was reassured to learn that Professor Malcolm Grant, a hugely reputable academic, was leading it. I hope that the House will permit me to say to the noble Countess that one can find out about the dates on the website if one wants; they are very accessible. Could we be reassured about the independence of the consultation process and when will it report to the Secretary of State?
Lord Whitty: My Lords, my noble friend is absolutely right. The independence of the consultation

1327
process is clear. Professor Grant is a person of the highest integrity and I am confident that he will be able to conduct the exercise in a way that draws a meaningful conclusion by the September date, when we expect his report to the Secretary of State.

G8 Summit
3.16 p.m.
Lord Williams of Mostyn: My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend the Prime Minister earlier today in another place. The Statement is as follows:
"With your permission, Mr Speaker, I will make a Statement about the G8 summit in France.
"I pay tribute to President Chirac's very skilful chairmanship in guiding our deliberations. We reached significant conclusions on the Middle East, on weapons of mass destruction and terrorism, and on Africa and sustainable development. In addition, we committed ourselves to strengthening the conditions for growth in the world economy. In all, there were 16 action plans and statements released at the summit, copies of which have been placed in the Libraries of both Houses.
"First, on the Middle East, we all recognised that a solution to the Israel/Palestinian problem is not only vital for stability across the Middle East; it would also deprive the terrorists of an issue which they exploit for their own inhuman ends.
"I need hardly remind the House of the bleak pattern of mistrust, hatred and violence that has blighted the lives of generations of Israelis and Palestinians. Children have been growing up in an area with seemingly no prospect of peace. Since the beginning of the intifada in September 2000, until the end of March of this year, 2,300 Palestinians and more than 600 Israelis have been killed.
"There have been too many dashed hopes to be anything other than cautious in assessing the current situation but, since I last reported to the House, the road map for peace has been published, the Israeli cabinet has accepted it and there has today been the historic meeting between President Bush and the Palestinian and Israeli Prime Ministers in Jordan. The whole G8 Summit united together behind the initiative that President Bush is taking and fully endorsed what is now agreed on all sides as the only ultimate answer: two states, Israel and Palestine, living side by side in peace.
"That is an objective of historic significance both for the Middle East and indeed for the whole world community. We in the United Kingdom will continue to support it with every means at our disposal.
"Secondly, on terrorism and weapons of mass destruction, there was striking unanimity of purpose that we must urgently strengthen our co-operation in the fight against these two closely related threats.
1328
"On weapons of mass destruction, we underlined that North Korea's uranium enrichment and plutonium production programmes and its failure to comply with IAEA safeguards were a clear breach of its international obligations. We called on it to dismantle its nuclear weapons programmes. We emphasised the proliferation implications of Iran's advanced nuclear programme and called on Iran to sign and implement an IAEA additional protocol without delay or conditions.
"President Putin made it clear that in the mean time Russia would suspend its exports of nuclear fuel to Iran. These are important steps to halt the proliferation of nuclear weapons and I welcome them.
"In addition, we took stock of progress on the 20 billion dollar programme launched last year to prevent terrorists acquiring nuclear, biological or chemical materials left over from the former Soviet Union, to which Britain has made a commitment of up to 750 million dollars.
"We put in place mechanisms to improve the prioritisation and co-ordination of technical assistance for countries seeking to assist in the war against terrorism. We launched new initiatives to tackle man-portable surface-to-air missiles and to tighten security controls on radioactive sources. And we agreed on a new drive to cut off terrorist financing.
"Thirdly, on Africa and development, the summit brought about the welcome participation of many African and developing nations. We all agreed that of central importance is a successful outcome to the WTO ministerial meeting in Cancun in September and the successful completion of the development round by 2005. The wealthy nations of the world simply cannot any longer ask the developing world to stand on its own feet but shut out the very access to our markets necessary for them to do so. Reform of the common agricultural policy will be vital in this regard.
"In addition, we agreed to resolve all other outstanding WTO issues, including the compulsory licensing of drugs—the so-called TRIPS question—which is important for poorer countries to access drugs for their people, and is also essential for progress in the Doha round.
"We had extensive discussions about the problem of HIV/AIDS which afflicts 42 million people around the world. All of us welcomed President Bush's recent announcement of a 15 billion US dollar initiative to combat it. I hope that at the European summit in Thessalonika the EU will agree to match the US commitment to the global health fund, potentially up to 1 billion dollars a year. We remain on course, too, to eradicate polio from the face of the globe by 2005.
"I set out in some detail my right honourable friend the Chancellor's proposal to establish a new international finance facility, which could deliver a doubling of current aid flows for recipient countries committed to economic reform and good governance.

1329
Finance ministers have been asked to report back to leaders on this proposal by September. It is important that we now sustain the momentum behind this initiative.
"G8 leaders also took the opportunity to discuss with President Mbeki and other African leaders the good progress that we have made in partnership with NePAD leaders over the past year in implementing the Africa action plan launched at Kananaskis. Over the past year we have seen the largest ever US commitment to aid for Africa, and many EU countries, including our own, are increasing substantially our aid and development programmes. Consistent with this African-led initiative, we discussed the steps they are taking to resolve the current appalling crisis in Zimbabwe. We condemned the action taken by the Zimbabwean authorities on Monday against their own people and called on the Zimbabwean Government to accept their citizens' right to demonstrate against the regime peacefully.
"I was also pleased that we endorsed the initiative, which I launched last year, to reduce corruption by getting companies in the extractive industry to make public the tax and royalty payments they make to governments, and for those governments to publicise their receipts. I believe that this simple idea could have a powerful impact. Transparency and increased accountability are the best defences against corruption.
"Leaders also had a full discussion on the world economy and agreed on the central importance of fostering macro-economic stability and intensifying structural reform as the essential pre-conditions for strengthening growth. Chancellor Schröder briefed us on the steps Germany is now taking to modernise its health and pensions systems and to increase the flexibility of the labour market. And President Bush expressed confidence in the strength of the US economic recovery based on rising productivity and a pick-up in domestic demand.
"Finally, G8 heads agreed to step up our collaboration on science and technology to help combat the long-term problem of climate change. It is crucial that we tackle this, but in ways that encourage sustainable growth and development. The G8 must lead the way, working in partnership with developing countries. We shall focus, for example, on renewable energy, the hydrogen economy for transport, fuel cells and biodiversity.
"After the sharp disagreements in the world community over Iraq, the summit represented an important coming together by leading nations. In the past few weeks, we have seen the restoration of unity in the UN with Resolution 1483. As important as anything else, on the very issue of WMD and terrorism, there was a renewed sense of urgency and purpose. Of great significance, we have seen the Middle East peace process, despite all the cynicism, moving forward again.
"Whatever the differences of the past few months the summit showed common purpose on these key issues. It is now the task of the whole world
1330
community to build on the objectives that have been reached which are of such fundamental importance to us all".
My Lords, that concludes the Statement.
3.25 p.m.
Lord Strathclyde: My Lords, I thank the noble and learned Lord for repeating the Statement made by the Prime Minister in another place earlier today.
It was an important summit. Perhaps the most significant thing about it was that it linked the United States in partnership with Europe. I hope that the noble and learned Lord can agree that nothing is more crucial than that relationship and that it should be maintained. Like it or not, the United States will be the predominant power in the world for the rest of our lifetimes.
The concept floated by France and Germany of a multipolar world in which some European power—governed we know not how—could be created to counterbalance the United States is in my view an illusion. The United States has been, and can continue to be, a power for liberty, freedom and democracy in the world. We should work with it. We can, of course, collude against it, as France and Germany did earlier this year. But I believe in working with it. Can the noble and learned Lord assure the House that the Prime Minister made that firmly and unequivocally clear to Mr Chirac and Mr Schroeder at the summit?
Turning to the Middle East, we stand four-square with the Prime Minister in backing the bold initiative of President Bush. We welcome the hopeful and promising declarations made only two hours ago, or thereabouts, at Aqaba. We welcome the road map to peace in the Middle East and sincerely hope that it may succeed.
As the Prime Minister said, a two-state solution is inevitable, and it is right. It is good news that Israel has now officially welcomed it. Terrorism must end. But the search for peace must also be multilateral.
Can the noble and learned Lord explain to the House how Syria and Lebanon will be involved in this process? Does he believe that Iran and certain circles in Saudi Arabia will now cease to finance and support terrorism? Can he also assure us that France, which dabbled so damagingly in Saddam's Iraq, fully supports the initiative?
We greatly welcome the statesmanlike action of President Putin over Iran's nuclear programme. We agree with the Prime Minister and the G8 that the threat of proliferation in Iran and in North Korea is a major one. Can the noble and learned Lord tell us whether our Government have ruled out military action in North Korea under any circumstances? Does he think that it might be helpful for the Government to publish dossiers on the nuclear policies of Iran and North Korea?
Much has been said in the past few days about the case made by the Government before the war with Iraq. Let me make it clear that we on this side need no persuading that the war was justified. And, incidentally, will the

1331
noble and learned Lord make it clear that we have no truck with allegations about the behaviour of our own troops? Our Government must give no houseroom to the hypocrisy of human rights campaigners who were silent about Saddam for so long, but who now target our soldiers on the flimsiest of evidence.
Saddam was a threat. He did use weapons of mass destruction. He was a merciless tyrant, not least to his own people. We need no persuading that Iraq and the Middle East are well rid of him. But some people did need persuading. That is why the material published by the Government before the war and the Statements made to this House and another place raise issues of trust and parliamentary accountability. Something so solemn as a war must be founded on fact. There can be no suspicion of half-truths or spin.
That is why we believe that an independent judicial inquiry would be desirable to clear up this matter. It would help the Government and underpin the integrity of the Prime Minister. Will the noble and learned Lord use his considerable influence to persuade the Prime Minister of the wisdom of that course? Will he consider ways for Members of this House to be involved in any parliamentary inquiries that might take place?
There is another factor that is peculiar to this House. Many of us regret the unworthy accusations levelled at the noble and learned Lord the Attorney-General that somehow his advice on the legality of war was not as unqualified as the published documents suggest. Therefore, would it not be sensible in any inquiry into the publication of the intelligence dossier for the scope to be widened to explore the background to the advice given by the Attorney-General? An independent examination of that, too, would be helpful. I hope that the noble and learned Lord will also use his influence in that direction.
Can the noble and learned Lord tell us a little more about the likely timetable towards self-government in Iraq?
I wish to press further the noble and learned Lord on the important declarations on Africa. We welcome the commitment of the G8 to further help for that benighted continent. However, we still deplore the generally pusillanimous stand being taken by the international community over the savage dictatorship of Mugabe in Zimbabwe. Words and declarations are fine, but when will effective action be taken to remove Mugabe?
Given the importance of the summit talks on Africa and discussions on medical supplies and relief in Iraq, can the noble and learned Lord give the House any hope of an early debate or a full Statement by the Secretary of State for International Development to lay out in some detail the Government's strategy? We are privileged to have a Secretary of State in this House. Surely, we should hear from her on these matters, at least before the House rises in the middle of July.
1332
Furthermore, while on the subject of debates, I note that another place is rightly going to debate the crucial issues of the future of Europe before the EU summit at Thessalonika. I urge the noble and learned Lord to press his deputy leader, the noble Baroness, Lady Symons of Vernham Dean, to change the Foreign Office's view—as I understand it—that a debate in this place also is not needed before that vital summit.
President Bush has given inspiring leadership in the world in the past few months. The Prime Minister has been right to support him. So long as he does so and does not veer off to chase the rainbow of integration in Europe before the rock of co-operation with our greatest ally he, too, can rely on our support.
3.32 p.m.
Baroness Williams of Crosby: My Lords, I, too, thank the Leader of the House for repeating the Statement. I begin by picking out certain aspects that we on these Benches very much welcome and which I am sure the wider House welcomes.
First, there are the steps taken, evidently successfully, to limit nuclear proliferation. In that context, like the noble Lord, Lord Strathclyde, I ask specifically whether the noble and learned Lord can bring us up-to-date on whether there has been any response from either North Korea or [ran to the representations made to them: first, with regard to their nuclear programme; and, secondly, with regard to nuclear enrichment facilities. I also echo the question as to whether the Lord Privy Seal is willing to rule out the prospect, at least at this stage, of any military action being considered with regard to Iran.
Secondly, perhaps I may say that we very much appreciate the statement made about the international finance facility, which is a real opportunity to increase the level of investment in Africa. I agree strongly with the statement that this is an initiative by the Chancellor of the Exchequer which deserves strong support from the international community. We wish it well and hope that it can be speeded on its way. September is, after all, for many thousands of people quite a long way off.
Thirdly, I echo what has been said about the road map. In particular, the noble Baroness, Lady Symons of Vernham Dean, was, in our view, absolutely right to express caution and to suggest to us that we need to emphasise the hopeful side of this, which is, after all, the first constructive development towards resuming the peace negotiations in Israel in the past three years. Does she agree that, first, it was not specifically an American initiative but one which was started by the quad, which of course indicates the significance of a multilateral approach, not least when the European Union is bound to be one of the significant financiers of any final peace settlement, particularly with regard to reconstruction on the Palestinian side? Therefore, it is crucial to emphasise that this is a multilateral exercise and that it is all the more important for that.
Finally in that context, I think that all of us agree that the path forward must be pursued by reconciliation and reciprocation between the two sides. We can all hope that any move forward on one

1333
side will be matched as quickly as possible by a move forward on the other. Therefore, the citizens of Israel and of the Palestinian territories will be able to see a steady move forward in the direction of peace. Anything less than that will sow only disappointment.
Having said that, I turn briefly to Iraq. In particular, I ask whether the noble and learned Lord the Lord Privy Seal can confirm that it is likely that an Iraq interim authority will not be in place for at least another year or 18 months, which is the slightly gloomy indication we have had from that quarter? I raise a matter with regard to Iraq, not least because of the points raised by the noble Lord, Lord Strathclyde, about the current debate on WMD and the doubts about whether the intelligence was based on factual material. I shall not pursue that matter further. It will be pursued on many other occasions.
However, for those on these Benches the issue raises a larger question about whether the involvement of the so-called "Iraq survey group" now being launched—as the Prime Minister said in another place—to investigate the possibility of weapons of mass destruction throughout Iraq and involving, we understand, no fewer than 1,300 people drawn from Australia, the United States and Great Britain, will not seriously feed the problem of credibility since all those people will come from the so-called coalition. Would it not be better to leave the matter to experts who are regarded throughout the world as people who have no axes to grind and who do not come from one side or the other; in other words, the UN inspectors? In that context, we should pay tribute to Hans Blix, who is leaving office today, for all that he attempted to do and actually achieved as an independently-minded and uninfluenceable chief inspector.
I turn from those favourable issues to what I regard as the other side of this Statement. I regard that other side of the Statement—the one that concerns Africa and the developing world—as an utterly inadequate response to a world in which the inequities and unfairnesses are so great that they are now at the level of obscenity. These statements were made by the G8 when the western world—and in particular our own government and that of the United States—took credit for what it had done in Iraq. It cannot I think take credit for producing a peaceful proposal that would begin to limit the sense of profound injustice that exists through much of the world.
In that context, I refer to the 16 action plans of precooked honeyed words that seem to us to add up to extremely little in terms of action. Perhaps I may give two examples. The first relates to what the Prime Minister had to say about the common agricultural policy. I should be grateful if the Leader of the House could tell us why at a time when, unusually, President Chirac of France proposed the ending of subsidies on EU products exported to Africa, particularly of food exports, the United Kingdom was one of three countries that objected to that initiative alongside the United States and, I believe I am rightly informed, Japan. That was the first move by France towards beginning to dismantle the common agricultural
1334
policy. We on these Benches cannot begin to understand why that was not welcomed and pressed forward in every possible way.
The other example I want to give is equally sad—I would even call it shocking. It is the proposal that was put forward to allow African countries to buy drugs to deal with the major diseases that today rack those countries—HIV/AIDS, malaria and tuberculosis—which led again to an initiative by the European Union for the rules that protect copyright to be relaxed so that those products could be bought at the generic price, and alternatively that they could buy them from other developing countries such as Brazil on the basis of copyright being extended to those countries and the generic price being charged. It is to us a tragedy that it was among others our own country, and in particular the United States, that refused to accept that initiative. Therefore, although the United States has given 15 billion dollars in aid to Africa, which we welcome, much of that money will be absorbed in the fact that the market price for the drugs is seven times the generic price. That means that the profits will simply go back again to the very companies that led the lobbying for that objection.
In conclusion, the medical director of the UK branch of Médecins sans Frontières referred to promises that are mostly unfulfilled. With regard to the developing world we must fulfil our promises and not produce any more words that do not mean anything. Let us be sure that of the 16 action plans at least a few come to fruition. The Government will then have the right to take credit for that part of the Statement, as they have reasonably and rightly taken credit for the earlier part of the Statement.
3.40 p.m.
Lord Williams of Mostyn: My Lords, I am grateful for the responses of the noble Lord, Lord Strathclyde, and the noble Baroness, Lady Williams. There were a large number of questions and I have about five minutes to deal with them, unless your Lordships can be patient enough to let me stray a little beyond.
I was pleased that the noble Lord, Lord Strathclyde, urged me to look for the rock at the end of the rainbow. That is an interesting intellectual conceit that I had not encountered before in my sheltered life. The noble Lord's first point was absolutely right. It is wholly false to suggest that our future lies either with the United States, our historic ally, or with Europe, which is growing in confidence and power. I agree with him entirely that they are not alternatives and that they are not exclusive. Was that made plain to President Chirac and Chancellor Schröder'? I think that they understand quite well.
On the question of President Bush and the Middle East peace process, it is important that we recognise what is happening. There are historic opportunities. The Israeli cabinet has accepted the way forward. That is not an achievement that should be overlooked. It struck me particularly when I was in Buenos Aires for the installation of the new Argentine president that one of the representatives of the State of Israel there

1335
was a cabinet minister telephoning his assent. That was a truly historic opportunity that we must all work to support. We should not also underestimate in our own interests the extremely persuasive and powerful influence that our Prime Minister and Foreign Secretary have had. There is no doubt in my mind that without their intense commitment we would not be at this stage, however early it may be.
The noble Lord asked about military force being used against Korea and the noble Baroness asked about military force being used against Iran. The answer is to be found in paragraphs 3 and 4 of the G8 declaration on non-proliferation of weapons of mass destruction. Paragraph 3 states:
"We have a range of tools available to tackle this threat",
and, right at the end of that paragraph,
"if necessary other measures in accordance with international law".
Paragraph 4 states:
"While all these instruments are necessary, none is sufficient by itself".
So I think that that gives the answer. France does indeed support the initiative.
The noble Lord, Lord Strathclyde, troubled me as I was paying careful attention by using that dreadful word "dossier". I hope that it is not the result of rogue elements in the Conservative Party. I agree with him that those torture chambers and those mass graves were not built and excavated by the United States or any western power. They were all the result of bestial dictatorship.
The question of accountability in the parliamentary context is very important. It is Parliament that should bring Ministers, governments and executives to account. That is what is being done by the Senate Committee investigation in the United States in Washington, and that is what is going to happen in this country. As the Prime Minster has made perfectly plain, any document called for by the Intelligence and Security Committee will be provided, evidence will be given, and the report that the ISC produces—subject to the constraints of intelligence sensibilities—is going to be published.
The Foreign Affairs Committee may or may not have its own investigation, but if we speak of parliamentary accountability, should we not deal with it in Parliament? After all, we have a Member of this House, my noble and learned friend Lord Archer of Sandwell who is on that committee. His views on the conflict are well known. His integrity is absolute. I think that we should, to use the noble Lord's phrase, rely on parliamentary accountability. Whether the ISC chooses to call for the Attorney-General's advice, I respectfully suggest, is a matter for it.
Have I a timetable for Iraq? No. I suggest with great respect that the conflict has been over for such a short time. It is idle to think of setting a timetable, because timetables, as we know so well in the context of Northern Ireland, have a habit of becoming more important than the process.
1336
I do not think that the approach to Zimbabwe has been entirely pusillanimous. There was an interesting contribution on the "Today" programme this morning. I am not speaking of Dr Reid interviewing John Humphrys. There was the most fascinating contribution by the brother of President Mbeki. He is the chairman of an independent authority and I think that his remarks deserve careful attention and scrutiny.
Regarding requests for early debates, however passionately they are made, I dispassionately reply that that is a matter for the usual channels. I agree that I am one of the usual channels and I will use my undoubted influence, to coin a phrase, in the appropriate way.
I am grateful for what the noble Baroness, Lady Williams, said about the Chancellor the Exchequer's initiative. He has been well known for his imagination and determination to eradicate the grossly unacceptable—I think the noble Baroness said obscene—discrepancies. She is right. It was a quartet initiative—that is extremely important. We should not forget that one of the quartet is President Putin's Russia. We also should not forget that the other contribution is from the EU. Everyone in this House recognises the overwhelming importance and significance of the role that the United States must be called upon to play. President Bush promised in Hillsborough that he would apply his energies to the matter, and so far, one has to say fairly, that he has. He has been successful. The noble Baroness is quite right to say that reconciliation is the only key. We know that ourselves from Northern Ireland and she is quite right to say that she hopes that one party will not say "we shan't do anything until you have done something first". We should learn the lesson of 30 years past in Northern Ireland on that.
The Prime Minister has made it plain that the survey group of 1,300 will have ample opportunity to detect what evidence there is or may be about weapons of mass destruction. We ought to wait to see what will happen, as the Prime Minister has said. I do not think that all those documents were simply, again I quote, "pre-cooked, honeyed words". It is a great opportunity today for metaphors not entirely unmixed. I do not think that those words should be so described—they are serious declarations. The noble Baroness is right to say that September is a long way away if you are poor and starving, but setting a deadline of September was important. There are many bases for optimism in the documents, not least the fact that they are coming from a large number of different countries that do not always share the same starting point.
I have over-run by three minutes, but I thought that you Lordships desired the answers.
3.49 p.m.
Lord Elton: My Lords, the obscene gap referred to by the noble Baroness is best illustrated by the fact that life expectancy for a baby born in this country is more than twice as long for one born in, for example, Sierra Leone, where the income—the GDP per capita—is

1337
one forty-ninth of what it is in the UK. It is accepted that that is a great contributor to the ease with which terrorist events are now brought about, because of those perceived iniquities. Therefore, I was glad that the Statement included the sentence:
"We all agreed that of central importance is a successful outcome to the WTO ministerial meeting in Cancun in September and successful completion of the development round by 2005".
I could not find those words reflected anywhere in M. Chirac's summary issued after the summit. I was surprised that when, at 2.20 p.m., the Library told me that the Foreign Office could not produce a final communiqué. No doubt there is a reason for that. It remains the case that the WTO has a crucial role to play in stabilising the world, as well as making it more just and safe. I read that the WTO has 28 or 29 members from countries that are too poor ever to send them to it. The WTO itself funds a number of countries to enable them to attend twice a year. Surely something is needed of the order of Short money—we are familiar with that process in this country—because to be effectively represented means to have someone there able to attend meetings two or three times a week, not twice a year.
Could the project in paragraphs 2, 39 and 40 of the Government Command Paper, Eliminating World Poverty, published in 2000, which allocates money for the machinery of WTO, be focused in such a way as to make those countries more effectively represented? Secondly, as the WTO works by consensus—
Noble Lords: Question!
Lord Elton: My Lords, I think that noble Lords are looking at their watches; I shall content myself with that question.
Lord Williams of Mostyn: My Lords, I am grateful to the noble Lord. There was a final communique, but it is the chairman's statement, which he correctly referred to as M Chirac's statement, which has been placed in the Library.
I agree with the thrust of what the noble Lord said. Earlier this week, when asking a question of my noble friend Lady Symons, he put it extremely eloquently by pointing out that if there is that obscene and indecent disparity, there is not only a moral imperative on us to reduce it, but, to put it at its meanest and in terms of realpolitik, it is in our own self-interest. Trade eventually means internal judicial systems that must be appropriate and proportionate; the increased benefits of doing away with malnutrition for lengthening life expectancy; and that, eventually, we shall benefit in all sorts of not so subtle ways.
It is true that the chairman's summary was simply that, but it refers to the problems to which the noble Lord referred. Paragraph I on page 1 is entitled: "Strengthening Growth World-Wide",
and covers,
"Macro-economics, structural reforms, trade and responsible market economy".
Paragraph 2 is entitled: "Enhancing Sustainable Development". That paragraph contains a bullet point on Africa; a bullet point on famine, which deals in
1338
particular with emergency food aid needs; a bullet point on water and on health; one on financing for development; and one on debt.
I recognise that few of us have had the opportunity to study the documents in detail, but there are references there to the problems correctly identified by the noble Lord, Lord Elton.
Lord Williamson of Horton: My Lords, in relation to development in Africa, can the noble and learned Lord tell us what has happened to the suggestion that there should be no subsidies for food exports to Africa—a suggestion that has been strongly pressed for by many non-governmental organisations for many years? Further, did the British Government oppose it? I ask that because, if I may say so, half a cake—it is quite a large half of a cake—on the common agricultural policy is something that we should welcome. because we do not usually get a crumb.
Lord Williams of Mostyn: My Lords, I am grateful to the noble Lord for so gently and indirectly reminding me that I have not dealt with the question of the noble Baroness, Lady Williams. In fact, we welcomed the French proposals; specifically, we said that they must go much wider than Africa, because two thirds of the world's poor live outside Africa. We therefore wanted a different approach. So it is not correct to say that we objected to the French proposals; we said that they did not go far enough.
Lord King of Bridgwater: My Lords, will the Lord Privy Seal confirm that the perfectly sensible choice of the Intelligence and Security Committee to conduct the investigation in no way prevents it, if it so wishes, from sitting in public; that it may ask for the attendance of any person—including officials, who are often prevented from attending Select Committees by Ministers; and that the Prime Minister confirmed today that any information that the committee requires will be provided to it?
I did not spot this in the communique, but the noble and learned Lord said that the war in Iraq is over. Recognising the continuing losses of American troops, which are occurring day by day, and the point made by the noble Baroness, Lady Williams, that it may be a year or a year and a half before an interim administration is in place, is not one of the most critical needs at present to ensure that the situation in both Afghanistan and Iraq can be sustained? That will require a considerable number of people and considerable resources. Was there any discussion in the G8 of other members playing a full military and security part to help to achieve that?
Lord Williams of Mostyn: My Lords, I am most grateful to the noble Lord; we all know of his great expertise in the context of the ISC. He knows, because we had discussions on the matter, that I myself gave evidence to the committee and was happy to do so. If the ISC comes to the conclusion that certain areas of evidence could be properly and safely explored in public, we would welcome that.

1339
The noble Lord is quite right and extremely generous in drawing to the House's attention what the Prime Minister said: that there will be full cooperation. The Prime Minister repeated more than once in the House of Commons that such reports as the ISC thought prudent to make would be published, subject to the usual constraints.
The noble Lord is quite right. He says that I said that the war had finished; I think that I actually said that the conflict, in the sense of the grand conflict, had concluded. But he is quite right; soldiers are still being killed, as are civilians; military and quasi-military activity continues.
The discussions about military and general resistance to which the noble Lord referred are continuing. It was an optimistic development that troops from Pakistan, for instance, are to be committed to the reconstruction of Iraq. It seems to us that the more multilateral the approach, the more likely it is to succeed. However, I agree with his necessary implication that one cannot set a timetable; this will be a long haul. If we were not committed to the long haul, we should never have been committed in the first place.
Lord Hylton: My Lords, I very much welcome the international financial facility. Does the noble and learned Lord think that that will lead directly to universal primary education? Would that not be about the most welcome possible kind of globalisation?
As for Iraq, a Question in your Lordships' House only yesterday about the looting in Basra University drew attention precisely to the importance of policing. Will the Government discuss with the American authorities the possibility of recruiting Arabic-speaking police officers from the rest of the world to serve in Iraq during the interim period? Will they further discuss with the Americans the vital importance of disarming the population of small weapons?
Lord Williams of Mostyn: My Lords, I am most grateful to the noble Lord for his question. I know of his concern about universal primary education; I share his approach. He will know—because both of us have been in the Chamber on previous occasions when my noble friends Lady Symons and Lady Amos made it plain—that it is our long-term aim that that should be a truly universal right, rather than simply a universal ambition.
On the question of police, the noble Lord makes an extremely important point, which is not entirely unrelated to similar helpful observations that he has made about widening the police recruitment base in Northern Ireland, for instance. In reply, I am happy to tell your Lordships that we have already sent police experts out there to see what could usefully be done. His specific point seems to me one of great value and I undertake to transmit it to the appropriate quarter.
Lord Mackie of Benshie: My Lords, are there any plans to help Israel to overcome its major difficulty of
1340
settlements in which settlers, I understand, are determined to stay? For example, might Egypt be asked to lease some of the Sinai desert, so that they could use their skills on that? It is the most difficult question, and I wonder about the thinking.
Lord Williams of Mostyn: My Lords, the noble Lord is quite right. It is a very difficult question that will require enormous courage by the Israeli cabinet, not least because the cabinet is a coalition and a coalition of views as well as a coalition of parties. What has been done so far is a courageous first step.
We ought to recognise that these matters must initially be for internal decision by the Israeli cabinet. However, we stand ready to assist in all appropriate ways. I think we have made that plain.
It is going to be very difficult on a human basis to ask or require settlers to move. They have committed their lives and their energies, determination and dedication. It is a very difficult problem for the cabinet in Israel to resolve and to try to reconcile different views. Again, I shall transmit the noble Lord's suggestion. It is a suggestion worth considering, but what the ultimate worth of it would be, I cannot say without further examination.
Lord Bruce of Donington: My Lords, in the course of my noble and learned Lord's emphasis on the further inquiries to be made, he was kind enough to indicate the agencies that would provide the information. A little phrase crept in with which I am thoroughly familiar. I think the House is familiar with it too. The words were "subject to the usual constraints". This is a vital phrase. If, for example—as seems likely on the face of it—our intelligence services and other official and governmental services were to provide further and enlightening information, this should not be subject to customary practices and restraints. So whenever I hear governments in this place—and I have been here a long time—talk of "usual constraints", my ears prick up immediately. It will not amount to very much and I doubt whether it will be significant in the ultimate, but I have to inform noble Lords that my ears will be very alert for the sources and nature of the usual constraints that are about to be deployed by the Government.
Lord Williams of Mostyn: My Lords, I know from past experience that the noble Lord's ears are constantly in a state of pricking, but I think he has mistaken the point and the approach made by the noble Lord, Lord King, to which I responded.
The noble Lord, Lord King and I share one thing in common at least; we have both had to read intelligence material. It would be foolish and dangerous to recite it all in public and, for instance, to identify sources who might be in mortal danger. That might compromise future intelligence operations. But one is able to describe conclusions as, "Are the assertions made that the Prime Minister lied? Is that borne out by the material or not?" That committee can come to that conclusion. I personally resent the suggestion—it is more than an implication—that the Prime Minister has lied. If the ISC came to the conclusion that on the

1341
material available he had not, it is able to come to that conclusion. It does not have to publish chapter and verse on every informant. As soon as you publish an informant's name two consequences follow: he is likely to be killed and you will not get a large crop of informants for the future.

Globalisation
4.6 p.m.
Lord Pestonrose to move, That this House takes note of the Report of the Select Committee on Economic Affairs on Globalisation (First Report, HL Paper 5–1).
The noble Lord said: My Lords, I thank the Clerk to our committee, Christine Salmon, and our secretary Deborah Delacroix. 'Those noble Lords who are familiar with the membership of our committee will be aware of the saint-like character required by a Clerk or a secretary to such a committee. We are most indebted to them. I thank our economic advisers, Professor Venables of the London School of Economics and Professor Wickens of York University. Both are world-class figures in their own right. I also thank two more junior members of staff, Martin Stewart and Adrian Lewis, who were also immensely helpful to us.
As chairman I must thank the committee and say that all the good parts of the report were down to them and the errors I will accept myself.
Since we are discussing globalisation, it would also he remiss of me not to say a word about my right honourable friend Clare Short. She was an outstanding Secretary of State for International Development—probably the best we have ever had in this country. We found on our overseas visits that she did much to enhance the esteem in which our country is held by most countries in the world, especially in the area of globalisation. With no disrespect to my noble friend Lady Amos, whom we welcome very much to her unique position in the Cabinet, it would be wrong of me not to say that Clare Short will be much missed.
Turning to the report, I start with a boast. We are the first committee ever to publish its report and evidence on CD-ROM. Whatever else we have achieved, we are at a technical frontier here and I hope all of your Lordships' committees will follow that achievement. Where we failed is that we did not manage to get all our evidence regularly in good time on the web. I shall try hard in future to make sure that the evidence is more easily available.
I hope I do not have to remind noble Lords that your Lordships' committee always sticks to the highest standards of your Lordships' House. We are totally non-partisan in our approach to this matter. We never have votes. It is often said that that is another way of saying only one person has a vote—perhaps the chairman. Much more important than that, everything we do is evidence-based and I hope that noble Lords who have looked at the report will be impressed by the remarkable collection of witnesses that we had before us. We could have had many more and that shows the
1342
very high esteem in which your Lordships' House is held world-wide. These top international figures did not have to be persuaded to come to see us. They really wanted to come to see us and tell us about globalisation because they thought it was important.
I turn to our report and what lies behind it. The easiest way to give the background is to quote from three of our witnesses, who had very different views. Dr Noreena Hertz made the important point that,
"it is a matter of making globalisation work in a much better way for many more people."
That is our view of how we ought to approach this matter.
Professor Stiglitz noted "a real sense of hostility towards globalisation". However, he said that in his view,
"it is not hostility towards globalisation. it is really hostility towards the way globalisation has been managed and to a particular set of economic doctrines that have accompanied globalisation on the part of some of the international economic institutions."
That exactly encompasses the committee's view on this matter and I am sure it is entirely right.
Lastly, I cannot refrain from quoting George Monbiot of the Guardian. He said:
"I feel the protest against what has been called globalisation…has brought together an extraordinary array of concerns, some of which are mutually contradictory…it is a very broad and very wobbly coalition indeed".
He referred to seeing vegetarians alongside meat farmers on the protest march. One of the interesting things about the issue is that it produces such strange bedfellows, which makes it even harder for your Lordships, with our dispassionate approach, to come to a rational conclusion.
Some noble Lords may think that some of what we say is controversial. First, we take the view that globalisation is a genuinely new phenomenon and is not simply free trade writ large. I do not believe for a moment that, in the late 18th and even the 19th century, the great protagonists of free trade—I speak as one—ever envisaged a world viewed globally. That is not to say that free trade is not important, but that is not quite the flavour of the thing. Secondly, the committee takes the view—I am convinced that it is right that, although openness to the global economy provides an opportunity for economic success, that success is not guaranteed. Our view is that there is no certain path to success and no simple economic formula such as "Do that and you will achieve economic growth and no inflation. You will reduce inequality and avoid social and political upheaval". There is no simple formula.
It is also our view that there is no single path to success. A public infrastructure is important, but so are free markets. Efficiency and uncorrupt administration are important in the public and private sectors. All of that is partly a causal factor, but it is also a consequence of economic success. The same point applies to the legal system. Someone who says, "All we need is legal reform, and everything will be fine" has neither examined the facts nor thought through them.

1343
It would be absurd to point a priori to a large number of conditions that must be met before economic advance is possible. The list approach would guarantee that nothing would happen in the world, as we could never meet all the points on the list. The committee takes the view that the correct approach to economic success is a step-by-step path of improvements, rather than just laying down vast numbers of pre-conditions.
The second part of our approach is that the most important thing is to help countries—especially poorer countries—to help themselves. There is a role for a country such as this, for the great international economic institutions and for the European Union. We and they can advise and warn, but we must not threaten. For example, aid is important—no one doubts that—but so is the free movement of capital. In terms of numbers, the free movement of capital is far more important. The second example is that the correct approach is not for us to take over such countries but to co-operate with them. I was interested to see the extent to which major companies saw cooperation as the way forward. I was particularly impressed by companies who said, "We must advance local management, so that it can eventually become the dominant force". It is vital that the countries with which they are concerned feel that they—not us—are in charge of their destiny.
This matter troubles me greatly. We must avoid adopting the contradictory position of, first, rejecting imports from poorer countries because they are produced by cheap labour, while, secondly, attacking our own countries for moving production over there because they have cheap labour. Thirdly, we are against that labour moving to countries such as ours where it could be more productive. We insist that all countries competing with us—the poor ones—have the highest standards of health, hygiene and safety, standards that we never met until after we had become successful. In other words, there is a whiff of hypocrisy about the way in which many people in the advanced world say, on the one hand, that they are devoted to the interests of such countries and that they have got to make themselves efficient, while, the moment that those countries make themselves efficient enough to threaten our production, we find ways of pointing out that it is unfair competition. As my noble friend Lord Barnett is aware, it is as if, every time Arsenal produce a better team, Manchester United say that they want their goal narrowed and the other goal made wider. I bring that in because it is fundamental to the matter. The important thing is that, a belief in globalisation, openness and free movement is a real belief; it is not a "Yes, but—".
I shall turn briefly to three other matters. First, there are the transnationals. I found it interesting—about myself, in a way, and about the committee—that we were open to the evidence. There is no doubt that many of us started with the view that the transnationals were central to the problem. I am not saying for one moment that the transnationals are perfect bodies and certainly not that they are altruistic bodies. However, the more we looked,
1344
the more we found that the notion that the world's ills particularly the ills—of the poor countries—could be laid at the door of the transnationals was simply wrong. Not surprisingly, there is a mixture. Also unsurprisingly, they do not always tell the truth entirely.
We were always taken aback to hear the overwhelming amount of evidence that there was a great deal of corruption in the world, even though we could not find a transnational that would admit that it ever engaged in corrupt activity. There was a slight contradiction there. However, I say to your Lordships, especially those who are concerned, as we all are, about the problems of Africa, particularly sub-Saharan Africa, that, although there is no doubt that we can do more to help, the notion that African countries that have the potential to be rich and have great resources—I shall not go through the list—are poor because of the appalling behaviour of the transnationals is not right.
We had the same openness with the world economic institutions. That surprised me, given my prejudices. We started off with a ranking list of all the world economic institutions. We took the position that they were all terrible and that the only question was, "Which is the worst?". On the whole, having met them and heard their evidence, we felt that they could do better, as we say in the report, but we also felt that they were trying to learn. In particular, having started off very anti-World Bank, we moved to a more positive position. My noble friends will confirm that. The International Monetary Fund stuck to the old-style religion for many years, saying, "This is the only way to economic success". Joe Stiglitz, in particular, published a book on that. The IMF is showing more and more intellectual flexibility i thinking about different paths to success. I am fairly optimistic about that.
I shall steal my concluding remarks from another distinguished economist, Paul Krugman. He is optimistic. in the sense that he drew to our attention the considerable number of countries that had become successful, despite starting from far back in the line. He said:
"A number of countries have made significant progress—enough so that at least we can say that that permanent division of the world into rich countries and the other quarter is not, in fact, the case".
The emphasis is on the word "permanent". My final message to your Lordships is that he also said:
"All of the success stories are export-led growth. All of them are by getting into the global economy".
Therefore, I end by saying that that is the message—that the global economy is there, that to achieve success one has to go in and use it. That does not guarantee success, but what will guarantee failure is autarchism and cutting out of the global economy. I beg to move.
Moved, That this House takes note of the Report of the Select Committee on Economic Affairs on Globalisation (First Report, HL Paper 5–I). (Lord Peston.)
4.20 p.m.
Lord Howe of Aberavon: My Lords, it is a privilege to follow the noble Lord, Lord Peston, after his most effective presentation of the report of his committee.
I should like to begin by thanking the authorities for making this debate possible so soon after the completion of the committee's report, and to thank the noble Lord and all his colleagues on the committee for the quality of their work.
The House should rather modestly congratulate itself on the availability of the formidable team of people who composed the committee. When we look at their qualifications set out in the report, we see that we are privileged to have such an assembly of talent, and, as the noble Lord pointed out, to be able to attract to give evidence to such a body witnesses of the quality that appeared. The only comment I would make is that we ourselves have no doubt about the quality of the work that has been produced, but a prophet is not without honour save in his own country, and I should like to think that there are some ways in which the quality of this thinking could be more effectively publicised, to the advantage of the House and of those who might read it.
I commend first a very large number of well-balanced and important judgments on controversial issues which are too often misunderstood, beginning with the net benefits—I emphasise "net"—of globalisation as a concept. Of course, there are hazards and down sides, as in anything, but that is the important central message.
Secondly, there is the net beneficial role of the multinational corporations. They are, as one of the witnesses pointed out, in many cases the drivers of economic change, the dynamos—if properly viewed—that help us along. Alongside that, of course, as part of the picture there is the importance of corporate social responsibility.
I am glad that the Committee endorsed so clearly the legitimacy of the role of the International Bank for Reconstruction and Development (the World Bank) though it has had shortcomings historically. I am glad that the Committee rejects so decisively the unwisdom of the so-called Tobin tax, the capital transactions tax. It is very useful to have all the misunderstandings that have had a fashionable following objectively analysed and rejected in the way that the Committee does.
I am also glad that the Committee endorsed the importance of the International Monetary Fund, as clearly set out in paragraph 291, where it says that
"were it not to exist, it would have to be re-invented".
I recollect that—astonishingly—20 years ago, the year when I was chairman of the Interim Committee, we had the task, which I am sure we did not perform fully, of handling the early examples of debt crisis, in Mexico, for example, with enhancement of the fund's resources by a 50 per cent expansion in special drawing rights. If the fund had not been there it would have had to be put there.
I want, like the noble Lord, to focus mainly on the unevenness with which the benefits of globalisation are shared around the world. That is one of the recurrent
1346
themes in the report. The most grave and wilful example is one that was also discussed in our exchanges on the Statement about the G8 summit meeting: the protectionism by developed countries, above all of their agricultural sectors, on both sides of the Atlantic and, just as mischievously and harmfully, in Japan and other places. It is rightly condemned, in the words of the Committee in paragraph 208, as "wholly objectionable arid unjustifiable".
One asks oneself why that is, and one answer is the inherent selfishness of democracies in protecting their own interests, because their politicians feel driven by the electorate to do that. But it is also because we have not yet got sufficiently in place respect for what should be the obligation of the international community, in many cases the legal obligation, to begin stripping away the protection that exists.
Time and again we have asserted the need to do that, and yet we have not yet fully grasped the importance and effectiveness of international law or international law in the making. Unlike common law, international law is a rather osmotic commodity, but it is important that it should be as effective as possible.
Therefore, it is important to consider the value of an aspect of globalisation that is not touched on in the report. I make no criticism of that. I refer to the globalisation of' law. It is interesting to witness the impact that that is having in many ways that we had not fully anticipated. Can we do anything to enhance or extend that process?
I often cite a non-economic example of the impact of the globalisation of law, starting with the Helsinki Final Act 1975. When I began to try to raise with that great figure Andrei Gromyko the importance of the Soviet Union's commitment to human rights in the Final Act, he told me the first time round that I was lowering the tone of the conversation, and our discussions thereafter continued along the same track. When I raised the matter with Mikhail Gorbachev on the second day of his visit here in 1984, and when a Select Committee of the Commons raised it with him the next day, instead of repudiating the Final Act in that way, he was prepared for the first time to begin addressing those arguments. Within four years his Foreign Minister, Eduard Shevardnadze, who has always earned my immense respect, not least for his courage still in his own state, Georgia, told a diplomatic conference in his own country:
"The image of a state is its attitude towards its own citizens, respect for their rights and freedoms and recognition of the sovereignty of the individual".
That, from a Soviet Foreign Minister, within 13 years of the Helsinki Final Act, showed the impact of law in that field.
Can that be translated effectively into economic terms as well? To some extent we can answer that question if we ask ourselves: why is the flow of foreign direct investment so uneven? Where is it spreading most beneficially? Where is it not spreading at all?
The flow is manifest in the developed countries. We have confidence investing in each other. If we look at the countries of the former Soviet Union, or the central and

1347
eastern European bloc of the former Soviet empire, we see a very differentiated pattern. In Poland and the Czech Republic, where legal institutions are increasingly well fashioned, the flow is running well. Byelorussia and the hapless Ukraine, with 55 million people, are in a very sorry plight indeed; foreign direct investment flows scarcely at all, because the legal institutions that are necessary to give confidence do not exist.
In Russia itself, in a gradually improving twilight state—I speak as chairman of the Framlington Russian Investment Fund, which has struggled, not very successfully, to make money in that market—investment is taking place gradually and the flow is happening. But, my Lords, compare that with India or the People's Republic of China, where we see the impact of law—law coming into China, for example, from outside.
I had the privilege during the last decade of helping one of the leading American law firms establish offices in both India and the People's Republic. I remember vividly—and I have longed to say this in this House—going with my noble kinsman, which is what I think I should call her, and the noble Lord, Lord Brittan, on a visit to China in 1978. We were looking on that visit for any lawyers at all in the People's Republic. We found two or three struggling to re-create the law faculty in Beijing. We found one criminal court, which had never acquitted anyone, and that was only on the last day of our visit.
In the decade between 1985 and 1995 China trained 70,000 lawyers. The pace of training has doubled in the decade since then. The number of foreign law firms in Beijing in 1992 was 10. Four years later it was a hundred. And the pattern still grows.
Legal infestation is not normally regarded as a manifestation of prosperity, but the fact is that because there is growing confidence in the legal structures in the People's Republic more than 50 billion dollars of foreign direct investment is now going there each year. I am happy to say that the United Kingdom is the largest investor in China of the European Union countries. There are some 3,000 British-Chinese joint ventures in China. This partnership in the commercial field can also spill across into the field of human rights.
Let us look at the more difficult areas, such as Africa, for further applications of this message. We see in Zimbabwe, for example, the extent to which the process of institutionalisation can go tragically backwards. In Uganda, a country that I knew well when I served in the Army in East Africa, what seems like a hundred years ago, in the late 1940s, we saw what Amin and Obote could do to destroy working institutions. But if we look to the other side of the coin. we can see what President Museveni has since been able to do in beginning to restore legal institutions in that country.
The noble Lord was right to pay tribute to Clare Short, as a notable International Development Secretary. I cannot resist the temptation to pay a corresponding tribute to my noble friend Lady Chalker, who is not present in the Chamber today. She has played
1348
a formidable part in helping countries like Uganda in their efforts to get back on the path towards economic stability.
The magic that I relish from the Ugandan experience comes from a phrase that President Museveni used early on during his time there. He recognised, like the noble Lord, Lord Desai, in his evidence to the committee, that one of the problems of the developing countries is the extent to which they have been plugged in to the least stable part of the global economy—the commodity markets. President Museveni recognised the importance of trying to create within Uganda its own market economy. When he first came to a Commonwealth conference in, I believe, 1987, I remember him saying that Uganda had to become a "self-starting" economy, rather than a "towed" economy. If we bring our help to bear in the right way, that is the kind of change that can be helped by the world outside.
Finally, I have a wider message for the way in which we can help transmit these qualities to the developing countries. Indeed, how we can—if I dare use the phrase—help in "regime change". We cannot do so by way of shock therapy, whether administered in an ill-judged fashion by the International Monetary Fund, as has sometimes happened. For example, the impact of IMF treatment on Indonesia, unduly driven also by political ambition, may have made it much harder for that country to go through the process of transition. My great anxiety is that the impact on Iraq will be carried too far. I have in mind the removal of everyone of any competence from the administrative structure, thus literally having "created a wilderness and called it peace". I fear that replacing the necessary resources that we have removed from the country will prove to be a formidable task.
As the noble Lord, Lord Peston, said, we must apply ourselves to these issues carefully and step-by-step through advice, not threats. At present the western world is increasingly divided in the prescription that it offers as to the best way to handle such problems. There is a gulf between the present American view and the European view, within which I include that of the United Kingdom. Robert Kagan rather dramatically discussed the "Martian" quality of the Americans and the Venetian quality of the Europeans. Venus is actually a bit wet for us. I asked the staff in the Library of the House to try to find a different parallel to set against Mars. I wondered whether there was some attractive goddess who can symbolise justice rather than love. I searched for justice. Apparently, the Greek Gods of justice were either the Furies or Nemesis. That is a bit rough for me. However, I hope that the House will understand what I mean.
I believe that we all wish to see a change taking place by extending the effectiveness of a rule-based system, instead of a rather more raw exercise of military and political power—even though it may have good objectives. In an article in the Financial Times on 21st May, Martin Wolf put it quite succinctly when he said:
"The United States wants to transform the world, Europeans want to manage it".

1349
It is no good being divided by such ideological arguments. We must bring ourselves together and, if we can, restore the real strength of G7 summits.
God help me, I attended 11 global summits. During that time I saw a gradual deterioration taking place because of the almost inescapable tensions between the charm of empty photo opportunities and the hard reality of getting international leaders to lash each other to the mast of economic virtue—and doing so in a way that would compel them to fulfil their obligations. There is one example with which I should like to close my remarks. I have in mind the most objectionable and unjustifiable maintenance of agricultural protectionism in the leading economic countries of the West. Until we introduce into the conclusions of these international economic bodies a self-enforcing, collective economic discipline, and one that gives us the courage to begin to dismantle such obstacles, we shall not be achieving as much as we could to help the poorest people in the world economy.
4.34 p.m.
The Lord Bishop of Chester: My Lords, I, too, congratulate the Select Committee on producing this stimulating report. For a Member of these Benches to speak on economic affairs, not least sandwiched, as I am, between the noble and learned Lord, Lord Howe, and the noble Lord, Lord Barnett, might seem foolish. However, it has not always prevented my predecessors from attempting to do so. I hope that I shall not lower the tone of the debate in the way alluded to earlier in relation to Mr Gromyko.
I begin by asking whether globalisation is such a predominantly economic phenomenon as the report assumes, although that is understandable as it is a report from an Economic Affairs Committee. With some reservations, I am inclined to agree that the current phenomenon of globalisation is both quantitatively and qualitatively different from what has gone before. My reservation is that it is probably the quantitative scale of the phenomenon of globalisation that also generates the sense of qualitative change.
History tends to speed up, and it can also take us by surprise. I remember being in the United States in 1979 when there was a widespread sense that the period of American dominance, wealth and prosperity was actually drawing to a close. People could only buy petrol in the country on every other day, depending upon their car number plates. The subsequent 24 years have seen a great advance in American economic power and prosperity, both absolutely and relatively, as compared to that of most of its major competitors. With this development has come the great spread of western influence, if I may put it that way, around the world.
I turn to what I believe to be the roots of globalisation. One of the great shaping forces of the modern world probably the greatest is modern science. We sometimes forget that modern science is a comparatively recent arrival in our midst, dating from the 16th and 17th centuries. The report before us seems
1350
to support the view that the essential catalyst and fuel of globalisation was the invention of the microchip. We are living through a new industrial revolution which is more potent than those based on the invention of either steam power or the internal combustion engine. I am told that there are more scientists practising their craft today than the sum total of all scientists who ever worked previously, such is the power and reach of modern science.
We are still only in the early stages of the computer-based revolution. It has unleashed enormous power—economic, military and cultural—which is different, but, in its own way, comparable to the discovery of nuclear power. Were the equivalent of the Iraqi war to be fought in 20 years' time, we can imagine B52 and Stealth bombers no longer needing pilots, which is rather a frightening prospect. That military power, based upon new technologies, has all manner of economic cousins on which the report naturally concentrates.
So what must we do to be saved? Can we exert any real control over the huge forces that have been unleashed in the evolution of the modern world? The answer to that question may actually be no. Modern man has always tended to over-estimate his ability to control what will happen in the future. However, we can—and must—endeavour to shape the future as best we can. That is our responsibility. Perhaps I may briefly refer to two ways in which this might be attempted and addressed.
The first way would be to recognise, amid the distinctive features of the contemporary world situation, that the process of globalisation probably began around the year 1500. That is when the -death of distance"—to use an expression from the report—really got underway. In that sense, we could see Bill Gates as a sort of modern Captain Cook. In the ancient world, sophisticated civilisations could develop and yet have very little intercourse with each other. Of course, great oceans played their part. But let us take, for example, ancient China and the great Roman civilisations 2,000 years ago, both of which had very little mutual impact over a period of 400 or 500 years.
Even in medieval times, there was just a trickle of trade and a few travellers between China and what became known as Europe. All that has completely changed. We now live increasingly with what the historian John Roberts, in his splendid BBC series 20 years ago, called "The Triumph of the West". Western civilisation is increasingly pervasive globally to the extent that it is becoming difficult to speak of the West as a meaningful concept. On concluding his series and the accompanying book, Dr Roberts said:
"'The West' is hardly now a meaningful term. except to historians".
That was 20 years ago. If it was true then, it is even more true today.
If we are to understand what is happening today in the phenomenon of globalisation, we have to be prepared to dig more deeply into the past; into the cultural roots of Europe and the United States. That

1351
will include the idea of the autonomous individual, able to escape from fate and external forces of enslavement, allied to the great belief in the possibility of progress.
It is good that the scriptures have been quoted. I shall leave your Lordships with a picture from St Luke Chapter 4, where Jesus of Nazareth went to the synagogue in his home town, took the scroll of Isiah, with its reference to liberating the oppressed, and proclaimed, "Today this word has come true in your hearing". In so doing, he burst through the bounds ancient Greek rationalism had placed on human expectations and hopes and led the world on a course where the striving for perfection and progress would characterise any civilisation based on Christian belief.
That took a long time to take root, develop and get going, but we are living in the latter stages where the momentum is extremely great. I believe it is becoming clearer that it is only as we understand the religious foundation of western culture that we shall fully appreciate its contemporary secular and economic dimensions as they envelop the world for good and for ill. The triumph of the West, as Dr Roberts made clear in his series, is a deeply ambiguous triumph; hence the subject matter of our report.
I shall conclude by trying to appreciate why western culture has been such an ambiguous influence, both liberating—I would not wish to underestimate that in any way—but also destabilising as it has spread around the globe. Western culture has called into question traditional beliefs in the societies it has touched; it has undermined the stable expectations with which many have lived and died. Rising expectations and even the process of beginning to meet them have compensated only partially for the cultural destabilisation which we now routinely export around the globe. Therein lies the root explanation of modern terrorism, still so poorly understood among us.
The destabilising effect of the core beliefs of western culture, whether one chooses to regard them as myths or truths, has been exacerbated by the fact that freedom tends to breed inequality. The report recognises that but suggests that growth in economic equality is more within countries than between countries, although that assessment is too dependent on the fact that China and India are among the countries that are successfully coming to terms with economic globalisation. Many smaller countries are in increasing danger of being left behind.
The growth of inequality—the tendency for some countries and individuals within the countries to grow ever richer as other countries and individuals grow poorer—is a major cause of instability in the modern world. We heard that point at Question Time on Monday and in the earlier exchange between the Leader of the House and the noble Baroness, Lady Williams. Perhaps one cannot buck the market, as someone once said, but one can certainly influence it. The striking revelation in the report that the total subsidies for agriculture in rich countries amount to no less than 350 billion dollars per year—seven times the total amount of overseas aid—influences the market.
1352
Unless we can find means of expanding international aid in all its forms, not even first and foremost in terms of money, although that must form a great part, and in creative ways and far beyond its present level and vision, the twenty-first century will present our global village with great and increasing instabilities. That is the challenge. It was hinted at in the Prime Minister's earlier Statement: the putting of flesh on those aspirations, hopes and commitments lies at the heart of a successful response to the phenomenon of globalisation.
4.45 p.m.
Lord Barnett: My Lords, I congratulate the noble and learned Lord, Lord Howe, and thank him for his congratulations on the membership of our Select Committee. I have always recognised—as far as the other members are concerned—that we have an excellent committee. I congratulate my noble friend Lord Peston both on his introduction to the debate and on his chairmanship of the committee. I do so even though at times he digresses into matters that do not include what we are discussing; namely football, but I shall not talk about Arsenal and United. He said so much about the report, which spells out clearly the reasons for its conclusions. I will emphasise only one or two points.
First, one often hears a rather silly question: are you for or against globalisation? It is a silly question because globalisation exists. We heard a quote from paragraph 55 of the committee's report, where we referred to globalisation as being a new departure. The "death of distance" is to some extent the reason for that new departure. At paragraph 57 we said that it is true that the same has happened before, but it is quantitatively and qualitatively different. That is what is different about globalisation today.
On this, as indeed on every paragraph of the report, we are told that the Government agree. I shall comment on that point in a moment. They agree on every paragraph, but what they do beyond that is more important. When we started on the report, I and, I believe, many members of the committee, did not expect international development issues to be as central to the report as it turned out. In paragraph 64 we stated that we were appalled by the shameful level of poverty that we learnt about from our witnesses.
Again, the Government agree about the shameful level of poverty. I suppose that all governments have done so over many years. No doubt I have done so and so has the noble and learned Lord, Lord Howe. But what then? What are governments in the developed world doing about the shameful level of poverty? That is at the heart of our discussion. The attitude of the West is shameful. In the Prime Minister's Statement we had more excellent, wonderful words about what the G8 summit wants to see achieved. But what specifically will be done about the shameful level of poverty?
In fairness to the west and the developed world, it needs to be said, as we said in our report, that civil wars, corruption and incompetent governments have played a

1353
crucial part in why so many people in the developing world are still living in shameful poverty. China and India—I believe my noble friend Lord Peston said—have shown what can be achieved if governments seek to take advantage of what is available to them through both globalisation and the work of the developed world and the TNCs to which my noble friend referred.
But sub-Saharan countries in particular have shown what should not be clone. To a large extent in those countries it is their own fault that they are in this position. Zimbabwe and Nigeria, for example, should be very wealthy countries. The reason that they are now experiencing shameful levels of poverty is not primarily to do with western developed countries. One has to concede that. There are many other parts of sub-Saharan Africa and other areas of the world where that applies.
Members of the Economic Affairs Select Committee were discussing primarily economics and perhaps we had not appreciated—or at least, I had not—that the economics of severe poverty around the world were so crucial to the developed as well as to the developing world. In paragraph 86 we refer to the "failure" on the part of some of the developing world "to integrate", and again in paragraph 6 of their response, we are told that the Government agree. They state that,
"greater integration (especially trade) is a very important factor for growth".
Of course it is; we all know that. But what is the western world doing about it? The plain fact is that the nations of the western world are not doing anything substantial. Indeed, in many cases they are doing the reverse.
We have heard already about what happens in the case of food aid and the unwillingness of western countries—not only the UK; this involves the whole of the European Union and the United States—to do anything. On the one hand, the nations of the western world talk glibly about help and the integration of trade and so forth, while, on the other hand, they refuse to do anything seriously to make changes to the system that would really help the developing world.
As we set out in the report, one is bound to say that there are shameful levels of poverty. Speaking in economic terms, the investment climate is also very relevant. Paragraph 94 refers to the issue of levels of investment. We are told that the Government agree. They welcome our work and say that they are working towards helping in this regard.
As I have said, it is not entirely the Government's fault that people in countries around the world are still living in shameful poverty. But what is the solution as regards foreign direct investment? In agreeing with paragraph 150 of the report, what is the Government's solution there? We are bound to recognise that the Government alone cannot solve it. The real solution is to put more effort into influencing actual action taken within the European Union and the United States. It is not simply a matter of words of agreement.
The plain fact is that, as a percentage of GDP in the West, no nation is yet anywhere near the target of 0.7 per cent in aid currently being talked about. Given
1354
that our own GDP today in current account terms is probably around £1,100 billion—across the western world GDP amounts to a huge sum—the amount we are providing in aid is abysmally low. I ask myself why that should be the case. The governments of the western world contain decent people who want to help. Over successive governments of all political persuasions there has been the desire to help. So why do they not do so?
I am afraid that I have come to the appalling conclusion that it is democracy which is the problem. The fact that presidents and prime ministers want to be re-elected means that they are not willing to spend more in this regard It has happened to all governments of all political persuasions, not just to the present Government. It is democracy that is creating the problem. I do not suggest for a moment that we should abolish democracy in the West, but it is time that those of us who want to see something done recognise that it is not enough just to talk about it. We have to see governments act and it is up to Members on the Back Benches to try to persuade governments and, indeed, opposition parties, that they must join together in a policy that will truly help, rather than just talk about helping the developing world.
4.55 p.m.
Baroness O'Cathain: My Lords, like previous speakers, I should like to thank our chairman very much—even though, as a non-football follower, I found myself totally out of my depth at least once per session. I thank also our specialist adviser, our Clerk and the staff in the Committee Office, and last but by no means least, I thank our wonderful array of witnesses. All those people combined to make this the most fascinating work that I have ever undertaken in your Lordships' House over the past 12 years. It was a stimulating experience. I believe that the report is a good one and adds to the knowledge of the subject.
At the beginning of our work, our inimitable and rather intimidating chairman stated that there would be three rules governing our behaviour: first, we were to be apolitical; secondly, we must produce a unanimous report; and thirdly, we were to steer far away from Third World issues of poverty and other deprivations. It would be hard to believe that when reading our report.
Obviously we stuck to the first two, but within weeks the realisation dawned that there was no way that we could or even should avoid giving the deepest consideration to the impact of globalisation on the people and not just the economies of the deprived areas of the world. The noble Lord, Lord Barnett, has already referred to the "shameful level of poverty", something which became very evident to us all. I suggest that it was a steep learning curve for all members of the committee. Of course, those self-same issues have been even more in the spotlight since we began our work, as we have lived, and are now living, through a period of huge instability in all the areas that we looked at.

1355
We tried to arrive at a clear and succinct definition of globalisation. We all know what it embraces, but it is such a complex area that the emphasis put on certain aspects can actually confuse the understanding of all the implications of the term. I think that the phrase used in the Government response to the report—
"an increasingly integrated global economy"—
is one of the better definitions.
Dealing with the government response, I am somewhat disappointed by the rather anodyne reactions to the points made in our report. I support what the noble Lord, Lord Barnett, said on this. It is good to see such a large measure of agreement with our conclusions, but the solutions advanced by the Government to some of the very serious issues are lacking in teeth and rely too much on the pious hopes of the ability of international organisations to change things. Perhaps I am a pessimist, but our recent history of reaching agreement with international organisations does not fill me with hope in this direction.
Before I comment on these points in more detail, perhaps I may in an aside make a plea for greater clarity in such responses, and better use of our wonderful language? Are split infinitives becoming as common as the use of the phrase "road map" in Treasury-speak? Please let us avoid the temptation to make "road map" the next "level playing field".
Speaking in this debate, I feel that, as the weight of sad evidence about poverty in so much of the world is likely to cloud the beneficial effects of the increasingly integrated global economy, I ought to dwell on how we thought, and the Government think, we can or could affect future discussion, debate and legislation with the aim of improving the lot of so many millions—actually billions—of the world's people.
Governments of the richer countries, international organisations such as the International Monetary Fund, the World Bank and the World Trade Organisation, along with the trans-national corporations—the TNCs—all have a responsibility. Whether that responsibility can be translated into action which will achieve the desired effect is a different matter.
There is universal agreement that better governance is required if countries are to benefit from globalisation. In their response, the Government seem to draw comfort from the fact that the codes and standards framework overseen by the IMF and the World Bank are good. They are fine in theory, but what about the practice? In addition, how can we enforce those codes and standards? By their very nature, codes are voluntary and any attempt by the developed nations to influence these countries could be seen as unacceptable interference. Linking aid to the operation of codes and standards would be a difficult task. How would it be policed?
The Government state that:
"On corporate governance, the government will work to pursue convergence towards a globally agreed single set of accounting standards that are capable of consistent application, interpretation and enforcement".
1356
I am tempted to say, "Physician, heal thyself'. There has not been much success in achieving that in our own backyard. This is really my major concern about the response. The measures have been put in place, the suggestions have been made, but will they improve the lot of workers in developing countries or truly improve education levels?
Since we completed our report, I have been mulling over whether we gave the right emphasis when considering help in the drive for education in poorer countries. I may be quite wrong, but do we concentrate to a large enough extent on technical education or apprenticeship projects when giving aid? Naturally we hope that the basic skills of the three Rs plus IT skills should be emphasised, but the need for skilled workers is so great I believe that even greater emphasis should be placed on technical training.
I can see a possible objection to this emphasis because the discussion on education is dealt with in our report under the heading of "Child Labour". I suppose the connection could be made with the learning of new technical skills over a short period and then the transfer of these children back into the "child labour" market. However, as Dr Superchai Panitchpakdi, the new Director General of the World Trade Organisation, said when he came to see us, the most effective means against child labour, which is one of the key labour rights violations, is to extend compulsory education. The most important word there I see as being "compulsory". Perhaps we should try and get more compulsory technical education over a longer period for people in these countries.
The Government's response to this states,
"since May 1997 the Government has committed £700m to support education for poor people".
Fine, but where? Incidentally, as an aside, the implication of that statement is that the previous Government did not commit any money to support education for poor people. I just do not believe that, but the Treasury response referred to it not once (Conclusion 10), not twice (Conclusion 14), but three times (Conclusion 15). It is such a pity that the Treasury is unable to be bipartisan, like the Select Committee. This is not, nor should it be, a political issue.
About 30 years ago, or maybe a little less than that, the righteous indignation of the critics of capitalism was directed fairly and squarely at the MNCs (the multinational corporations) as they were then called. There were many cases of abuse of power, and certain companies had a really wretched record of slave labour tactics, or almost, particularly in areas such as South Africa.
Since then the MNCs have become TNCs, and there is no doubt that corporate responsibility has become much more important. It is a development which has most often been initiated by the companies themselves in the recognition that the dignity of labour must be regarded and recognised.
What has been most encouraging about the work of the Select Committee is how far the cause of fairness and justice in the labour force has been improved. That

1357
is not to say there is not a huge amount still to do, but the TNCs have been very instrumental in the raising of living standards in many parts of the world.
More than that, there is now a genuine recognition of the fact that investing in developing countries has to be sustainable on every level and the development of local management, as the noble Lord, Lord Peston, noted, the involvement in training, the provision of good working environments and the commitment to long-term investment in the country are the norm—not the exception.
Although some witnesses expressed real concern about the economic power and influence of the TNCs in democracies, I feel that the contrary evidence was so strong that the fear should be focused on the operation of the democracies themselves rather than the operation of the TNCs. It was pointed out that any country had the sanction to expel a company. I cannot think of any company that could possibly have the power to expel a government.
George Soros subscribed to the view that "footloose capital" could be an issue as the companies could move their investment elsewhere. As an acknowledged expert of experience in the power of moving capital, his statement should be carefully considered. The other side of the argument was just, if not more, compelling, as stated by the noble Lord, Lord Browne of Madingley, the group chief executive of BP, when he said,
"you do not go into business and go into a country for a year. it is just not possible, it is very long term".
This view was echoed by the chairman of Unilever and the then chairman of GlaxoSmithKline.
Our Conclusion 18 and paragraphs 158 to 162 deal with this issue and certainly give me a sense of comfort and pride in the fact that our companies have come such a long way, even if it is not universally acknowledged.
In this debate there is nothing like enough time to deal with all the fascinating aspects of globalisation. I believe the report deserves to be read widely and, as my noble friend Lord Howe of Aberavon recommends, to have greater recognition outside this House. It is thoughtful, authoritative and a most interesting read. It gives many pointers to what could and should be done to minimise the apparent and real drawbacks of globalisation but also to what could and should be done to maximise the genuine opportunities that globalisation offers. It should not be ignored, because there is one absolute fact—globalisation is here to stay.
5.5 p.m.
Lord Skidelsky: My Lords, I was determined to take part in this debate as it is a subject that really interests me, despite the fact that I cannot delay a suddenly sprung commitment. So I apologise in advance to the noble Lord, Lord Peston, and his colleagues, and to the whole House if I slip away a little early.
The report follows the standard characterisation of globalisation as a growing integration of the world economy, chiefly through trade and capital. This means that political borders will be increasingly less
1358
important in deciding the allocation of goods, services and perhaps labour in what one witness called one giant global economy, although cultural and natural frontiers will always be important.
The logical end of this line is a world government providing the public goods for a world economy which national governments now do for national economies. We are not, of course, there yet, and many fervently hope we will never get there. What is happening is quite different. As time goes on, it becomes increasingly clear that what is shaping globalisation is politics. as it has been from the start. Here is the root of my first hesitation about the argument of the report. It takes the view that technological changes and trade liberalisation are driving the whole process. But trade liberalisation has come about as a result of political decisions—much more importantly, decisions to liberate capital movements were in all cases political decisions taken by national governments. Technological determinists will need to explain the irony noticed by Paul Volcker in his evidence that financial markets really only opened up dramatically in the 1990s following the break-up of the Soviet Union.
Today, it is even clearer that globalisation is being shaped by politics—above all, by the ambitions and vulnerabilities of one hyperpower, the United States. In every area, globalisation takes the form the United States wants it to.
Since the fall of communism, the American ideology of extending free markets has been driving the process. Since 9/11, however, this has to some extent been overshadowed by the war on terrorism, which points in a different direction to what might be called the Osama bin Laden factor, linking security issues, drug trafficking and money laundering in an atrocious mix. This points away from free markets towards more control over trade, the movement of goods, capital and labour.
Where do we go from here? US policy might go in one of two directions. We may see a much more explicit commitment to a pax Americana—explicit in the sense that military force is used more actively to keep the peace and ensure political arrangements supportive of American interests. We may see, for example, some elements of a territorial empire, particularly in the Middle East. If this happens, if a pax Americana is established, perhaps globalisation can proceed under American protection just as it did in the 19th century under the aegis of the pax Britannica. It may even proceed with a large measure of international agreement. On the other hand, there may be a much less benign American nationalism in which the United States uses its immense power to pursue its own interests at the expense of multilateral agreements, if necessary tearing up any already negotiated. There are some signs of that.
Two problems have scarcely begun to he tackled. One is the problem of rogue states and what we do about them, as their existence makes all of us less secure. The other problem, to which noble Lords have alluded, is that of so-called failed states, most of which are located in sub-Saharan Africa. They cannot

1359
provide even a minimum standard of civilised government; we have examples of that in Zimbabwe and, much more tragically, in the Congo. There are worrying reports of a growing exodus of skilled whites and blacks from South Africa.
There is good sense in the report about the problem of poverty and the role that good domestic governance can play in taking advantage of the opportunities that globalisation opens up. However, such language really fails to do justice to the extent of the collapse of any acceptable form of government in the poorest parts of Africa. We cannot in the end avoid asking a primal question: do we prefer self-government or good government? If there is a choice, which answer do we give, and what consequences flow from giving different answers? In short, one criticism of this admirable report is that it leaves out politics. I wish that it had an international relations dimension, as that would have strengthened it.
More briefly, I turn to a second omission. There is nothing in the report about exchange rates, even though capital movements are discussed. There is of course a relation between capital movement volatility and the exchange rate regime. The logical end of globalisation is the end of national currencies. It is surely a paradox that virtually all economists of Anglo-American provenance are united in lauding the virtues of national monetary autonomy, which is generally interpreted to mean "floating exchange rates", as they also oppose any limitations to free capital movements. That is the line that the report takes, as I interpret it.
I should have thought that it was worth some sacrifice of national autonomy, whose benefits are in any case greatly exaggerated—much good it has done Japan, for example—to keep at least G3 exchange rates as stable as possible. Not only is that more in the spirit of the multilateralism that informs other sections of the report, but it would be of great benefit to the emerging market economies themselves.
Globalisation based on floating exchange rates seems to me a contradiction in terms. In the past year, the euro has appreciated 25 per cent against the dollar. A trader might have lost 25 per cent of his expected revenues, having lost a similar amount when the currency movement was in the opposite direction over the previous year. We are airily told that we can always hedge, but we are told less often that it can be very costly to hedge, especially for a small company.
The report does not deal with exchange rates because they are at present off the agenda: no one is discussing them. That well illustrates the dilemma of that type of inquiry. If it is to be taken seriously, it must not be too stimulating or it will be ignored. To that argument, Keynes gave a classic reply. He said that the realistic mind was an awful thing and that to work out an inspired solution to the problems that face the world requires a person with a crazy mind. In welcoming the report and paying tribute to those who produced it, I would have welcomed a little less realism and a little more craziness.
5.13 p.m.
Lord Paul: My Lords, let me first thank my colleagues in the Select Committee for the earnestness with which they set upon what I can assure noble Lords was quite an immense and challenging task. I would particularly like to congratulate our chairman, my noble friend Lord Peston, who has done a marvellous job in chairing our committee and gave an excellent introduction to the debate.
I am grateful to have a chance to discuss two of the recommendations in the report, which I believe are important to move further toward globalisation. I was born and raised in a developing country—India—and I know that people in developing countries are determined to improve their well-being and are happy with the globalisation process. As all noble Lords know, great and sustained economic progress has produced spectacular engines of wealth creation for several decades. Now, for the first time ever, we live in a truly international market and a global economy. There are virtually no barriers to the free flow of ideas and capital across national borders. Most goods that are in demand also find their way into markets that want them. That is a major change from just a few decades ago.
None-the-less, some nations that hitherto have been champions of the free trade movement try sometimes to reverse the process in certain areas when the heat is on, which has given a confusing message to the developing countries. Economic insecurity has increased and large numbers of people feel left behind. The achievements of globalisation have been outstanding but, unless we correct their focus and moderate their distortions, our successes will recoil on themselves and become endangered.
International economies are consolidating into powerful formal or informal trading blocs such as those in Western Europe, North America or the East Pacific. Countries and economies that find themselves on the periphery of those blocs now have to become exceptionally competitive if they are to be successful in this new world. For them, there is no other option. They have learned that the question is not whether or not to join the globalised world, but how to join it and benefit from it.
The United Kingdom, of course, has been a leader in the globalisation process for centuries. We must realise that, even today, we can help to steer globalisation in the direction of our choosing. Unless we steer it so as to improve the lives of people across the whole world. we will find that it does not benefit us nearly as much as it could.
There are two aspects of this report in particular where I believe Britain should take the moral and political lead. The first aspect is the current regime of agricultural and textile protectionism in much of the western world. Such protectionism runs contrary to the spirit of free enterprise and free markets. More tangibly, it constricts the abilities of farmers and workers in much of the world to make a sustainable living. That is not because farmers in developing countries are working in inefficient sectors. It is

1361
because wealthy countries are giving huge subsidies to their own farmers to keep inefficiencies going. That denies their own people the choice of better and cheaper products from other sources. If these subsidies are removed, it will be much fairer to everyone and will stop the need to give aid to some of these countries.
Take a country like India, which was suffering famine conditions in the 1940s, and now has a surplus of food. If the developed world stopped propping up inefficient primary sectors, developing countries would be able to trade more of their products. That would give them more pounds, euros and dollars to buy the sorts of goods that we in the western world have to offer. British intellectuals and policymakers have been showing for generations that open markets benefit both trading partners. The Prime Minister has also repeatedly declared his commitment to challenging EU agricultural policies. Let us in this House now help to lead the way in calling for the reduction of artificial agricultural subsidies.
I request that the Government take up this issue more vigorously at the next WTO Conference in Mexico in September. Of course I am delighted that the G8 leaders in Evian have decided to attend to this issue. I hope that they will do something about it.
The second aspect of globalisation that I believe we should actively work to change is the effect of the international movement of educated and skilled people on the economies of poorer nations. The phenomenon of brain drain—where bright people receive their education in their native land, often under state sponsorship, but then move away to pursue higher-paying jobs in wealthier countries—is a difficult problem to tackle. On the one hand, it is unjust to prevent individuals from living where they want to live and working where they want to work. On top of considerations of individual justice, there are tremendous economic advantages to labour mobility. On the other hand, it is unfair that a poorer nation should finance the education of those who will then move away and not generate wealth for that nation.
I therefore applaud the report's recommendations for solving the brain drain problem. Compensating a country for its human capital losses by providing aid to finance education and training seems to be a good temporary solution to what might otherwise appear to be an intractable problem. Given that the United Nations considers education to be one of the most fundamental measurements of development, our foreign assistance could hardly be put to better use. When our Prime Minister said that his biggest priority was education, education, education, I am sure that he meant that for the whole world. So let us show some action.
Globalisation creates more opportunities than dangers. We should be emboldened by the opportunities that it has given to so many countries in the world, especially our own. However, let us remember that we can control the path of globalisation. We should guide the process along the most fair and inclusive trajectory that we can.
5.22 p.m.
The Earl of Sandwich: My Lords, it is a pleasure to follow the powerful speech of the noble Lord, Lord Paul. I warmly thank the noble Lord, Lord Peston, and others for this excellent report from such a wide range of opinion. I have seen many reports on globalisation, and I truly hope that this is the last of them. However, I have not found any as succinct and useful as this one will prove to be.
One important sentence which has already been mentioned, on page 20, drew me to this debate. It is that,
"there remains…a shameful level of poverty in the world".
The committee goes on to say:
"We are appalled at the sheer waste of human potential that such poverty implies".
I can testify to that as a trustee of Christian Aid and a member of the World Development Movement. However, the evidence is unclear as to whether poverty is generally decreasing, as we would all like to believe, because evidently the opposite is true in many countries which are unlikely to reach the 2015 development targets, even the education targets.
The committee accepts that the gap has widened between what the World Bank calls the "new globalisers" and the "weak globalisers". Among the former are the Asian tigers and China, which has paid for it with greater inequality. Within the latter group, African countries have been marginalised. I am sorry that the committee did not spend more time on the problems of the very poorest countries—perhaps because those countries by their nature are not natural allies of globalisation. I am not sure whether McDonalds has yet arrived in Ouagadougou, but I am certain that the beef will not come from there. Listening to some economists, I have a strong sense of a law of diminishing returns whereby trade is only for the advantaged to profit from while aid is a handout to the rest.
In my experience of world development there is no such simple divide; there is more of a tapestry of opportunity in which even the poorest can sometimes develop considerable income on a small scale from sensible economic policies. Research from micro-credit enterprises finds that the poorest in India, for example, are more efficient borrowers and are the first to repay their loans. In my view, those are the entrepreneurs who should be at the cutting edge of the drive against poverty, given the right kind of institutional support. That is where governance is, of course, the key factor. As one would expect, there is much in the report about the building of capacity—a DfID line of thinking which only just falls short of, "We can do it for them". However, it is the system which is wrong. It is the sheer inequality between rich and poor negotiators which strikes me rather than the inherent lack of capacity or ability.
So keen are we, the developed world, to exploit the developing countries that we send vast delegations to the WTO and the IFIs. One NGO at Doha counted more than 500 in the EU delegation compared with small island states with only two each. Haiti, one of the

1363
poorest nations, as has been mentioned alongside others, had no delegate at all. The cost of providing proper capacity, let alone legal representation in disputes, further demonstrates that inequality.
The committee accepts that the WTO is,
"dominated by a small number of rich countries",
and that that domination is excessive, especially in the case of the WTO. However, it does not come up with a solution. It appears to endorse the World Bank view that without the WTO, matters would be much worse—as the noble and learned Lord, Lord Howe, said of the IMF. The Government are, however, urged to consider how to improve the balance of power and make their decisions more transparent. So far, their response has been weak in the extreme.
The committee, to its credit, goes on to berate developed countries for "objectionable and unjustifiable" protectionism. Those are strong words and will perhaps force EU ministers to reflect a little more, as the noble Lord, Lord Paul, reminded us, on the progressive damage done by the CAP, by last year's US Farm Act and the backdating of the textiles agreement—one of the so-called "implementation issues" which have caused a lot of frustration. We have had several recent debates, notably on NePAD and the CAP, which comes up again next week. However, apart from small advances on the decoupling of our larger farm subsidies, which seems to be going ahead, the only new EU initiative seems to be the new one on GATS. That is obviously to be welcomed, but only if it is not used to condone the privatisation of essential public services.
The noble Lord, Lord Barnett, mentioned the need for substantial action. It is difficult to see, with so little coming out of the G8, how the poorest countries can look forward to Cancun with any enthusiasm. For example, what has happened to the concept of special and differential treatment—the means by which countries with special problems could be given more attention—which was part of the real breakthrough at Doha? The Government have mentioned it in their response. Perhaps it will be mentioned at Cancun. Will we see the end of it?
In that context, President Chirac has surely stolen the Government's African clothes, as we heard in the debate between the noble and learned Lord the Leader of the House and the noble Baroness, Lady Williams. However, why did not the Government give more visible support at the G8 to the French proposal for a moratorium on all subsidies related to agricultural exports to Africa? It has been ignored by almost all but the financial press. That, I understand, was coupled with an investigation into the effects of deregulation on price stabilisation for primary commodities and products. France is also putting forward ideas for the development of regional markets, again with a particular emphasis on Africa. Surely that amounts, as the noble Baroness, Lady Williams, said, to a genuine move by France, which other EU countries which already support NePAD and the Africa Action Plan should seize upon. They should not wait even for Cancun.
1364
So we move to corporate protectionism, which is a strong concern of Christian Aid. The committee is broadly supportive of the NGO view of TRIPS. I am even pleasantly surprised that it takes a distinctly sceptical if not NGO line on the motives of pharmaceutical companies. I was personally encouraged by Mrs Brundland's comment on page 216 that public money and even a degree of intellectual property regulation would help research into new products and not just less profitable medicines.
There is a lot of suspicion of the TNCs, some of it unjustified. I agree with the noble Baroness, Lady O'Cathain, that the companies have come a long way and that they have further to go. As I said in the debate on globalisation two years ago, a commission on intellectual property rights will be useful only if developing countries believe that TRIPS is designed as a means of benefiting them and is not merely a Trojan horse for multinational companies or a vehicle for unregulated investment.
I am not qualified to speak on many areas of the report, especially on the financial chapter, and I shall make only one point on the IMF and the World Bank. It is an irony that neo-liberalism has coincided with genuine attempts to reform and reflect the views of civil society. The two seemed incompatible and yet advances are being made. I am sorry that the committee did not find time to include that in the report.
Finally, I am relieved to see the dismissal of the Tobin tax idea, which was always unworkable. Let us hope that that red herring has been finally laid to rest. The Government's response ignores it altogether, but does mention the important international finance facility—the Chancellor's attempt to double aid flows. It is another strange result of the Evian summit that that important initiative has not yet achieved the necessary G8 support and may run out of steam, unless the noble Lord. Lord McIntosh, can put us right on that.
5.32 p.m.
Lord Griffiths of Fforestfach: My Lords, it gives me great pleasure to take part in the debate and especially to follow someone who is such an authority on developing countries and the problems of poverty. I should declare an interest. I am involved in a number of companies that could be said to make money out of globalisation.
This is an excellent report. It bears the stamp of a first-class academic in its chair. It is an inherently difficult subject. Globalisation is ill-defined. It is contentious and it has become a slogan. The report is comprehensive and balanced. It confronts difficult issues and makes good judgments. I would go so far as to say that I have read over the years many reports from your Lordships' House and, in my judgment, this is one of the very best.
As I read it, the report says that globalisation produces great benefits at some costs but that, overall, it is creating global prosperity and is therefore good. Let us consider those countries in the world that have

1365
engaged in globalisation and export-led growth—most recently, in the 1990s, China and India; beforehand, Mexico; and again, recently, Vietnam and Uganda. Those countries and their citizens have benefited in material terms from globalisation. Those countries which have not engaged in globalisation—Nigeria, Ukraine, Pakistan and others—have really suffered. Their GDPs per capita have gone down.
The report also says that globalisation is beneficial but that it is not autonomous. One cannot just leave it to itself. It must be managed. To follow the expression of the noble and learned Lord, Lord Howe of Aberavon, it should be managed for transformation. It should be managed, first, because private benefits may not equal social benefits and private costs may not equal social costs. Secondly, it should be managed because it has a moral dimension. Globalisation raises, whether we like it or not, questions of equity and justice and that dimension cannot be ducked.
The report also says that global institutions should be critical, advisory and supportive, which I wholly agree with, but that they should never be a substitute for national governments.
I would like to make three comments. The first is on the subject of globalisation and poverty. As the noble Earl, Lord Sandwich, said, the state of world poverty at the moment is scandalous and shameful. The report faces that head on. It welcomes the second of the millennium development goals; namely, the achievement of universal primary education, recognising that at present there are over 100 million children who do not go to school.
I would have thought it within the spirit of the report to welcome all of the millennium development goals of eradicating extreme poverty and hunger, of reducing child mortality, improving public health and so on. Globalisation is successful for the countries involved. The gap between them and countries that have not been involved is glaring and is a scar on our world. I was therefore rather surprised by the pessimism of the noble Lord, Lord Barnett. I have been the most enthusiastic supporter of the initiative that the Chancellor of the Exchequer, Gordon Brown, has taken with the international finance facility. That was welcomed and encouraged by the Doha meeting of finance Ministers last month. The communiqué from Evian also suggested that it is on the agenda and will be implemented.
I believe that it helps the situation in a number of ways. First, it recognises that the key to development in the developing countries is the private sector. Secondly, for that to happen, as the noble and learned Lord, Lord Howe of Aberavon, again said, a legal infrastructure is needed. We also need stable policies and a transparent government. Thirdly, developing countries need access to developed ones. I am sorry that the noble Lord, Lord Desai, scratched from the debate because he said that the CAP and the protection of agriculture in the US are nothing less than a crime against humanity. He is absolutely right.
In addition, if the private sector is beginning to take off, and there is the possibility of greater exports from the developing world, the IFF says that there should
1366
be a doubling of foreign aid to developing countries. Even if the private sector really gets going in, for example, sub-Saharan Africa, I still do not envisage there being universal primary schooling, clean water, better roads and public health simply because of a take-off in the private sector. Therefore, we in the developed world have a responsibility.
The demand for aid, however, does raise problems. Should it he provided in the form of loans or of grants? I see a great advantage in grants. Should it be bilateral or multilateral? Since the aid is taxpayers' money, there is good reason for stipulating that it should be given on a bilateral rather than a multilateral basis.
There is also the very difficult question of conditionality. The millennium challenge account, which is the response of President Bush to global poverty, sets out 16 specific performance indicators—for example, the number of days it takes to set up a business in a country and the output of primary education—as a condition for giving aid. That is maybe a trifle too restrictive, but it has value. In addition, there is the difficult question of what role the private sector and NGOs should play in the delivery mechanism of aid.
The second issue on which I want to touch is that of transnational corporations. It has emerged from the report and our debate that they are without doubt a force for good. I have been involved in a very small way. One sees investment going into a country; jobs being created; training of local people; new systems; new standards in internal controls, audit and compliance; the transfer of technology; and new management ideas. Typically, one also sees many companies from Europe and America giving advice to governments on the regulatory framework and so on.
My one concern about the way in which transnational companies are dealt with in the report involves corporate social responsibility. I am totally convinced that corporate social responsibility is a good thing. On the other hand, I get frightened when I read the European Union's approach in terms of "triple bottom line" reporting, which could easily become a process that is bureaucratic, lacks substance and has a needless increase in cost. Ultimately, if we go that way in terms of increased regulation rather than transparency for companies, it could be a dead hand.
Thirdly, and finally, I should put a rather different emphasis on the IMF and the World Bank. I should have been tougher on the World Bank and a little easier on the IMF. When the World Bank started in the 1950s, it was concerned with infrastructure; then it got into education and health, and then into poverty. Today, it is virtually in everything. As a result, it has genuinely lost focus. It is simply doing too much. It must ask itself, "What can we do best?". The answer is that it should lend to countries that do not have access to capital markets, and focus on advice that is given elsewhere.
The IMF has a very tough job, typically dealing with countries that have got themselves—mainly—themselves into trouble. Its resources are limited. It is never going to be a lender of last resort. It needs

1367
more sympathy, especially in its monitoring and surveillance roles. Globalisation raises the issue of global governance. A very cautious, step-by-step approach in reform is needed, not something too radical. In view of that—the IMF is currently reforming itself—and the implementation, I hope, of something like the IFF and allowing the market economy to work, I end up much more optimistic than, for example, the noble Lord, Lord Barnett. I did not sense that the report was that pessimistic.
5.43 p.m.
Lord Sheldon: My Lords, the noble Lord, Lord Peston, is to be congratulated on introducing this report. I had not expected at the outset that a debate on a report from the Economic Affairs Committee would lead to a demand for the understanding of the needs of the underdeveloped world. That rather surprises me, and I very much welcome that consequence of the report. It shows the wide-ranging nature of the report. The issue has tended to educate the committee and the whole of this House.
Globalisation is a crucial matter. We share the same planet with many other nations. Globalisation should mean that we recognise the responsibility we have for all of the peoples of the world to share in the increasing prosperity that only part of the world currently enjoys. Globalisation has particularly shown up the inequalities that we see today; that was represented in the speech of my noble friend Lord Barnett and others. As the report shows, although there is not a simple definition of globalisation, there has been a fundamental change. That is largely due to the ease of modern-day communications, whether by transport, telephone or electronic means. Those means have produced an interchangeable world in which trade, culture, language and social advances become rapidly interchangeable. In fact, globalisation effectively means communication—physical, electrical and electronic. Globalisation has brought and continues to bring great benefits, which we must embrace with enthusiasm; they are essential to our future planet. It also brings responsibility for parts of the world that are not achieving the same level of improvements. The benefits of globalisation must mean and must be shown to mean benefits for all. Protectionism of developed countries, as the noble and learned Lord, Lord Howe, mentioned, must be addressed. We cannot tolerate protectionism against the interests of developing countries in our world.
On page 84 of the evidence, Professor Bill Buiter said:
"globalisation is, potentially, a blessing. It is first and foremost about increasing opportunity, choice and freedom. The simple but fundamental proposition that is the cornerstone of this positive judgement, is that trade—voluntary exchange—is not a zero-sum but a positive-sum game".
He is quite right in that. Larger economic and social units mean that each part must accept some responsibility for those in the global community. The
1368
trend to globalisation must be accompanied by greater awareness of and action in relation to the problems of the rest of the global community.
Globalisation means that we live in one world but we must accept responsibility for the less successful parts. If there are benefits—it is not a zero-sum game—that should create a surplus, part of which should be used to assist less fortunate parts of the world. How is that assistance to be given? That is the critical question before us today. Financial help, yes, but on what conditions? Who organises it? The IMF, the United Nations or some new UN body?
Which countries have benefited from globalisation and which have lost out? We know that China and India have benefited as well as the developed countries. Some so-called developing countries have not been developing at all. Notably in Africa, some have gone backwards. Globalisation means mobility of goods, services, capital and labour.
In its evidence, the Engineering Employers' Federation commented some time ago on the way in which companies are resourcing their products from abroad. It points out that,
"35 per cent of companies currently have at least some of their production located abroad. This is a trend that is expected to continue with nearly half of the survey respondents anticipating some production to have moved abroad in five years".
That is what is happening today. Those developing countries that have some manufacturing capabilities attract investment through their lower wages and standards of living. Those who rely on raw materials are frequently disadvantaged. Developing countries that are dependent on their agricultural sector are the least successful. Part of that involves the quite shameful way in which so many developed countries subsidise their agricultural sector and so deny developing countries their rightful place in increasing world prosperity, which should be their right. The major question is: how do we help with administrative and political reform in those countries, which are frequently a pre-requisite for financial assistance?
Globalisation has the advantage of spreading technology and practices—both good and bad—throughout the world. Efficient methods of working are diffused as movements of people and companies take place. One of the problems of globalisation and the increasing importance of transnational companies is that they can move their profits around. That means that the taxes they pay are less than those which smaller companies are having to pay. Remedying that is never going to be easy and is likely to take a great deal of international effort and agreement as well as time. Much of that may not be forthcoming. Efforts will be made and will continue to be made for very many years to come.
Another aspect of globalisation is that goods are made in one country, processed in another, further processed in another country and then sold in yet another. Textiles are an example of that. Cotton is grown in one country, spun and woven in another—perhaps halfway across the world—dyed in yet another country and made up into finished garments in a further country.

1369
We never had that sort of thing before. Such has been the pace of change that there are efficiencies that would have been inconceivable even 10 or 20 years ago. Such things are happening all over the world. People who are transporting goods and conveying information through various means, including e-mail and other forms of communication, have transformed the way in which the production of goods and services rapidly move across the world.
It is understandably resented that although many countries benefit from globalisation, some countries lose out as their agricultural exports are subject to the tariffs in developed countries—the CAP in particular. Issues such as opening markets and protection in agriculture must be addressed.
Obviously some sectors need to be considered, but that should be by assistance and a reduction in their protection by, if required, long-term measures. If we are to make a long-term success of globalisation, then the fact of one world must mean one world in the consideration of improvements to all parts of the world. That is what globalisation should really mean.
5.51 p.m.
Lord Vinson: My Lords, it was a great privilege to be a Member of the House of Lords Committee on Globalisation and I pay special tribute to the noble Lord, Lord Peston, for his indefatigable and pleasant leadership.
I should like to major on two particular aspects of our deliberations: first, some thoughts on the possibility of free trade in agricultural products; and, secondly, where aid should or should not be directed.
When our committee visited the director general of the World Trade Organisation, he said that the Doha World Trade talks were "about trade in agriculture". Indeed agricultural commodities lie at the heart of world trade. Here I declare that at one stage I was a substantial grain farmer, but no longer. However, I trust that experience qualifies rather than disqualifies one to talk, as the modish politically correct might appear to wish.
Our report said:
"Protectionism with regard to agricultural products in particular is wholly objectionable and unjustifiable".
That may be the case, but it is my belief that however desirable in theory free trade in such products may be, the reality is that food trade is not wholly driven by natural advantage and prices seldom represent the cost of production—or are ever likely to do so. Agricultural trade or most of it—is bound to be cat's cradled with restrictions for quite understandable reasons.
If one goes back to first principles, one of the primary objects of any government is to ensure food supply. As planning for inadequacy is not an option, food supply in most western countries means food over-supply. Protected agriculture is encouraged to produce, over-production results in falling prices, falling prices call for increased subsidy, increased subsidy in turn causes further over-production. So the cycle goes on until the next generation of politicians
1370
says enough, and then all restrictions are removed, as they were five years ago in America, and a free market is attempted.
However, prices then collapse still further and, as we saw last year in America and Canada, massive intervention is necessary to avoid widespread agricultural bankruptcy and ensure security of food supply. The food production cycle then recommences and surpluses are dumped at market clearing prices on to the world market.
The paradox is that the world today has never grown so much food. There is no overall scarcity. Food has never been so cheap. Wheat is currently sold below the cost of production. The consequence is that farmers in poor countries are abandoning their agriculture because they just cannot compete with the heavily subsidised foods that are flooding in on the back of world trade rules. Paradoxically prices need to rise to make it worthwhile for them to export.
It might be possible for a nation to follow the theoretical line given to us by Sam Brittan in his evidence, which is:
"If the Americans want to subsidise my breakfast, who am Ito say that that is a bad thing?".
Security of food supply may appear unimportant to smaller nations that can always pick up bargain priced commodities except in times of scarcity. But if we take central Europe as a whole, it produces some 200 million tonnes of food grain. North America produces some 300 million tonnes of food grain. There is absolutely no sensible way that America could produce another 200 million tonnes and substitute completely for European demand. Those are enormous tonnages. Europe could certainly replace its marginal farm production by imports, but overall it is difficult to argue other than that prudence calls for it to remain as a major producer based on its own climatic natural advantage, which it has.
The margins in growing food are extremely line, even with subsidy. A 10 per cent variation in the exchange rate, if the product is unprotected, can lead to farm losses and shortly bankruptcy. In the past year the euro-dollar rate has moved by more than 25 per cent—a point well made by the noble Lord, Lord Skidelsky. Exposing agriculture to the full variations of the exchange rate would shortly mean no agriculture in any country.
In his evidence, the ex Fed chairman, Paul Volker, said:
"I think the instability of exchange rates in terms of globalisation is an important problem that threatens emerging countries…it is hazardous for emerging nations to participate happily due to the instability of exchange rates".
It is hazardous for any nation to expose its long-cycle industries not only to massive exchange rate variations but to worldwide climatic ones as well. The European climate is good for growing grasses. Wheat is a grass. The American plains may be well blessed but they have dramatic climatic swings, as anyone who has read about the dust howl conditions of the 1930s will recall. Australia, which is one of the predominant

1371
players and the leader of the Cairns group that lobbies for free trade in grain, had a disastrous drought last year and actually imported wheat from this country.
One cannot turn agricultural production off quickly or on quickly, even in an emergency. Once the infrastructure is lost it is gone. It is for those practical reasons that most governments strive to ensure secure food supply. And it is for that reason that Europe will remain a major producer of wheat grain, and is unlikely ever to sign up to unfettered free trade in agricultural products.
However, that does not mean that it needs to grow the surplus that it does, particularly that grown on marginal land. It could and should afford to take limited inputs from other countries.
What applies to western world agriculture applies even more to the under-developed nations. That point was graphically and clearly made by Save the Children and by Dr Carline Lucas of the European Parliament, who said:
"I do not think it is good enough to say that the USA can produce our food more cheaply than we can and therefore we will stop producing food. I think there are certain minimum things a country should have control over, and food production is one of those. Since agriculture came into the WTO the impact for many countries has been negative".
I believe that free trade in agricultural products will never be completely free however theoretically desirable.
That leads me to the second part of my speech—the distribution of aid. Productivity in the production of primary commodities has made them cheaper than ever, which is greatly to the benefit of user nations. But the producer countries are not sharing this golden harvest. The more they produce the less they get paid. How then can the West give meaning to the slogan Trade Aid and help those nations?
I agree with those who say that the only long-term solution is for primary producers to increase internal consumption, to add value and to develop quality of output. It is about turning wood into chairs, not planks. The punch question is how to do that.
It is beginning to happen where aid is routed bottom-up and helps the establishment of small enterprising businesses. Helping local markets develop naturally will solve their problems ultimately as it has broadly solved ours in the West. What poor farmers, street hawkers and others want is the freedom to create wealth in the way in which they best see it without an over-intrusive government. That leads me to the basic problems of many under-developed countries. It has been said before, but nobody really likes to say it: bluntly, underdevelopment is often due to corruption on the one hand and a total inadequacy of the framework of law and property on the other.
Of all the solutions to global poverty, the one suggested by the Peruvian economist, Hernando de Soto is among the simplest, and I believe the best. He said:
1372
"Give poor people formal ownership rights to the land they live or do business on and you immediately turn their unnegotiable capital into Wealth. They can then take out bank loans or trade on it. In short, they become part of the formal economy".
Without the possibility to prove title to the ownership of land or your house, be it only a mud hut, it is not possible to secure credit, to borrow money, to invest on even the smallest scale; to buy a water pump; to buy a small tractor; or to buy a lathe on which to make furniture.
So, if poor countries can put their internal corruption right, then the initial step is to create an institutional framework where the market, in its smallest form, can begin to develop. Most of our aid flows top down. We need to reverse that and make more aid flow bottom up—sowing the seeds of a simple market economy by developing indigenous enterprise.
Hong Kong has no natural resources, but it has a framework of law and land title. We also only have to look to Singapore to find a shining example of the proof of this concept.
I have tried to make two essential points in this speech: first, food security has an economic rationale and commands huge political support in most countries. Consequently, policies to develop trade liberalisation should and must recognise that fact and work with it. Secondly, such policies need a new direction basically aimed to engender the inherent wealth-creating enterprise that can be found in all societies at all levels.
6.1 p.m.
Lord Parekh: My Lords, I congratulate the Select Committee on Economic Affairs on its excellent report on globalisation. Such a report is only to be expected of a committee consisting of talented people drawn from different walks of life and led by someone of the stature of my noble friend Lord Peston.
Although the report covers many important issues, some are dealt with either cursorily or entirely from an economic angle. As someone who by profession happens to be a philosopher interested in issues of culture and politics, I hope your Lordships' House will forgive me for introducing those angles.
Globalisation by universal consensus is a process by which the globe becomes a single and integrated unit. Interests of different societies are intertwined, such that events in one part of the world directly or indirectly impinge upon another. Globalisation understood in this sense is almost an inexorable and irreversible fact of life. No country can step out of it, either because it is technologically impossible because of Internet and satellite television, or because the cost of so doing is so prohibitive that a government which dared to step out of globalisation simply would not survive.
Globalisation is not confined to the economy. It extends to political life, to cultures, to civil society, to religion and to many other walks of life. In each of these spheres of life it has good and bad consequences. In the economic sphere, for example, it increases

1373
consumer choices, reduces prices, improves the quality of products and brings them up to international standards, brings in new technology and capital and improves the lives of some groups and even perhaps adds to the prosperity of different countries. It also increases inequalities within and between societies. It bears rather heavily and harshly on those societies that are too weak or have too poorly endowed infrastructures to compete as equals. It gives the transnational corporations a free run of the weaker economies, as happened in the case of Union Carbide and Enron in India. In the short term, it tends also to increase unemployment.
The same kind of balance sheet of good and bad consequences happens in other areas of life—for example, politics. Globalisation creates a common political culture; a common vocabulary of human rights and liberties; and it encourages greater international co-operation. It makes it possible for us, collectively as humankind, to regulate the forces of the market.
But it also leads to the greater domination of powerful countries, especially the United States. It weakens democracy within the countries; it weakens the nation state; and it undermines the protection offered by the principle of national sovereignty. In many developing countries the poor tend to be political orphans because they can no longer rely upon the nation state, upon which they have traditionally relied to protect their interests in the international forum.
In the cultural sphere, globalisation can lead to better intra-cultural understanding, the sharing of ideas, and the possibility of creating a rich and thriving multi-cultural world. But it can also increase the domination of American culture and its cheap cultural products. I do not need to remind your Lordships of how, for example. the US film industry almost wiped out 80 per cent of the cinema studios in France and eastern Europe. The US film industry is able to recover most of its costs from its large domestic market and therefore is able to export films at a price with which the domestic counterparts can simply not compete.
One of the great French writers talked about "cultural totalitarianism of a monoculture". That kind of thing tends to result in cultural uniformity and homogenisation, which is bad in itself. But it also tends to provoke panic in some societies and promote fundamentalism. Some consequences of globalisation—good and bad—are inherent in the very process of globalisation. Others arise out of the fact that globalisation occurs in a world which is so unequal. Yet others arise from the fact that globalisation takes place within the context of neo-liberal orthodoxy.
Therefore, I suggest that globalisation has both good and bad consequences. Although on balance it is a good thing, we should be thinking in terms of minimising its harmful consequences and maximising its beneficial consequences. In other words, rather than asking the question, "Are you for globalisation or against globalisation?", as some anti-globalisation protestors in France, Switzerland and elsewhere have
1374
been doing, we should recognise that there are repressive or hegemonic as well as emancipatory and progressive forms of globalisation. The question to ask is: how can we ensure that the globalisation upon which the world is inexorably and irreversibly embarked is emancipatory and progressive rather than hegemonic and repressive?
What do I mean by "progressive globalisation" and what are the yardsticks by which we will judge whether a particular form of globalisation is to be welcomed or not? I offer three which I think have enjoyed universal consent. First, globalisation should promote global justice, so that human beings the world over are able to lead decent and fulfilling lives. Secondly, it should increase the space for human freedom and our capacity to control the forces of the market so that we do not feel completely at the mercy of forces we can no longer control. Thirdly, since I believe, and I am sure your Lordships would agree, that there is a good deal to be said for a rich and plural multicultural world, therefore, the third criterion I propose is: does globalisation foster such a rich and culturally diverse world from which we all gain?
Judged by these criteria I suggest that there is not very much to be said for the current neo-liberal orthodoxy which fuels and propels globalisation. Of course it does some good, but it also does some harm. It has not helped the really poor countries. It has imposed unfair burdens on developing countries, to which many of your Lordships have referred. It imposes a single prescription model. Stiglitz talks about that in his book Globalisation and Discontent. He was the chief economist to the World Bank. He shows how the IMF, constantly guided by the so-called "Washington Consensus" and the Structural Adjustment Programme, completely disregarded the cultural context of economic development and prescribed a single model, causing havoc not just in Indonesia, to which the noble and learned Lord, Lord Howe, eloquently referred—but also in several parts of Latin America and elsewhere. Furthermore, TRIPs and TNCs sometimes tend to plunder local knowledge and herbs and export them back at prohibitive prices.
So we should therefore think in terms of new measures, new principles, new institutions which can guide the process of globalisation. In a spirit of great humility, because I am not an economist, I want to suggest four or five solutions.
First, under globalisation today capital is free to move, but not labour. When labour is able to move—for some people labour is their only capital—either in the form of economic migrants or refugees, we make laws to make sure that it does not travel. On the one hand we insist that capital should not be prevented from crossing boundaries. On the other hand the rich countries insist that labour should not be allowed to cross boundaries. That is unfair.
Secondly, at the global level we have forums where rich governments and large corporations can regularly meet and plan their strategies. However, we have no forums where civil associations or civil society

1375
institutions, which are close to the people and struggle to fight for justice, can meet regularly and plan their response. Nor do we have international forums for trade unions. In that context several interesting ideas have been canvassed by academics and activists. I would not rehearse them but they are worth a careful thought.
Thirdly, developing societies, if they are going to compete in a global world, ought to be able to build up their competitive capacities. Therefore, they need development assistance and not a bail-out in situations of crisis as the IMF tends to do. Foreign aid needs to be increased from the current mean figure of 0.27 per cent of the OECD GNP.
Fourthly, I entirely agree with the report that the WTO is a democratic organisation in the sense that it is based on one country, one vote. However, there are several things about it which leave a great deal to be desired. Its negotiations and modes of resolving conflicts occur in secret. Poor countries have no qualified staff or representation in Geneva. Nor do they even have much technical expertise that can guide them on the implications of various agreements that they sign up to. We have realised that even half of the countries that have signed up to the WTO, including in some cases India, have signed up to agreements whose implications they have never understood, and have been frightened when they realised what they were expected to do. It would therefore be most welcome if there were to be an independent institute or agency which would assist developing countries in matters of negotiations with others in the context of WTO.
Fifthly, the hypocrisy and the economic and political muscle of the rich countries dictate unfair terms of trade to which many of your Lordships have referred. We ask developing countries to open up their markets, but refuse to open up ours. We deny them the right to subsidise their industries, but we use clever devices, including terminological inexactitude, to subsidise our own within the legal framework of WTO. I could give the House half a dozen examples during the past three years alone. Western farmers receive, as the report rightly says, an annual subsidy of 311 billion dollars. Contrast that figure with the annual foreign aid of 11 billion dollars. The West gives that in foreign aid and even some of that is tied.
Sixthly, current globalisation is too much in thrall to corporate interests and is too indulgent towards that misdemeanour. We should put a stop to that sort of thing. A vigorous global anti-monopoly authority linked to the WTO would help. Such a global antimonopoly authority could be built on the existing United Nations Restrictive Practices Code.
We could also think of a global tax on corporate profits to close such loopholes as transfer pricing and offshore arrangements. We could also abolish offshore finance centres and tax havens. We need to find ways of guarding against speculative runs against vulnerable markets and currencies. I agree that although I have long been an enthusiastic supporter of the Tobin tax, there are difficulties with the Tobin tax and in its current form it is not workable, as Professor Tobin himself recognised
1376
before he died. However, although the economic reality has changed in recent years the tax in principle still remains a good idea, and could be applied if it were suitably redefined and adjusted.
Finally, developing countries themselves need to change a great deal. They cannot sit passively and expect the rich West to adjust or readjust its ways. Corruption in those parts of the world must stop. More importantly, globalisation produces massive changes and causes political and social dislocation. Democracy is needed to debate those changes and how those societies can best comprehend and respond to them. Democracy cannot be exported, and we need to find ways of sustaining local forces.
In conclusion, all that I have suggested so far is largely a matter of detail. The most important thing to realise is that globalisation, sadly, is not working for some countries or some groups within even those countries where it seems to work. Those frustrated groups, feeling that they have been denied the benefits of globalisation, build up hatred of the rich West and threaten it with terrorist and other activities. It is therefore important that globalisation, which can he a great force for good, needs to be so institutionalised and regulated that it can sell the three goals of global justice, human freedom and cultural diversity that I talked about earlier.
6.16 p.m.
Lord Burns: My Lords, along with others I would like to say what a great pleasure it has been to be member of the committee, chaired by the noble Lord. Lord Peston, and that is not only because of the constant chatter about football in the margins of our meeting. We also enjoyed robust debate. We considered challenging topics and, to our greater surprise, we even reached some conclusions at the end of the deliberations. At the outset of the inquiry I was not at all sure what we would achieve, given the confusion on some of the issues. In the end I hope that we have gone some way to help people to understand this immensely complex issue and why it has become so contentious.
First, I have been surprised that the anti-globalisation movement emerged in the way it did and with the force it has, accompanied by the appalling violence seen on occasions. I am one of those people who was brought up to believe in the benefits of trade and closer association between economies. My starting point still is that there are huge benefits to be had from competitive and innovative imports, as well as the rewards from being able to sell goods and services in markets around the world. In the past 25 years we have seen great benefits in the UK from the relaxation of the controls over capital introduced by the noble and learned Lord, Lord Howe, when he was Chancellor of the Exchequer.
We have also seen the great benefit of inward investment from Japan, the US and elsewhere on some of our most depressed regions. I am always astonished to see the extent of the benefits in both the north-east of England and in South Wales. By contrast, it is

1377
striking that the countries which have made the least progress in terms of standards of living are those that have attempted to cut themselves off from the trading systems and flows of capital that bring so much benefit to the rest of us. If, therefore, a country like the UK can benefit so much from globalisation, why has there been so much concern about the impact on other, usually poorer, countries?
I had my first taste of the protests at the IMF meeting in Berlin in 1988 when there was a considerable show of violence. It struck me at the time as rather strange that the protesters were targeting the bankers of the world while, less than a mile away, a captive population was being prevented from moving to the West to share in its prosperity by the existence of a huge wall. Since then the wall has come down but the protests have, if anything, become worse.
One of the important insights of our study was that the anti-globalisation movement was itself very complex and no more than an umbrella for a whole range of protesters, some of whom it is easier to understand than others. As we dug deeper, a second insight emerged. The movement was not so much antiglobalisation but a better globalisation movement—a point to which the noble Lord, Lord Peston, referred. Even then there is much difference of emphasis. To some, better globalisation was making sure that all countries and peoples might benefit from the increased integration of the world economy. To others, better globalisation was a rejection of some of the economic doctrines that have characterised the recent period—for example, more open markets, removal of controls and the central role given to profit-making transnational companies. Some people wanted globalisation, but in a different way.
We heard from several witnesses on the question of whether the latest round of globalisation was a new departure or whether it echoed similar developments in the past. Although it is not free trade writ large—as the noble Lord, Lord Peston, again mentioned—I prefer to think of it as a continuum.
At the end of the 19th century there was the big push towards more trade, greater capital flows and increased integration of markets—partly through labour mobility but driven by falling costs of transport. As the 20th century came to a close, we witnessed a huge technological push driven by information technology and the communications industry. This time, the process has shown itself in increased trade in services, ideas, information and product brands, as well as continued growth of trade in goods. Not only do we have reduction of travel costs in familiar ways, we also have the new digital world of communication which has virtually eliminated the cost of trading certain kinds of information.
However, when I was being taught about the gains from trade and economic integration, I was also taught that the distribution of those gains was unlikely to be equal and that that could be a matter of political and economic contention. That is what lies at the heart of much of the opposition to globalisation today and of much of what we have heard in this debate. We have
1378
the growing fear that the bulk of the gains from globalisation are going to the wealthy countries and that the poor countries are being left to their own devices or may even be damaged by the process.
On the one hand, we received quite a bit of evidence that pointed to less inequality between countries, although we are acutely aware of some remaining areas of huge poverty within countries. The conclusion we reached was much more that it was a question of who were the real gainers from globalisation. Rather than many parts of the world having been clearly identified as losers from the process, they simply had not gained as much as others.
The overwhelming feeling with which I came away at the end of our inquiry was that most of the economics I was taught those many years ago (surprise, surprise!) remains valid. There are great gains to be made from trade, capital flows and greater integration, although some countries will benefit more than others. However, that is no reason to hold back integration. Indeed, those countries that seek to cut themselves off from it will probably lose the most. But all members of the committee came to recognise that if the world is to retain confidence in the benefits of globalisation, more urgent action is needed to deal with some of the resulting inequalities. Of course, judging what can be done about that over what time-scale is extremely complex. Many of the committee's conclusions seek to give some direction. As we recognise, the extent to which countries can benefit from globalisation is in substantial part a matter for them. There is also an important role for collective action by the richest countries in the world, but that will come to little unless there is also change within the countries themselves. Most of the action open to countries themselves to take advantage of that new world lies outside the world of economics in the institutions of government and policy making; the rule of law and enforcement of contracts; safety for the individual; and the absence of corruption. I join with others in being surprised that there is great support for lawyers at this stage in the development of some countries.
There are also matters that are very much to do with economics, so it is not all about lawyers. These include the macroeconomic framework; the financial and commercial infrastructure; the extent to which countries are an attractive home for inward investment; and the ability to produce goods and services in an efficient way—all important topics covered in the report. The developed countries may be able to provide assistance, but that requires a willing host.
Where the issues become slightly more contentious is where we move on to the things that the developed countries can do to assist the poorer countries in taking advantage of globalisation. Again, we reached a number of conclusions about which there has been much discussion; I shall highlight only two or three that struck me most.
The first is the willingness of developed countries to open our markets to goods of all kinds, including agricultural and textile products. I do not share the

1379
view that agriculture must be excluded. It is so important to developing countries. If we seek to remove it from the world trading environment, we shall have the greatest of difficulty in moving forward. I find extraordinary the damage that protectionism by wealthy countries can do to developing countries. We know that, from time to time, imports will create disruption to businesses at home, but I regard that as an inevitable part of the process of development and something with which richer countries must themselves find a way to deal.
A similar issue is likely to arise from the import of services. In today's globalised world that will mean moving some large-scale service activities, such as call centres and back-office work, as well as specialist tasks such as software development, to poorer parts of the world. Again, that will be disruptive and will raise emotive issues about the export of jobs. But access to our market for services will be just as important as the market for goods if we are to develop higher-valueadded jobs in poorer countries.
Several speakers have mentioned health and education and the part they have to play. From my involvement in the water industry, I have been struck by the crucial part that it plays in the health of developing countries. The provision of clean water to the tap and the ability to cope with the disposal of dirty water are a crucial foundation of the health of all societies.
Finally, developing countries need the power to borrow. That in some cases means an easing of capital controls in a careful way, but it also means responsible lending by the western world and an important role for the IMF but also for the private sector to try to resolve problems when things go wrong.
My view—I came to this conclusion having sat through and listened to a great deal of evidence, including some impressive witnesses—is that there is capacity to make progress on some issues. If we can do so, it should be possible to convince some of the doubters of the benefits of globalisation. Through that, we could achieve benefit to an even larger group of people and countries.
6.27 p.m.
Lord Elder: My Lords, it is appropriate to start by saying that the rather disparate—and rather argumentative, at that—group of people who constitute the Economic Affairs Committee would perhaps not have produced this substantive report or retained an ambitious programme for the future were it not for the role played by the chairman, the noble Lord, Lord Peston, who manages, despite provocation from us all, to keep his temper in check—at least most of the time.
The committee concluded that although almost all the elements of globalisation had been about for a long time, what was happening was a new phenomenon, not just the reworking of an old theme. Indeed, the change of pace and acceleration mean that, perhaps for the first time, not only do countries move forward at a
1380
quite unprecedented rate, but also that those who are not involved drop off the map in a way that has not happened before.
The evidence sessions on globalisation were absolutely fascinating. As the debate has shown, a full range of subjects was covered. Near the end of that debate, I want to concentrate on only a few of them. When we started off the whole process, if I had been asked on what we were likely to spend our time concentrating, it would probably have been the big institutions: the IMF, the World Bank and the World Trade Organisation. I started with the prejudice that they were all pretty grim. I ended up with the prejudice that at least one of them is pretty grim; one of them is perhaps not quite as bad; and that, rather surprisingly, the World Trade Organisation turns out to be OK.
I also ended up realising that one area to which we returned again and again, as has been the case in this debate, and on which I had not expected to spend as much time, was the issue of the poorest countries, sub-Saharan Africa in particular. We ended up in no doubt that, whatever the difficulties, the real problems of poverty in the world were much more the result of those countries being excluded from the process of globalisation than due to the process itself.
In that regard, we heard impressive evidence about the impact on the poorest countries of the agricultural support that we give in the West—in the EU, America and Japan. That has been much commented on in this debate. Both Mike Moore and Clare Short—I echo what my noble friend Lord Peston said about the contribution that she has made to international development over the years—when the latter was Secretary of State for International Development, were perhaps unsurprisingly outspoken. But their views were mirrored by the Chancellor and the Secretary of State for Trade and Industry, who said that developments such as the Farms Bill were not to be welcomed.
In the course of his evidence, Nick Stern gave an illustration of the sort of problems that the developing world faces when describing a series of impediments put in the way of a Mauritanian trader trying to sell camel cheese in the European Union. It would have been comic had it not been tragic. It culminated in a ludicrous decision that in the interests of hygiene it was only acceptable to have that cheese here if the camels could be proved to have been milked by a mechanical device. It was another case of the wealthy West ruthlessly protecting their own while denying by whatever means at their disposal the possibility of advance to a seriously poor region of the world.
There has been a good deal of talk about the need for further aid in the context of the present plight of many countries in sub-Saharan Africa. I do not doubt the need or urgency of that, but following all the evidence we received, I believe that to make a really fundamental difference, we must find a way of ensuring that the benefits of globalisation are available to these countries. That means that they must have a chance of exporting their food and textile produce. That in turn means that the grotesque imbalance

1381
between the support given to agricultural producers in the leading economies of the world and of the West, compared to those in the poorest countries, must be changed.
Whatever figures are used there is no real dispute about the scale of difference: whether it is the more than 2 dollars a day being paid to every cow in the European Union while over a billion people live on less than half of that a day; whether it is the total aid to farmers in the West being 350 billion dollars while total aid to the third world is one-seventh of that at 50 billion dollars; or whether it is the fact that the third world has to open up its markets while Western farmers continue to be protected behind very strong trade barriers. Whatever it is, it has to change.
In the face of that, aid can alleviate. However, it is not the long-term answer. The rhetoric of support to Africa will remain empty while that issue—by far the most difficult issue—remains unaddressed.
I was a little puzzled by the remark made by my noble and learned friend the Leader of the House in response to a question earlier today on the G8 Statement. When asked about the French initiative in Africa, he said that it was wrong to say the Government had not supported it but that the problem was that it did not go far enough. I have always had difficulty with the argument that says that because we want to take two steps forward, we absolutely must not take one. It has also always puzzled me that people do not appreciate what an enormously helpful thing a precedent is in this. Being able to say as far as the rest of the world is concerned, "but we already do it in Africa", would be an enormously powerful tool. I hope I misunderstood what the noble and learned Lord the leader of the House was saying, but that seemed to be the implication of his remark.
The great issue facing Africa is the loss of life associated with HIV and AIDS. There are firms in southern Africa where all of the workforce are HIV positive. What impact that has on an economy where productive labour is vital is almost too difficult to contemplate.
The latest moves to try to convince pharmaceutical companies to be more co-operative in providing drugs at a price that can be afforded is to be welcomed. It is certainly not enough.
There are many other issues regarding the labour market. There is a real tension here between not wishing to deny trained workers in the third world access to the Western job market while ensuring that the countries do not lose out from a loss of skills in which they have invested so much time and money.
In the West, and North too, there are difficulties. Often those who speak most forcefully for the liberalisation of trade and finance are markedly less enthusiastic when it is suggested that there should also be a liberalisation in the movement of people about the globe. That too should he a consequence of globalisation. The idea of linking aid in some way to the issue of compensation for the loss of trained and skilled workers has been raised by the committee. While I agree that impediments to the free movement of labour are not
1382
to be encouraged, it may be that the best way forward in a very imperfect world is pointed to in that. It certainly deserves further study.
My final comment relates to the new enthusiasm among TNCs for plans for corporate social responsibility. The Government's view is that a mix of voluntary and regulatory rules might be the best way forward. Perhaps because we were sent rather a lot of CSRs, I began to take the view that they all looked the same in glossiness and approach. I began to wonder whether they were all that useful. There is a danger that CSRs are just seen as something that must be done to appease the shareholders and are more gloss than substance. They must be real and if that takes an element of regulation, so be it.
I had a discussion outwith the committee with the representative of a tobacco company. They said they were happy with the response they had to their report. They were fulsome in the good relationship they had with their workers. However, they seemed unappreciative of the fact that reports of happy workforces do not mean that in producing a product which all medical opinion says kills a lot of the users, could be considered to be far from socially responsible. It struck me that in producing a corporate social responsibility report, it does not necessarily mean that the corporation is acting in socially responsible manner.
This report sets out the range of the problem and the extent of the challenge facing us all. The Government's response was supportive and I am very much aware that the real impact any one government can make is limited. The test of our commitment will be in the extent to which we are prepared to press for difficult changes in agricultural subsidies. Aid will he a necessary palliative, especially at a time of real crisis as now, but tougher decisions will have to be taken if we are to make a real difference. The fact that we know what to do does not make it any easier to do it.
6.36 p.m.
Lord Newby: My Lords, I too should like to begin by expressing my thanks to the noble Lord, Lord Peston, for the way in which he conducted this inquiry. I also thank Christine Salmon and our special advisers and other members of staff who served us so well. I also thank the remarkable range of witness whom we interrogated.
There was a surprising degree of agreement among the witnesses about the nature of globalisation. The differences were, as the noble Lord, Lord Burn, described it, about the nature of better globalisation rather than whether it existed or whether it should exist. No alternative was offered by any of the witnesses to the processes we describe as globalisation. There were differences about how to achieve it but not about the basic principles.
What is globalisation and how far is it qualitatively and quantitatively different? I am afraid I must disagree with the right reverend Prelate the Bishop of Chester about the extent to which this is a qualitatively different situation from previous periods. For example, it is tempting to say that when Sir Thomas More went to

1383
Bruges in 1514 to negotiate a trade agreement and found that the French were intransigent and it took longer than he expected, it meant he could see Erasmus and write Utopia and so in the end it all came right. To an extent that is how the WTO operates, although perhaps without the intellectual gloss. There are a number of ways in which the current world and the current process is fundamentally different.
First, the death of distance is a huge difference. The fact that from my desk I can send an e-mail to thousands of people in the world instantaneously, gives a different quality to the way in which we interact.
Secondly, the growth of world institutions is qualitatively different from any previous period. In Geneva, we are told by Gro Harlem Brundtland that for many of the world's poor, the biggest influences on their lives were not their domestic government but the interventions of the various international institutions. In my view, that is a wholly new phenomenon.
Thirdly, there is now a single ideological and economic framework which is broadly accepted by opinion formers and economic decision makers across the globe. The economic elite seem to agree about how to do things to an extraordinarily great extent. Whether it was the Russian industrialist we heard, the governor of the Central Bank of South Africa, or many of the other witnesses, there was a remarkable degree of agreement about how things should best be done. This agreement is found among graduates and new economic players across the globe and that again is new.
I would love to have time to discuss the effect of globalisation on culture with the noble Lord, Lord Parekh. There is, in many respects, a predominance of US culture, However, anyone who attended or listened to the BBC World Service's 70th birthday party and who heard Youssou N'dour, a world-class Senegalese band, in London, as well as music from Kabul, from India and from South America, could not claim that there was no cultural diversity and that technology was stifling it. It is altogether so, and we must be cautious about being too critical.
As many speakers said, the economic consequences of what we now describe as globalisation are, on balance, beneficial. There are, of course, huge costs. There have been huge costs here. Whole industries have been decimated by increased global competition. Since the Government came to power, 500,000 jobs in the manufacturing industry have gone, due, in large measure, to globalisation. Service sector jobs in call centres are being lost as a result of globalisation. We all have to bear costs, as well as benefits, but we see major changes in the biggest countries as a result of such progress.
In China, there has been growth of 8 per cent, 7.5 per cent and 10 per cent. China is now the biggest destination for foreign direct investment. It will be the world's largest car market in five years, and it is already the biggest mobile phone market. India, which
1384
we think of as being relatively sluggish, has seen growth of 6.5 per cent in the first quarter of this year. The software and call centre industry is booming, partly, they claim, because they have been able to move so quickly that the bureaucrats have not caught up with them. That is part of globalisation—they have been able to get on with it. The consequence is that there has been a re-drawing of the world economic map. The emergence of China and India, in particular, and of other countries in the Far East is analogous to the emergence of the United States in the 19th century as a new major economic power. There are major problems as well, as several witnesses pointed out.
As some of my fellow committee members said, we started with some serious concerns about the role of transnational corporations. In the course of the committee's work, they were reduced significantly, although they did not necessarily disappear altogether. We found that the argument about excessive power vis-à-vis governments and the argument about a race to the bottom were not sustainable to anything like the extent that we had expected. In a raft of ways—relating to human rights, corruption, HIV/AIDS, other health and safety issues or the education of staff—TNCs were often far ahead of local indigenous producers. They acted as they did not for altruistic reasons but for sound economic reasons. The NGOs deserve much of the credit for shining a spotlight on many of the unacceptable practices that the corporations followed, but it is wrong to think that they have not responded.
We disagreed about whether we should recommend moving towards triple bottom-line accounting. Should all companies be required to report on their social and environmental performance? Our disagreement has been reflected in our contributions to today's debate. I am a strong advocate of compulsory reporting in those areas. Although the best companies may maintain good standards and report on what they are doing, there is a major free-loader problem, even among the TNCs. If we believe that the way in which companies treat the environment, the way in which they treat their workers and the way in which they inter-act with local communities are important, we need to regulate, as in many other areas of social legislation. It is difficult, and we want to avoid stifling initiative and to avoid box ticking, but there is no alternative.
There are also great concerns about the role of the institutions. Again, we felt that the IMF and the World Bank—for the centre Left, the bad boys among the world economic institutions—had had a chequered history but were making substantial moves. Anybody who heard the evidence from Nick Stern simply could not sustain the kind of arguments about the World Bank that were commonplace a decade ago.
The WTO is in a slightly different category. The noble Lord, Lord Elder, is not alone in being a fan of the WTO, in some respects. The GATT and WTO process has had great success. Industrial tariffs have come down from 40 per cent to 4 per cent in the past 50 years. That has undoubtedly helped world trade.

1385
There are major problems, and they have been well aired in the debate. The scandal of the continuing agricultural subsidising by the EU and the US ran like a leitmotiv through all the evidence. We agreed strongly with those who wanted the subsidies withdrawn. That is not a shortcoming of the WTO itself; it is a shortcoming of the US and EU, who insist on maintaining the subsidies. The WTO is not imposing them.
The noble Earl, Lord Sandwich, raised the question of bias in the WTO against developing countries. Because of the resource problem, they do not have trade lawyers. That is undoubtedly an ongoing problem. The WTO itself attempts to address the problem, but the resources that they have at their disposal for that are limited. Although there has been some progress, there must be more.
There is a division of view on whether the GATT arrangements are a positive or negative development—an argument between the noble Earl, Lord Sandwich, and the noble Baroness, Lady Symons of Vernham Dean, as it were. The problems with GATT that have been highlighted by the World Development Movement and others are important. The Government believe that those difficulties are nowhere near as great as the World Development Movement alleges. There should be more dialogue between the two sides, if they are to come to a resolution. There is an issue about the pace and irreversibility of some of the provisions in GATT. Undoubtedly, the EU is in a stronger position than individual developing countries as regards negotiations about openness.
The other problem with globalisation that we grappled with was the question of losers. We did not spend much time on losers in the developed world—rightly, as they have other options—but we worried about the shameful poverty in sub-Saharan Africa, in particular. The evidence suggested that, although the number of people in abject poverty had fallen in the past decade, it was still unacceptably high. There is a huge concentration in sub-Saharan Africa. It was argued that 95 per cent of the abjectly poor—those living on a dollar a day or less—lived in sub-Saharan Africa.
Why is that the case? There has been too high a dependence on primary products in sub-Saharan Africa. I was particularly impressed by the evidence given by Niall FitzGerald, who said that, when deciding to invest, Unilever looked for four things. The first was political stability, and Africa does not do well on political stability. The second is good macroeconomic management. The third is attractive financial returns, and the fourth is a healthy, educated and skilled population. At a time when not only is AIDS ravaging Africa but malaria is killing 3,000 children a day—3,000 children a day—it is not surprising that many investors worry about risking their investments and their staff in Africa.
Incidentally, I absolutely agree with those noble Lords who pointed out the lack of progress with TRIPS and in getting the drug companies both to
1386
make a greater volume of drugs available at acceptable prices and to make a greater investment in research for those drugs that relate to diseases of the very poor.
However, there are sonic positive signs coming out of Africa. The NePAD process, the New Partnership for Africa's Development, by which the leaders of Africa have accepted that they must take responsibility for growth and development, rather than look to the West to solve all their problems, is a major cultural shift which is hugely to be welcomed.
The growth rate in quite a number of African countries—Botswana, Ghana, Tanzania and Zambia, and even in sub-Saharan Africa in recent years—is such that the situation is not all gloom.
To sum up, we found that globalisation was on balance a hugely positive process. There are many losers—far too many—and still far too many non-gainers. The key factors for improving the process involve all the players, not least the major economies.
Earlier today there was much discussion of the conclusions of the weekend's G8 meeting. We should remember that it is only just over a century ago that the European powers were fighting to carve up Africa for their own empire. The fact that they are now concentrating on famine relief, water and sanitation, health, financing development and dealing with debt is surely an advance that should be welcomed. Much more needs to be done and the pressure needs to be maintained.
In the debate today there has been a certain difference between the pessimists and the optimists, particularly in terms of inequality and the effects of globalisation on gainers and losers. As a result of my participation in the Committee's work, I have become more of an optimist.
6.51 p.m.
Lord Saatchi: My Lords, I join my noble and learned friend Lord Howe in saying that one has only to look at the volume of evidence from what my noble friend Lady O'Cathain called the "distinguished array" of witnesses—I think the noble Lord, Lord Newby, called it a remarkable range of witnesses—to see that the report alone is testimony to the rightness of what the noble Lord, Lord Desai, has said on many occasions. The noble Lord believes that it should be compulsory for our schools and universities to have available Select Committee reports from your Lordships' House, either to be read or, now, to be viewed on CD.
The noble Lord, Lord Barnett, was surely rightly impatient that the House should have the opportunity to debate the report, because it is so central to all our lives. As my noble friend Lady O'Cathain said, it is a thoughtful piece of work, and as my noble and learned friend Lord Howe said, it is a very well balanced piece of work. My noble friend Lord Griffiths said that it was one of the best reports he had ever seen in your Lordships' House, and I agree. It certainly is a tribute to the members of the committee, to their chairman, the noble Lord, Lord Peston, and to your Lordships' House itself.

1387
As the committee says in paragraph 55, and as the noble Lord, Lord Barnett, reminded us, globalisation is,
"a new departure in world affairs."
It is, as the noble Lord, Lord Peston, said, "a genuinely new phenomenon", as the noble Lord, Lord Newby, said, "fundamentally different", and, as the noble Lord, Lord Sheldon, put it, "a fundamental change".
I can certainly testify to that, because I can safely say that globalisation changed my life. When I first read the original Harvard Business Review article, in the 1970s, it was a startling revelation. It struck me as stark, simple, irrefutable logic, because it was, as the noble Lord, Lord Burns, said, the application to the whole planet of the logic of the first industrial revolution—economies of scale, mass production, specialisation and the division of labour.
Before the concept of globalisation took hold, there was the old idea of the country as a profit centre, with a country manager who, if he hit his profit target for his country, would receive a bonus. But then along came that article, which said that companies should and would evolve along a continuum from loose coordination to complete integration. I was particularly struck by its conclusion, which I have never forgotten. It said:
"Companies that adopt this method can literally pave over competitors who are still stuck in the old ways of doing things."
The clear injunction of that article was that if one does not do things globally someone else will. It determined that one should sell the same things in the same way everywhere, and so people have.
Today, 30 years later, nobody doubts the economic power of globalisation, but people share with one of the witnesses before the committee the view that the word has a "menacing ring". That is because there is, as my noble friend Lord Griffiths said, an inescapable moral dimension to the concept.
To assess that moral dimension we should, as I am told English law does, examine the motive of its proponents. What drives these companies? Is it greed? I do not think so; I think it is fear. In his famous book The Origin of Species, Charles Darwin noted the fierce competition between and within the species in nature. He observed, for example, that in birds the bones of the face, the curvature of the jaw, the number of ribs, the gape of the mouth, the length of the eyelids, the width of the nostrils, the size of the beak, the manner of flight and so on all varied remarkably. In what he called their "incessant struggle for survival" he described the process of "natural selection". Those with an advantage go forward. For the rest, extinction inevitably follows: the survival of the fittest.
The laws of Darwinism apply as inexorably and ruthlessly in commerce as they do in nature. That is why to oppose globalisation in economics is as futile as opposing Darwin in nature.
As politics follows economics, governments know this, and that means that they know that there is very little they can do about it. That may explain the
1388
anodyne response from our government that my noble friend Lady O'Cathain described. But, as the right reverend Prelate the Bishop of Chester said, that is surely a "deeply ambiguous triumph".
It is legitimate to ask, as the committee did and as many noble Lords have done today: does any good flow from this brutal market process?
Here I take my stand with Professor Lionel Robbins of the London School of Economics. Fifty years ago Robbins upheld the market as a "perpetual referendum" in which all vote pound by pound, day by day, between countless goods and services produced by unnumbered suppliers around the world, all competing in quality and price to satisfy their customers. And from that Darwinian struggle for survival better products and higher living standards emerge. "Benefits for all", I think the noble Lord, Lord Sheldon, said.
That is why I was very pleased and relieved to find the committee's conclusion, reached after reviewing all the issues. Despite what the noble Lord, Lord Barnett, and the noble Lord, Lord Newby, called the "shameful poverty" of many countries; despite the lack of education in many countries, which my noble friend Lady O'Cathain spoke of: despite the "exploitation" and "inequality" that the noble Earl, Lord Sandwich, referred to; despite the gap between rich and poor—I think my noble friend Lord Griffiths called it "the scar"; and despite the "grotesque imbalance" that the noble Lord, Lord Elton, described; despite all that, the committee still came to the conclusion, in paragraph 86, that,
"the opportunities created by globalisation outweigh the dangers".
On that note, it is important to question how globalisation and America have become entwined in the public mind. I think that it is because the concept of globalisation has its deep philosophical roots in a uniquely American view of the world. In his famous essay on President Franklin Roosevelt, Isaiah Berlin described what he called the chasm that divides America from Europe. It may explain why America has embraced globalisation, and why so many Europeans, in the words of the noble Earl, Lord Sandwich, are "so suspicious of it". I shall quote from the essay at some length. He said that the American vision,
"is larger and more generous; its thought transcends, despite the parochialism of its means of expression, the barriers of nationality and race and differences of outlook, in a big, sweeping, single view. It notices things rather than persons, and sees the world (those who saw it in this fashion in the nineteenth century were considered Utopian eccentrics) in terms of rich, infinitely mouldable raw material, waiting to be constructed and planned in order to satisfy a worldwide human craving for happiness or goodness or wisdom. And therefore, to it"—
the American vision—
"the differences and conflicts which divide Europeans in so violent a fashion must seem petty, irrational, and sordid; not worthy of self-respecting, morally conscious individuals and nations; ready, in fact, to be swept away in favour of a simpler and grander view of the powers and tasks of modern man".
To me, that world view is perhaps the greatest asset of the great American global corporations that dominate the economic world. It is also their greatest liability in the eyes of their critics.

1389
We must face up to the fact, as does the committee both fair and square in its report, that the result of globalisation is American domination of the economic world. Critics say that that means not competitive capitalism, which can be admired, but monopoly capitalism—the monopoly of America. For example, in its conclusions the committee finds that "better globalisation" means that,
"strengthened international governance is required".
Critics fear—and many members of the committee who have spoken in the debate reflected that view—that globalisation is shaking up all our institutions and has produced an entirely new version of capitalism, beyond the reach of national governments. Professor Bulmer-Thomas said as much in paragraph 153 of the report.
It is here that dislike of globalisation has merged with distaste for its chief exponent, America. There are now 37,600 Internet sites that deride American global capitalism. To the surprise of the noble Lord, Lord Burns, and as he said, anti-globalisation and anti-Americanism have become one; they have become the conspicuous feature of our age. Critics dislike the fact that globalisation has given America such a competitive advantage. America now accounts for seven of the top 10 investment banks, and eight of the top 10 companies. They disapprove of American unilateralism in foreign affairs. Hence French Foreign Minister Vedrine's expression "hyperpuissance"—beyond superpower—to describe the "hectoring hegemon".. America. As the noble Lord, Lord Parekh, indicated, critics also resent American cultural imperialism. Hollywood and the American media are said to be paving over precious national identities with a homogenised US version of life.
The critics follow Ken Tynan's injunction that we should not,
"sell our souls for a pot of message".
For them, anti-Americanism is a branch of intellectual anti-philistinism. All critics of globalisation link hands under the unlikely banner:
"Join the worldwide movement against globalisation".
Despite the fact that the US Government, very sadly—and, I would say, unwisely—declined to give evidence to the committee chaired by the noble Lord, Lord Peston, I was very pleased to see that the committee did not fall for the pat solutions of the corporate social responsibility movement, neither did my noble friend Lord Griffiths. Instead, as the noble Lord, Lord Newby, reminded us, the committee accepted that,
"often transnational corporations adopt standards higher than local businesses".
The committee report ends its splendid tour d'horizon on this subject on an optimistic note, as did Darwin. Charles Darwin is often thought of as a pessimist; but that is not the case at all. He said something most uplifting at the end of his book, which I quote:
1390
"All that we can do, is to keep steadily in mind that each organic being is striving to increase at a geometric rate; that each at some period of its life, during some season of the year, during each generation has to struggle for life. But the vigorous, the healthy and the happy always survive and multiply".
As the committee says in paragraph 81 of the report, many countries that have not been successful have failed to adapt to the globalised economy. The noble Lord, Lord Burns, echoed that sentiment today. As the noble Lord, Lord Peston, said at the beginning of this wonderful debate,
"That is the message".
So it is. The noble Lord, Lord Paul, seemed to accept the message on behalf of India. When the noble Lord, Lord McIntosh, responds for the Government, I hope that he will not be anodyne in his comments on the benefits of globalisation. As the committee said, the healthy and happy ones will be those who understand the power of globalisation and embrace it.
7.5 p.m.
Lord McIntosh of Haringey: My Lords, it may, or may not, be anodyne, but the Government's response to this excellent report is very clear. On virtually every recommendation and conclusion, other than that which is a search for information, the Government agree. Having said that, l could sit down at this point. However, your Lordships will not expect me to do so, because I have too much interest in the subject and too much concern for the issues raised in what the noble Lord, Lord Saatchi, rightly called a "wonderful" debate.
This is not just an economic issue. Indeed, it is also an emotional issue for all of us. One part of all of us is with the wise statesmen assembling at Evian, while another part is with the young idealists—and many less than idealists who gathered on the fringes at Annemasse, and also in Genoa, Seattle, and in many other places in the world. In many ways, these are the best of our young people; they are acting out of a profoundly-felt concern. The noble Lord, Lord Saatchi, is probably right: it is partly anti-Americanism and partly the fact that since the demise of the Soviet bloc there is only one major economic power in the world, a situation that may last for another 20 years until China catches up. Nevertheless, we are talking about profound emotional feelings, which we have to take into account.
I was fascinated by the process of thought described by the noble Lord, Lord Peston, in his opening speech. Clearly, the committee started off with a good deal of scepticism, but not about globalisation as such. Everyone agrees with the noble Lords, Lord Bartlett and Lord Parekh, that the question is not for or against. Everyone agrees with the noble Lords, Lord Griffiths and Lord Parekh, that globalisation is there and that the question is: how do we best manage it? It is not about that.
The issue with which the committee started its deliberations was scepticism about the organisations involved in globalisation—that is, scepticism about the International Monetary Fund, about the World Bank, and especially about the World Trade Organisation. However, as is clear from what the

1391
noble Lord, Lord Peston, and the noble Lord, Lord Newby, said, that scepticism diminished as the work of the committee progressed. I thought that the choice of three witnesses from whom to quote made by the noble Lord, Lord Peston, was most interesting. He chose, Noreena Hertz, Joseph Stiglitz and George Monbiot. I thought that that was probably harking back to his opening steps along the road to Damascus. But that is perhaps being unfair.
The committee must also be congratulated—or,perhaps, in this case, the usual channels ought to be congratulated—on the timing of the debate. It immediately followed the Leader of the House repeating the Prime Minister's Statement on the G8 summit at Evian. A great deal of the work at Evian is relevant to globalisation and to the subject matter of the committee's report. I shall highlight some of the commitments made which show that there is a will to meet the challenges of globalisation on the part of all countries: a new commitment to further work to develop the Chancellor of the Exchequer's proposal for an international finance facility, about which I shall comment in due course; the endorsement of the Finance Ministers' approach to strengthening global growth and addressing the causes of financial instability—that is not a subject of much debate, but I want to say something about it before I conclude—and a range of practical commitments to enhance sustainable development that were agreed at last year's meetings in Johannesburg and Monterrey.
In the chair's summary of the Evian summit there is a commitment to the delivery of Doha goals on schedule by the end of 2004 and a commitment to the results expected from Cancun. I hasten to say to the noble Earl, Lord Sandwich, and the noble Lord, Lord Newby, that that includes a commitment to dealing with the availability of medicinal drugs at a reasonable price in the third world.
The issues discussed at Evian are at the heart of much of this debate and much of the subject matter of the report. I turn to the international finance facility. I was particularly grateful to the noble Lord, Lord Griffiths, for his remarks. It is important that there should be a reliable source of funds for an international development financing facility that can leverage funds from international capital markets to meet the demand for large-scale assistance and to make it possible to achieve the millennium development goals earlier than would otherwise have been possible.
I believe that everyone except my noble friend Lord Parekh is agreed that the answer is not the Tobin tax. I understand why my noble friend had to leave; he has apologised to me. I am glad to see the noble Lord, Lord Skidelsky, in his place. In September 2001, Tobin said:
"The Tobin tax is in Europe now the focus of reform and protest movements. I have had nothing to do with them and am not informed of their platforms. I cannot control the use of the words 'Tobin Tax'. While I assume that most advocates mean well, I deplore the tactics of extremists. I am, like most economists, in favour of free trade and I welcome developmental capital investment in poor countries, both private and public".
1392
If that is not what the noble Earl, Lord Sandwich, calls a red herring laid to rest, I do not know what is.
The Chancellor's international finance facility—it must be recognised as his initiative, together with Clare Short as Secretary of State for International Development—is of great importance and considerable size. It would meet the 50 billion dollar financing gap by doubling aid from 50 billion dollars per year today to up to 100 billion dollars per year in the years up to 2015. It would provide an important opportunity for donor countries to improve the predictability and stability of aid to the poorest countries to enable them to invest in medium-term programmes such as the development of education—a question raised by the noble Lord, Lord Hylton, in the debate on the G8 Statement—and health systems.
We are making good progress and it is good to see that the international finance facility is in the chair's summary of the Evian summit. That leads me on to aid. It is important that the developed countries should be prepared to increase vitally needed funds to achieve the millennium development goals. It is true, as many speakers have said, that progress on the millennium development goals has been far from uniform. East Asia and the Pacific have seen a rapid reduction in poverty. In sub-Saharan Africa none of the targets is on track.
I accept much of what was said about the reasons for that. I was particularly impressed by the comments of the noble and learned Lord, Lord Howe, about the globalisation of law. I was interested to hear the points about effective financial institutions in the Czech Republic and Poland. But the noble Lord, Lord Vinson, made a point following Hernando de Soto about the need for recognition and securitisation of capital assets that exist but have never been counted. That is an important complementary consideration.
The noble Lord, Lord Barnett, almost criticised the Government for inadequate aid. This is the only party political point I shall make: the spending review 2002 increased our aid programme to 0.4 per cent of GDP by 2005-06, which is above the EU/Monterrey target of 0.39 per cent. It represents a growth in real terms of 8 per cent per year.
The noble Baroness, Lady O'Cathain, and the noble and learned Lord, Lord Howe, were right that we must accompany aid with support, not threats. We must provide incentives for countries to adopt suitable codes and standards. I hope the noble Baroness will be encouraged to know that 70 per cent of the reports on observance of codes and standards are now published. That is becoming more of a standard process.
In terms of amounts of money, aid is insignificant in comparison with trade and foreign direct investment. Those developing countries that have been more open and trade more in the world economy have seen faster growth. That is the fundamental theme of the report and of the World Bank research, which suggests that the elimination of harriers to merchandise in both industrialised and developing countries could result in welfare gains—it says here—from 250 billion US

1393
dollars to 620 billion US dollars annually, of which over one third would accrue to developing countries. Those figures are beyond my ken.
In agriculture alone, the tariffs and subsidies of advanced economies cost developing countries an estimated 20 billion to 30 billion dollars per year directly, offsetting the value of 40 to 60 per cent of total annual aid flows from rich to poor countries. So many speakers spoke about protectionism and, in particular, the common agricultural policy, that I lost count: certainly the right reverend Prelate the Bishop of Chester; my noble friend Lord Paul; the noble Earl, Lord Sandwich; the noble Lord, Lord Burns; and the noble and learned Lord, Lord Howe, among others. The notable exception was the noble Lord, Lord Vinson, who stands up gallantly against received opinion on the matter.
The noble Earl, Lord Sandwich, and my noble friend Lord Elder criticised the Government for not supporting the France/Africa trade initiative. There are doubts about it; it is not just that it does not go far enough, as the Leader of the House said earlier. There are fears that it would entrench rather than eliminate subsidies in other parts of the world and that it would make Africa in particular dependent on continued protection from other developing countries. We take the view that multilateral liberalisation is a better process.
I agree with much of what has been said about the progress on the Doha round. There have been missed deadlines on TRIPS, public health, special and differential treatment for developing countries—a point that I believe was made by the noble Lord, Lord Newby; perhaps not. G8 has reinforced world leaders' determination to see that we get back on track with Doha and continue with Cancun.
In the debate on the G8 Statement, the noble Lord, Lord Elton, asked me to answer his point about support for smaller countries being present and represented at WTO meetings. I am glad to be able to do that. Agreed at Doha was trade-related and technical assistance capacity building and, as he rightly pointed out, fulfilling the Government's undertaking in the White Paper published in 2000 to contribute £45 million to that process. Some 80 per cent of that has been committed. I can assure the noble Earl, Lord Sandwich, that capacity building does include presence at WTO meetings. Furthermore, at Evian the Action Plan on Trade declared that we shall deliver capacity building technical assistance to developing countries in need to help them participate fully in WTO negotiations, implement trade agreements and respond to the trade opportunities created in co-operation with other bilateral and multilateral donors; 1.7 billion US dollars has been provided in 2002, representing a 16 per cent increase over 2001.
In addition to trade in the traditional sense I shall make only a passing reference to private investment, which is certainly the engine of economic growth. Foreign direct investment is an important source of financing for investment in developing countries and
1394
provides a vehicle for the introduction of new technologies and skills. This forms part of the corporate social responsibility agenda. I understand the scepticism expressed by my noble friend Lord Elder and on the whole I agree with the noble Lord, Lord Newby, when he said that he was in favour of reporting, even though that reporting is not always as it might be. As my noble friend Lord Peston and the noble Baroness, Lady O'Cathain, pointed out, transnational corporations increasingly recognise that they should attempt to answer these types of concerns in engaging with initiatives such as the UN Global Compact and the Global Reporting Initiative. The Government have been supporting those initiatives.
I shall say a brief word in response to my noble friend Lord Paul on migration. He set out very well indeed the difficult balance to be struck between natural justice—the right to live wherever you want—and the injustice of' developing countries losing those whom they have trained at great expense. He was right to say that the answer lies in support by the developed countries for aid for education in the developing countries. Of course that is a theme of the International Finance Facility.
Finally, I want to say a few words about Financial stability, which was not a subject of debate but is one of concern both to myself and to the Treasury. The right reverend Prelate the Bishop of Chester recognised the fears that might be felt on that. We have done quite a lot on this. Since the Asian crisis of 1997–98, we have recognised the extent of the risks. The links between the economies of the region at the time led to a remarkably swift reversal of capital flows and stalled the most rapidly developing economies in the world. It forced the international community to rethink. As a result, transparency in international institutions and on domestic policy has become central to the management of the global economy and the international financial institutions are embarking on a process of self-examination, which was discussed today.
Yes, things have been getting better. Let us take the example of the crisis in Argentina. If it had taken place seven or eight years ago, it would have spread much more rapidly to countries such as Chile, Mexico and Brazil; it has not done so. That does not mean that there is not much more to do, but for individual countries the lessons to be learnt are to ensure sound policies and institutions, which are domestic issues. However, the international community can help by supporting adherence to internationally agreed standards and codes. To that end, almost 100 countries have now been assessed against at least some of those.
For institutions, the procedures require continuous improvement. I thought that the point made by the noble Lord, Lord Griffiths of Fforestfach, about IMF surveillance was extremely valid. As the noble Lord knows, it is one close to the heart of the Chancellor of the Exchequer. He thinks that the IMF should be as independent of' influence in surveillance as an independent central bank is in its implementation of monetary policy.

1395
I have reached the limit of what I tried to set for myself. I hope that I have responded to many of the individual points, but I hope that I have also reinforced the point the Government make in response to this excellent report—that we agree with its conclusions. The report has steered an intelligent course around the controversies and emotion produced by this issue. It has brought together an astonishingly wide range of high quality evidence on many facets of globalisation and I congratulate all those involved in its production.
7.25 p.m.
Lord Peston: My Lords, I shall not ruin what the noble Lord, Lord Saatchi, called a wonderful debate by going over the ground again. All the speeches were excellent and all shall have prizes.
On Question, Motion agreed to.

Fire Services Bill
Brought from the Commons; read a first time, and ordered to be printed.

Stability and Growth Pact (EUC Report)
7.26 p.m.
Lord Radice roseto move, That this House takes note of the report of the European Union Committee on the stability and growth pact (13th Report, HL Paper 72).
The noble Lord said: My Lords, as a convenience to the House, it has been agreed that this debate on the stability and growth pact should embrace at the same time the debate on the report of the Economic Affairs Select Committee on the Monetary Policy Committee and Recent Developments in Monetary Policy. This debate will be less wide-ranging and perhaps more mundane than that which preceded it, but it is still important.
My committee decided to hold an inquiry into the stability and growth pact for two main reasons. First, the pact was very much a topical issue, with the two largest member states in the European Union on the verge of breaching it. Secondly, the Commission had proposed reforms of the operation of the pact which we examine in detail in our report. We held eight hearings and received a considerable amount of written evidence. Furthermore, instead of going to see the Commission in Brussels, the Director-General of Economic Affairs, Klaus Regling, came to the House to give evidence to our committee, for which we thank him. I am grateful to all our witnesses, to our committee staff—especially our Clerk and to my distinguished colleagues for their participation and commitment.
The first issue to address is why have the stability and growth pact. The first point to make on this is that while monetary policy in the euro area has been unified and is now run by the European Central Bank, fiscal
1396
policy still remains a matter for national governments, which are therefore free to decide on their own national expenditures and revenues according to their national preferences.
However, the member states have also set up a framework of fiscal rules in order to co-ordinate their fiscal policies. The Maastricht Treaty lays out the 3 per cent budget deficit criterion and the 60 per cent debt ratio criterion. It was those rules which helped dramatically to improve the EU's fiscal balances during the 1990s.
The stability and growth pact, which was adopted at the Amsterdam European Council of June 1997, complements and strengthens the provisions of the Maastricht Treaty. Member states agreed to commit themselves to maintaining sound and sustainable government finances through the medium-term objective of,
"close to balance or in surplus".
They also agreed to a system of monitoring and early warning. I should mention here that though not a member of the euro-zone, the United Kingdom has signed up to the stability and growth pact and is subject to its rules. It cannot, however, be sanctioned for running an excessive deficit.
One of our witnesses argued that the EU's attempt at creating formal fiscal co-ordination should he abandoned forthwith and it should be left to market discipline to ensure the sustainability of member states' finances. The committee's view, however, is that market discipline alone cannot guarantee fiscal discipline and that formal co-ordination of national fiscal policies is required to guard against the risk of default and to deal with the so-called free rider problem in a monetary union where a profligate government run up large deficits without having to incur penalties.
Co-ordinated fiscal discipline can also help member states prepare for the economic effects of ageing populations while providing overall stability for the European Central Bank and for the markets themselves. However, despite the excellence of these general arguments for the stability and growth pact, it has been much criticised in the past two years as the world economy slowed down and several large member states, as I mentioned before, were in danger of breaching the rules of the pact.
Several witnesses argued that the stability pact itself stifles growth. The TUC told us that the pact had put too much emphasis on stability and not enough on growth, while another witness considered that the pact created a deflationary bias in the longer term. However, the European Commission did not accept that sustainable growth could be stimulated through deficits and quoted the examples of Germany, Japan and Portugal. The committee agreed that fiscal policy was not a good instrument for effecting long-term growth of the economy and that slow growth in Europe is due not to the stability and growth pact but rather to the member states' failure to implement structural reforms.

1397
We also believe that it is important that the stability and growth pact is not over-rigid. We do not suggest scrapping the pact or drawing up new rules for it, but we strongly recommend that the existing rules are interpreted more flexibly. Indeed, this is the underlying theme of our report. Ideally, we believe it is sensible for countries to aim for broadly balanced budgets so that the so-called automatic stabilisers can be brought to play across the economic cycle without the danger of member states breaching the 3 per cent deficit criterion. But it is important that this medium-term target of budgets being close to balance or in surplus should be measured flexibly in terms of a cyclically adjusted or underlying budget balance and not the current value. We are therefore pleased that this proposal has been accepted by the European Council.
We also welcome the Commission's proposal, adopted by the Council, to allow a small deviation from the close to balance or in surplus budget requirement for member states which, as in the case of the United Kingdom, have low underlying debt ratios and need to invest in physical and human capital. We welcome the new emphasis on low debt ratios.
For the most part, however, our witnesses were much more interested, not so much in the medium-range target of close to balance but in the 3 per cent upper limit and whether this should be relaxed. Our conclusion was that the 3 per cent nominal upper limit should be retained. However, when deciding how the pact is to be enforced, the Council should not treat the 3 per cent as an absolute. Of course the Maastricht Treaty already allows for breaches in exceptional circumstances. In addition, we are proposing that in cases where a country has breached the 3 per cent reference value, the Council's decision whether or not to implement the excessive deficit procedure and all that goes with it, laid down in the Maastricht Treaty, should take account of the member state's underlying economic situation, including its position in the economic cycle and possibly its level of debt.
Looking further afield, we need to ensure that the stability and growth pact works more symmetrically and that member states are discouraged from acting pro-cyclically in times of boom. This merely stores up trouble for the bad times as was seen in the case of Germany and France. We oppose, however, the idea of applying formal sanctions. That would be not only excessively bureaucratic but liable to bring the whole pact into disrepute. In general, we believe that peer pressure—not us, but member states—is the most effective enforcement mechanism available and that the sanction of fines is a nuclear deterrent only to be used, if at all, as a measure of absolute last resort.
The Council should remain the final arbiter of all the enforcement procedures, as part of this peer pressure process. However, we believe that the Commission should have the power to issue an early warning direct to member states rather than go through the Council as it does at present; otherwise there is a danger of Council members refusing to pass on early warnings to their peers, as happened in Germany and Portugal.
1398
To sum up our report, we are in favour of a stability and growth pact with budgetary deficit targets, but we believe that it should be interpreted in a common sense, flexible way.
I should like to say a few words about the Government's response to our report. We were grateful for the way in which the Financial Secretary to the Treasury answered our questions when she came before us, but we were disappointed by the Treasury's formal response to our report, which seemed to be an extreme version of straight bat-ism. However, I, for one, have been somewhat mollified by the further letter which the Paymaster-General sent to my noble friend Lord Grenfell in which she said that the Government will make clear their views in a study published alongside the assessment next Monday. I hope very much that they take account of our views in their paper.
Noble Lords will forgive me if I end on a personal note. Those who are against the United Kingdom joining the euro will no doubt see the stability and growth pact as yet another reason for being against the euro. As a supporter of British membership, I see it as a necessary part of the development of economic and monetary union, and I believe that any weaknesses can be and, indeed, are being removed. They certainly should not be used as an argument for delay in joining the euro. If further changes are required, we should be there, inside the euro, making the case for them. I beg to move.
Moved, That this House takes note of the report of the European Union Committee on the stability and growth pact (13th Report, HL Paper 72).—(Lord Radice.)
7.38 p.m.
Lord Barnett: My Lords, I feel I should start by saying, "Unaccustomed as I am to speaking on three reports in one day", as a number of us will be doing in this debate. Before I do, I have been asked by my noble friend Lord Peston to move formally the report standing in his name on the Order Paper, and I am happy to do that. I should also like to thank our two Clerks, Christine Salmon and Susan Michell, who have done an excellent job for us, as has Professor Mike Wickens, our special adviser.
I should like to say a few words on the stability and growth pact report that was introduced so ably by my noble friend Lord Radice before I come to our report on monetary policy matters. My noble friend Lord Radice referred to what the committee said in paragraphs 49, 80 and succeeding paragraphs. It supports the stability and growth pact in principle but recognises a substantial need for some flexibility in the way in which it operates. I agree strongly with the committee and with the Government's agreement with the committee as well. That is obviously a sensible way forward, and I hope that it will be followed. There is a crucial need for that kind of flexibility, rather than the rigidity of the present system.

1399
Like my noble friend Lord Radice, I have no doubt that the stability and growth pact will be used as a sixth economic test. The previous five are not worth considering, but the sixth would be even worse. It is not the place or time to consider whether we should be joining the euro, but it would be wrong to suggest that the stability and growth pact is a reason for not doing so. As my noble friend rightly said, if we are to make changes in the way that the stability and growth pact works, we are better inside than outside.
There is a clear need, as my noble friend Lord Radice and the committee points out, for greater coordination of fiscal policies throughout the euro-zone. Few people can doubt that. There is a need to provide a stability in which the European Central Bank can operate. Unfortunately—although the report does not say too much about that bank—the fact is that the bank needs to have much greater transparency and accountability if it is to be a successful central bank. We need that greater transparency and accountability if we are to know what the bank's actions or inactions are at any given time, and we do not know at the moment how the bank works.
Lord Radice: My Lords, the committee is carrying out an inquiry into the European Central Bank, so I hope that we may soon be able to help him on that as well.
Lord Barnett: My Lords, I am most grateful to my noble friend. I look forward to seeing the further report, which I am sure will be every bit as good as the present one.
The Financial Times, in an article on 13th May by someone called Paul de Grauwe, said that,
"instead of creating clarity, the ECB has managed to create confusion about its true intentions".
That is a very good comment about the way in which the European Central Bank operates.
As regards monetary policy, there has been a definition of a new inflation target. There was one in 1998, when it was to be at the most 2 per cent. Now the ECB tells us that inflation should not exceed 2 per cent in the medium term. There is obviously no point in denying that there is bound to be strong disagreement between 12 central bank governors on the European Central Bank. That is all the more reason why we need a strong UK voice on that bank.
At this point, I turn to an excellent report from our own committee—the Monetary Policy Committee report. It is my privilege and pleasure to congratulate the chairman of our committee, my noble friend Lord Peston, who has chaired all our deliberations so brilliantly, even if he sometimes refers to the wrong football team.
As an aside—and this is nothing to do with our report—we in the UK need to appreciate how low our inflation is on what is called "hiccup" terms. To help Hansard reporters, I should emphasise that I refer to HICP, which is sometimes called "hiccup". I checked on the findings of the Office for National Statistics on
1400
what the level of inflation would be if we adopted HICP, and discovered that it would be around 1.6 per cent over the 12 months to March 2003, as compared to 3 per cent on the RPIX, which is the figure that we normally use. That would have very substantial consequences for the UK economy generally.
I asked my noble friend Lord McIntosh about the matter a week or two ago, and he thought that it was all theoretical. However, as he must now be aware, the Chancellor indicated in his Budget speech that he is considering whether it might be sensible for us to switch to the HICP index, given that so many other countries are using that index—not only in Europe but elsewhere. I hope that my noble friend might be able to tell us in this debate how far the Chancellor has got in his study on switching the index. That would have enormously serious consequences for pensions and all kinds of other areas of our economy that are indexed. No doubt he will be able to tell us about that. The Chancellor said clearly in his Budget speech that he might consider the matter.
The Monetary Policy Committee of the Bank of England is much more transparent than that of the European Central Bank. Whatever one may think of the Bank of England's Monetary Policy Committee, no one can dispute its transparency and accountability, both in the excellent way in which it has responded to our reports and in the evidence for which we have asked it.
However, the Bank of England's committee can be compared to that of the European Central Bank. The Bank of England committee is obliged primarily to consider the inflation rate forecast that is given to it by the Chancellor of the Exchequer. In those famous three words, only "subject to that" should it consider other economic matters—namely, the Government's economic policies. Although we do not know precisely what the European Central Bank is doing, we are told that "as long as"—another three words—the other objectives do not interfere with price stability, it must consider those other matters. We do not know precisely what that bank is studying because it is not very transparent, but I hope that it may be in the not too distant future.
As paragraph 45 of our report makes clear,
"the time is ripe for some serious research into the operation of monetary policy in the past five years".
There have been substantial changes in how that works. I hope that someone in the Treasury agrees with us, although the Government say that they have already published papers from the Treasury. In practice, as we say in the report, we need a more independent piece of research. We on the committee do not have the resources to do that, but perhaps the Treasury would provide us with the resources and we could do it ourselves. However, on the understanding that the Treasury may not give us that, could an independent piece of research be done by someone else? I note that the Government agree with much in our report, and I hope that they will come to agree with that as well.
7.48 p.m.
Lord Northbrook: My Lords, I add my congratulations to the noble Lords, Lord Peston and Lord Radice, and their committees, for their interesting and stimulating reports. We are debating both reports together due, I understand, to the joint wishes of both chairmen, but two separate debates could well have been merited, as the reports cover very different issues.
In comparing the two reports, the success of the MPC since 1997 may be contrasted with the huge problems of the stability and growth pact. As a failure in the European Community's co-ordinated fiscal policy, it is matched by the ECB's lacklustre direction of monetary policy, which is causing major problems in countries such as Germany and Portugal. I look forward with great interest to the report of the noble Lord, Lord Radice, on the ECB. However, I should like to concentrate my remarks on the MPC report. Paragraph 14 states as the first conclusion:
"Although the operation of the MPC has been satisfactory so far, we conclude that a re-examination of its remit to include broader concerns than inflation alone might benefit the United Kingdom economy".
That is a very sensible conclusion. While I am not an economist—I declare an interest as a City fund manager—I have to be aware of broad economic trends.
I should like the committee to include in its remit broader concerns such as the effect of global disinflation on the UK economy. I believe that the UK economy is experiencing disinflationary conditions, as indeed is the global economy, and that those may well turn to deflationary conditions. Part of the reason is that in many areas of the economy there is surplus capacity and consequently intense competition. Generally speaking, companies find it very difficult to pass on cost increases, having little or no pricing power. The problem may seem esoteric when inflation RPIX is running at 3.1 per cent. However, I believe that that is due to exceptional factors such as higher house and oil prices—both of which, as the MPC itself has stated, should weaken over the next year, as stated also in paragraph 49 of the report—together with higher council tax.
The deflationary problem is in my view a fundamental long-term issue. Its examination would help the committee to have a more global outlook and to consider, for example, whether the problems relating to Japanese deflation are relevant to the UK economy or whether German economic disinflation problems will replicate themselves here. I therefore ask the Minister to use his influence to persuade the Chancellor to broaden the formulation of the MPC's remit to something similar to that of the Federal Reserve Bank of the United States—where, as stated in footnote 4 on page 6 of the report, the remit in the Humphrey-Hawkins Act of 1958 setting up the Federal Reserve is to,
"maintain long-run growth of the monetary and credit aggregates commensurate with the economy's long-run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates".
1402
Another important issue with regard to the MPC's remit, which does not seem to have been covered in the report, although it has been mentioned by the noble Lord, Lord Barnett, is the Chancellor's proposed change to the inflation measure from RPIX to the European HICP. This important change would remove in particular housing costs from the inflation figures. As I understand it—and luckily my figures agree with those of the noble Lord, Lord Barnett—that would cut the rate of inflation by 1.4 per cent per annum. However, if adopted, it could cut government payouts to index-linked bondholders and index-linked pensions. Will the Minister, to whom I have given prior notice of the question, both confirm that and say whether the MPC's inflation target will be adjusted as a consequence? Does the Minister agree that the change would also bring forward the timing of interest rate reductions since inflation would fall below the current target of 2.5 per cent? It is for that reason that I largely applaud its possible introduction.
The issue to which I now turn does not seem to be covered in the report but is still important—the accuracy of the M PC's forecasting record. For statistics on that I turn to the Bank of England's Inflation Report of May 2002. On page 53, table 3, we see that the MPC, between February 1998 and May 2001, overpredicted inflation one year ahead by 0.2 per cent and two years ahead by 0.5 per cent. With regard to annual GDP growth, it underpredicted this by 0.3 per cent one year ahead and 0.2 per cent two years ahead. As stated on the same page, the two-year ahead forecast error for inflation is smaller than that shown in the August 2001 Inflation Report, thus demonstrating that the MPC, by analysing its forecast errors, has improved its subsequent performance. The main conclusion of all this is that the MPC has done as good a job as could be expected in its forecasts.
The final area of the report on which I should like briefly to focus is the section on UK fiscal policy. The committee noted:
"We are impressed by the unanimity with which witnesses supported the view that much of the deterioration of the fiscal position is cyclical and that fiscal intervention is therefore not necessary at present. We note that it is extremely difficult to know what is and what is not cyclical and we hope to return to this topic in a later report".
The shadow Chancellor said in evidence to the committee:
"There was beginning to grow a suspicion that the length of the cycle would be determined by reference to the need to comply with the golden rule rather than the other way round".
It is that vagueness in fiscal policy that contrasts strongly with the disciplined approach of the MPC in monetary policy. I believe—this is my one political point—that that is where the Government's economic strategy is most at risk.
My final comment is to emphasise paragraph 3 of the report. It was a great pity that the Chancellor himself, even with good notice, was unable to appear before the committee to enlighten it on this matter. May I ask the Minister to try to persuade him to appear in the future?
7.57 p.m.
Lord Oakeshott of Seagrove Bay: My Lords, from these Benches and following the noble Lord, Lord Barnett, I thank the noble Lord, Lord Peston, for his indefatigable chairmanship of the committee. I also thank our two indispensable Clerks and our specialist adviser.
"The Government's macro-economic policy framework is based on the principles of transparency, responsibility and accountability…The Bank of England has operational independence to meet the Government's symmetrical inflation target".
I am quoting, of course, not from our objective evidence-based report but from page 3 of this year's Budget Red Book. So transparency, responsibility, accountability and independence are the buzzwords favoured by the Chancellor and the Treasury. Tonight I want to scrutinise one constitutional corner highlighted in our report where these admirable principles are conspicuous by their absence—in the appointment of members of the Monetary Policy Committee of the Bank of England. We on these Benches welcomed the Chancellor's Damascene conversion the weekend after polling day in 1997 to independence for the Bank in setting interest rates. However, he is still in my view a sinner who has only half repented. Independence for the Bank of England? "Yes!", says the Chancellor. But an independent or even an open appointments process to pick MPC members? "Perish the thought! Gordon Brown just appoints MPC members by the divine right of Chancellors as invented by the Bank of England Act 1998".
Our Select Committee and its predecessor, in each of the last three reports on the MPC, have rightly raised serious questions about the appointments process. As we put it this time round,
"we favour a more open process, conducted in accordance with a Code of Practice analogous to the Code of Practice for Public Appointments published by the Office of the Commission for Public Appointments. We favour such an approach, partly as a matter of principle and partly as a way of enlarging and deepening the pool of people who might he considered for membership. The Chancellor has always rejected our view on the matter".
We also said:
"Similar considerations apply to the appointment of staff of the Bank of England who become members of the MPC. It is difficult to discern any formal appointment procedures. As far as we can ascertain, posts are not advertised…We therefore recommend, as we have done consistently before, that members of the MPC should be recruited and appointed in a manner consistent with Nolan principles".
The independent interest rate setting policies worked well so far because the Chancellor has appointed high-quality independent economists to the MPC. However, a benevolent individual dictator does not justify dictatorship. We all agree that interest rates should be fixed by independent experts, not by a single politician. How, then, can it be right for Gordon Brown to pick all of those experts personally and in secret, decide whether to reappoint them to a second term, ignoring the Nolan principles and with no advertisement, no application process, no questions asked and no reasons given for his choices?
1404
My Commons colleagues Norman Lamb and Matthew Taylor established that the MPC is officially an internal sub-committee of the Bank, but do the Government seriously intend to hide behind that technicality? To put the point another way, just because a car has not crashed in the first six years with one careful driver at the wheel, does not prove that the design is right or the brakes are safe in other conditions. How would noble Lords opposite have viewed an MPC packed with nominees such as, for example, the noble Lords, Lord Lamont or Lord Barber?
How can we make appointments to the MPC, which wields great power over our economy, more open and democratic? One way, which was suggested to us by the shadow Chancellor and, I am bound to say, tried so far with more noise than light so far by the Commons Select Committee, is post-appointment public confirmation hearings for newly appointed MPC members. That ex post, second-guessing system is rather the worst of both worlds. If the committee, or a Joint Committee of both Houses, has the formal power of veto over the Chancellor's choice, some outstanding candidates may be deterred by having to jump through the hoop twice and Opposition members of the committee may well be tempted to attack the Chancellor through the nominee. However, if the committee has no veto, the exercise is still basically a sham.
If we really want a transparent and robust way of picking MPC members, why not set up an independent monetary policy appointments committee to do the job? It should not need fresh legislation. The Chancellor could announce that he was inviting it to make a single nomination or renomination of a sitting member if a vacancy arose, which he would accept and appoint to the MPC using his powers under the Bank of England Act.
A membership of nine works well for the MPC, so why should it not for such an appointments committee as well? One could have a representative of the Treasury; the Governor or another representative of the Bank of England; the chairman or other representative of the Commons Treasury Select Committee and the Lords Economic Affairs Committee; a distinguished businessman such as Niall Fitzgerald: and a trade unionist such as John Monks, or people of similar standing from the Court of the Bank. That would make six people so far. The other three members of such a committee should be former MPC members who have done the job already and know exactly what mix of expertise and temperament are needed. Most of us agree that the quality of independent MPC members has been uniformly high so far, even though their turnover seems excessive, with a short term of office of only three years and only one independent member out of eight reappointed so far. The Governor made his views clear in his evidence to our committee two years ago. He said:
"I think turnover is disruptive. In a sense to have an average outcome which is longer than the frequency of turnover we have had would be a positive thing. I do not know quite what one can do about it. frankly".

1405
Frankly, I do know what one can do about it—one can change the system, let members serve longer and stop Gordon Brown shuffling the MPC pack so often. I would far rather trust distinguished experts such as DeAnne Julius, John Vickers or Sushil Wadhwahi as part of a team nominating MPC members rather than a single Chancellor. Such a committee would shine out as a beacon of Bank of England independence. It would need to meet only once or twice a year and should have no problem in securing the most distinguished names to serve. It could even serve as a model of transparency and independence for future appointments to the European Central Bank.
The main Government argument that we have heard against a more open appointments process to the MPC is that it is "highly market sensitive". That is nonsense. The Chancellor told our predecessor committee that,
"there would be difficulties if it became known that a particular individual was under consideration because that would have an influence on people's perceptions of what might happen to interest rates".
Here I declare my interest as an investment manager. That knowledge could look sensitive only to someone who does not know how markets work. How in practice would one change one's investments to reflect the chance that one person might be appointed to join a committee of nine people in several months' time, working to a very clear policy remit, when so much else would be moving markets far more in the mean time? Sir Edward George, in his evidence to the Select Committee, did not think that the appointments which had been made to the MPC were market sensitive. He must be right.
I end with a brief word of congratulation for the noble Lord, Lord Radice, on his committee's report. We first met 20 years ago when I travelled with my then boss, Roy Jenkins, up to County Durham to help him in his by-election campaign. I am delighted that we are together again in this House. Although we may now sit on opposite Benches, we still march together in the cause of European unity, which is well served by sober, sensible reports of this kind. That is in welcome contrast to the latest crescendos and hysteria in the anti-European press. I support both the analysis and conclusions of this practical and timely report.
8.5 p.m.
Lord Burns: My Lords, my remarks will be directed to the report of the Economic Affairs Committee on the MPC. I, too, express my thanks to the noble Lord, Lord Peston, for his chairmanship of the committee.
I include myself unambiguously in the group of people who regard both the design of the MPC and the execution of the remit that it has been given as a success. That is not to say that it cannot be improved upon but for me it continues to score high marks.
Enormous credit for the successful operation of the MPC is due to the Governor of the Bank of England, Sir Edward George, and I will be very sorry to see him retire from his post at the end of the month, even if Lady George does not share my concern. I saw at close
1406
hand over a number of years the skill and determination with which he discharged his responsibilities. He will be a difficult act to follow but I also wish his successor, Mervyn King, well in the role. He has done an excellent job in establishing the high level of analytical support for the decisions of the committee in his present role. I am sure that he will also carry out his job as chairman of the MPC extremely well.
A couple of years ago, it was common to say that the economic background had been benign, with the implicit warning that somehow or other we should not be too enthusiastic about the performance of the MPC because it had had a following wind. In one respect, that remains true; that is, an environment of low world inflation undoubtedly makes it easier for the MPC to follow a low inflation remit. But in other respects the MPC has had to cope with increasingly difficult challenges, and we should recognise that. These include the poor macro-performance of the euro zone and Japan, the threat of deflation, the stock market bubble and its impact on credit markets. We have seen huge volatility in the euro-dollar exchange rate and there was the shocking blow of 9/11 and the recent war.
Faced with those challenges and shocks, I continue to take the view that the performance of the MPC has been impressive, although our economy is going through some strains and stresses. On balance, they are rather less than for many other economies.
Most of the issues raised in the committee's report have emerged in previous reports. The key issue remains whether it is right that the primary objective of monetary policy should be to seek an explicit and symmetrical inflation target. It is now more than 10 years since the regime of inflation targeting was introduced. Although there have been improvements on the way, including setting up the MPC, they are still recognisably the same arrangements today, and we now have more than 10 years of evidence, which is an unusually long period by the standards of most policy innovations.
The report raises the question whether this single-minded focus on inflation should remain the approach or whether the remit should be changed so that it includes broader concerns than inflation. I agree that this is a subject that needs to be kept under investigation. Few things are forever in economic policy. However, in my view the present targeting regime is working extremely well. I am far from persuaded of the need for a change, although I think that it is the right time to have another look at the issue.
The period since the introduction of the inflation target has seen the most impressive record of stability of output and inflation that most of us can recall. Output growth has been robust relative to other countries, and the inflation rate has been astonishingly close to its target. The experience of the past 10 years suggests that actions taken continually to meet the inflation rate will generally also be the actions needed to stabilise output at close to its trend growth rate. There is nothing by way of a conflict in those objectives.

1407
Fluctuations in the exchange rate are a problem for monetary policy and there is often a debate about how far interest rates should respond to a clear misalignment of exchange rates over and above the direct impact of the exchange rate on inflation. But the way in which it has been handled so far has worked reasonably well.
The noble Lord, Lord Northbrook, raised the general question of deflation. But the present symmetrical target means that the MPC would have to respond to any threat of deflation, so there is no need to take any other factors into account, other those already given. If the MPC has to take account of inflation falling below target every bit as seriously as it takes the threat of inflation going above target, it has built into it the safeguard against the type of threat of deflation that we have seen in some other countries. Therefore, I take the view that if the inflation target is not broke, I am not inclined to seek to fix it.
I can see that the approach could come under greater questioning if we had a shock that took the inflation rate significantly away from target. At some point we must face the fact that that is likely to happen. It is unlikely that we shall continue to have the same success in targeting the inflation rate as has been achieved in recent years. The history of the variances around the inflation rate suggests that there will be occasions when we shall see some figure errors.
At that stage there would be room for debate and a judgment on how quickly to bring inflation back to target. The MPC has been given discretion on how to do that, should the circumstance arise. In deciding the speed of response, it makes sense to have some regard to the wider economic environment. However, that is recognised in the Government's response and the drafting of the legislation. A more general objective for the MPC undoubtedly appeals to some members of the Economic Affairs Committee, but it is not something that I wish to support at this stage, although the matter needs to be kept under review.
As the noble Lord, Lord Oakeshott, has described, the Select Committee has again commented on a number of other issues—in particular, the question of appointments made to the MPC. I support the committee's conclusions, although given my experience and background, noble Lords will not be surprised if I say that I fully understand why the Chancellor wishes to maintain a substantial degree of control over the process. I have a certain amount of sympathy for him. After all, he has a high degree of interest in good appointments of members who will discharge their remit with skill. He has decided to delegate those powers, and not surprisingly he thinks that he should be given quite a lot of weight in the appointments to the MPC. I can understand why he does not want a lot of embarrassing speculation in the newspapers about how the process might work.
Nevertheless, given the sympathy that I have for his position, it puzzles me why the Chancellor wants to make a stand on this issue. given the emphasis elsewhere on transparency and openness. As the noble Lord, Lord Oakeshott, said, the arguments against
1408
impress no one. I could not possibly use the sort of language used by the noble Lord, Lord Oakeshott, about this, but I am wholly unpersuaded by the arguments on market sensitivity. I should be surprised to discover any significant market effect from the news that one member was stepping down, that there was a vacancy and that the Treasury were seeking a replacement in the period ahead. Indeed, I suggest that here there are the makings of a small research study using conventional techniques to see whether any past changes to the MPC have brought about any market movements at all and what their scale has been. We might then hear rather less about its defence for the present arrangements.
The issue of the length of term and whether to have re-appointment is a further issue, which we have previously discussed. It arises in particular when we have the opaque method of appointment. There seems to be widespread agreement outside the Treasury that members' terms should be longer and that there should be renewal only very rarely. So far we have seen a heavy turnover of members of the committee, and, so far, only one has been reappointed. But what are the criteria for reappointment? Why are some people reappointed and not others? Why do some have to be silenced as to whether or not they would have liked reappointment? What does it say about the independence of members? Again, it seems quite extraordinary that we should be seeing stubbornness on this issue in an environment that has otherwise worked well.
The report touches on the issue of fiscal policy. If we had been updating the report. this is one area where opinion may have moved on a little from February. I think that there is no doubt now about the deterioration of public finances. The main issue is how far this deterioration is a function of the cycle and how far it reflects a deterioration in the underlying budget balance. And, of course, there is the implied question of how far the fiscal situation will deteriorate further.
I have two concerns. The first is that the underlying growth of the economy is less than the Government assume and that there is rather less spare capacity than judged. That means in turn that the growth rate in the next year or two might be less than suggested. Secondly, a larger part of the boom in taxes in the late 1990s was cyclical and the underlying level of tax collection is less than projected.
Taken together, the prospects for growth could be weaker; and for the budget balance much worse than hoped on a sustainable basis. In turn. that could pose challenges for monetary policy.
Finally, I want to touch on one subject that our committee did not dare mention: the implication for the remit of the MPC of the Government's policy towards the euro. Clearly, we cannot say much about this today as we do not yet know the results of the Treasury's tests, although we do not have very long to wait to see them. It is not difficult to see that if the Government embarked on a clear strategy to join the euro at some point in the future and wanted to direct policies towards being in a position to join, it could

1409
have some implications for the remit. At its simplest that might mean a change in the measure of inflation to be targeted to the harmonised index, as described earlier by the noble Lord, Lord Barnett, and at which the Chancellor hinted in his Budget speech.
The issue at its most complex could mean giving some weight in monetary policy decisions to the need for greater alignment between the UK economy and the European economy to put us into a position to join. Maybe this could also be the subject for another day, or it could be taken as part of the proposed investigation in the design of our remit.
8.17 p.m.
Lord Sheldon: My Lords, I want to speak mainly on the report of the committee on the stability and growth pact. There are serious matters that have been mentioned in the report of the Select Committee on Economic Affairs on monetary policy. In paragraph 41 it states that,
"there are substantial imbalances in the economy at present".
These are important and serious matters. They are,
"the imbalance between consumer spending and investment: rising house prices, and the attendant rise in mortgage equity withdrawal; and the trade balance and current account deficit".
It goes on to state:
"In relation to these imbalances in the economy we consider that some intervention in the future may be necessary".
The committee was right to flag up that issue; it is most important.
So far as the stability and growth pact is concerned, I must offer my good wishes to my noble friend Lord Radice, who very ably chaired the committee which produced a valuable report. The concept of the stability and growth pact was obviously necessary. The problem is that the present circumstances are not the ones envisaged when the pact was originally introduced. The pact is inflexible and changes need to be made. The most immediate and urgent problem is that the pact presumed a world where inflation was the dragon. It did not consider that whereas inflation can be a most serious problem—we understand that—it may not be the greatest economic problem at all times and in all circumstances.
The question we must ask is: what are the basic rules and how can they be improved? The stability and growth pact cannot be seen in isolation. It is one part of an increasingly complex process of co-ordinating policies. Since complete integration is unacceptable we have to devise means of making the stability and growth pact more workable.
Member states are free to structure the expenditure and revenue side of their budgets according to their own national preferences. We know that. But, subject to that, member states have agreed a framework in the pact for the co-ordination of fiscal policy—as mentioned by my noble friend when introducing the debate—with a view to maintaining sound public finances. We welcome that and we want to see how it develops. In particular the pact imposes tight limits on government deficits.
1410
Once the deficit of a member state goes above 3 per cent of the gross domestic product the Council must judge that the country has an excessive deficit unless the breach is due to exceptional circumstances, is temporary and the deficit remains close to the reference value. The regulation spells out what is meant by exceptional and temporary. That shows when the 3 per cent limit may be exceeded. The Commission has to apply tighter rules than the Council for qualifying the deficit over the reference value as exceptional. As a rule a deficit is automatically considered exceptional by the Commission if output falls by at least 2 per cent of GDP in the year in question. In addition, the Council may consider a deficit to be exceptional if output falls by between 0.75 per cent and 2 per cent.
The committee heard four main reasons why the stability and growth pact is needed. First, the overarching reason is that the performance and management of national economies in the European Union are a matter of common interest for the Community. Secondly, an important macroeconomic manifestation of the common interest is that the effect of public borrowing by one economy in the euro-zone may spill over onto other members of the euro-zone and there may be what is known as the "free rider problem". Thirdly, in extreme circumstances a heavily indebted member of the euro-zone might default on its debt, imposing costs on all the euro-zone members. Fourthly, low public debt would better enable member states to prepare for the increasing public pension obligations to ageing populations. That is a most serious matter to which I shall return.
There have been other important developments around the pact. For example, in the Amsterdam resolution the member states committed themselves to the medium-term target of achieving budgets that are close to balance or in surplus. Yet neither the resolution nor any of the other legal instruments of the pact specify the date by which member states must achieve that target of a balanced budget. It has been pointed out that one benefit of the stability and growth pact was that it prepared national budgets for the threatening time-bomb of an ageing population. So far as the time-bomb is concerned, there is the politically very difficult solution of dealing with it by raising the pensionable age, or more practically, having a range of retirement ages.
That is one of the most important economic consequences of an ageing population that is going to pursue the economic arguments over a long period ahead. We only have to see what is happening now in France to see the major problems that apply in many countries. Even in Britain we are not exceptional. We have our problems which are fortunately far less than those of many other countries.
I should mention the need to keep down the level of debt in the European Union in order to anticipate the burden on public finances and the consequences for public services of an ageing population. For the European Central Bank, that was the basic long-term justification of the stability and growth pact. The bank held that sticking to the pact might over time, maybe decades—because it takes take a very long view—create

1411
the room in budgets to cope with the costs of the ageing of the population which are expected to rise over a 30-year period by something in the neighbourhood of between 5 per cent and 6 per cent of GDP. Those are vast sums of money. So the question is: what realistic penalties can we impose on a country that is not meeting its obligations? Are fines really realistic? If a country were, in effect, found guilty and therefore fined, we have only to think of the political effects that that would produce. It is foolish to establish penalties that will never be used, and I cannot see those penalties being used. So we must consider the matter differently.
Much of the reasoning about the stability and growth pact was based on the over-arching importance of dealing with inflation. That situation has now changed and, as I said, deflation is appearing as a threat—perhaps not for very long. It is nevertheless a threat that must be dealt with. We should not be prepared to accept the decline of the standard of living of peoples all over Europe as the result of getting that judgment wrong. That is one further reason why a more flexible arrangement for the stability and growth pact is now required. My noble friend Lord Radice, who dealt with the matter, is fully aware of the problems that must be faced in the years to come.
8.26 p.m.
Lord St John of Bletso: My Lords, in my short contribution to the debate, I shall focus my remarks on the report of Sub-Committee A on the stability and growth pact. I join in thanking the noble Lord, Lord Radice, for his able chairmanship of our subcommittee. I should declare an interest as a consultant to Merrill Lynch because my personal interests were not declared in the report.
I fear that I differ somewhat in my views on the stability and growth pact from our chairman. Although I am broadly in favour of our joining the single currency when the time is right, I believe that the stability and growth pact is deeply flawed. In fact, I am tempted to call it the stagnation and instability pact. The economic reality is that when growth slows, deficits invariably rise and having to tighten fiscal policy often proves totally counter-productive. In my opinion, excessive deficits should be measured after adjusting for the economic cycle, to allow for the full use of automatic stabilisers in upswings and in recessions. As currently formulated, the pact is far too rigid—a common theme of our report.
Several commentators believe that the pact has been dead for some time and cannot be revived. Although the committee called for reform of the stability pact, my personal opinion is that the pact should be torn up and completely new fiscal rules drawn up. The noble Lord, Lord Barnett, mentioned an article in the Financial Times in May; I refer to the lead article on 7th May headed:
"Patching the pact—The EU should start afresh for stability and growth".
1412
The central theme of the article was that for every member country, the overriding principle for budgetary control should be to maintain a sustainable debt position.
It is well known that the pact is a political agreement, depending on the willingness of countries to co-operate with the Commission and the Council. Unfortunately, the pact has had a long history of being disregarded for political reasons. It is ironic that France and Germany, who refused to support the military campaign in Iraq, have been allowed to blame their massive budget deficits this year on the war, even though they did not take part. I noted the recent concession by Pedro Solbes, the EU Commissioner for Economic and Monetary Affairs, that the war on Iraq would be deemed an exceptional situation, allowing for short-term breaches of the deficit limits.
Against a backdrop of the severe economic downturn in most of Europe and the recent sharp rise in the euro, the credibility of the pact was severely damaged by the recent announcements by Germany and France that they were abandoning their efforts to balance their budgets by 2006. It appears highly probable that Italy will soon join Germany, France and Portugal in a growing group of countries in breach of the pact's 3 per cent budget deficit limit.
For the pact to have any chance of regaining any credibility, there needs to be far more flexibility. In that regard, I support the main recommendation of our report that the target of being close to balance or in surplus should be measured in terms of the cyclically adjusted budget balance. Members that have low levels of underlying debt should be allowed a small deviation from this target. Each member country's level of borrowing should depend on their initial level of debt. In other words, the lower their debt the less concern there should be about their maintaining budget balance in the medium term.
The noble Lord, Lord Sheldon, spoke on the ageing population in Europe. I understand that 23 per cent of the population in Europe is above the age of 60. With the increasing percentage of ageing population across Europe, future liabilities of governments, particularly from pension promises, need to be included in any assessment of budgetary solvency.
I tend to agree with the proposal of Professor Artis and Christopher Allsopp, in their recent edition of the Oxford Review of Economic Policy, that euro-zone governments should set their own tax spending rules with Brussels simply policing the framework. They call for a looser but still constraining form of fiscal agreement among the member countries.
Even though Eurostat, the statistical office of the European communities, is in charge of providing the actual statistical data to be used for the implementation of the excessive deficit procedure on behalf of the Commission, I have several concerns as to the quality and the accuracy of several governments' accounts.
Some national statistical institutes have scarce resources to compile the government's accounts and are not immune from political pressures. Countries must convince outsiders that their accounts give a true

1413
and fair view of their obligations. There is a suspicion that some countries manipulate their figures with off-sheet financing.
Given that monetary policy is effectively blocked for dealing with a country's specific shocks, this points to an increasing burden on national fiscal policy to offset and remedy such shocks. For example, Germany is faced now with the problems in its banking system and cannot react with its easing of monetary policy. As we know, this is entirely the remit of the European Central Bank.
Under the stability and growth pact, it currently has to do the converse and tighten fiscal policy, which is effectively strangling any chance of rekindling economic growth in that country. Surely the solution is to allow more of the burden of the adjustment to fall on fiscal policy in Germany, which needs to be more flexible.
It is apparent that if the United Kingdom were now to be in the single currency with the current stability and growth pact, it is highly improbable that our government would have been able to embark on their aggressive programme of raising public expenditure and improving public services.
A central theme in our questioning of witnesses was that of enforcement of the pact. It was generally agreed that fines would not be a satisfactory penalty but that the threat of such fines should remain. There is no doubt—and the noble Lord, Lord Radice, has mentioned this—that peer pressure, not from the House of Lords, but from other member states, is the most effective enforcement mechanism available in the pact.
There is no doubt that the inadequacies of the stability and growth pact, as well as the lack of transparency of the European Central Bank, present a real barrier to the UK joining the single currency right now. We will hear more about this from the Chancellor when he makes his speech next week.
Although I support the co-ordination of national fiscal policies throughout the European Union, so as to maintain sound public finances, market discipline alone cannot be guaranteed to ensure the sustainability of public finances. The maintenance of a sustainable position of debt and effective measures of enforcement are critical. For the European Union to formulate a new set of budgetary rules, a new treaty and new attitudes would be needed. Without both of those, as the lead article in the Financial Times of 7th March said,
"The Euro Zone is doomed to annual damaging fiscal squabbles just as debilitating as those of the past couple of years".
Finally, I again thank the noble Lord, Lord Radice, for his able stewardship of the sub-committee and of the report. I should mention our specialist adviser, Professor John Driffill, and our extremely able Clerk, Dr Richard McLean. It was gratifying to see that, at long last, our report made some headway in the broadsheets. It is always a concern that many of the great reports produced by your Lordships get such scant public exposure.
8.36 p.m.
Lord Lea of Crondall: My Lords, I welcome the innovative decision to put the two reports together. Incidentally, given the whole question of finding time for European Union debates in the Chamber, it is an innovation that, if successful—I think that it has been—could be extended, so that we could cover three or four cognate topics in one debate. That would have the additional advantage that we would not be addressing our own committee all the time. We should consider that. As several noble Lords, beginning with my noble friend Lord Radice, pointed out, this is the lull before the storm. As of Monday, we will have a vast number of documents—some 800 pages—to consider. I do not whether the Minister can comment, but I would like to know how we will debate that lot. We should give some thought to that.
Everything that can be said about the growth and stability pact has been said, but, as was once pointed out, not everyone has said it. I shall not repeat it all. In one sense, it is water under the bridge because the decisions have been made, for the moment. They were made in the European Council in March. Generally, we welcome what it did, but it has less scope for going further, if I can put it that way.
The matter must be left on the table for the reasons touched on by the noble Lord, Lord St John of Bletso. There is also the question of enlargement. I mention it not just because of the mantra that there will be more countries, but, if those countries are to start really to converge, there will be some odd statistical consequences in money terms. They will move from having less than 30 per cent of the current EU average GDP per head and could go in a few years to 60 per cent. That is not an unreasonable figure for countries beginning at a level below 30 per cent, which is, incidentally, far lower than that of the previous entrants—Greece, Spain and Portugal. Some of the growth rate numbers, deficit numbers and inflation rate numbers should be examined. That is also a good reason for having a growth and stability pact.
Some argued that we would open the floodgates and end up paying for Italian pensions or the problems in Germany. The euro has got off the ground precisely because it is clear that there is no question of paying for Italian pensions, as they say in the vernacular, even if it were the case that the markets, without the growth and stability pact, would have been able to say that people could borrow against a single European interest rate and the market would notice the national position against which they were borrowing. There is some truth in that. The fact is that in getting the euro off the ground we have been well served by some of the developments since the Maastricht Treaty, but life now has to move on.
The British position is rather two-edged in some respects. It is that in the euro-zone there are various deficiencies of economic policy and that the pact is not really sufficient to deal with them. Those countries have to pull up their socks before the euro-zone is allowed to join Britain in a wider European scheme. I hear my noble friend say "Fog in Channel"; that quip

1415
was the other way round too. They may be allowed to join Britain in the new euro-zone once they have pulled their socks up. This is part of the logic of many people in considering the debate.
I was intrigued that Robin Marris wrote in today's Financial Times:
"Arguments against UK entry into the euro-zone based on the Stability and Growth Pact are redundant. The pact reflects thinking of none other than Gordon Brown when in his early days in office he used to denounce Keynesianism. Yet the Treasury now complains in effect that the pact is not Keynesian enough."
The fact is that the four big European economies are now very similar. It may surprise some people to know that the latest GDP numbers at purchasing power parity are as follows: EU 100; Italy 105; Germany 104; UK 102; France 100. At a pub quiz night not many people would get that right. There is not a lot to choose between them.
The fact is that the Maastricht Treaty has worked remarkably well on the whole, but circumstances have been changing. We know that the main problem in one respect is the decision of Chancellor Kohl, though we understand the political reasons why he did it, to have the East German Lander come in at parity with West Germany. There is a huge burden, still, in trying to get the East German economy off the ground in a normal social market economy.
There was the paradox at that time, whose legacy we are still living with, that it was the Germans who were particularly adamant that we should not allow any free riders—hence the original conception of the stability and growth pact and the broadly 2 per cent inflation framework of the European Central Bank. All of this would require a big treaty change to fundamentally change the architecture. We are talking about adjustments to the interpretation of the pact. That is the exercise that we are involved in. Let us be clear that it is not another exercise, although after the Convention there will be another exercise.
Therefore, we reach the very clear conclusion, summarised in paragraph 163, that the "free-rider" problem was one of the overarching reasons for the pact. It would have been difficult to get the euro off the ground without that having been dealt with at that time.
I hope that we have now done enough to counter some of the very widespread nonsense about us paying for the Italian pensions, and so on—nonsense that has been generated by people who ought to know better. However, the British Government are to be congratulated on flagging-up the whole question of the economic effects of ageing. They produced the report entitled, Long-Term Public Finance, which points out that one way of securing the long-term sustainability of public finances is to pursue the comprehensive strategy to meet the challenges of ageing populations.
On the broader debate between the European growth and stability pact and the European Central Bank, which, as my noble friend pointed out, is the next project for Sub-Committee A, there is scope for
1416
looking more at the linkages between the role of what one might call the "fiscal policy side" and the monetary policy side. Is it not the case that we now have a reversal of traditional views on such matters and that it is the role of monetary policy to stimulate growth by cutting rates? Indeed, it is generally said: cut rates, stimulate growth. But fiscal policy, as in the growth and stability pact, can never do anything to stimulate growth; one can only, as it were, remove restrictions in that sense. A new consensus, as emerged in that respect, should perhaps be questioned.
Before I conclude, I should like to touch upon a matter raised initially by the noble Lord, Lord Barnett, and then picked up later by the noble Lord, Lord Northbrook. I refer to the Monetary Policy Committee. I, too, noticed the reference in paragraph 43 of the report to the question of the retail prices index. Tonight's debate was warmed up by reference to the potential move to the European harmonised index of consumer prices referred to by the Chancellor of the Exchequer in his Budget Speech. My reason for wanting to add a little to this debate is as follows. For several years I was a representative of the TUC on the Retail Prices Index Advisory Committee—not a very high-profile body, but an important one in its own way.
For many years, that committee made recommendations on any change in the RPI. Without fail, I do not know of an example where the government of the day—of either party—did not pick up the recommendations of the Retail Prices Index Advisory Committee, which was a committee of stakeholders that included statistical experts; namely, the Bank of England, the Treasury, and so on. Incidentally, that is why we now have the RPI alongside the RPIX in order to retain the mortgage interest in the RPI. Unlike some countries, we have never had any lack of confidence in the RPI. The TUC is currently worried about whether the RPI in some countries on the Continent is correct, but we have never faced that situation in Britain.
Ever since the First World War, when the cost of living committee was established to deal with the basic wage, there has always been confidence in our index. However, we are now told that there is to be a new index—namely, the European harmonised index—something which I believe to be inevitable. Side by side with that, the Chancellor has talked about regional indices that would be linked to pay bargaining.
Will my noble friend take on board very seriously, much more seriously than the rather brief—I was about to say "perfunctory"—replies that have been given to questions that I have raised on the matter hitherto, the danger of a collapse in confidence in the price index if changes are made without the fullest possible involvement of the stakeholders, as has, until recently, been axiomatic? I urge the Government to recognise the serious need to take that on board when addressing this important change that I believe is probably coming our way.
8.50 p.m.
Lord Peston: My Lords, I thank my noble friend Lord Barnett for taking from me the burden of introducing the Economic Affairs Committee report on the MPC and related matters. Like him, I am unused to debating three reports on the same day and 1 felt that introducing one was as much as I could cope with.
I follow the noble Lord, Lord Burns, in taking the opportunity to mark the retirement of Sir Edward George as Governor of the Bank of England. The MPC ipso facto has been a success and has set a world standard for the conduct of monetary policy. But that was not obviously the case a priori. Many of us, not least me, had doubts. Its success has been due in a large part to Sir Edward. He has assured himself a place in history for that reason if no other.
Again following the noble Lord, Lord Burns, I take the opportunity to welcome the new governor Mervyn King. The noble Lord, Lord Burns, did not point out that for the first time in history a world class economist is heading a central bank. That means that the Economic Affairs Committee is looking forward to interrogating him and the current MPC in the not too distant future.
I wish to comment on three topics on the Economic Affairs Committee report. The first is the need, as my noble friend Lord Barnett emphasised, to undertake a systematic study of how monetary policy has been conducted over the past five years—the George era, so to speak. If it is not undertaken by an independent academic body it is possible that your Lordships' committee might undertake the task subject to the resources being available, as my noble friend said. It has been put to me that we should carry out the job jointly with the Commons Treasury Committee, but sadly co-operation between the two Houses always seems more likely in theory than it ever turns out in practice.
Secondly, we reiterate—as did the noble Lord, Lord Oakeshott—our view that the method of appointment to the MPC is wrong and that a more formal Nolan-based approach is the right way. The Treasury's reasons for rejecting this—I put it far more mildly than the noble Lord, Lord Oakeshott are—simply unconvincing. Naturally I shall take seriously his suggestion about an appointments committee made up of the great and the good, but I have to tell him that all my instincts are against it. A committee that had me as a member, as he knows, simply would not work.
The Economic Affairs Committee had in mind that the Chancellor would continue to make the appointment, but using Nolan methods. I regard it as ridiculous to suggest that a committee of this kind would have its membership appointed by an outside body, to which the noble Lord, Lord Burns, seemed to allude.
Thirdly, 1 am surprised that no one else has raised the important reference at paragraph 41 of the EAC report to the imbalances in the economy. That is a large part of what we were on about. While agreeing
1418
that they are in part cyclical we have to note that they are not entirely self-adjusting. Yet—this is what puzzles me as an economist—they do not appear to be leading to any kind of crisis.
Lord Vinson: Yet.
Lord Peston: Not at all. Certainly the fall in sterling relative to the euro is not a crisis. Equally, while the fiscal position must be subject to constant scrutiny, even the most sceptical observer would not be inclined to call it critical. And somehow or other, although I do not understand how, in some way we are even getting through the fall in equity prices throughout the world without a calamity.
However, there is no room for complacency and I am confident that the MPC itself is alert to the dangers. However, as I have said, professionally I regard all the questions of imbalance as important but difficult to explain.
I turn now to the stability and growth pact. It is generally accepted that the conduct of fiscal policy should be rules-based, but should have a flexible element too. Economists differ on the right balance, but decision makers in the real and the financial sectors require some reassurance, first, on the medium to long-term fiscal stance being aimed at by the Government and, secondly, on how fiscal policy adjusts to short-term shocks. Although we may disagree on the precise detail, in broad terms we have got the balance right in this country. This does not mean that there is no room for argument on the nature of the cycle and how the fiscal position is to be measured, not least as to what counts as public expenditure and what is the true measure of the public sector's liabilities. But the debate here in our country is open and takes place between people who know reasonably what they differ on and who can also agree to differ.
The same cannot be said about the stability and growth pact. As my noble friend Lord Sheldon and other noble Lords have pointed out, it is set out too formalistically. It is interpreted even more rigidly. Above all, it is not subject to the same kind of critical scrutiny of our own fiscal and monetary arrangements. It fails especially on the criterion of transparency. In this regard one can simply contrast the scrutiny by the European Parliament with the scrutiny of the Treasury Select Committee, the scrutiny of your Lordships' Economic Affairs Committee, and the scrutiny now undertaken by Sub-Committee A of the European Union Committee.
Although I may disagree with one or two noble Lords, I have to say here that I believe, overall, policy has not been satisfactory. While the pact may have brought stability, as the noble Lord, Lord St John of Bletso, pointed out, it certainly has not been conducive to growth. Sub-Committee A received evidence from the TUC making it clear that that was its view and I have to tell noble Lords that it is also absolutely my view.

1419
Furthermore, the way in which the pact has been interpreted bodes ill for an expanded Union. The problem is not the one of a single interest rate and it is not the one of a single external value for the euro. It is that within such a desirable common monetary framework there must be more fiscal flexibility than at present. Within broader limits, countries must be regarded as the best judges of their own economic needs. I must add here that while I regard reform at the micro-economic market mechanism level as desirable, this, as a matter of fundamental economics, does not solve the macro-economic problem.
I am one of those who has always regarded what might be called the EMU problem, or EMU question, as one of balance. I have argued that, in my judgment, the balance favours EMU and our joining it. But I have never taken the view that those who see the balance the other way are either disreputable intellectually or idiots. I reserve that judgment for those who see that there is no downside and for those who see that there is no upside. Unfortunately, too many people do not have a balanced view.
I have to say that I would have joined at the outset. Despite not being privy to all the marvellous research documents that the Treasury has made available to the Cabinet and which I assume that we shall all be able to access early next week—I cannot wait for this vast amount of material, and of course our detailed scrutiny of it in your Lordships' House, which should not take more than around three weeks working all day—I would still join. Even if I could not see all the documents, I would still do so.
My only doubt, which arises as a consequence of our failure to join in the first place and our dithering since, is that by the time we do make up our minds to join, the stability and growth pact will be set in stone, as well as the way in which the ECB conducts monetary policy. It may be that some will then say that, as a result, joining would be disadvantageous. I would not go that far, but I can say that, were that to happen, we would have only ourselves to blame.
8.59 p.m.
Lord Taverne: My Lords, I read the report of the Economic Affairs Committee on the Monetary Policy Committee with interest. But if I may sound a note of dissent, however convenient it is to combine the debate on that with the debate on the stability and growth pact, I do not see much of a common theme between them. With the exception of the remarks made by the noble Lord, Lord Peston, it is interesting that most of those who have spoken did so about their own committee report and did not cross the border to the other field. I shall therefore speak about the stability and growth pact, except to say that I very much agree with the noble Lord, Lord Burns, that a single inflation target seems more sensible than having two targets of inflation and growth.
The stability and growth pact has been declared to be stupid. No less a person than the President of the Commission called it stupid. Many people have blamed
1420
it for the period of low growth and relatively high unemployment that we have seen in recent years inside the European Union. Some of those who have attacked it have been very eminent—the Financial Times, the noble Lords, Lord Peston and Lord St John of Bletso. Yet, to my surprise, after hearing the evidence of most of our witnesses, the general conclusion to which our committee came was "not guilty". It should be adapted, it should be made more flexible, but on the whole the report does not find that the stability and growth pact is to blame.
I think our report is very good, and I do not say that in a self-congratulatory fashion. It had a very able chairman and a very good Clerk. It is written extremely well, it is well argued and has a good logical flow.
Let me start with the background. On the face of it, there is a case to be made against the stability and growth pact. Contrary to what many people now state, over the past 20 years the European Union has strongly outperformed the United States. Despite the fact that it is now declared to be sclerotic, it has certainly outperformed the United States in terms of productivity growth and, over 20 years, generally in terms of unemployment. Even today, after a short period of much faster growth in the United States, productivity per hour worked is still higher in France, Germany, the Netherlands and Belgium, and is very close to it in a number of other EU countries. The only laggard is the United Kingdom itself.
That is against a background of a much more attractive form of capitalism. I greatly prefer the European form of social capitalism to what Professor John Kay has called the American business model. There is more security of employment, more consensus, fewer hours are worked, holidays are longer, there is far greater equality and not the same concern for financial engineering and maximising shareholder value. There is more investment and innovation, partly because there has been more security and much more intracompany innovation, a particularly strong feature of the German economy. However, the past five years has seen slow growth in Europe and high unemployment, particularly in Germany, which, after all, makes up something like one third of the total economy of the European Union.
I come back to the question of whether that is the fault of the stability and growth pact. Would we be better off without it? Our answer was no. Everyone agrees that it makes sense to have fiscal policy which is of common concern to all members of a monetary union. The noble Lord, Lord St John of Bletso, one of our witnesses, suggested that we should concentrate on debt, not on deficit, and that deficit was not important. This was very effectively answered by the evidence of a very impressive witness, Mr Klaus Regling of the European Commission. He said that,
"deficit is important for the conduct of monetary policy. When you look at the policy mix and what really affects the European Central Bank, it is the deficit. When they look at this year and see the economic situation, price developments, where the pressures are coming from, it is not so important whether a country has 40 per cent of GDP debt or 80; for the management of monetary policy this year what is really important is how big the deficits are".
He goes on to say:

1421
"Looking at it another way, even if a country has a very favourable debt situation, no ageing problem, no long-term sustainability problem, if it is a big country and it decides during a normal economic situation to all of a sudden shift from a surplus in the public finances of I per cent of GDP to a deficit of 2 per cent, this has an impact on monetary policy, on the policy mix".
That is a very powerful argument.
If we need to have rules, one obvious way is to have an economic government, but no one is ready for an economic government of Europe. That is not a realistic possibility, whatever the euro-sceptics say. But we need rules. This point was eloquently expressed in a question from the noble Lord, Lord Lea of Crondall, who said, "If we don't have rules, all that lot would spend all our money".
We cannot leave it to the market, either. That was put well in paragraph 46 of our report, which said that where previously—before there was monetary union—interest spreads,
"might have gone up by between 100 and 500 percentage points in reaction to fiscal policies that the market saw as profligate or unsustainable, today in the Eurozone the spreads were 'down to below 50 basis points,' which was 'not surprising' because of the absence in the Eurozone of exchange rate risk".
Therefore, we cannot simply leave it to the market. We must have rules.
Then it is said that the rules are much too tight and rigid. To some extent, that point was conceded in the committee, because we do call for a much more flexible approach. However, is 3 per cent really an unreasonable limit, especially if it is seen as a benchmark for the exercise of peer pressure rather than as an absolute limit? There was a good essay by Barry Eichengreen and Charles Wyplosz, which pointed out that only in exceptional circumstances were there budget deficits of more than 3 per cent in EU countries in the period since the war for more than one year. The evidence that we heard was that the 3 per cent limit—if people manage their fiscal policy sensibly—leaves plenty of room for the automatic stabilisers to work.
The problem faced by Germany and France is that they pursued pro-cyclical policies in boom years. The suggestion that there would be faster growth if they were only allowed to borrow much more has not been supported by most of our witnesses. The ideal mix is a much tighter fiscal policy and a loose monetary policy. The evidence that we heard was that Germany's position would be no better whether it had a deficit of 4 per cent or 5 per cent. The mantra is that Germany has been affected by interest rates that are too high, but historically interest rates are relatively low for Germany at present.
There is no great output gap in Germany, either, because wages are actually rising. It is difficult to know whether there is an output gap, as the Economic Affairs Committee also pointed out. However, there is no particular evidence that Germany's problems at the moment are caused by a big output gap, and that if it was only allowed to borrow more and expand by fiscal policy, its problems would be solved. The reasons our witnesses gave for Germany's problems were structural, and the legacy of reunion.
1422
In so far as the European Union needs structural change, it does not mean that we should adopt the American business model. The Netherlands has been as successful as almost any European country in reducing unemployment and improving economic growth. It has a much more successful record than this country, I am sorry to say. That has proved that if one combines a degree of flexibility and competition with the consensus model—sometimes known as the Polder rather than the Rhineland model—one can deliver economic success and not lose the many advantages of social capitalism.
In terms of longer term historical context, we have seen a seesaw between the United States and the European Union. There was a time when Europe felt that it was unable to compete with the United States. Many years ago, a hook entitled La Défi Americain was published and asked how we could meet the American challenge. Then it shifted the other way. I remember a speech by the late Lord Jenkins in the early 1970s, before he was Lord Jenkins, when he looked to the United States and saw gloom and Europe was the place of excitement, innovation and growth. "Westward look, the land is bleak-, I remember him saying.
Now, in the past few years, there has been an American success. Some of the gloss has come off that success. Their success has been partly an inflated share price bubble and partly inflated profit figures. Mr Robert Gordon has been a fairly effective critic of the so-called "new economic miracle" in the United States. They may face a lot of problems with the twin deficit. I am not going to make any forecasts. I will not predict whether the see-saw will tilt again the other way. However, suitably modified and flexibly interpreted, the findings of our committee were I think sensibly that the stability and growth pact was not something that would stop that happening.
9.11 p.m.
Lord Saatchi: My Lords, like the noble Lord, Lord Lea, but I am afraid unlike the noble Lord, Lord Taverne, I am grateful to the usual channels for the fact that we are debating these two subjects together. As the noble Lord, Lord Burns, said, it allows your Lordships' House to look at how the euro-zone rules may affect the MPC and UK monetary policy. So I begin by right away joining other noble Lords in congratulating all the members of both the committees, led by their two chairmen, the noble Lords, Lord Peston and Lord Radice, on both their most thorough, comprehensive and excellent reports. Both committees have upheld the high standards set for them and have demonstrated again, I hope for all to see, why your Lordships' House deserves its new role in the scrutiny of economic policy, as the Government have now recognised.
I begin with the MPC. We, like the committee and the noble Lord, Lord Burns, do not propose any immediate or major changes in either the remit or the composition of the MPC. We, like the committee, fully support the fact that the inflation target is a single target and that the approach to it is symmetrical in the

1423
sense that deviations below the target are treated in the same way as deviations above it. Having said that, there are three questions that I should like to put to the Minister about the report and the Government's response.
First, we think that the committee is perhaps a little modest in its definition of Parliament's role in MPC appointments. I should be interested in the Government's point of view. In the United States, the appointment of the chairman of the Federal Reserve is approved both by the banking, housing and urban affairs committees of the Senate and then by the Senate itself. So while not going anywhere near as far as the noble Lord, Lord Oakeshott, we do propose that the appointment of the Governor of the Bank of England, the Deputy Governor and members of the MPC should be approved by a joint committee of both Houses of Parliament. We think that that would help bolster their independence, make the process more transparent and increase the power of Parliament. I am sorry that the committee does not agree on that. I look forward, as I said, to the Minister's views.
Secondly, our MPC model of monetary policy relies on the single weapon of the short-term interest rate and the one target of 2.5 per cent inflation. I wonder whether the Minister thinks that that model—whatever the resulting definition, as the noble Lord, Lord Barnett. raised the question—adequately reflects the fact that the overall inflation rate is made up of the composite of two inflation rates. I am referring to public sector inflation and inflation in the rest of the economy, the composite of which gives the overall familiar national inflation rate which is targeted by the MPC. That might not matter very much when the two rates are similar, but as the Minister knows, there is now a remarkable gap between the two. It is interesting to ask what the policy implications would be if people were more aware of that. For example, an analysis of official data from the Office for National Statistics reveals that government expenditure on goods and services rose by 7.6 per cent in nominal terms in the first quarter of this year, compared with the first quarter of last year. The data estimates that the real inflation-adjusted increase in the volume of services provided was just 1.5 per cent. So the official figures imply that public sector inflation has now reached 6 per cent per year—up from 5.5 per cent in the previous quarter.
That raises some serious questions. If public sector inflation is 6 per cent and the total is 2 per cent, what does that make inflation in the private sector? Is it zero? Is it deflation? Apparently, shop prices fell by 0.1 per cent in April, which was the thirteenth monthly decline in a row. My noble friend Lord Northbrook referred to the new fears of deflation. That is my first concern and I would be interested in the Minister's view.
My second is that it means, insofar as I can calculate, that nearly £80 out of every £100 of taxpayer's money now being spent on schools, hospitals and other public services is being spent on higher salaries, benefits and administrative costs, with
1424
only £20 of every £100 going towards increasing the volume of services provided. Does the Minister agree that further scrutiny of the disparity in inflation rates between the public and private sector might be very interesting?
My third concern is that in its document, Reforming Britain's Economic and Financial Policy, the Government time and again praise the MPC for "acting in a proactive manner". Is it not at least curious that, on the one hand, the Government praise the flexibility accorded to Britain by the current MPC system, but that, on the other hand, say that they intend and want to eliminate that flexibility by joining the euro? Is it not a supreme irony that at the very moment when we reach unprecedented, historic, cross-party consensus on the framework for monetary policy, it is only the Conservative Party that is in favour of maintaining that framework?
It is not just the possibility of joining the euro that creates anxiety about the framework. The noble Lord, Lord Burns, drew our attention to that. Perhaps I may draw to your Lordships' attention the fact that the Convention on the Future of Europe raises the question before anything arises about joining the euro. It makes a clear injunction towards the co-ordination of economic policies, but I can find no echo of it in the Bank of England Act 1988. Indeed, the committee restates the familiar remit of the MPC on page 1 of its report, but neither there nor anywhere in the iconic Bank of England Act 1988 can I find any mention of the EU, of the objectives of the EU, of EU guidelines or of co-ordination with the EU. I would be interested to hear the Minister's response to that.
The mention of Europe brings us conveniently to the second report, on the stability and growth pact. I believe that after the great inflation of the 1970s, the priority of policymakers was, as Sam Brittan put it, "to lock the monetary cupboard" to prevent governments trying to expand too fast for short-term political advantage. And so it was, as the noble Lord, Lord Lea, said, that the Bundesbank made its great gift to the euro-zone—what economists called "a pre-nuptial contract written in blood"—the stability and growth pact. The committee's report and many noble Lords who have spoken support the need for some form of co-ordination of national policies to maintain public finances across the EU. The committees says on page 38, in its conclusions, which were supported by the noble Lords, Lord Radice, Lord Sheldon and Lord St John of Bletso:
"Market discipline alone cannot be guaranteed to ensure the sustainability of public finances".
As the noble Lord, Lord Taverne, said, we cannot leave it to the market. I believe that the thinking behind that conclusion is that excessive public borrowing always weakens a currency and that once a country is in the euro, it may be tempted to borrow and spend at everyone else's expense, raising interest rates for all. That is, as the noble Lord. Lord Sheldon said, the famous 'free-rider' problem. However, we have a disagreement about whose rules are to apply: ours or theirs. The Chancellor has set out his two fiscal rules, against which he says the performance of fiscal policy

1425
should be judged: the golden rule and the sustainable investment rule. Noble Lords are familiar with both of them. The Treasury believes that its model is better. I am not clear whose rules will prevail. I hope that the Minister can shed some light on that.
The committee does not approve of that rule-based approach, as the noble Lord, Lord St John, made clear. While agreeing that,
"the Commission's proposals provide member states with a useful aim and sound objective",
it concluded:
"They should be interpreted as guidelines rather than as rules".
As many noble Lords, including, I believe, the noble Lord, Lord Peston, have said, the mechanism operates too formalistically and it bodes ill for the euro-zone. The committee wants the rules to be interpreted in a flexible way, that:
"takes account of the particularities of each individual situation",
and which is,
"sensitive to the specific circumstances of each country".
Romano Prodi, the European Commission President, agrees with the committee that it needs to,
"implement the stability and growth pact in a more intelligent and forward-looking way".
Mr Francis Mer, the French Finance Minister, also agrees. If noble Lords will allow me, he said:
"Le pacte de stabilité Européen n'est pas inscrit sur le marbre".
The committee says:
"The Council should not treat the 3 per cent figure as an absolute limit".
It should, it says:
"take account of the underlying economic situation, including the Member State's position in the economic cycle and possibly its level of debt".
It goes on to say that it,
"should not be treated…as an enforceable rule, any breach of which would activate the excessive deficit procedure".
The noble Lord, Lord Barnett, referred to that as the crucial need for flexibility. As the noble Lord, Lord St John, said, the current Oxford Review of Economic Policy in the article by Allsopp and Artis, also condemned the SGP's emphasis on what it calls,
"the legalistic imposition of rigid rules with little economic justification".
To complete that happy consensus, the Government, too, welcome any move to a more country-specific interpretation of the pact, as it allows them to continue their programme of priority public investment in public services. In their response to the committee's report, the Government said, in paragraph 165, that they support a "prudent interpretation" of the SGP. So anxious were the Government to make sure that we get the message that they repeated the phrase "prudent interpretation" five times in their two-page response. Why is that? Only a mean-minded cynic would say that the Government's motive is that their own forecast for public debt, on which the committee rightly says there should be more emphasis, has shot up from £34 billion to £118 billion in 18 months.
1426
It is understandable that when people see those who are either in breach of the pact's rules or are about to be in breach of the rules, they wish to change things. To some people, that crumbling of the fiscal rules underlying the euro will lead to economic disaster. Others respond that in the current economic circumstances, a sustained period of public deficit is just what the euro-area needs. Either way, not everyone is impressed by the quality of the debate. The Economist, for one, said that the pact needs substantial reform,
"preferably to the point where it ceases to exist".
It describes the stability and growth pact—I am sorry to say this to the noble Lords, Lord Barnett and Lord Radice—as:
"The best argument against joining the euro".
9.25 p.m.
Lord McIntosh of Haringey: My Lords, I have the task, which was identified by the noble Lord, Lord Taverne, of trying to find a common theme between these two reports. I also have the much more pleasant task of doubly congratulating the chairmen, members and everybody who gave evidence or took part in the production of these two excellent reports.
The common theme that I look for is macro-economic stability in this country and in Europe through sound fiscal and economic policy delivering, as we believe it has, not only sustained economic growth but low unemployment.
That is the case in this country. Clearly, as the Budget has made clear, no country can remain immune to the effects of global uncertainty. As a result of the economic framework that the Government have put in place over the past six years, Britain is better placed than many of our competitors. We are better placed than in the past to withstand difficulties. We have no intention of being diverted from our priorities of investing in public services and encouraging enterprise for achieving full employment, tackling child and pensioner poverty to build a Britain of economic strength and social justice.
The strength of the UK's economy can be attributed to the sound fiscal and monetary frameworks in place, which ensure that fiscal policy plays its proper role by supporting monetary policy during this period of global economic weakness. It has certainly been tested in recent times. There has been a background of hesitant—to say the best—global recovery, stalled by continuing concerns around the world. But we are on track to meet the fiscal rules over the economic cycle to ensure that public finances are sustainable in the long term.
Specifically in terms relevant to the stability and growth pact, the average surplus on current budget is projected to be comfortably positive over the projection period, meeting the golden rule. Our net debt is set to stabilise at 34 per cent, which is well below the 40 per cent that is necessary to meet the sustainable investment rule. It is at the lowest level in the G7 and among the lowest in the EU.

1427
Clearly, we are cautious in our forecasts. The noble Lord, Lord Northbrook, raised that point, but I shall not read out tables of figures. But I am prepared to write to him to set out our forecast on the relevant criteria against the consensus. They are set out in table 2.4 of the Budget document, but I am happy to set them out in the terms in which he asked the question. The assumptions behind our public finances, as has been the case for a number of years now, are independently audited by the National Audit Office to provide a safety margin against unexpected events. The cautious assumption for equity prices, for example, rises only in line with GDP, locking in the recent falls rather than assuming that they will be reversed.
I turn to the European side of things and the stability and growth pact. There are assertions about the way in which the pact is being implied. I can best illustrate the situation by reading out the recommendations hot off the press from ECOFIN yesterday when it declared that France came within the situation of an excessive government deficit. The ECOFIN council recommended that the French authorities put an end to the present excessive deficit situation as rapidly as possible and by 2004 at the latest, in accordance with Article 4 of Council Regulation No. 1467/97. The council has established a deadline of 3rd October 2003 for the French Government to take appropriate actions to that end and expects the French authorities to achieve a significantly larger improvement in the cyclically adjusted deficit in 2003 than that currently planned. That gives credence to what was said about the way in which the cyclical adjustment has been taken into account in ECOFIN decisions. The council also expects France to limit the increase in the general government gross debt to GDP ratio in 2003.
In addition, the Council notes the commitment of the French authorities to ensure that the budgetary consolidation continues in the years after 2004 as reflected by the December 2002 update of the stability programme; namely, through a reduction in the cyclically adjusted budgetary deficit by at least 0.5 per cent GDP per year in order to move decisively towards the medium-term position of government finances close to balance or in surplus, and bring back the debt ratio to a declining path.
The Council notes the commitment of the French authorities to ensure a tighter control of expenditures in 2003. It welcomes the commitment of the French Government to achieve the pension reform already in process to secure the long-term sustainability of public finances. I have to say that that is slightly ironic in a week in which there is an immobilisation générale in France against the Felon project. Nevertheless, that is the way in which the stability and growth pact is being operated. It can be seen that it is by no means as rigid as has applied.
The Government firmly support the premise of a strong stability and growth pact which is founded on sensible fiscal policy co-ordination, as set out in the EU treaty. All speakers, whatever their view about the
1428
details of the stability and growth pact, have supported the policy for co-ordination of fiscal policy and for convergence. Even the noble Lord, Lord St John of Bletso, who was the most dramatic opponent of some of the provisions of the stability and growth pact, was in favour of co-ordination and convergence.
My noble friend Lord Radice and others talked about having the existing rules implemented more flexibly. That is not language the Government use. The noble Lord, Lord Saatchi, chooses to make fun of it, but our view is that a sensible fiscal policy coordination is consistent with the UK's prudent interpretation of the stability and growth pact, which takes into account the economic cycle, sustainability and the important role of public investment. That is what "prudent interpretation" means. It would lock in long-term fiscal discipline and sustainability, enhancing credibility while allowing the automatic stabilisers to smooth fluctuations in output and allowing appropriate increases in investment in public services.
Under those circumstances, that is a stability and growth pact we wish to support. The noble Lord, Lord Saatchi, asked how that relates to the UK fiscal rules. They cannot and should not be compared on a likefor-like basis. Their starting points are different, but their underlying ethos is common—securing and sustaining sound public finances. As the noble Lord said, we have the golden rule and the sustainable investment rule, but, consistent with a prudent interpretation of the stability and growth pact the Government's fiscal rules operating together have both allowed automatic stabilisers to operate fully over the economic cycle; they have contributed to macroeconomic stability: and they have allowed the Government to undertake much needed quality public investment while staying within the 3 per cent deficit limit.
I turn to the committee's report on monetary policy. We are grateful for the very wide degree of support from the committee for the operations of the independent Monetary Policy Committee. We were glad to have at least a modification of the views of such noble Lords as my noble friends Lord Barnett and Lord Peston, who were opposed to considerable elements of the Monetary Policy Committee when we debated the Bank of England Bill in 1998. After all, the Monetary Policy Committee continues to deliver RPIX inflation around the Government's target of 2.5 per cent with inflation expectations anchored close to the Government's target, having fallen from over 4 per cent in 1997. As the noble Lord, Lord Burns, said, this delivery has been going on for a period approaching 10 years, which is quite a long time in the life of an economy.
Long-term interest rates are around their lowest levels for over 35 years. That has reduced the Government's debt interest payments and freed up resources for investment in public services. Again there is a query about the inflation target. There are still those who would wish to go away from a single inflation target to more complex targets. As the noble

1429
Lord, Lord Northbrook, reminded us, that applied to the Federal Reserve Bank under the Humphrey-Hawkins Act. We do not take that view and I am glad to have the support of the noble Lord, Lord Burns. We think that inflation targets are clearly and easily understood. They make the monetary policy objective transparent, they make it possible for the public to monitor it and they provide an effective anchor for monetary policy and inflation expectations. As the committee discussed, those targets are a weighted average, but they are a weighted average between manufacturing and service inflation. They are certainly not a weighted average between the mythical public sector inflation, to which the noble Lord, Lord Saatchi, referred, and which I hoped that I had demolished for good in the past couple of weeks, and private sector inflation. It is clear that inflation has to be the right target.
I turn to the question of which measurement of inflation is used. The noble Lord, Lord Northbrook, and my noble friend Lord Barnett referred to this point. In the Budget Statement the Chancellor announced only that the Treasury would continue to examine the detailed implications of changing the inflation target to an HICP basis. The implications are being examined from a monetary policy perspective only. We have already made it clear that, for example, the basic state pension will rise each year by 2.5 per cent or by the September RPI, whichever is the higher. We have made it clear that social security benefits will rise in the normal way, and it is certainly true that gilts will continue to be treated in the current way because they are legally tied to RPI. There is no difficulty about having a different criterion for different purposes. Even in the euro-zone, where the European Central Bank uses HICP, the Greek and French governments use different measures for inflation indexed bonds. There is no problem about that. There is a review continuing of which I am not going to pre-empt the outcome, except to assure my noble friend Lord Lea that the review will involve discussions with stakeholders who are concerned, as he is, particularly with wage setting.
The noble Lord, Lord Northbrook, seemed to think that there is a conflict between the inflation target and the Government's objectives for growth and employment. I hope that the summary figures that I have given show that that is not the case. Price stability is a necessary condition to ensure sustainable growth and high employment. There is some evidence to suggest that high and variable inflation can damage growth and productivity. That evidence was fairly strong over a longer period in the 1960s and 1970s when I was in business on my own account. The framework is designed to ensure that price stability is
1430
the long-term objective of monetary policy. I have to say to the noble Lord, Lord Northbrook, that there is no evidence that it leads to low inflation—or certainly not to deflation.
The noble Lord, Lord Burns, and my noble friend Lord Peston are right that the target must explicitly recognise that external events and temporary shocks may hit the economy. The target does reflect that. The MPC will need to find the most appropriate way of responding to those shocks. It does that in case inflation moves more than one percentage point away from the target through the open letter system.
We have had a valuable debate. It has been inevitably polarised by the interests of those who have taken part, but I hope that I have been able to bring the debate into the context of the broader objectives of UK monetary policy, and to indicate in doing so my support for the work of the two committees.
Lord Radice: My Lords, at this time of night, I shall not make a "right of reply" speech—as noble Lords will be glad to hear. I thank noble Lords for their high-quality speeches. To my surprise, there was overlap between the two subjects—it was not always to my taste, but it was there. Above all, the arrangement allowed both reports to be debated, which might not have happened otherwise, so there was a severely practical reason for it. On the whole, the debate has been a success. I commend the Motion to the House.
On Question, Motion agreed to.

Monetary Policy
Lord Pestonrose to move, That this House takes note of the report of the Select Committee on Economic Affairs on The MPC and Recent Developments in Monetary Policy (2nd Report, HL Paper 66).
The noble Lord said: My Lords, despite having placed the burden on my noble friend Lord Barnett, it appears that I must beg to move as well. Just before doing so, I certainly strongly believe that the debate was worth while, and that conducting it jointly a fortiori was worth while—not least because otherwise, neither of us would have had a debate, but also because the two reports intermingled. I beg to move.
Moved, That this House takes note of the report of the Select Committee on Economic Affairs on The MPC and Recent Developments in Monetary Policy (2nd Report, HL Paper 66).—(Lord Peston).
On Question, Motion agreed to.
House adjourned at nineteen minutes before ten o'clock.

Official Report of the GrandCommittee on the

  Local Government Bill
  (Second Day)
  The Committee met at half past three of the clock.
  [The Deputy Chairman of Committees (Lord Haskel) in the Chair.]
  The Deputy Chairman of Committees (Lord Haskel): Perhaps I may remind noble Lords that except in one important respect our proceedings 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 a Grand Committee. Any issue on which agreement cannot be reached should he 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.
  Perhaps I may also remind noble Lords that it is not necessary to touch the microphones when speaking. The engineer in the corner will switch them on and off as required.
  Clause 10 [Non-money receipts]:
  Baroness Hanhammoved Amendment No. 42:
  Page 5, line 16, leave out paragraph (b).
  The noble Baroness said: In moving Amendment No. 42, I shall speak also to Clause 10 stand part. In our debate on the first day of Committee, I asked the Minister to clarify when a capital receipt was a capital receipt and when it was not. I believe that at the time he thought it a most uninvigorating question because it did not then receive a reply. But it was important. These clauses of the Bill are about just that. Because of their opaque nature, local authorities will be in considerable doubt as to what constitutes a capital receipt.
  In Clause 10 we come across the concept of a non-money receipt. It is not helpfully described in subsection (1)(b) as being where,
  "a local authority receives otherwise than in the form of money anything which, if received in that form, would be a capital receipt under that section".
  Presumably, the repayment of loans, the disposal of mortgage portfolios and payments made to redeem landlord's share of a payment, which are described in the draft regulations and which we discussed briefly on the first day in Committee, qualify as money receipts.
  GC182
  There are as yet no other references as to what receipts are, and certainly none which describe non-money receipts.
  So what do the Government have in mind in this context? A planning gain, for example? If that were to be one, there would be a considerable outcry as negotiated provisions are often crucial to a council achieving its strategic objective. It may be that that is not in the Government's mind, but it would he most helpful to have an answer.
  It is important that the Government clarify their intentions over this subsection and its meaning and I ask the Minister to do so today, otherwise, we will once again be left to consider the, so far, non-regulation.
  My comments on Clause 10 stand part continue the concerns I have outlined in the previous amendment regarding what are non-money receipts. However. this also gives me the opportunity to raise the question of why the Government feel it necessary to become embroiled in these matters, whatever they are.
  What, if any, abuses have taken place which have brought these non-money receipts into focus, and under what circumstances would the Government feel it necessary to use the powers under subsection (2)(a) and (b)? In particular, what is the purpose of the power in subsection (2)(b), which allows the Government to fix the trigger date for deciding,
  "when the deemed receipt is to be treated as taking place"?
  Do the provisions mean that matters such as, for example, a contribution made by local companies to council activities—sponsorship, ongoing support for sport or facilities or the provision of play equipment—is where a council receives a partial non-money benefit? Could such assistance be caught in its entirety and be considered as a non-money benefit?
  The Government must explain these provisions more clearly. It is interesting that there is not one word about this particular clause in the Explanatory Notes, which leads me to believe that either the authors of the Bill had not made up their minds as to what it meant or that the authors of the Explanatory Notes had no clue either. I beg to move.
  Baroness Maddock: I have considerable support for the noble Baroness, Lady Hanham, in moving this amendment and I look: forward to hearing what the Minister has to say. I want to speak to Amendment No. 44 standing in my name and that of my noble friend Lady Hamwee. It ensures that any new regulations made by the Minister are subject to affirmative resolution by both Houses of Parliament.
  The questions raised by the noble Baroness, Lady Hanham, explain why we have proposed the amendment. Certain matters are unclear, particularly planning gain. The noble Baroness, Lady Hanham, also indicated that the Explanatory Notes do not deal with this clause and I therefore hope that the Minister will be able to explain that.
  A later amendment relating to the clause will also highlight some of our main issues of concern.
  The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): I want to make two statements. The first is to answer the debate and the second is to answer the question I was asked on Monday. I shall also deal with Clause 10 stand part. I shall deal with things in order.
  First, Clause 10 and Clause 9(3) are lifted wholesale from the 1989 Act of Parliament passed when the Tories were in power. We did not invent the drafting; much of it follows from what already exists. Therefore, the vicious criticism of the drafting of paragraph (b) amounted to an own goal. I have to defend the provision because it appears in the Bill. But there is a good reason for it. By and large, it has been shown to be effective and it has worked.
  On Monday, the noble Baroness, Lady Hanham, asked about the meaning of the terms in Clause 9(2) and I undertook to look further into the issue she raised. It is easier to put the matter on the record—it might take a week to receive a letter but Hansard will be out tomorrow. That is not a criticism of my officials, it is the system.
  The definition of "capital receipts" is crucial to our understanding of the debates on Clauses 9, 10 and 11. The noble Baroness, Lady Hanham, asked whether a capital asset is acquired only by capital expenditure and what would be the position of assets acquired under leasing arrangements financed on the revenue account. She gave an example of an asset acquired under a mortgage.
  A reminder of the context may be helpful. We are dealing with the definition of "capital receipt". The starting point is Clause 9(1). That states that a capital receipt is,
  "a sum received…in respect of the disposal by it of an interest in a capital asset".
  Clause 9(2) goes on to state that,
  "An asset is a capital asset…if at the time of the disposal, expenditure on the acquisition of the asset would be capital expenditure".
  The key words in that respect are "would be". They make it clear that we are dealing with a notional situation. We must ask whether, if we were acquiring the asset now, the expenditure would rank as capital expenditure. If the answer is yes, the receipt is a capital receipt. That has nothing to do with the way in which the receipt was acquired in the first place and, in particular, nothing to do with the way in which it was financed.
  That approach follows the wording of the equivalent provision in the 1989 Act and is familiar to local government practitioners. We are not therefore acting in a way unfamiliar to people who will deal with this legislation.
  The noble Baroness, Lady Hanham, also asked about acquisitions under a mortgage. I should make it clear that that question would not arise for the local authority. It is forbidden to mortgage or charge its property as security for money borrowed and that prohibition is continued in the Bill in Clause 13(1).
  GC184
  The noble Baroness also asked about assets held under leases. The treatment of leases, both under accounting practice and local government capital controls, varies according to the nature of the lease. If the lease is effectively a way of paying for an asset over an extended period—in other words, a form of borrowing—the authority is taken to have acquired an asset at the beginning of the lease. In that case, there would be a capital receipt if the asset was subsequently disposed of.
  However, if the lease is effectively the hiring of an asset, which at the end of the lease is returned to the lessor, the authority is taken to be paying for the service and no asset is acquired. If the asset is not owned by the authority, there cannot be a disposal so there cannot be the acquisition of a capital receipt. I realise that "verbalise" is not always convenient, but I hope that when one reads the answer tomorrow it will be a satisfactory explanation.
  As regards the two amendments, Clause 10 is a necessary anti-avoidance measure to ensure that the controls on capital receipts in Clause 11 cannot be evaded by an authority agreeing to receive consideration otherwise than in the form of money. There are numerous ways in which that might be done. Clause 10(1) therefore addresses the problem by giving the Secretary of State power to apply Section 9 to non-money receipts; that is, to treat the receipts as though they were money.
  The principle that non-money receipts can be controlled in the same way as capital receipts is established in Clause 10(1). The precise technical details of the amount which the authority is to be treated as having received and the time when it is received is left to the regulations under Clause 10(2). These regulations reflect the existing system—we are not changing it.
  Amendments Nos. 42 and 44 seek to limit the Secretary of State's power to make regulations about the treatment of non-money receipts. Non-money receipts take various forms. Local authorities may dispose of a capital asset and be paid not in cash but by being given some other asset, service or benefit. The simplest case is straightforward barter where one property is exchanged for another.
  Amendment No. 42 would remove the Secretary of State's power to make regulations about certain non-money receipts—specifically, those receipts that the authority receives for reasons other than for the disposal of a capital asset; for example, a repayment for a loan the authority has made. If they were cash receipts, they would be treated as capital receipts. That is because they have been received in respect of capital expenditure; that is, the making of the original loan.
  To continue the loan example, without the power to make these regulations an authority making the loan could receive a non-money repayment in the form of a service such as street cleaning. That would mean that authorities could use their capital assets—for example, by making a loan to a registered social landlord—in return for revenue funding. In other words, they could sell off much-needed housing stock artificially to

  GC185
  reduce council tax because they are receiving a revenue service. That conflicts with the fundamental principle that authorities should not use capital resources to fund revenue expenditure.
  As drafted, Clause 10 relies on the negative resolution procedure. That is consistent with the position under the present capital finance system, which depends heavily upon secondary legislation. Amendment No. 44 would make the power in Clause 10 subject to the affirmative resolution procedure. Without apology, I rest on the fact that the Delegated Powers and Regulatory Reform Committee, in its 16th report of 2nd April this year reporting on the Bill, did not recommend any change in the procedure for the Clause 10 powers. In view of that, I believe that the amendment is unnecessary.
  In order to avoid upsetting the sensibilities of the members of that committee, I do not say that they agree with the Government. I say that if the committee disagrees with the Government, it is entitled to say so in its report. Where it chooses not to say so, and does not comment, I am entitled to say that it has not made a recommendation for change and therefore the negative procedure we have put in the Bill is held to be satisfactory. I am not misusing the wording of the committee in any way, shape or form. If its members want to change their rules, that is fine; it is up to them. Unless they report on a particular power in a Bill, I am entitled to consider that they are content with that power as set out. I dare say that that will cause me to receive a letter from the committee—but there you are!
  3.45 p.m.
  Lord Hanningfield: Perhaps I may clarify one issue and quote an example used in my authority. It has used capital expenditure to replace a great deal of street lighting. It has a limited term and will therefore have no end. The Government agreed to that. But here we have an example of an item which could be revenue or capital. It is an expensive, physical item, but needs replacing after 30 or 40 years. It is ultimately worthless, but that is down to capital expenditure. The Minister in his comments could have been excluding such expenditure, which has sometimes been considered as capital expenditure.
  Lord Rooker: I thought that street lights were a capital asset. I am not a local government expert. In my view, the lights should be changed sooner than 30 or 40 years. I suspect that it is an old-fashioned authority that has such old street lighting. There will be a lot of glare in the sky from it, contrary to policy, causing light pollution particularly in rural areas.
  In my view, it would be capital expenditure but the authority is replacing capital stock. It is not a question of selling it off. They are replacing capital stock from a loan and it would be further capital expenditure. It is like replacing the capital goods in one's home when they reach the end of their life. The fridge goes to Mr Meacher's fridge mountain and one buys another fridge. That was not meant in any derogatory fashion—it just popped out! It could be an iron but the fridge just popped out!
  GC186
  I want to make a general point on Clause 10 because of the stand-part Question. It must not be looked at in isolation. The clauses come as a package—Bills are always like this and we deal with the clauses one at a time. Clauses 9, 10 and 11 hang together. I have explained that Clause 9 defines the capital receipts as the sums received when property is sold. Clause 11 will allow rules to be made about the use of such sums and Clause 10 enables us to make regulations about property sales receipts which are in a non-money form.
  When property is sold, the payment received usually takes the form of cash. But of course payment may be made in kind, as I have mentioned. One property might be bartered for another and no cash is used in the exchange. However, the present capital finance system has always recognised the need to deal with non-money receipts. 11 will be important under the new system in relation to housing receipts. As I shall explain, Clause 11 envisages that certain restrictions will be placed on the use of receipts from the sale of council housing property, but local authorities often dispose of housing land in return for non-money receipts; for example, in exchange for other property.
  Major disposals could therefore fall outside the rules to be made under Clause 11, so non-money receipts must be brought within the definition of capital receipts. Clause 10 enables that to be done. Regulations will provide that where sale proceeds consist of property or other benefits, a cash value will be placed on whatever is received. The regulations will say how that cash value is to be determined. The authority will then be treated as obtaining a capital receipt of that amount. That is wholly consistent with the arrangements under the present system. People outside, such as treasurers in local authorities, understand how the system is working.
  As under the present rules, an exception will be made where housing property is sold in exchange for housing nomination rights. It is a wholly exceptional case and that is fully understood by those in the system. Land or dwellings may be sold in exchange for nomination rights and it is considered to be quite normal. That exception is granted and will be continued.
  I hope that, given the initial statement in answer to some of the points made on Monday, we will put this matter to bed. But if there are any further points, I shall do my best to answer them.
  Lord Smith of Leigh: I want to clarify one point. A number of authorities, including my own, have facilitated the acquisition of sporting facilities by putting land into the deal. They may have acquired a share in the new facility or use in kind in the buildings. Is that caught up by the non-money receipts?
  Lord Hanningfield: Before the Minister answers, perhaps I may add to that. We are looking to regenerate the centre of Basildon—something dear to the Minister's heart because it is in the Thames gateway. We are putting in land and will have capital receipts for housing and sports facilities. We would not

  GC187
  therefore want to be caught up in a new regulation which would prevent that investment into the regeneration of Basildon.
  Lord Rooker: As far as I am aware, there will not be a change in the rules. In other words, we are not changing that part of the present system for those facilities. If I am wrong, I will be corrected, but I have every reason to believe that I am right.
  Baroness Hanham: I see lots of nodding from the advisers behind the Minister and I am grateful to him for putting that on the record. It will be understood that we will want to look at his answer and perhaps return to it.
  The Minister said that everyone out there understands all of this. I will take his word for it but I want to give another example. Let us say that contractors, as part of a contract, agree to provide a new civic recycling centre. It is capital expenditure on the new centre and it is run by contractors. At the end of the contract, who owns the capital? Is it a non-money capital receipt by consideration if it goes back to the council or is it considered to be outside those regulations?
  The trouble is that as regards many areas the Minister's explanation begins to raise many additional questions, particularly when the services of many councils are provided by contractors. There may be improvements to a swimming pool, for example, and capital input into a swimming centre. That will be run by the contractors and may or may not come back to the council afterwards.
  We can go on looking at examples and the Minister will struggle to answer them all today.
  Lord Rooker: That is a fair example because it takes us back to what we discussed on Monday. We are talking about a package because there is both capital and a service. It would depend on how the deal was set up. One assumes that if ultimately the property were owned by the council, the price paid originally would reflect that. If it were not ultimately to be owned by the council, the price would reflect that also.
  I said on Monday that as regards PFI contracts, one could not separate out the capital and the service and the package would be the total. However, the price of the package would be dependent on its contents. That would be taken into account, subject to whatever deal the council has done on who will own the asset at the end of the life of the contract. That is covered by the answer I gave on Monday about not splitting PFI contracts. They are set up as a package.
  Baroness Hanham: I do not want to come back on the Minister's reply. I am grateful to him for having gone to the trouble of putting it on the record and we will take it from there. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Baroness Hanhammoved Amendment No. 43:
  Page 5, line 23, at end insert—
  "( ) No regulation may be made under this section in respect of a disposal the consideration for which is wholly in the form of housing nomination rights.
  ( ) Regulations under this section in respect of disposals consideration for which consists partly of money payable to the authority or consideration other than housing nomination rights and partly of housing nomination rights may not apply section 9 in respect of that part of the consideration which consists of housing nomination rights."
  The noble Baroness said: The Minister touched on this matter, but as I am not about to be done out of my amendment I shall move it anyway.
  The amendment is necessary to test again—it was originally moved in another place by my honourable friend Philip Hammond—the Government's intentions over non-money capital receipts. Following the debate in the Commons, the Minister, Nick Raynsford, wrote to Mr Hammond assuring him that the provisions under Clause 10 would not relate to housing nomination rights. He told my honourable friend that his amendment was not the right way of proceeding and that the matter would be better dealt with under the regulations—more regulations—in Clause 11.
  On 7th March, he concluded that the regulations were not ready but that they would provide that when an authority's contribution to pooling was calculated any consideration in respect of housing nominations would be excluded.
  The regulations have now been produced and it appears under Section 16(4)(a) that the matter is now covered. However, it would be helpful to have further reassurance on the matter in Hansard. Although the Minister gave a couple of sentences of reassurance in his previous reply, I would ask him specifically to address this amendment so that we can have it clear. The amendment gives the Minister an opportunity to do so.
  Clause 10 deals with the disposal of non-money capital receipts. It states that the sales proceeds obtained both in cash and in non-monetary form, such as, presumably, housing nomination rights, be subject to the new highly controversial proposals for pooling.
  We will come on to the whole question of pooling. The Minister has told me that housing nomination rights will be outside that, but I should be grateful to have that formally on the record. I beg to move.
  Baroness Maddock: There was considerable discussion about this issue in another place. I realise that the regulations had not then been circulated and now that we have seen them the issue has become clearer. However, I hope that the Minister can say briefly how he sees the provision sitting in with overall government housing policy. I want to hear him say that in no way will councils which choose to provide their affordable housing in this way be penalised by anything in the Bill or the regulations. There was concern in another place and it would be helpful to hear a wider explanation.
  Lord Rooker: For the avoidance of doubt. I do not believe that pooling is controversial. I put that on the

  GC189
  record to start with. Pooling happens now and we shall come to a modest technical adjustment of pooling in the Bill.
  Baroness Hanham: Perhaps I may say that there is pooling and pooling; and there is controversy and controversy.
  Lord Rooker: In answer to the noble Baroness, Lady Maddock, we have no intention of operating the provision to penalise local authorities seeking to provide affordable Housing. Far from it. We want them to do more in that regard. And I accept the need for a further explanation in Hansard because when the Bill was debated in another place the draft regulations were not available.
  As I said when we discussed the previous group of amendments, non-money receipts take various forms. In addition to receiving an asset, service or benefit, there is the further option to which I have just referred. It is of particular relevance to housing and it is the disposal of land in return for the right to nominate the occupiers of certain properties; typically to occupy some of the units to he built on the land sold.
  Although it does not say so in the regulations and I would not know the answer off the top of my head, I presume that somewhere there must be a formula. When land is being disposed of as an asset for well under market value and there is a reason for that, I know that authorities need to come to government for sanctioning because during the past 12 months such instances have come across my desk and those of other Ministers. Nine times out of 10—or perhaps 10 times out of 10—the reason is because that is the value nominalists have put on, for instance, nomination rights.
  We do not want to penalise local authorities for that. We want to take things away from the narrow, old-fashioned Treasury view of looking at a single transaction. One would obviously be receiving less than the value of the objects one was selling, if not the full market value for the land. To any customer, one is saying, "No, we will take less than the so-called market value because we are going to get something in exchange for that". That is, nomination rights. They would not otherwise be available on the open, unregulated market.
  Under the present system, housing nomination rights are by regulations exempted from the set-aside requirement. That is an important provision that makes it possible for local authorities to pass land at a value well below its market value to registered social landlords so that development of social housing can take place and to reap the benefits in the form of nomination rights. We have no wish to end such sensible arrangements. They encourage good partnerships between local authorities and registered social landlords and are all part of a proper prudent financial process and a proper housing policy process of ensuring that assets are used to best effect to provide housing for people in need.
  We accept the intention behind the amendment. We agree that the current exemption should continue under the new pooling arrangements. The right place
  GC190
  to deal with such an exemption is secondary legislation rather than on the face of the Bill. That gives us greater flexibility and means that we can respond more easily to changes in circumstances, or to changes in local authority and registered social landlord practice.
  Members of the Committee will have seen, in the draft regulations made available, that Regulation 16 indicates how we plan to deal with non-money receipts, and the question of housing nomination rights. The regulation is broadly modelled on the existing regulations in the current system. That requires an authority to place a realistic cash value on the benefit that it receives in return for its property. In the case of relevant housing revenue account disposals, the pooling regime would apply to that notional sum, just as though the authority had been paid in cash. For housing nomination rights, the notional capital receipt is nil, thus exempting housing nomination rights from pooling. It is important to put a value on the disposal if the value is not the market value; otherwise, you would get crazy finances. The notional capital receipt later converts to a nil amount so that an authority is not penalised.
  Having put that explanation on the record, I hope that it assists the noble Baronesses opposite and local authorities, as it is a vital part of their activity.
  4 p.m.
  Baroness Hanham: I thank the Minister for that. I apologise for pursuing him to the extent of making him read out the whole of his explanation. It has been an important matter that has received a lot of attention in another place. The Minister's explanation, which is now on the record, will be nothing but helpful. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 44 not moved.]
  Clause 10 agreed to.
  Clause 11 [Use of capital receipts]:
  Baroness Hanhammoved Amendment No. 45:
  Page 5, line 25, leave out subsection (1).
  The noble Baroness said: I shall speak also to Amendment No. 47 and, briefly, on Amendment No. 50. As I said in my previous amendment, the Minister in another place advised my friend Philip Hammond that his amendments on housing nomination rights would be best dealt with under the regulations in Clause 11. Of course, they now have been. We have already discussed the fact that regulations now exist for housing nomination rights and also, more specifically, for the pooling arrangements for capital receipts. Amendment No. 45 will mean that these regulations would fall. As I am sure the Minister is quite aware, the amendment, if it were agreed, would blow the whole clause out of the water. Many would feel that to be a very good thing, since, in effect, the pooling proposals involve a confiscation of money raised by an authority from its disposal of assets.
  The present rules require part of housing capital receipts to be set aside to complete debt redemption; that is to say, the payment of money borrowed to build

  GC191
  the properties initially. It has been an onerous but just-about-understood requirement since capital charges have been paid over the years as with any borrowing. The main drawback has been that where money had to be set aside it was not available to provide for capital improvements to remaining properties. As a result, other means have had to be found—more often completely inadequate ones—to try to ensure that dwellings are in reasonable repair. I should think that any Members of the Committee with any involvement in local government could point the finger at many areas that have not had access to capital resources to ensure that the properties were kept in good repair.
  The elimination of debt redemption is being replaced by arrangements whereby the proportion of the receipt is handed over to the Government so that it can be used, not to help the local authority that has received it, but so that it can be "redistributed", as it is described in the Explanatory Notes, to other authorities with a "greater need" for new housing investment. Who is to decide whether there is a greater need but the Secretary of State—perhaps it will be regeneration projects in the South East? Practically every authority in the country is under intense pressure to provide new affordable housing. To take from some to give to others, when there is a need in both cases, seems complete madness.
  Capital finance for housing has never been an easy matter. It was not an easy matter under the previous government; nor is it so under this Government. But for some years, it has been a balance of capital receipts and capital grants and borrowing. The proposals to play Robin Hood are unwelcome and should be rethought. In particular, the Government need to reconsider why an authority that is debt-free—like other Peers, I have been briefed on the issue by the capital receipts group—should have to hand over any of its capital receipts. There are around 34 such authorities across the country. They would wish any non-debt receipts to be retained and used for housing purposes. Indeed, they could be ring-fenced.
  This is a particular point from a few authorities, but they, as others, have raised the question of the validity of the principle of these provisions. Although transitional arrangements for those 34 authorities were agreed in another place, they still do not address the main principle of the problem. For that reason, we believe that neither the regulations under Section 1 and in draft nor those in subsection (2)(b) should be agreed by the Committee. The Select Committee on the Bill recommended that the clause should be removed. I note that the Local Government Association is also against it. I beg to move.
  Baroness Maddock: The Liberal Democrats have tabled an amendment in this group—Amendment No. 52. Let it suffice to say that the Minister and my colleagues and I will continue to disagree on what should be brought before the House for affirmative resolution. I shall speak to the other amendments moved by the noble Baroness, Lady Hanham.
  GC192
  The amendments, which concern capital receipts, seem to me and many others to be totally against the main freedoms given in the Bill, which many support. It is opposed by the LGA, which has already been cited, and councils across the whole political spectrum, not just one political party.
  As the noble Baroness said, a group of authorities are debt-free. They see themselves as having been very prudent councils and they now feel very penalised. It seems strange to people that one should give with one hand and take back with the other. It is those councils that will lose out. Many feel that they will not benefit from the pooling of capital receipts because most are not in deprived areas. Having looked at the matter in more detail, only one council could be described as being in a deprived area and would therefore get the money. Nevertheless, many such authorities are in areas where house values are high, so there is a shortage of affordable housing, particularly for key workers. It is an issue that we have debated considerably in recent months.
  The Government have argued that central government have funded the provision and helped local authorities to maintain their housing. Many of the local authorities that feel aggrieved have actually received negative housing subsidies for quite a long time. I think that all authorities, over the years, have invested substantial sums, not only in the provision of new housing, but in improving existing housing, and that that has been paid for by tenants. That was certainly the case during the years in which I was a councillor on a housing committee in Southampton.
  In the Statements by the Deputy Prime Minister in July 2002 he specifically said that,
  "tackling housing shortage is a national responsibility and we must all play our part—central and local government alike".
  Some of the authorities that will be affected by the clause feel that they have played their part. I hope that the Minister can assure us that nothing in the Bill will prevent local authorities from using capital receipts that they want to reinvest in housing. That issue was raised in another place.
  It would be helpful if the Minister could explain how the pooled receipts would be distributed. We have not heard much about that. In that respect, perhaps it would be helpful if the Minister could try to define what the Government believe constitutes housing need and how they believe it will affect distribution, as they have not done that.
  With effect from April 2004, we are changing the system of allocating funds for investment in housing at regional level so that it supports the new regional housing strategy. Regional housing boards will do that. It would be interesting if the Minister could explain—perhaps not today—how the system would fit in with this part of the Bill. I will raise further points when I move another related amendment that I have tabled.
  Lord Rooker: During her speech, the noble Baroness, Lady Hanham, used the emotive term "confiscation". "Nationalisation" might be a better

  GC193
  word. There is a little hit of socialism in New Labour. The provision is intended as a redistribution measure; it does not involve confiscation. Nevertheless, it has obviously wound up many people. It is amazing that, in response to all good deeds by the Government, those who benefit never say thanks, and those who pay whinge. I am afraid that that is part of the price that we pay for doing good deeds. At this stage it is not always apparent who will benefit. The inability to explain that is a difficulty for me at present.
  In response to the final question of the noble Baroness, Lady Maddock, in all justice, I cannot say in detail how the housing boards and the regional strategy will work. The housing boards have been set up. We have not been prescriptive about the centre; they were more or less set out in community plans. They differ slightly in some regions, which is fine. They are all working on their first housing strategy, which they will provide to Ministers by July. Some strategies have been launched in draft form and are being consulted on at present. There will not be a "big bang" next year. We want a seamless change from one system to the other, so a lot of money will already be pre-allocated through the Housing Investment Programme and the Housing Corporation's Approved Development Programme. It will take a few years to change from one system to the other; we do not want a hiatus in the process. Nevertheless, we do not have a figure for how much money will be available, so unfortunately I cannot give it. Authorities that think they will lose cannot prove that that will happen. One does not automatically assume that debt-free authorities will receive nothing at all. That is a false assumption.
  I shall deal with the central issues and put on record the formal response. I realise that the provision is controversial for some people, but it is only a technical adjustment of pooling. In many respects, pooling already exists. This is a technical extension of it. For those who check the dictionary, I accept that it is more than an adjustment; it is an extension.
  This group of amendments, and the ones in the groups that follow, are concerned with the treatment of capital receipts, and with limiting the housing capital receipts that may be subject to pooling, or removing the power to pool housing capital receipts altogether. If the amendments were agreed, it would mean the end of the clause.
  Amendment No. 45 would remove the Secretary of State's power to make regulations on the use of capital receipts. That would have very serious implications for the framework within which authorities manage their financial affairs. The Secretary of State could not, for example, specify that capital receipts could not be used to meet revenue expenditure. Frankly, I do not believe that that is the purpose of those who tabled the amendment. Instead, authorities could use capital receipts for any purpose. They could dispose of much-needed housing stock and use it to fund the day-to-day running of the authority. They could use capital assets for short-term purposes, to subsidise council tax levels, rather than investing them in public services.
  GC194
  At present, local authorities may use capital receipts only for new capital expenditure or for repaying debt. That system prevents authorities from disposing of assets and then using the proceeds to meet running costs. It is a fundamental principle that underpins the capital finance system in local government and it remains our policy.
  We propose to make regulations to ensure that when authorities spend their capital receipts they do so only to fund capital expenditure and to secure increased capital investment. They will also be free to use the receipts instead to pay off old debts and credit liabilities. Those are sensible and responsible limitations which exist to prevent abuse of an authority's capital assets. We do not believe it is right to see authorities selling the family silver to meet ordinary day-to-day expenditure. That is the exact complaint that the late Harold Macmillan made against the government of the noble Baroness, Lady Thatcher. I am sorry to introduce those political notes in our debate.
  4.15 p.m.
  Baroness Hanham: I am glad that the Minister's memory is longer than mine.
  Lord Rooker: That is the result of long years of opposition in another place—scarred years. All we had to do in those days was to use one Tory against another. We did not have the votes ourselves. The late Harold Macmillan was wonderful in talking about real people and the one-nation Tory, with the smashing up of the country by the then government. He had represented the North of the country. He knew about poverty and poor housing conditions, and he tried to do something about it. However, I digress.
  Capital receipts also come in the form of loan repayments, which may have been financed by the authority through borrowing. The Chancellor's "golden rule" demands that such repayments be used only for capital investment. We achieve that by defining the repayment of capital loans and grants as a capital receipt and by requiring that it can he used only to fund further capital expenditure or to repay debt. Those amendments would prevent us from doing so.
  Amendment No. 50 is similar to Amendment No. 45, except that it would remove the power to make regulations only with regard to one category of capital receipts; namely, non-housing receipts.
  If we were to accept the amendment, only housing receipts would be subject to the requirements that I outlined earlier. Local authorities could use their non-housing receipts—for example, by selling off school buildings—to meet day-to-day revenue expenditure, to subsidise rent or council tax levels or to pay salaries. Again, we are being asked to support a breach of a core principle of local government finance. In this case, additionally, the amendment distinguishes between different types of receipt. There is no logic to that distinction and no reason to support it.

  GC195
  Amendment No. 47 would remove altogether the Secretary of State's power to make regulations to pool capital receipts. That would mean that pooling could not operate as it must if authorities are to have the resources that they need to meet our pressing housing priorities nationally. I remind the noble Baronesses that redistribution is a fundamental principle of housing capital finance, and these amendments would overturn it. We have always taken the view, as have other administrations, that it is right for a portion of the proceeds from the sale of council housing to be available for use in areas of greatest need. That is exactly what the current arrangements do, with the notable exception that they do not include the increasing number of debt-free authorities.
  The present system works by requiring local authorities to set aside a portion of housing capital receipts, such as those from the sale or disposal of housing revenue account assets. That portion is 75 per cent of receipts from the sale of council dwellings and 50 per cent of receipts from other assets such as land. As the amounts set aside may be used only to repay debt or other credit liabilities, that then reduces the level of interest that they are required to pay. That, in turn, brings down the amount of revenue support for debt charges that authorities receive from central government by way of housing revenue account subsidies.
  That frees up subsidy resources to support new borrowing by housing authorities generally. The amount of that new borrowing is determined as part of the annual Housing Investment Programme—the HIP round—taking account of the assessed priority for capital investment in each authority's area. The net effect is that the current set-aside mechanism allows us to redistribute spending power to where it is most needed at the time. I challenge anyone to say that that is a bad system.
  Debt-free authorities do not have to set aside any portion of the capital receipts that they receive from right-to-buy sales. Those authorities have been effectively exempt from the redistribution system. They may use all of their receipts for whatever capital purpose they wish, regardless of their relative need to spend.
  We do not accept that some authorities should routinely be able to spend significantly more than other authorities, regardless of the condition of their stock or their other housing needs, simply because they are debt-free and rich in receipts. They are rich in capital receipts primarily from right-to-buy sales. They have nothing to do with right-to-buy sales. Such sales do not occur because of good financial management by a local authority, but simply because people in that area decided to exercise their right to buy. The local authority does not make that decision; it cannot be the result of an authority's management of the sale of assets, such as a redundant school or other buildings, as part of the prudent financial approach with which local government is famed. Right-to-buy sales are wholly different, because they are outside the control of the council; the tenant has full control.
  GC196
  Some authorities happen to be debt-free because of good fortune, not good financial management. Some happen to have inherited assets. Others may have been remiss in meeting responsibilities in their area, so they simply have not incurred debt. Some authorities did nothing about transport services or providing school meals. They kept council tax levels down because they did not spend any money and did not provide services. I shall not name the councils concerned, as they have improved a lot in recent years, particularly as political control has changed. The suggestion that there is an absolute parallel between efficient management and debt-free status is inaccurate. In a nutshell, an authority is not necessarily good because it is debt-free. In the same way, an authority in debt is not therefore badly managed. There are other reasons why authorities are good, bad and excellent, which are wholly unconnected with their debt-free or debt-bearing status.
  If we choose not to retain some form of redistribution, authorities with debt or lower capital receipts are denied a fair share of housing resources, even though their need for housing investment may be greater. I must ask those promoting the amendment, whether in Committee or on Report, to think about authorities in debt that might have housing need, rather than simply those without debt, which are the authorities that are crying at present.
  Authorities under the control of all political parties are in debt; it is not a party matter. I shall not read out all the authorities in debt because it would take up time unnecessarily. For convenience, I shall name one from each party. If we choose not to retain some form of redistribution, authorities in debt, such as the Labour authority of Blackpool, the Liberal Democrat authority of Milton Keynes and the Conservative authority of Medway, are denied a fair share of the housing resources. I could mention other authorities that I have visited in the past where housing investment is needed. Therefore, one must look at the situation in the round, considering all authorities in need. Redistribution is a good thing. So it must be right for the proceeds of the sale of housing assets to be available for use in areas with the greatest need.
  Without pooling, there are only three alternatives: higher tax, less investment by the most needy authorities or cuts in other programmes. Those are the consequences of abandoning pooling. I am not trying to make a challenge today, but if the matter comes back on Report, I will demand that those who promote such amendments say which of those alternatives they promote in their stead. That is the only fair way. The consequences for those authorities—I could list others—of moving such amendments would be very unfair.
  The current provision for capital receipts applies to all other local authorities where a proportion of receipts must be set aside. We are ending that provision; instead there will be a pooling mechanism. If it is right that all other authorities in the country should be part of the pooling mechanism, there is no logical reason why debt-free authorities should not be, too.

  GC197
  We do not propose to pool 100 per cent of receipts. Our proposals are in line with the current arrangements, which I have already mentioned. Authorities will still be free to keep 25 per cent of receipts from right-to-buy sales and 50 per cent of receipts from other sales. We also propose to allow all authorities to retain all non-right-to-buy receipts used to provide affordable housing or to support regeneration schemes. That is wholly consistent with the general thrust of housing policy. It is a very good example of saying that the local decision is the one that counts. If an authority wants to fund affordable housing or regeneration schemes, there is a mechanism whereby it can get money from non-right-to-buy receipts.
  It is of paramount importance that, in the longer term, all authorities should have access to the maximum funding to meet national housing priorities such as affordable housing and decent homes. The Government provide significant additional resources to help in that regard. Since 1997, the total amount provided to local authorities in England has increased two-and-a-half times, from just under £1 billion to £2.5 billion. But the arrangements proposed in Clause 11 and the draft regulations are central to our efforts to achieve the necessary investment while being fair to all authorities. Those areas that generate the most receipts will still retain significant amounts to use as they see fit. All authorities will be eligible to benefit from the resources available nationally on the basis of their needs.
  We recognise that some authorities will need time to adjust to the new arrangements, where the national resources are shared equitably among all authorities. We have therefore decided to institute transitional funding for existing debt-free authorities, as those are the authorities most affected by pooling. Under the special arrangements, a proportion of the total resources expected to be pooled by debt-free authorities will be earmarked to them, in addition to any other resources that they may be allocated, provided that they use it for housing.
  An authority with housing stock that is debt free when the new capital finance is introduced will receive up to a given percentage of its share of the total capital receipts, which we have estimated will be paid into the pool by debt-free authorities. That percentage will be 75 per cent in year one, 50 per cent in year two and 25 per cent in year three.
  Clause 11 relies on the negative resolution procedure. That is consistent with the position under the present capital finance system, which, as I have said before, depends heavily on secondary legislation. I shall not repeat the point that I made, but the Delegated Powers and Regulatory Reform Committee made no comment on the power. Therefore, my earlier remarks apply equally to the amendment.
  I have no apology to make whatever for the redistributive effect, and the pooling effect on the debt-free authorities. I have listened to everyone who wants to speak to me on the matter with respect to authorities since it was first highlighted. It is one issue that I have
  GC198
  questioned in the ODPM, and I am more than satisfied, and more than happy to defend the proposals in the Bill. They are fair. The provision has nothing to do with parties. I can find authorities under Labour and Lib-Dem control that will benefit. I suspect that that is also true of those under no overall control; I have not gone through the list of those, but I have met their representatives recently and it is clear that they have housing need. Birmingham is one of them now. That is not the one whose representatives I met; I was thinking of one in Northamptonshire.
  I could not defend the passing of the amendments to those authorities, because it looks thoroughly selfish in the interests of housing. I do not accept that the authorities should claim the credit for the right-to-buy sales, because they do not manage those. They should not claim that it was their money that paid for the houses in the first place. Council housing is a national asset. I understand the vagaries of finance in different authorities—it varies from town to town and city to city. However, by arid large, it is a national programme. As I have freely said, it is not confiscation, but genuinely nationalising to share the resource up for the national kitty, based on those authorities with the greatest need.
  In regionalising housing finance, and looking at the system that will come forward, clearly we are taking a much broader view across the region. I cannot give the amount of money. For some reason or another, as I went through the answer, I had a figure in my mind, but the amendments all got messed up again today—since we left on Monday, different amendments have been joined together. The noble Baroness is umm-ing and ah-ing, but I assure her that Amendments Nos. 45, 47, 50 and 52 were not in the same group when I left the Moses Room on Monday. Therefore, I had separate sets of speaking notes.
  I tore up my original speaking notes, and threw away the authority list that was provided to me, I might add. I remember a figure of what the effect would be. I think that it was £750 million. That will be relevant to a later amendment, so I shall come to it in greater detail. We are not talking about a tiny sum of money; it is substantial. As I was asked the question, I thought that I should put as much on record as possible.
  That is a rather long response, but the provisions are an important part of the Bill. I am not in any way critical of the amendments, but I have more than adequately made the case for the arrangements in the Bill.
  4.30 p.m.
  Baroness Hanham: I thank the Minister for his enormously detailed reply. Housing capital finance is probably one of the most arcane and difficult areas of local government finance with which to get to grips. One unfortunate aspect of the matter is the expectation raised by the provisions—on other amendments, we will come to the proposals for the annexation of the money—that there will be a change from money being set aside to pay debt to being pooled into a pot arid cast

  GC199
  around as the Minister thinks fit. Perhaps that is an oversimplification. However, even Robin Hood's enemies who were stripped of their resources were not all that happy about how those were redistributed. Others may feel in the same position.
  I want to make one thing clear. The Minister made a lot of political points, and I shall not join in those arguments particularly. The capital receipts group was only a small part of my amendment. I recognised within that that transitional arrangements had already been agreed in the Commons. That is what I said, and that will be in Hansard. Those transitional arrangements will relate only to any capital arrangements that take place after the passing of the Bill. They will not be retrospective, so the starting point will be the date of Royal Assent. That will not cheer anyone up all that much, but it may make an inroad.
  I want to read very carefully what the Minister said about all the pooling arrangements. My gut feeling is that the provision is not the same little tweaking to the current capital housing finance regulations that the Minister suggests. It does not look like it in the Bill, and it does not sound like it from what the Minister said. I tend to look at an egg as I see it, and what I think that I see is the shape of the egg and the shape of the argument. What is inside tends to be a different matter. It would be better if I withdrew the amendment for the time being, but I have not the slightest doubt that we will return to it at a later stage. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Baroness Hanhammoved Amendment No. 46:
  Page 5, line 30, after "expenditure" insert—
  "( ) a trust established to improve amenities or services within the local authority area,"
  The noble Baroness said: The amendment moves us a little further down Clause 11. The purpose of the amendment is to probe reasons for the restrictive list of purposes to which a council may apply a capital receipt. Such powers are circumscribed at the moment by subsections (2)(a)(i) and (ii). The Minister referred to them in his previous reply. As the Bill is supposed to be about freedoms, do the Government consider that it should contain a few more freedoms and flexibilities?
  I want to make a suggestion. What if a council had a civic trust specifically set up to improve the amenities of an area? Many councils have. Would that be permitted under the provisions? Would the Government want to prevent the creation of such trusts for, for example, conservation purposes, or improving street scenes or the environment? Would that not be a proper use of capital receipts? Would long-term improvement not be a sensible use of capital provision?
  That is something to which my noble friend Lord Hanningfield alluded when he talked about street lights, but the point was rather subsumed in maintenance and councils' proper use of their money, either revenue or capital. There are cases in which the
  GC200
  improvement of the street scene goes beyond street lamps. Some of it would require capital expenditure from capital receipts, and why not? I beg to move.
  Lord Rooker: I can be brief on the amendment, I hope. I thought that the purpose of local authorities was to run services and improve amenities. I thought that that was what they collected their council tax for, and why they functioned. I am not quite sure why they need trusts set up to do that. However, if the idea behind the amendment is that the money put into the trust from the capital receipts would escape the pooling, I have to draw the Committee's attention to subsection (2)(b), because such money would still be required for pooling. The trust may be a great idea, but it would still be required for the pool.
  Furthermore, giving money to a trust for capital purposes would also count as capital expenditure under subsection (2)(a)(i). Giving for revenue expenditure again would breach the principle in the case of a capital receipt. In other words, if a capital receipt is put into a trust for revenue services, that breaches the rules of local authority spending.
  I am not sure what the purpose of the trust is. If the idea of the Central Office whiz-kid who dreamt this one up was to have a trust and avoid the pooling, I am sorry, but it will not avoid the pooling. It would not work anyway. If capital money goes into a trust for revenue, that would breach the rules in the first place.
  Lord Hanningfield: Can I give an example to the Minister? It is not to do with housing in any way. In the East of England, we are going to have a big new art gallery. I have considered setting up a trust by selling some artworks owned by Essex County Council to invest in more contemporary art and sculpture. Therefore, we are selling capital assets to put in a trust, to buy more capital assets. One can do that under the present system, but one did not want to get caught up in some of the legislation, which looks to handicap trusts.
  We are talking about something that benefits the community—about the setting up of a permanent long-term trust, with investments coming in, perhaps including individual contributions, to improve the quality of life in the eastern region. I gave the example because I thought that it could be caught up in the legislation and we would be prevented from doing it.
  Lord Rooker: The noble Lord has raised a specific example on which, off the top of my head, I dare not comment. What I have said all along is that, if something is okay now, it should be okay when the Bill has been passed, but I cannot be certain of that. Selling paintings is not selling housing. It is not right-to-buy sales, but capital. On selling one set of paintings to buy another set of paintings, I do not have a clue.
  Lord Hanningfield: The Minister will understand our concern, because the legislation refers to capital sales, which cover a wide spectrum. Therefore, one

  GC201
  wants to make it absolutely clear that the legislation does not catch something that I am sure that he, too, would think desirable.
  Lord Rooker: I shall have to take advice on that. I cannot give an answer on the buying and selling of paintings. One has to be careful. The value of the painting is what someone is prepared to pay for it. Local authorities going into the art market ought to be really careful about it—that is all that I can say.
  Baroness Hanham: My noble friend Lord Hanningfield is a very good example of a Central Office whiz-kid. I am not sure that he will necessarily relish the description, but I shall tweak and tease him about it in future.
  The matter is quite a good exam question. It is a test of what the rules, and possibly the regulations, which we are assured now that we will never see, will be all about and reflect. I leave the Minister sucking the end of his pen. He has failed the test so far, but no doubt he will be able to recover before Report. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 47 not moved.]
  Baroness Maddockmoved Amendment No. 48:
  Page 5, line 33, at end insert—
  "( ) Regulations made under subsection (2)(b) may include only the following in relation to payments to the Secretary of State—
  (a) in relation to the disposal of dwellings, the maximum amount that can be specified is 25 per cent of the capital receipt: and
  (b) in relation to the disposal of any other asset, the maximum amount that can be specified is 15 per cent of the capital receipt."
  The noble Baroness said: The amendment is tabled in my name and that of my noble friend Lady Hamwee. The Minister talked earlier about matters in Clause 11 being a technical extension of the present situation. The amendment attempts to make that rather less of an extension. It is in line with part of the draft regulations, in which the Government state that, in relation to the disposal of dwellings, the maximum amount of capital receipt that can be specified is 75 per cent, whereas we propose that it be 25 per cent that basically goes into the pool. In relation to the disposal of another asset, the Government's figure was 50 per cent, and we suggest 15 per cent.
  We have had a series of amendments this afternoon, the first of which would have totally disabled the clause. Then we had various others to try to lessen the effects of the clause. Amendment No. 48 would not totally remove money to be pooled in the way explained very graphically by the Minister, but it would reduce the amount.
  I do not intend to speak at great length; we have discussed the issues surrounding the clause rather a lot. The clause emphasises the fact that the Government still do not really trust local authorities. The Bill itself proposes a prudential capital regime, which people across the board think is a step in the right direction.
  GC202
  However, the clause seems to many of us to go against that. The Government clearly did not want to give local authorities the freedom that they would have had under the old legislation in conjunction with the new, so they have brought in new measures, which the Minister described as a technical extension.
  The new regime imposes quite a big restriction and penalties on local authorities that have managed their finances well. I agree with points made by the Minister. He said that simply because an authority is debt free, that does not mean that it manages its finances well. We could all agree with that; that is not the point of many of the arguments that we have used this afternoon. However, I am afraid that debt-free authorities might look at the legislation as it stands and question whether they will sell off land and housing—whether they will use their capital receipts—so that they can provide further housing.
  I listened to the Minister, and I think that he reassured me—I will look at the report again—that if local authorities wanted to invest in housing, they would not be penalised. However, there is a fear that people may have a disincentive to manage their finances as well as in the past. The Minister probably does not need to reassure me again.
  I believe that the amendment is a compromise between the Government's position and that of many people outside Parliament, with regard to the use of capital receipts. I do not expect that the Minister will take it up, but it is one answer to many of the criticisms made on the way in which the Government have proceeded on the issue. The real problem is whether the Government really believe that local authorities can be trusted. Our amendment would give them quite a bit more trust than the Government are prepared to do. I beg to move.
  4.45 p.m.
  Baroness Hanham: I tabled Amendment No. 49, which does not seek to do what the Liberal Democrat amendment suggests, although I have some sympathy with how they are trying to look at the issue. The draft regulations have recently been published. It is very clear from them that there will be 75 per cent attrition for housing and housing land. Both amendments try to ameliorate that position, but the Minister has already made it pretty clear that he is not in ameliorating mood. Between them, they might go quite a long way towards making the provisions more palatable, but I think that neither is the final word on the matter.
  Lord Rooker: It is on Amendment No. 48 that the figure of £750 million comes in. People always want to know what the cost of an amendment would be. The Opposition tend not to want to know that; they simply want to use an amendment to make a point. I am very depressed to have to announce to the noble Baroness, Lady Maddock, that the amendment would mean that the money available nationally for redistribution to spend on housing would be reduced by £750 million—three quarters of £1 billion for what, in the 25 per cent and 15 per cent figures, look like small adjustments of the pooling percentages.

  GC203
  We are dealing with big money for what looks like a little bit of a fairer system. The money is from the sale of assets that taxpayers have funded through the years, one way or another, which would not be available to meet the most pressing needs. Given the politics and policies of the Liberal Democrats, I do not believe that they would genuinely want to support an amendment that would provide £750 million less for redistribution. True, the money would remain where it was, but it would be less available for redistribution to the authorities in greatest need.
  Amendment No. 49 seeks to remove subsections (3) and (4). The provisions are intended to ensure that poolings apply only to housing capital receipts. Their removal would mean that the Secretary of State could extend pooling to all capital receipts. In some ways, the amendment would make sense only if it were consequential on Amendment No. 47, which turned up in a previous group.
  The noble Lord, Lord Hanningfield, is back in his place. I am sorry; I turned my page over and did not go back, and I actually have the answer to his question. It is very important that the art gallery in southern Essex is not prevented because Rooker did not have answer. So long as the trust uses money for capital expenditure purposes, the Bill will allow that, as now. If it is capital for capital, there should be no difference. However, as I say, be careful of entering the art market.
  Baroness Maddock: I thank the Minister for his reply. As I said, I did not expect that he would accept the amendment. He made much play of taxpayers funding housing and its being a national asset. In my last years in local government—the last years of Tory government—the amount of money spent nationally on housing diminished rapidly, and it did not increase under this Government in their early years because they stuck to the Tory spending plans. A lot of the money was from a long time ago. I question whether it is right for us to penalise people who are doing their best in present circumstances for what happened in the past.
  The Government, particularly in recent weeks, have boasted about how much money they will put into housing, and especially how much extra money will go into the affordable housing communities plan in the South East. I put the figures that the Minister gave into that context, which makes them look rather different. I suspect that we shall return to the issue on Report.
  Lord Rooker: I am speaking off the top of my head. I take the point that the noble Baroness makes. As she has said on more than one occasion, she now lives in the North. The figure of £750 million is not far short of what the Government plan to spend not in the South East, but in the market renewal pathfinder areas in the Midlands and the North, where there has been a collapse and we need to rebuild communities. The figure is £500 million to £600 million, or something of
  GC204
  that order. It is a substantial amount of money, and £750 million is not to be sniffed at. One can make good use of £750 million.
  Baroness Maddock: I hope that I did not give the Committee the impression that I sniffed at it. I was indicating that there was a bigger housing finance picture. Before the Minister gave his point of view, my next sentence was going to be about my intention to look in rather more detail at the finance before Report so that we could continue the debate at a later stage.
  Another point that I made is that the matter is not only about finance. It is about giving local authorities the freedom in their own area to do what they think best there. We as a party—we make no bones about it; the Liberal Democrats have said it for years—would give a greater proportion to the local authorities, so that they could decide what they wanted to with it. We have been totally consistent about that. Having said that, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 49 and 50 not moved.]
  Baroness Hanhammoved Amendment No. 51:
  Page 5, line 41, leave out subsection (5).
  The noble Baroness said: The purpose of the amendment is to probe what is meant by the power to allow the Government to set off a sum that a local authority is liable to pay them against a sum due to it from them. The Explanatory Notes are surprisingly silent on that point.
  As the clause is written, it could, for example, mean that by virtue of subsection (3) a regulation could be laid requiring a local authority to pay all or part of its capital receipts to the Government. Although we are theoretically moving away from a specific grant regime, the clause might mean that the Government could declare that they would have paid a grant to that local authority but, because it was due under the subsection (1) regulation to pay a capital receipt, they would not then pay the grant.
  If we read the provision correctly, is it not a possible licence for the Government to make their own decisions and—I would not use the word gerrymander hut, since we have had a political thrust every so often—to gerrymander? A government could alight on a receipt received by, say, Lancashire County Council and say "We'll have that under Clause 11(2)(b)". Let us say that the receipt was of £1 million. The Government could say under the power that they were liable to pay a grant of so much to Lancashire County Council under the settlement formula, but actually would net off £1 million and let the council keep the capital receipt that it would otherwise have had to hand over.
  The power could be applied selectively under the Bill, allowing favoured councils to benefit from capital receipts, while unfavoured ones—whether politically or for any other reason—would have payments to them docked. That surely is not satisfactory. There is already enough messing about in the small print of the annual financial settlement. It would allow a

  GC205
  government to have a pretext for squeezing authorities, a power that—however much we might wish otherwise—they might be tempted to use politically.
  If the Government intend to use the power—the Minister must make it clear how and when it would be used—it must be done openly. Every authority should get its due under the settlement, and then the Government should be required to claw back each capital receipt openly and justify it in each case, if that is what the ultimate decision of Parliament should be. The power under the subsection would allow the Government, in effect, to confiscate a capital receipt even if their action was under challenge in the courts. The amendment would block what is thus a potential route to selective action. I beg to move.
  Lord Rooker: I can dispose of the amendment quite quickly. Subsection (5) is simply an administrative measure to ensure that we do not have checks and payments going in two different directions, one from the local authority to the Government, and one from the Government to the local authority. That is its only purpose. It is a sensible measure that does not affect the overall resources available to any local authority, so all the talk of favoured authorities does not apply. What the noble Baroness suggests could not happen. The provision is purely an administrative measure to make sure that money is not flowing two ways when it can simply be netted off.
  Baroness Hanham: The whole paragraph is about the use of capital receipts. Is the expectation that a local authority due to pay more than 75 per cent of its capital receipts would do so, but that the Government would net off some other capital issue—not capital receipts, but perhaps housing improvement programme money? I do not think that the provision is as clear as the Minister says. The Government will pass capital receipts to other authorities, but they will not pass them back to the ones that they have taken them from. So what other money is involved in this cheque that is not going backwards and forwards? That is the burden of the question.
  5 p.m.
  Lord Rooker: I cannot answer the detail of that question but the resources of a particular authority will not be altered by the measure that we are discussing. Wherever the receipts come from and whatever the pooling arrangements may be, the resources of a particular authority will not be altered by the provision in subsection (5). It is purely an administrative measure. It is not even, as it were, central to policy. If it were not included, money would flow in two directions: money that the Government may pay to an authority and money that the Government expect to receive from an authority. It simply does not make sense for cheques to flow in two directions. As I say, the resources of a particular authority remain unaltered but the provision may result in someone saving the postage required in sending a cheque.
  Baroness Hanham: I shall not pursue the matter but I still think that it depends which moneys are involved here. Confusion may arise with regard to other forms of capital flowing to an authority. I refer to money that cannot be considered as revenue and, therefore, must be capital but which is not a capital receipt as that would flow in the other direction. As I say, I shall not take the matter further but perhaps the Minister for his own satisfaction will consider it further at some stage. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 52 not moved.]
  Clause 11 agreed to.
  Clause 12 [Power to invest]:
  [Amendment No. 53 not moved.]
  Clause 12 agreed to.
  Clause 13 [Security for money borrowed etc]:
  Baroness Hamweemoved Amendment No. 54:
  Page 6, line 8, leave out subsections (1) and (2).
  The noble Baroness said: In moving Amendment No. 54, I wish to speak also to Amendment No. 55. These amendments seek to remove the prohibition on charging property as security for borrowing and to allow charging on any asset of a local authority.
  Under Clause 6, lenders are protected in that they are not required to inquire whether an authority has power to borrow. I tabled these amendments to inquire whether it is not inconsistent not to allow lenders to have the protection of being able to enforce security. I appreciate that in the world that we are talking about having no security may be less important than when an individual or a company with limited liability and perhaps few assets borrows as local authorities tend to have quite a lot of money. But is it in the best interests of council tax payers to have this prohibition? It might be argued that that is the very point of it but I should be interested to understand the Government's attitude here. This again is a centralising provision. It does not allow the local authority to take its own decision as to whether or not it is appropriate to give security for money borrowed. I beg to move.
  Baroness Maddock: There was considerable discussion about this issue in another place. Clause 13 retains the principle that all local authority debt is deemed to be secured on the totality of the assets and revenue streams of the local authority. Questions were asked in another place about whether the Government had carried out an analysis of the impact of the total cost of borrowing if any changes occurred in the financial arrangements that I described in my opening remarks. We still believe that the Government should examine other options. There are lessons to be learnt from PFI and from the experience of other countries where lower tiers of government have wider freedoms than the tier that we are discussing. Will the Minister

  GC207
  indicate whether, given the discussion that took place in another place, the Government's mind is still totally closed to a wider consideration of the matter?
  Lord Bassam of Brighton: As both noble Baronesses said and clearly understand, Clause 13 makes provision about the security that local authorities are to offer for the money they borrow.
  Amendments Nos. 54 and 55 would remove the long-standing ban on the mortgaging of local authority property. I understand that the ban goes back to 1933. Therefore, I believe that one could make the valid argument that it has worked well for—
  Baroness Maddock: I think that that precisely makes my point. If a regime has been in place that long, is it not time that we considered something else?
  Lord Bassam of Brighton: The Government constantly consider such matters. However, I make the simple point that the ban has worked well since 1933 and we see no reason to change it. We do not think that that is necessary.
  Authorities will still be able to borrow from the Government via the Public Works Loan Board (PWLB), which never seeks such security. In accordance with Clause 13(3), a local authority's borrowing will continue to be secured on its entire revenue income and that is all that is ever necessary. Such security should also be perfectly adequate if authorities choose to borrow in the market. The fact that authorities can occasionally get loans from the private sector on favourable terms compared with the Public Works Loan Board demonstrates that it is not necessary for them to mortgage their assets to do so. And in any event the potential for private sector lenders to seize authorities' property would pose an unacceptable threat to services. I am sure that that is not at the forefront of Liberal Democrat thinking.
  As I say, we do not consider that the amendment is necessary. The noble Baroness, Lady Maddock, asked whether any work had been done to assess the impact of removing the ban. No systematic work has been carried out but some thought obviously has been given to the matter. We see no benefits or savings being gained if local authorities were allowed what might be described as the additional flexibility that the two noble Baronesses have tried to recommend. They have said nothing which convinces us to change our mind. We believe that we have the measure right and that the current system works very well indeed. I hope that with those reassurances the noble Baroness will withdraw the amendment.
  Baroness Hamwee: After a few years in your Lordships' House one becomes accustomed to seeing a Minister read the words, "Nothing that the noble Baronesses have said today has convinced us".
  Lord Bassam of Brighton: That was not in the brief.
  Baroness Hamwee: The Minister makes the point that the Public Works Loan Board does not seek
  GC208
  security. However, it could not do so because, as the Minister explained, there has been a ban on doing so since 1933. Of course we are not suggesting that services should be prejudiced. However, we ask whether it is appropriate that this should be a matter for central control. We believe that it is not. Local authorities may well not want to go down that route. However, the Minister did not, for instance, suggest that borrowing might become more expensive to those who do not offer security. It is very difficult to judge the position. I have not written, "Nothing the Minister has said has convinced me", although it may be written in invisible ink. I hear what the Minister says and I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 55 not moved.]
  Lord Hanningfieldmoved Amendment No. 56:
  Page 6, line 19, leave out "two" and insert "three"
  The noble Lord said: We are concerned that these provisions do not allow local authorities sufficient flexibility to repay, or possibly challenge, a debt before the intervention of the High Court and the appointment of a receiver.
  Will the Minister assure us that two months will allow sufficient time for local authorities to raise the necessary sums or challenge the debts? Although we accept the need for the safeguards Clause 13 provides, we should prefer to see the time limit extended to three months to allow for greater flexibility.
  We accept that this is a matter of practical judgment rather than a philosophical or political difference. We should be grateful, therefore, if the Minister could share with us what evidence has led the Government to set a time limit on the repayment of large debts at two months. I beg to move.
  Lord Bassam of Brighton: Amendment No. 56 relates to Clause 13(5). This provides that if the principal or interest owed to a lender is overdue by two months, the lender may ask the courts to appoint a receiver with power to oversee the management and distribution of the authority's revenues. So there is a common agreement and understanding of what the clause does. As the noble Lord said, Amendment No. 56 proposes that this period of two months should be extended to three.
  The amendment is clearly meant to help local authorities. However, we believe that it could have the opposite effect. The measures in Clause 13(5) may seem stringent but they provide the assurance demanded by lenders. Any weakening of this protection to lenders could adversely affect local authorities. We know that private sector lenders are very much aware of the existing provisions, which have been in force for a considerable time. They have acted as a guarantee for a very long time. Even a minor change could send entirely the wrong signals to the market. I am sure that the noble Lord is well aware of the sensitivity of the market to such messages which would be very unwelcome. The effect could be to make it more difficult or more expensive for authorities to

  GC209
  borrow. I do not think that that is desirable and I do not believe that the noble Lord thinks that that is desirable. We do not want to encourage such a situation which would not be helpful to local authorities.
  I suggest that the noble Lord reconsiders the amendment and perhaps takes some further advice from lenders.
  Lord Hanningfield: I thank the Minister for that reply. There are two ways of looking at the matter. I accept that, as the Minister said, we want lending to be at favourable rates and to be secured. I shall reflect on the amendment. It is not a terribly important amendment, but we sought the Government's reasons for wanting a period of two months. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Hanningfieldmoved Amendment No. 57:
  Page 6, line 29, leave out "£110,000" and insert "£50,000"
  The noble Lord said: In moving Amendment No. 57, I wish to speak also to Amendment No. 58.
  We have concerns that these provisions set the threshold too low for the intervention of the High Court and the appointment of a receiver.
  As I hope that I made clear in the previous amendment, we agree that there is a need to set safeguards of some kind, but we should be grateful if the Minister would share with us what evidence led the Government to set the thresholds at these levels. From our side, they seem too low.
  We also seek some clarification as to why it should be necessary for the Secretary of State to have the power to alter this threshold by order. Can the Minister clarify whether the power is likely to be used to lower the threshold further, and under what circumstances it might be employed? I beg to move.
  Lord Bassam of Brighton: As the noble Lord said, Amendment No. 57 relates to Clause 13(8). It relates to the ability of a lender, where interest is overdue, to ask the court to appoint a receiver to oversee debts and secure the revenues.
  Clause 13(8) provides that lenders may not apply to the courts for assistance unless the sum owed to them is at least £10,000. Amendment No. 57 proposes to increase that figure to £50,000.
  The present threshold, set in 1989 by the previous administration, is £5,000, so we are already making an increase, very roughly to reflect inflation. But the figure needs to remain low for the reassurance of lenders. As I said when responding to Amendment No. 56, any weakening of protection to lenders could make it more difficult or more expensive for local authorities to borrow. They might even try to borrow to invest in the art market. We would not wish matters to go awry in South Essex in that respect.
  Even so, it seems sensible to keep this threshold figure under review. Clause 13(9) allows us to do that and to vary the figure by order, if we considered that was necessary. But Amendment No. 58 would remove
  GC210
  that power. As I have said, we think that the figure in the Bill—given what has happened since 1989 in terms of inflation—is about right. However, we believe that we ought to have flexibility for the future. That is reflected in the wording of Clause 13(9). The Delegated Powers and Regulatory Reform Committee, which reported on the Bill recently, was entirely happy with the procedure that we set in place. I say to the noble Lord that it would not be our intention to lower that threshold. We cannot see any immediate circumstances in which we would want to do that. It is more than likely that the threshold would need to rise with inflation.
  5.15 p.m.
  Lord Hanningfield: For the record, will the Minister confirm that the purpose of the Secretary of State's power is not to lower the threshold but to raise it with inflation as the years go by? Will the Minister clarify that for the record?
  Lord Bassam of Brighton: I think that that is what I said. The threshold would need to rise from time to time to reflect movements in inflation.
  Lord Hanningfield: I thank the Minister for those comments. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 58 not moved.]
  Clause 13 agreed to.
  Clause 14 [Information]:
  On Question, Whether Clause 14 shall stand part of the Bill?
  Lord Hanningfield: I oppose the Question that Clause 14 stand part of the Bill.
  We should like to take this opportunity to question the Minister about the kinds of information the Secretary of State intends to request from local authorities under this clause and how this information will be used.
  Although we accept the need for an ongoing dialogue between local authorities and central government, we should like some assurance that the Secretary of State does not intend to use this power to intervene unnecessarily in local authority affairs.
  Can the Minister also assure us that that will not add significantly to the workload of local authorities—we shall return to that point on another amendment—and that the range of performance indicators, data and statutory returns already submitted on a regular basis to the Government will not be duplicated in this information?
  I speak with feeling on the matter having recently exchanged a considerable amount of information and letters with the Secretary of State for Education. I felt rather bruised and hurt by the Secretary of State's treatment of local authorities. I strongly oppose the Question that Clause 14 stand part of the Bill. I should like the Minister to confirm that the dialogue with local authorities will be conducted in a fair and just

  GC211
  manner and that information will not be sought in such a way as unduly to increase the workload of local authorities.
  Baroness Maddock: When this clause was discussed in another place there was a considerable amount of political knockabout—some of it concerned the clause but some did not—which reminded me of my early days in another place. I could never get used to the fact that we spent so much time saying how pleased we were to serve on committees with certain people and recounting our connections with those people outside politics.
  When the clause was debated in another place my honourable friend the Member for Kingston discussed at length what it was reasonable for the Government to require under the terms of the clause and how much that would cost. The Conservative Members tried to persuade him not to press his amendments to a Division and the clause was agreed. Indeed, the honourable Member for Cotswold, Mr Clifton-Brown, said that the concept of reasonableness would have to be taken into account from a legal point of view. Perhaps I am being a little disingenuous in introducing a political knockabout point into the Committee, but I was surprised at the line taken by the Conservatives in another place.
  Lord Smith of Leigh: Will my noble friend confirm that this is one of the freedoms which excellent authorities might have—namely, not to submit these returns—bearing in mind my interest as a leader of an excellent authority?
  Lord Bassam of Brighton: I am surrounded by excellence in the Committee. We are all local government friends from times past—or at least I think that we are.
  I hope that I can offer some words of comfort and reassurance on Clause 14. It requires local authorities to provide the information that is needed to implement the new capital finance system. That much is clear. There is an information requirement at present. That has been in existence for some time.
  When I was a local authority leader I used to complain bitterly when the government wanted yet more information before they would accept a reasonable case that we had made. I also used to complain that the government did not ask for particular bits of information which would have proved that we needed to have extra resources for whatever project we were trying to plan. Those of us involved in local government always wanted to have it both ways.
  We are trying to put in place a sensible system, to ensure that the information requirements are reasonable—to use a term that was used earlier—and that the requirements are no more onerous than they are at present. We are also trying to do our best in central government to simplify the information needs so that we do get the matter right. Obviously, there needs to be dialogue on these matters from time to
  GC212
  time. The LGA is very good at making its case. We have discussed the matter with the LGA and with CIPFA. They have shared their views with us. So it is not just a case of central government imposing arbitrarily a need for information that we have dreamt up. We have worked it out with those parties that have worked closely with us to ensure that we request necessary data.
  Some of the information sought for the new regime will be different because it is a new regime. Therefore, there will be new information requirements. I understand that we shall ask authorities to notify us of the affordable borrowing limit they have set at the start of the year. That ties in with Clause 3(1). That will be one of the factors we take into account in deciding whether a national borrowing limit needs to be imposed in any one year under Clause 4(1).
  We do not wish to impose more onerous requirements. We want to keep the matter as simple as we can. The principle on which the clause is based draws on the history of controls in the area of the capital finance system. Therefore, the clause is not—and I hope will not be seen as—something which is new and burdensome for the sake of it. It will be reviewed from time to time and we shall take into account the views of CIPFA, the LGA and those other bodies that work with local government to ensure that regimes are sensible and practical in their workings.
  Lord Hanningfield: I thank the Minister for that explanation. I still consider that the Secretary of State has a strong power under the clause.
  Lord Bassam of Brighton: What is it specifically in the clause that the noble Lord objects to? What is it that the noble Lord thinks places additional onerous burdens on local authorities? It would be helpful to know that.
  Lord Hanningfield: Clause 14 refers to a local authority supplying the Secretary of State with information,
  "at such time, as he may request".
  That is a very general power for the Secretary of State to have. As I said, we totally accept that information should be supplied.
  Lord Bassam of Brighton: Does the noble Lord also accept that that wording is common throughout the language of local government finance and has been in existence for many years? I am sure that he is familiar with it from the time when his party was in government.
  Lord Hanningfield: I accept that the wording is familiar but I do not consider that it is necessary to include it in the clause. I hear what the Minister says. This is a matter on which we shall want to reflect. We may return to the clause at a later stage.
  Clause 14 agreed to.
  Clause 15 [Guidance]:
  Lord Hanningfieldmoved Amendment No. 59:
  Page 7, line 5, leave out paragraph (a).

  GC213
  The noble Lord said: In moving Amendment No. 59, I wish to speak also to Amendment No. 60.
  We welcome the Government's intention to support local authorities by issuing guidance on prudent financial management where necessary. This amendment would ensure that any such guidance is scrutinised by Parliament in the appropriate manner. This is a theme that runs through several amendments.
  The Government have promoted the prudential regime as extending considerable and extensive new freedoms to local authorities. We hope that that will occur. Much of the practical working of the regime is not covered in the Bill and will become clear only once we have seen the regulations. The regulations are where many of the key elements will be determined. It is, therefore, of the utmost importance that Parliament has the opportunity to scrutinise the regulations. I beg to move.
  Lord Rooker: Amendment No. 59 seeks to delete paragraph (a) of Clause 15. That would result in all guidance issued by the Secretary of State having to be in the form of regulations. However, there are well-established precedents for Secretaries of State to issue statutory codes of guidance without any requirement for regulations. We are not trying to circumvent parliamentary scrutiny, far from it. We are thinking of using the power in paragraph (a) mainly to give clear and simple guidance on prudent investment practice. Local government representatives themselves have agreed that such an approach is preferable to the present one which requires complex regulations about investments.
  In those areas where we need to introduce regulation we shall do so, subject to parliamentary scrutiny. However, in other areas guidance will be issued following well-established precedents. Frankly, it would be a complete and utter waste of Parliament's time to force the Secretary of State to issue regulations in every case and would make the matter ever more complex. I hope that I have reassured the noble Lord.
  Lord Hanningfield: I accept what the Minister said. At a later stage of our debates on the legislation we shall need to make clear that the regulations will be scrutinised by Parliament. As I said earlier, the new regime to which both Ministers have referred is totally new and, therefore, people will want to see the detail of it. I shall withdraw the amendment at this stage but we shall want to return to this theme as the Bill progresses through its stages. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 60 not moved.]
  Clause 15 agreed to.
  Clause 16 ["Capital expenditure"]:
  Baroness Hamweemoved Amendment No. 61:
  Page 7, line 1l, after "proper" insert "relevant"
  The noble Baroness said: In moving Amendment No. 61, I wish to speak also to Amendment No. 62.
  GC214
  Amendment No. 61 could perhaps have been more elegantly phrased by inserting "relevant" before rather than after the word "proper". But I hope that inelegance will not impede the Minister giving a satisfactory reply. I have tabled the amendment in order to probe the meaning of the measure in the Bill. I assume that the words "proper practices" refer to accounting practices. I assume that accounting practices—perhaps I have too much faith in the profession—will be proper. It is unlikely that they would be improper practices, if I can put it that way. Perhaps more seriously, Clause 21 seems to cover the position thoroughly, so I am unclear as to what is imported by this one word.
  Amendment No. 62 would delete the power of the Secretary of State to make regulations providing that expenditure is or is not capital expenditure. We particularly oppose Clause 16(2)(b), as do the Conservatives, which provides that expenditure of a particular local authority is or is not capital expenditure. We have had, and no doubt will go on having, arguments about whether particular local authorities should have the powers that, in general, this Bill grants and whether there should be distinctions between authorities as to whether or not they can exercise powers. For the Secretary of State to be able to say, "Well, in your case, that expenditure on a particular matter is capital but in your case expenditure on the same matter is not capital'', seems to be odd at the least and, certainly, a control too far.
  Having missed part of today's proceedings, I am unsure whether reference has already been made to the Hackney factor. Perhaps this is due to the Hackney factor. But we question the appropriateness of this in the context of the economy of local authorities about which we have talked from this side of the Committee. In another place, the Minister said that this was a "continuation" of an existing direction-making power. Is not the existing power adequate? Why is it necessary to continue it? If it is an extension, how is it an extension? Is it simply an extension because it goes into a new clause in a new Bill? And, of course, why? I beg to move.
  5.30 p.m.
  Lord Rooker: Amendments Nos. 61, 62 and 63 relate to Clause 16 which defines the term "capital expenditure". Amendment No. 61 focuses on the basic definition in Clause 16(1).
  Lord Hanningfield: The Minister has referred to Amendment No. 63. That has not been moved.
  The Deputy Chairman of Committees (Baroness Turner of Camden): It is in the group of Amendments Nos. 61, 62 and 63. The noble Lord can speak in this group if he wishes.
  Lord Hanningfield: Perhaps I may speak to this amendment to add to what the noble Baroness, Lady Hamwee, said. This is an odd clause because it particularly wants to define the capital expenditure for individual authorities. That obviously could be done for political, for favouritism, or for some particularly

  GC215
  odd reason. Clause 16(2)(a) already provides for the Secretary of State to define "by regulations" what should constitute capital expenditure for local authorities, and we accept that. In fact, we started the day by defining capital expenditure.
  But the most appropriate way to maintain transparency in local authority finance is to ensure that local authorities are treated equitably. We understand that the provision to define capital expenditure by local authorities by regulations is a necessary safeguard. However, given this provision, can the Minister explain under what circumstances it might be necessary for the Secretary of State to have the power of direction to make a different provision for an individual local authority, along the lines outlined by the noble Baroness, Lady Hamwee?
  If this provision is intended to deal with anomalies or grey areas in the finances of a particular authority, can the Minister give us a better understanding of what these might be and how this provision will be applied? When will it be necessary to capitalise parts of a particular authority's expenditure and what types of expenditure will qualify for this treatment? Our concern is that this measure may raise doubts about the equitable treatment of different authorities and the transparency of local authority finance. Is the Minister able to assure us otherwise?
  Lord Rooker: I certainly hope so. I shall start again, but I am sorry if I pre-empted the noble Lord. Amendments Nos. 61, 62 and 63 relate to Clause 16, which defines the term "capital expenditure". Amendment No. 61 seeks to replace the words "proper practices" with the phrase "proper relevant practices". That would make the provision unworkable. I draw the attention of noble Lords to Clause 21(2) in which the expression "proper practices" is defined. Therefore, the terminology in the two clauses must be kept fully consistent.
  More significantly, Clause 21 makes the amendment unnecessary because it enables relevant accounting codes to be identified in regulations. We have placed the draft capital finance regulations in the Library in which Regulation 21, dealing with proper practices, names the statement of recommended practices, which is in draft form issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). Local authorities will therefore be in no doubt where to look for relevant guidance on such concepts as that of capital expenditure.
  Amendment No. 62 seeks to remove the whole of subsection (2) which provides two powers to vary the definition of capital expenditure. One is a power to do this by regulations applying generally to authorities and the other is a power to make variations for individual authorities by directions. Amendment No. 63 seeks to remove only the direction-making power. I understand why these amendments have been tabled, but both powers are basically continuations of ones we already have, which are much appreciated by local government.
  GC216
  By classifying expenditure as capital expenditure, we increase authorities' flexibility to apply their resources. Capital expenditure can still be met out of revenue resources, if authorities wish, but they have added options. They may use their capital receipts; alternatively they may borrow the money, subject to keeping within the limits applicable at the time.
  In the draft regulations that I mentioned, Regulation 19 illustrates how we expect to use the first power. We want to continue to allow authorities the flexibility to treat computer software development costs as capital expenditure. A similar provision exists under the present system and, we believe, anticipates likely developments in standard accounting practice. We also want to ensure that when making loans and grants towards capital expenditure by other bodies, authorities may draw upon their own capital resources. That freedom exists under present legislation and it seems a sensible modification of accounting practice since authorities are, in effect, undertaking capital expenditure by proxy.
  The direction-making power is also important. It enables us to define items of expenditure as capital expenditure on a one-off basis for individual authorities rather than having to make a regulation generally applicable to all authorities. We have used the power, for example, to help authorities cope with substantial redundancy costs and pension fund deficits that would otherwise have been unaffordable. The power was, of course, introduced by the previous Administration in 1990, which used it in much the same way as we have since.
  Under the new system, the power would be exercised as of now. That means we would continue to issue capitalisation directions only in exceptional cases. Without the power, we could not offer quick assistance to local authorities facing serious financial difficulties borne out of these types of examples. I hope, with those reassurance, that noble Lords are assured and will withdraw their amendment.
  Lord Hanningfield: I thank the Minister for those comments. Of course, one totally accepts, and is pleased, that computer software and so forth are considered capital expenditure. What concerns us, in particular, is the manner in which this is presented. The Secretary of State might suddenly decide to give advantages to one authority over others because that was the way he felt at the time. For example, the Secretary of State might say that a great deal of capital expenditure could be used for education provision, and choose the authorities which they wanted to do that to.
  Because of the recent unpleasant experiences in education funding, at present, one is very suspicious of these types of clauses. I accept that at times it is appropriate that some capital expenditure could he used and should be used for revenue help for an authority. But it should be general for all authorities rather than for a favoured authority of the Minister of the day receiving preferential treatment. That is how it could be read. I accept that it is already in current legislation and that the Secretary of State needs powers

  GC217
  to be able to help authorities. But the way in which it is presented here, it appears as though it could be given to some authorities and not others. That is our concern.
  Lord Rooker: However much Labour might have argued during the long 18 years in Opposition, it is not possible that Ministers operated on whims to look after their own. We know that it cannot be done in that way because my noble friends usually slip in and have something to say. Therefore, the noble Lord, Lord Hanningfield, is being very unfair in talking about Ministers operating on whims in respect of individual authorities. As the noble Lord raised this matter, I must point out that the very freedoms that exist under the legislation we are perpetuating are the freedoms that allow his trust to buy and sell its paintings. It is exactly the same freedom for the local authority. I rest my case.
  Baroness Hamwee: I am really sorry that I missed the start of today's proceedings. There was obviously a lot of discussion which took us into interesting realms. Earlier today, I thought that I should declare an interest in not being a leader of an authority, having been a leader of an authority. Therefore, I understand the concept of capitalisation.
  What the Minister said has reassured me quite a lot and has helped to put the matter into context. Inevitably, because it is what oppositions are supposed to do, I retain just a sense of unease and a feeling that one must keep on asking for reassurance and asking how differences might be applied. But I thank the Minister for what he said. As regards proper practices, I understand how it relates to Clause 21. It is not always easy to know that a phrase is defined in a particular way because one does not know whether to look back, look forward or look at the interpretation clause at the end.
  I am sorry to have taken the time of the Committee, but I have made the point because practitioners need to be able to handle legislation of this complexity.
  Lord Rooker: I know that parliamentary counsel listen to what Members say. There is no science in drafting Bills—it is an art. The fact that there is no index, as opposed to a contents page, is always a problem in finding one's way through a Bill, particularly if it refers to further legislation. The definitions are used throughout the Bill; they are not found in one place. Therefore, I think that the noble Baroness has made a wholly legitimate point which should be taken up by those charged with drafting the Bill. I might add that those who draft the Bill are not the Government, of course. Parliamentary counsel is a separate body—of fine upstanding people, by the way. I have been into the inner sanctum as a Minister. I have made good friends there. I have enormous respect for them. But they do not have to stand at the Dispatch Box sometimes defending the way in which a Bill is drafted. We defend the policy. But putting policy into
  GC218
  legislation and the rules of drafting Bills make it extremely difficult and sometimes cause amendments to be tabled that would riot otherwise be needed.
  Baroness Hanham: I slightly despair because I think I made the same point during the course of the Regional Assemblies (Preparations) Bill.
  Lord Rooker: Yes, I am sure.
  Baroness Hanham: I hope that it was recorded in Hansard. Whether it was or was not, I hope that this exchange is recorded in Hansard because, ultimately, something might happen if all the comments are brought together from the different Bills.
  Baroness Hamwee: I am grateful for the Minister's remarks. I have enormous respect for parliamentary counsel who clearly work fantastically hard—through the night as we move into the summer. While we are on the subject, there is a similar problem when different counsel draft different parts of the same Bill because the style changes and that makes it even harder to navigate. Perhaps we had better bring apples in for parliamentary counsel on the next day of Committee. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 62 and 63 not moved.]
  Clause 16 agreed to.
  Clause 17 agreed to.
  Clause 18 [Local authority companies etc]:
  [Amendment No. 64 not moved.]
  Lord Hanningfieldmoved Amendment No. 65:
  Page 8, line 28, at end insert—
  "(5) A local authority may make and issue a guarantee in respect of membership of a company incorporated under the Companies Acts either operating in its area or operating as a local authority association.
  (6) Any guarantees issued under subsection (5) above may not exceed a total value at any one time equivalent to one-fifth of the expenditure limit applicable at that time under section 137 (as amended) of the Local Government Act 1972.
  (7) The provisions of Part 5 of the Local Government Act 1989 (local authority controlled companies) shall not apply in the case of a company limited by guarantee which is either one with charitable objects or is a local authority association.
  The noble Lord said: Amendment No. 65 refers to parish and town councils. The Government have taken a number of steps to improve the position of parish and town councils during the past few years. I hope that they will consider this amendment sympathetically. At the moment, parish and town councils are unable to join fully in the operating partnerships of companies limited by guarantee and, of course, a great number are much bigger than district councils which are allowed that provision within this legislation. In addition, many charities and regeneration partnerships are incorporated in this way. That means that on many occasions the most local tier of government is rendered incapable of contributing to the wellbeing of its community. This amendment would remove that obstacle and would

  GC219
  enable parish and town councils to participate in these partnerships and to make a real contribution to their local communities.
  While I am on the subject of parish councils, I should like to fly a little kite on which I would like the Minister to comment. It has been suggested that the minimum age for standing for election in parish councils should be reduced from 21 to 18. That would provide an opportunity for young people, particularly in rural and smaller communities, to participate and reinvigorate their local areas. I hope that the Minister might comment on that point. This is very much a pro-parish council amendment and I hope that the Government might think fit to support it. I beg to move.
  5.45 p.m.
  Lord Rooker: As regards the final question asked by the noble Lord, Lord Hanningfield, about the minimum age for standing for parish council elections, I do not know anything about that proposal. But I do know that the minimum age limit of 21, in which minors shall not be elected, is in an Act of Parliament, currently on the statute book, dated 1675. Time for renewal, I think. That is the Act of Parliament that sets the age. One cannot be elected to the House of Commons until the age of 21. That is barmy. The side-title of the clause is "Minors shall not be elected". This is a matter that I researched some years ago—for reasons of which I shall not bore Members of the Committee. I do not know whether there are any proposals but I presume that there would be plans to update current legislation that is more than 300 years old.
  Turning to the point of substance, Amendment No. 65 seeks to add a new subsection at the end of Clause 18. That would give authorities power to issue guarantees in respect of companies, subject to certain safeguards. We are not clear about the exact intention, although the noble Lord has now spoken to it. However, we believe that authorities have sufficient powers under existing legislation to work in partnership with companies of the kind mentioned in the amendment. In appropriate circumstances, that could include offering guarantees on their behalf to enable them to raise loans more easily. We do not think that it is practical to specify the limits to such powers on the face of the Bill, as the amendment seeks to do. The prudential system should offer a sufficient safeguard against reckless use of guarantees.
  Any authority offering a guarantee to a company will have to assess the risks of that guarantee being called and the likely cost implications for the authority. Obviously, such revenue implications will need to be taken fully into account when the authority calculates its capacity for affordable borrowing under the prudential rules. In the event of a national limit ever being imposed, the regulations enforcing it could make special provision relating to guarantees if it was deemed necessary at the time.
  GC220
  The regulations setting a national limit could exempt specific kinds of companies, such as those with charitable objectives. There are certain exemptions of that kind under the present system and we would expect them to be carried forward into the new system. We think that that is best done in regulations rather than on the face of the Bill. I hope, with these assurances, that noble Lords will withdraw the amendment and enable us to move quickly on to the next amendment on which I have some really good news.
  Lord Hanningfield: I thank the Minister for those comments, on which I should like to reflect. Obviously, I shall be consulting the town and parish councils. As I said in my introduction, there are several of considerable size with budgets of several million pounds and representing communities of 50,000 or 70,000 people. I think that they should be able to benefit from some of the provisions of this Bill. I thank the Minister for his comments. I shall examine his comments and consider whether we should return to this issue at a later stage.
  In addition, I was interested to hear his comments about the voting age. Certainly, the Association of Councils feels that it would like a younger age of representation in order that it could more widely represent its communities. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Baroness Hamweemoved Amendment No. 65A:
  Page 8, line 28, at end insert—
  "( ) The Secretary of State may by order make provision amending the definitions referred to in subsection (2) and contained in Part 5 of the Local Government and Housing Act 1989 to ensure that the definitions conform to generally accepted accounting practice.
  ( ) An order under subsection (5) shall not be made unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament."
  The noble Baroness said: I turn first to the issue of age, which is one to which we shall return when we discuss the amendment tabled on that matter.
  Yesterday, I mentioned a briefing that we had received from CIPFA. I talked about it being "in elation" to the Bill—maybe this is the time to apply that. Amendment No. 65A is made at the request of CIPFA and is supported by the Local Government Association. The regulatory framework for local authority companies is currently provided in Part V of the Local Government and Housing Act 1989. The definitions in it differ in small but very significant ways from definitions in the UK Generally Accepted Accounting Practice (UK GAAP). That practice, adapted to reflect local authority circumstances, is the basis for financial accounting for UK local government and also underpins the definitions and the computations of the key indicators in the Prudential Code. It will also form the basis of the information flows for the Whole of Government Accounts programme, which is now rapidly developing momentum—I am told by this note.

  GC221
  It is expected that local government will be included within this programme. If the current Part V of the 1989 Act definitions continue, local authorities will have to carry out separate classification exercises for prudential framework/annual financial reporting purposes on the one hand and the regulatory framework on the other. As Members of the Committee will appreciate, that will create costs and—I am not sure that this is a technical expression—will risk creating a technical fog where we want to see clarity and transparency.
  The Local Government Association confirms the importance, in its eyes, of local authority accounts following best practice and supports the mechanism introduced in the Bill to allow statutory definitions to be replaced with definitions from UK GAAP, subject to modifications for local authority practice. CIPFA has also said that the amendments are not merely technical. In the post-Enron environment the issue of whether entities are on or off balance sheet has a particular resonance and it looks forward to local authority accounts following best practice. I beg to move.
  Lord Rooker: Amendment No. 65A relating to Clause 18 is important. While we should like to accept the amendment as it is, we cannot do that. But we shall accept the spirit of it and, by and large, come back on Report with something that goes even further. I am quite happy to put all this on the record, but I do not think that it is strictly necessary to go through the whole of my speaking notes.
  We were aware, of course, that CIPFA, which lays down the accounting standards for local government, had been examining the treatment of local authority companies and whether local authorities should move to a formal system of group accounting under which the authority would prepare consolidated accounts for itself and its companies. Once such a system is in place, the statutory definition of a company could easily be based upon that in the revised accounting code. That would mean a reference to the 1989 Act would no longer be necessary.
  Such a change would also fit well with another imminent development—that is, the Treasury's Whole of Government Accounts initiative—to produce a consolidated set of accounts for the whole public sector, as required by the Code for Fiscal Stability.
  The difficulty is that the timetable for CIPFA's introduction of a group accounting standard is still uncertain. The revised accounting code may not be in force by the time the Bill becomes operative. We were therefore unable to refer to this accounting definition and decided to keep the existing definition which, though far from ideal, is workable.
  The amendment suggests an interesting approach. It would leave the definition as drafted for the moment, but would give us power to update later by order in line with changes generally accepted in accounting practice. The introduction of CIPFA's group accounting proposals would certainly come under that heading. Therefore, as soon as its new standard is in
  GC222
  place, we could make an order which would base the definition of a local authority company on the new accounting standard.
  Since the Bill was drafted, we have continued to explore this whole issue in liaison with CIPFA and the Local Government Association. Our own ideas have moved in much the same direction as those embodied in the amendment. However, we have taken the concept a little further. We are aware that other international and national developments are on the horizon, including potential major changes in the accounting treatment of leasing and borrowing. Some of these accounting changes may be a few years away but, if and when they materialise, it may be necessary to harmonise various aspects of existing local government financial legislation. We should like to ensure that we have the power to do that.
  Consequently, we are proposing to put down our own amendment on Report which would go rather beyond what is proposed in this amendment and allow a wider range of definitions to be revised by order in line with accounting practice. That would achieve all that the amendment proposes and, indeed, more besides. I am extremely grateful that the amendment has been tabled because it has given me the opportunity to make that response and foreshadow what we shall put forward.
  Baroness Hamwee: For my part, I am grateful that the Minister has not teased me about proposing to give the Secretary of State an extra power. That is very welcome news and I thank the Minister. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 18 agreed to.
  Clause 19 [Application to parish and community councils]:
  Baroness Hamweemoved Amendment No. 66:
  Page 8, line 35, after "may" insert ", following consultation with representatives of parish and community councils and charter trustees,"
  The noble Baroness said: In speaking to Amendment No. 66, I speak also to Amendment No. 230 with which it is grouped. Amendment No. 66 proposes inserting in Clause 19— under the power which allows the Secretary of State or the National Assembly to make regulations to extend the provisions of the Bill—that,
  "parish and community councils and charter trustees",
  have an obligation to consult with their representatives. I hope that I can quite simply be told that that will happen and have that assurance on the record.
  Amendment No. 230 has been tabled because it is perhaps unclear whether Clause 23(2), bringing in first tier councils, is replacing Schedule 13 of the Local Government Act 1973. The local councils have asked me to table this amendment to probe whether that is the case. I beg to move.
  Lord Hanningfield: I support the amendment, which is very much in line with the amendment I moved earlier. It is very important that we involve parish and community councils, which are the trustees, in the new provisions and the new legislation. They are an increasing part of our local communities and it is important that we support them. I endorse and support the amendment.
  6 p.m.
  Lord Bassam of Brighton: I can deal with the amendment reasonably easily and provide the assurance and clarification that the noble Baroness—and, by extension, the noble Lord, Lord Hanningfield—seeks.
  Amendment No. 66 would require consultation with representatives of parish and community councils before regulations were made under Clause 19(3). This power allows provisions in Chapter 1 to be applied to these councils and corresponding provisions in Schedule 1 to be disapplied.
  The system for regulating parish council borrowing has always operated in close consultation and co-operation with the National Association for Local Councils and its network at county association level. The package of administrative improvements to the system announced in the White Paper was developed in consultation with it. We greatly value its input and—I can say this without any fear, favour or risk—it would be unthinkable that the power under Clause 19(3) would be used without seeking its views.
  Amendment No. 230 is quite interesting and I can understand why the noble Baroness has brought it forward to probe what has happened. As it stands, the amendment would add Schedule 13 to the Local Government Act 1972 to the list of repeals in Schedule 7 to the Bill. The schedule contains the provisions regulating borrowing by parish and community councils that are to be superseded by Clause 19 and Schedule 1.
  It therefore seems perfectly logical to include the repeal in the Bill, so why did we not do so? The answer is that it was unnecessary. The repeal of Schedule 13 is already on the statute book. It came about in this way. Before 1990, Schedule 13 applied to all local authorities. The Local Government and Housing Act 1989, which introduced the current system of capital controls for principal authorities, included the repeal of the relevant parts of Schedule 13. But the 1989 Act controls were never applied to parish and community councils and so the repeal was never commenced for those councils. When Clause 19 and Schedule 1 are brought into force, we intend simply to make a commencement order under the 1989 Act to complete the repeal.
  The amendment is virtuous but unnecessary and I am sure that the noble Baroness will feel quite confident in withdrawing it.
  Baroness Hamwee: I am grateful to the Minister for filling in the gaps between the lines. Others no doubt will follow that Minotaur's trail. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 19 agreed to.
  Schedule 1 [Capital finance: parish and community councils and charter trustees]:
  [Amendment No. 67 not moved]
  Baroness Hamweemoved Amendment No. 68:
  Page 79, line 3, leave out "due rate" and insert "rate from time to time specified by the appropriate person"
  The noble Baroness said: I suspect that I may be told that the definition of "due rate" appears elsewhere in the 100-odd pages of the Bill. The amendment seeks to delete the words "due rate" in paragraph 3(2) and to replace them with "rate from time to time specified by the appropriate person"—in other words, the Secretary of State or the National Assembly.
  I do not, of course, support the Secretary of State having additional powers but it may be what the "due rate" means. Can the Minister say where and how it is defined? This is another case of it being quite difficult for new readers starting here. I beg to move.
  Lord Bassam of Brighton: I am sorry, but I cannot resist a tease. It is usually the case that the Opposition seek to remove or limit the powers of a Minister. Here the Liberal Democrat spokesperson on the Bill is proposing a new and thoroughly draconian power for the poor old Secretary of State. But we really do not want it. So thank you, but no.
  Consider what would happen if an interest rate were to be set under this power. Parish councils throughout the country would be repaying loans taken out at different times at different rates. They are contractually bound to pay the interest rate stipulated for each loan, but this provision would constrain the charge for interest that they make to their revenue accounts.
  The charge to the revenue account, of course, in turn determines the precept that they set as a call on their council tax. If they were required to charge less to their revenue accounts than the amount they were required to pay, they would have insufficient funds to make the payments. It is true that they have a discretion to make a higher charge, but that is not likely to reassure a lender that funds will necessarily be available. If the charge is to be greater than the amount due, then council tax would have been raised unnecessarily.
  So the provision requiring the due amount of interest to be charged to revenue accounts is taken over from the Local Government Act 1972. We believe that that works well for local government, and local government seems to believe that it works well. It is certainly well understood. It is a fundamental part of good and sound financial practice and provides a good framework for parish councils. We would be ill-advised to alter it.
  We are grateful for the suggestion that the Secretary of State should have new powers, but on this occasion we do not believe it would help parish councils.
  Baroness Hamwee: The Minister's answer showed a lot of imagination. However, he omitted to refer to the

  GC225
  clause in the 1972 Ad which defines and provides for "due rate". Teasing aside, it would be helpful to know the definition. I appreciate that this may be a question to be dealt with in a letter, although the Minister may be about to be told the answer by people who carry the enormous volumes of local government legislation in their heads, which is admirable. Perhaps he will be able to tell us which clause it is.
  Lord Bassam of Brighton: "Due rate" means the rate due. It means no more nor less than that.
  Baroness Hamwee: That answer may or may not be helpful. I shall think about it. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Schedule 1 agreed to.
  Clause 20 [Directions]:
  [Amendment No. 69 not moved.]
  Clause 20 agreed to.
  Lord Hanningfieldmoved Amendment No. 70:
  After Clause 20, insert the following new clause—
  "COST TO LOCAL AUTHORITIES OF COMPLIANCE WITH REGULATIONS
  (1) In publishing any regulations or directions under this Chapter, the Secretary of State shall publish a statement of his total estimate of the time and the average cost in officer time that it will require for local authorities and functional bodies as a whole to read, implement and comply with each set of regulations and directions that he may issue, and the number of civil servants in his department or other government agencies required to prepare, monitor and apply the said regulations, together with his estimate of the cumulative annual cost to the taxpayer of implementation of the regulations and directions by both central and local government.
  (2) The chief executive of each local authority or functional body in receipt of regulations and directions issued by the Secretary of State under this Chapter shall publish an estimate of the total compliance cost to his authority and shall furnish the figure annually to the Audit Commission.
  (3) The Audit Commission shall publish an annual table setting out the figures published by the Secretary of State and the chief executives of local authorities and other functional bodies under subsections (1) and (2) above, and shall lay that table before Parliament."
  The noble Lord said: The amendment is straightforward. It would require estimates to be produced of the costs involved in complying with the new provisions set out in Part 1 of the Bill.
  Most people accept that there are freedoms in the Bill, but increasingly—as we have discussed in Committee for two days and will discuss in the next four days or so in Committee—more and more regulations and complexities are contained in legislation. When members and officers of local government read this legislation they are very concerned about the continuing cost and work involved in providing the material to implement it, as we have discussed today. That applies not only to this legislation but to other legislation all the time.
  GC226
  We have brought forward the amendment to ensure that someone will calculate the cost of this legislation to local authorities. I shall be interested to hear the Minister's response.
  Baroness Hanham: It could be said—the Minister may be about to say it—that this is a trivial amendment, but people in local government will not believe that it is. As my noble friend Lord Hanningfield said, they have to wrestle all the time with the regulations and the legislation produced here, and with its impact when it falls on them. Perhaps at some stage we should pay more attention to the impact of such regulations and legislation.
  The cost of implementing regulations and legislation arises from employing people to carry out its requirements and to provide the information required, and ensuring that they understand what is proposed. It is to be hoped they will not try to do that from this Bill because they will not be able to. They will have to go back through all kinds of legislation to understand what is proposed.
  Without in any way wishing to denigrate civil servants, I believe that they are frightfully good at producing reams of regulations. They rationalise issues very carefully because they do not want to leave any stone unturned in the course of what they are doing, but they do not perhaps understand its implications. The reality of life in town halls is that more and more senior officer time is taken up by reading, interpreting and responding to government directions and regulations.
  For once, we may wish to follow the US, which has a paperwork reduction Act that requires federal agencies to estimate how long it should take to read and respond to documents. It is a very good idea. Every civil servant should have an egg-timer on his or her desk, as do lawyers and other professionals to help them in estimating their bills.
  The amendment is not trivial. It suggests that we should stop and take stock. If we were to go through what we have already covered on page 10 and add up the number of times it is stated "and this will be carried out within regulation", the Committee will perhaps understand the purpose behind the amendment.
  Lord Rooker: In speaking to this amendment to the "Local Government Reduction of Bumph Bill", which is what the Bill is—
  Baroness Hanham: No. It is not a reduction of bumph Bill in its proposals.
  Lord Rooker: Yes it is. The Bill reduces burdens on local authorities up and down the land. It takes the heavy rod of government off their backs and gives them greater freedom to operate without constantly reporting back to Whitehall.
  I should be very interested to learn what the chief executive of the noble Lord's authority said about compliance with the amendment. I should be very interested to hear what the Local Government Association would have to say about this amendment

  GC227
  putting extra burdens on local government. That is the reality—the amendment would put extra burdens on local government. That is what the proposed subsection (2) is all about.
  I am appalled. The amendment goes against the whole grain of the Bill, which seeks to reduce the burden on local government. Many of the issues in the Bill that we have covered so far relate to powers of last resort which, like previous governments, we would use only as a last resort. The implication that the powers in the Bill are excessive and will be costly for local government does not stand up. The procedures involved in the amendment would cost a fortune to implement and require loads of paperwork, loads of red tape, loads of monitors and loads of people not delivering benefits or any other services. They would be incredibly time consuming. Before coming back with this issue at Report stage, I challenge noble Lords opposite to get the Audit Commission or the Local Government Association to run a rule over the amendment.
  We have kept regulations to a minimum and made them easy to operate. The overall aim is to increase local government freedom, not to curtail it. It is true that there are some necessary long-stop powers in parts of the Bill. We understand that many of the main powers are regulations and directions, but most are such that they impose the national or local borrowing limit. As we have said repeatedly, we hope never to have to use them but we need long-stop powers.
  The other regulations—those allowing the capitalisation of expenditure—are designed to help local authorities to cope with financial pressures. Local authorities have stated that the overall effects of Chapter 1 can be only beneficial to local government. But then what happens? We are faced with this amendment which seeks to place further burdens on local government. I am absolutely appalled. Opposition members should be thoroughly ashamed of themselves.
  6.15 p.m.
  Lord Hanningfield: We are not thoroughly ashamed of ourselves. I accept much of what the Minister said. The idea behind it has certainly not involved very much the LGA. The ideas behind freeing up local authorities are laudable but, increasingly, laudable ideas are then hemmed in by red tape. That is a problem in our country.
  When I speak to colleagues in the United States—this follows on from what my noble friend Lady Hanham said—they are amazed by the prescription in the legislation for local government in this country. We prescribe so much and continue to do so. Every time a government—both previous governments and this Government—introduce legislation they continue to spoil the whole effect of it by so much prescription. We have tabled the amendment in an attempt to make people realise that.
  Many people who have looked at this Bill—not chief executives but day-to-day people—feel that it is a very prescriptive and very detailed Bill which
  GC228
  imposes a lot of work on local authorities. I accept that the Government want to free up the borrowing regime and improve the service for local government, but it would be very nice if the Minister would not joke about the amendment. He should take it seriously, because that is what many people feel.
  Lord Rooker: I was not joking.
  Lord Hanningfield: I recently made a speech in the Chamber pointing out that we have had 1,000 new regulations in the past three years or so. That is an enormous amount. Every piece of legislation introduces new regulations.
  Lord Rooker: My noble friend Lord Macdonald has looked into the issue. The vast majority of all those so-called regulations were minor—for example, to close a road for repair. It is an absolute myth that there are loads of regulations. Some are necessary—as they were under the previous government—for road safety purposes. The vast majority, as I understand it—I remember reading the Parliamentary Answer at the time—were road closure orders required for necessary repairs to be carried out.
  So it is an absolute myth that thousands of regulations are placed on thousands of local government officers every day. It is not true.
  Lord Hanningfield: The Minister has given a classic example. In what other country in the world would a national Parliament be worried about road closure orders? It is a symptom of our centralised system. It is the same under both governments. Having joined Parliament from local government, I can see how everything has to be prescribed.
  The spirit behind the amendment is that people should recognise that not everyone sees—as the Minister hopes— this legislation as a freeing-up. They see elements of it as being bureaucratic and number-crunching in the figures that local authorities have to provide all the time. I shall withdraw the amendment today but I am sure that we shall return to this issue during the passage of the Bill. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clauses 21 and 22 agreed.
  Clause 23 ["Local authority"]:
  Lord Hanningfieldmoved Amendment No. 71:
  Page 10, line 41, at end insert—
  "( ) a regional assembly constituted pursuant to a referendum."
  The noble Lord said: The amendment seeks to probe whether the Government intend any elected regional assembly to be subject to the provisions under this part of the Bill. I should be grateful for clarification on this matter. I beg to move.
  Lord Rooker: It is amazing that we have reached this part of the Bill without anyone referring to the regional assemblies. Let us live in the real world. The assemblies do not exist. The detailed policy on such assemblies is still being developed. We have not made any firm

  GC229
  decisions. There has been no announcement yet about the soundings exercise, which is fairly imminent, so this is purely hypothetical.
  We have not made any decision on whether the assemblies' capital finance system should be governed by the provisions of this Bill or the Bill that will establish them if they are established after referendums, and if referendums take place. The legislation creating the assemblies could bring them within the scope of Clause 23(2) if that is considered appropriate. However, elected regional assemblies will not be local authorities.
  The Government intend that elected assemblies will be established in the England regions in the future, but only if approved by regional electorates in referendums. We expect the first referendum or referendums to take place in autumn 2004. We would then need to introduce legislation whenever parliamentary time allows to set up the elected assemblies. That legislation will set out their detailed powers and functions, including provision for their capital finance arrangements. But those good debates are for the future, not for this Bill.
  Lord Hanningfield: Can the Minister tell the Committee when the Government will announce the first dates for the referendums?
  Lord Rooker: Shortly.
  Lord Hanningfield: Obviously I accept that there will be legislation. We have been told that over and over again. I gather from what the Minister said that some of that legislation may apply to regional assemblies, if and when any are established. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Hanningfieldmoved Amendment No. 72:
  Page 10, line 42, leave out subsection (3).
  The noble Lord said: We welcome measures in the Bill to free local authorities to manage their finances in order to respond to local needs. However, we seek an explanation—this is somewhat similar to my previous amendment—as to why it should be necessary to make provision in the Bill to extend this regime to other bodies. Can the Minister be more specific about the kind of bodies to which the regime may be extended and clarify whether the subsection has been drafted with regional bodies in mind? I appreciate that he has given me an answer on the second issue. I beg to move.
  Lord Rooker: I hope to be able to answer the noble Lord's question. Amendment No. 72 seeks to remove subsection (3) of the clause. However, the subsection serves an important purpose. It enables us, when bringing additional bodies within the system by regulations, to apply the legislation in a modified form. The kinds of bodies in question may well be structured differently from the mainstream authorities listed in the Bill in Clause 23(1).
  Before giving any of these less typical bodies full access to the freedoms of prudential borrowing, we must, in particular, be satisfied that they can cope
  GC230
  properly with the new responsibility of setting and monitoring an affordable borrowing limit. The power in Clause 23(2) would enable any necessary additional safeguards to be introduced. The amendment would remove that flexibility. That could work to the disadvantage of bodies with an untypical structure, which might then have to be denied access to the system altogether.
  As I have no example to give of the kind of bodies that may involve, I offer that explanation on the basis that situations are always changing—bodies merge and different bodies are created for different purposes—and that we need flexibility. If I had any example of bodies to give, I suspect they would be listed in the Bill in any event.
  In the draft regulation 22, examples are given of bodies, including the National Parks authorities, Broads Authority and the Lea Valley Regional Park Authority, which are not mainstream authorities. I hope that satisfies the noble Lord.
  Lord Hanningfield: I thank the Minister for that answer. Obviously I accept that bodies such as the National Parks authorities should be included in the regime. It is interesting that other bodies could be included. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 23 agreed to.
  Clause 24 agreed to.
  Clause 25 [Budget calculations: report on robustness of estimates etc]:
  Lord Smith of Leighmoved Amendment No. 73:
  Before Clause 25, insert the following new clause—
  APPLICATION OF PROVISIONS OF THIS PART
  (1) The provisions of this Part shall be applied to those local authorities which have—

  (a) been assessed as weak in Corporate Performance Assessment overall;

  (b) been assessed as weak in Corporate Performance Assessment in "Use of Resources";

  (c) received an adverse report from their external auditors about their financial management.

  (2) The application of the provisions of this Part to a local authority shall cease if a subsequent assessment or report shows improvement in its financial management."
  The noble Lord said: The purpose of Part 2 was clearly established in the Second Reading debates in both Houses by the Government's Front Bench spokesmen. Broad agreement exists that the overwhelming majority have to have, as my noble friend said,
  "effective processes in place to manage and monitor their budgets".
  The problem therefore lies with a small number of local authorities which do not live up to that requirement. As my noble friend the Minister in another place said, it remains the case that a small number of badly managed and poorly performing local authorities tarnish the good reputation of local government.

  GC231
  If the problem lies with a small number of local authorities, why is Part 2 attached to the performance of all local authorities? The amendment seeks to limit the provisions of Part 2 to those local authorities which need to improve their procedures and processes and to target in on those.
  In his letter to me replying to the points raised at Second Reading, my noble friend admits that the new duties under Clauses 25, 27, 28 and 29 will not be a matter for central government to police. If that is the case, why on earth are all local authorities meant to jump through these particular hoops?
  I appeal to my noble friend's deserved reputation for directness: let the legislation apply only to those local authorities that have a problem and to which it needs to apply. The remainder of local authorities feel somewhat offended that procedures that are natural and normal to them are suddenly now applied through this legislation. I hope my noble friend will listen to what I say and concentrate the attention of the Bill on those who need its direction. I beg to move.
  Lord Hanningfield: I support the amendment. The debate has shown that there is a lot of unanimity across local government areas. We have debated several times the CPA regime and what is happening in local authorities. The amendment is laudable and I support it.
  Baroness Hanham: I do not want to embarrass the noble Lord. Lord Smith, by overstating our enthusiasm for what he has proposed. However, I know him well enough to know that he is perfectly able to shoulder the burden of the responsibility of our support.
  When I first read the thrust of Part 2 I found it absolutely astonishing. In most senses, most authorities would consider the aspects of budget monitoring, the calculation of reserves and so forth to be par for the course. They come absolutely naturally. It is nine-tenths of any senior cabinet member's responsibility to ensure that it is all carried out above board. As the noble Lord, Lord Smith, said, it is probably only a few authorities in which there is a problem. In the past there may have been many authorities with problems. Mostly it was the ones run by the party opposite which caused the difficulties.
  The noble Lord, Lord Smith, put his case well. Now that we have in being a system of comprehensive performance assessment, if the purpose of the Bill is to take the dead hand of government off local government then the whole of Part 2 is quite extraordinary. I support the amendment.
  Baroness Maddock: We are not quite unanimous. I understand what is behind the amendment and I have great sympathy with not wanting any interference from national government in local matters and in allowing local authorities to look after their own finances. But this would still allow the Government a hit of control.
  GC232
  In an ideal world we would say that local authorities look after their finances well and that there are various other bodies to ensure that they do so. When I was in local government I can remember the district auditor coming along. As we have said many times, there is a lot of flourish in the Bill about how local authorities will be given freedoms, and then, as we go through it, they are taken back again.
  We have some sympathy with the amendment but we would not want this part of the legislation to apply to local authorities but to rely on the mechanisms that have worked satisfactorily in the past.
  6.30 p.m.
  Lord Rooker: But they have not worked satisfactorily; that is the point. I understand the reason for my noble friend tabling the amendment. I hope that I have a sufficiently robust and practical answer in defence of this part of the Bill. Clearly, there is an attempt to reduce the burden of regulation on local authorities. I sympathise with that objective. I keep repeating that it is one of the main purposes behind the Bill. We have given a yard but now they have come for the marathon. The idea that the Bill is not reducing burdens is not true; it is.
  We do not believe that the amendment would improve the Bill. Indeed, it would not reduce burdens on authorities and will leave authorities uncertain in some cases as to whether or not Part 2 applies to them. To explain that I need to consider the effect of the amendment on each of the clauses it will affect. There are not many. I shall take Clauses 25, 28 and 29 together.
  These three clauses put into statutory form some of the basic elements of good financial practice. The point has been made that well-managed authorities will follow this good practice anyway. We agree, and for these authorities the clauses will impose no extra burden. However, we know that other authorities have not made proper provision for reserves and have not followed good budget monitoring practice. When we consider authorities which have experienced severe financial problems in recent years, for instance Hackney, Walsall or North Tyneside, some combination of those failings will always be involved. But the problem is not confined to those extreme cases. The Audit Commission's auditors identified 12 per cent of authorities in England and Wales as having inadequate reserves.
  The duties on reserves and budget monitoring are so basic that they should apply to all authorities without exception. A duty similar to Clauses 28 and 29 has applied to the housing revenue accounts of all authorities that keep such accounts since 1990. If Amendment No. 73 were accepted, the duties would apply only once financial management had deteriorated. It would then be too late; the damage would have been done. Once that has happened, it is far more difficult to restore sound finances.
  As regards the effect on Clause 26, this is a power for the Secretary of State or the Assembly to require authorities to budget for a minimum level of reserves.

  GC233
  We have made clear the very limited circumstances in which we would intend to use the power. Regulations would apply only to particular authorities that were disregarding the advice of their chief financial officers and heading for serious financial difficulty. Amendment No. 73 would prevent the power being used until an authority had been formally identified as having poor financial management. Remedial action would be delayed and we would lose the chance to catch a developing problem at an early stage.
  In the case of Clause 30, we suspect that its inclusion within the purview of the new clause was an oversight. Clause 30 concerns the most extreme situations, where it appears an authority may not have the resources to meet its spending needs. The chief financial officer in those circumstances already has a duty to report under Section 114(3) of the Local Government Finance Act 1988. If I remember correctly that is the poll tax Act. I was on the committee, helping my friend Dr Jack Cunningham lead for the opposition. I can remember the powers that were put in that Act for the whistle blower; that is, the duties of some of the officers in local government to blow the whistle before the problems arose so that we could nip them in the bud.
  The effect of the report under that section is to oblige the full council to consider the situation within 21 days and in the mean time to impose a prohibition on new Financial commitments. That prohibition has been found in practice to delay vital action required to deal with the financial emergency. Therefore, Clause 30 provides a tightly-controlled gateway through the prohibition to let remedial action be taken without delay. That is crucial.
  I repeat that Clause 30 has been generally welcomed in local government and by the Local Government Association in particular. In this Room I am surrounded by experts, representatives and practitioners of local government. I have never been a councillor and I cannot understand why local government associations support particular clauses. I accept that it is good to get things on the record. However, the effect of the amendment would be to restrict its application to the authorities where we have received adverse assessments.
  As I said, I understand the reasons for my noble friend tabling the amendment, so that the good and excellent authorities, such as the one he leads, do not have any burden. But an excellent authority will not suffer. An excellent authority should not be affected by this part of the Bill.
  It is true that Section 114 reports are generally associated with poorly-run authorities that have brought about their own financial troubles. But other authorities not covered by the new clause may also be subject to Section 114 action. Perhaps an authority has lost a court case that results in substantial damages being awarded against it. The effect of Amendment No. 73 would be to deny such an authority the flexibility permitted by Clause 30.
  Amendment No. 73 is therefore unnecessary and would have undesirable consequences for the application of Part 2. It would create uncertainty for
  GC234
  authorities in knowing whether Part 2 applied to them. It is in some instances difficult to say whether an auditor's report is adverse; I accept that. Auditors will usually include elements of criticism and praise within a report to give a balanced view of an authority. A subsequent report may refer to improvements, but they may not be sufficient improvements.
  In the light of the problems that the new clause would create, I hope that on further consideration my noble friend will agree to withdraw the amendment. It may be that there are elements of this which should be discussed on Report. Nevertheless, I repeat what I have said. Excellent, well-run authorities carrying out proper financial procedures should not find this measure a burden. It is there to be used in a small, limited number of examples. As I said as regards Part 1, it is a measure of last resort.
  Lord Smith of Leigh: I thank my noble friend for his response, although I am nevertheless disappointed. Perhaps what he does not understand is that what local authorities do naturally most of the time is to listen to good, sound advice from officers. Suddenly, that has become part of legislation. Are we to have a new clause in the Bill which states that we have to listen to the advice of a chief education officer or a director of social services? That is what councils do daily to implement their business. Suddenly there is an element here that is treated as different from the rest.
  I accept the point made by my noble friend at the beginning. There is a problem that the current legislation has not dealt with. That is why I do not agree with the comment made by the noble Baroness, Lady Maddock, that this can be left to local authorities. There have been problems with local authorities of all political persuasions which have not taken a grasp of their financial situation. I understand that there is a problem.
  My noble friend said that we need to nip this in the bud. If I really felt that the Office of the Deputy Prime Minister was best located to nip the problem in the bud I might be more sympathetic to what he said. Frankly, I do not believe that that is the case. I believe that the district auditor, who is hands-on, working with the local authorities, is the best person to discover the sudden change in circumstances that my noble friend suggests. Those authorities in which there is a systematic problem, to which he referred earlier, will be shown in a CPA result and can be regularly monitored. But where there is something that has changed, surely it is the role of the district auditor to understand problems on the ground and to deal with them.
  I am disappointed by my noble friend's response. However, I shall read what he said—
  Lord Hanningfield: Before the noble Lord sits clown, the Minister referred to the LGA. Clause 26 on minimum reserves is the one to which the LGA had the most objection in the whole of the legislation, and in a moment I shall oppose the question that Clause 26 stand part. The Minister very kindly said that he was surrounded by local government figures. Those of us

  GC235
  who have been through the CPA process this year will be aware that the rigour of the auditing part of that is immense. The Government have set in place that process. To put in this further piece of legislation is rather offensive to local governments. Before we reach the final stages of the Bill I hope that the Government will think again as to how this section is dealt with.
  Lord Smith of Leigh: I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 25 [Budget calculations: report on robustness of estimates etc]:
  [Amendment No. 73A not moved.]
  Clause 25 agreed to.
  On Question, Whether Clause 26 shall stand part of the Bill?
  Lord Hanningfield: I shall speak at some length on this matter. As I have just said, this is the part which the LGA finds the most difficult of the whole legislation.
  This clause gives the Secretary of State the power to set a minimum level of reserve for a local authority. It is a power that is wrong in principle for the Secretary of State to seek to take and a power that will be ineffective in practice.
  As the Minister has just said, I understand that Ministers are seeking this power as a reserve to enable them to deal with a small number of authorities. However, there is surely a question as to whether the powers will enable the problems in those authorities to be tackled. The Select Committee did not think that those powers would prove effective. It stated that it did not receive any evidence that had those particular measures been in place they could have prevented financial imprudence. We have just referred to cases in Hackney, Walsall and so forth.
  In the light of that it would be interesting to hear from the Minister exactly how and in what circumstances those powers might be exercised. However, I note from the ODPM's memorandum to the Select Committee on Delegated Powers and Regulatory Reform that those circumstances cannot be foreseen at present. So the Secretary of State is taking power which no experts think will work, which local authorities oppose, and which he is not quite sure how to exercise.
  I also noted with interest that the same memorandum states that the exercise of that power would be through the negative resolution procedure as the powers might have to be exercised rapidly. However, looking at the Bill these powers cannot be exercised rapidly. The Bill does not prevent an authority from running down its reserves to a level below that set by the Secretary of State during the course of a year. The Bill refers only—we have not discussed this before—to an out-turn position at the year end. By that time the damage will have been done.
  GC236
  We might then have a situation in which local authorities required to meet a statutory obligation at the year end have to scramble around to make the necessary savings. It is conceivable that under those circumstances the focus will be on meeting the short-term target and not on what the long-term implications for the community or for the financial health of that authority may be. One can see some extremely painful decisions being taken by local authorities: the closure of elderly people's homes; the withdrawal of grants to voluntary bodies, and reductions in services simply to meet a figure stipulated by the Secretary of State. In the long term, breaching this minimal level of reserve might save an authority money if the alternative is to take drastic action in the short term to meet it.
  That is why reserves are a highly sensitive local issue, a point recognised by CIPFA in its evidence to the Select Committee on the Bill. I wonder how the Secretary of State will set the level of reserve and whether he will take into consideration and take responsibility for the effect on services that having to meet this requirement will mean.
  Local people will find it very hard to understand why homes are being closed and services cut because the Secretary of State believes that the authority should keep a certain amount of money in the bank. I urge the Government to think again on this provision. Perhaps I may add that this is the part of the Bill about which I feel most strongly. It is an intrusion on local democracy. I regret very much that the Government feel that they need this power in the Bill. I hope they will think again.
  6.45 p.m.
  Baroness Hanham: I want to continue the comments made by my noble friend Lord Hanningfield. The suggestion under Clause 2 is that a minimum amount would be determined in accordance with regulation by the appropriate person, neither of which is defined in the Bill in Clauses 2 and 3.
  As leader of a council I spent a disproportionate amount of time at any budget meeting defending the position of any reserves. My council was very prudent. It insisted on having at least three months' worth of salaries in reserve so that if a crisis arose it would have something on which to fall back. That was a political decision taken after advice from the then director of finance that that, in his view, was the minimum that should be in any reserve. But that might not be the view of any other director of finance—I am sure that the Minister is listening—who might have different ideas on what the level of reserve should be.
  I agree with my noble friend Lord Hanningfield. This section undermines the authority of a local council to decide what it will do with its money and what it believes it requires to ensure prudence so that it will not fall into difficulties. It has been said that some of these provisions have come about because of the well-known and well-vaunted problems of some less than prudent councils. I accept that there have been a few and probably there will be a few more, but

  GC237
  of all those of which we know setting a level of minimum reserve would have had not the slightest effect. They were well beyond any minimum reserve by the time they were in difficulties. It was not a problem associated with minimum reserves.
  This is a tendentious clause. It is a matter about which local authorities need to make their own decisions. It is politically highly contentious as to what those levels of reserves should be. But, indeed, that is probably correct—that is what it should be—because what is in reserve is not being used for expenditure and all kinds of decisions have to be made as regards that. I support the comments of my noble friend Lord Hanningfield.
  Baroness Hamwee: My name is also down to oppose the question that Clause 26 stand part. As I said on the first day of Committee, the only reason that my noble friend's name does not appear also is to leave the gap for number four.
  When I first read Clause 26, I felt that it was a bit rich of the Government—
  Lord Rooker: That is the problem. It is not rich.
  Baroness Hamwee: It is a bit rich. I have experience of seeing organisations coming into the control of a new sphere of government in London. The Metropolitan Police and Transport for London were handed over by the Government without reserves. Frankly., their finances were in a state such that, particularly in the case of the Metropolitan Police, it was difficult even to understand what assets they had. They would accept that now. The state of finances of such bodies and their lack of reserves—presumably because they would just turn to the Government and say, "Can we hold out our hand and ask for a hit more as we need it from central government?"—was appalling.
  This again is about central government not leaving local authorities to carry on their own affairs, subject to the decision of the electorate as periodically stated. The electorate is not concerned only about a minimum; it is sometimes concerned about a maximum, which is not dealt with in the Bill. The experience of administrations building up a war chest in order not to have to increase the council tax by much or at all—or even to be able to reduce it in election year—is certainly not unknown. That is not something which I have done, but I have observed it. It is perfectly right that it is a matter for the democratic process to state, "We are not funding this". I support the opposition to Clause 26 stand part.
  Baroness Maddock: I, too, support the opposition to Clause 26 stand part. As with many other things, as Liberal Democrats we believe that it is up to the local electorate to make a judgment about how many aspects of local authorities are run. When my noble friend referred to a war chest I was reminded of the war chest that was left behind in Southampton by the Conservatives. The present Member of Parliament for Southampton Test, Dr Alan Whitehead, was able to put a lot of money into saving what was a bingo hall
  GC238
  and is now the Mayflower Theatre. So, it was put to good use. That is the kind of thing which happened. We were able to spend money on other things, too, not just the theatre, because there were rather larger reserves than were needed. It is important that we consider not only the minimum but the maximum.
  My question to the Minister concerns how this would play out if the Bill were enacted now. Let us consider what happened recently as regards money for education when instructions were given to dip into reserves. Some of those would have been in individual school budgets, some would not. I refer to capital reserves for repairing buildings which have been under-funded for quite a long period of time. However, the recommendation from the Government was, "Do not make teachers redundant; use that money". Could that have happened if this Bill had been on the statute book?
  Lord Smith of Leigh: In reply to the noble Baroness, Lady Hamwee, my treasurer did his thesis upon the level of local tax rises in county councils and found, remarkably, that in an election year they were a lot lower than in other years. I am sure that that was entirely coincidental.
  I rise to give a sincere warning to the Minister. Is this a power that the Government really want? I think it is a power that will be very difficult for them to exercise. The figures he quoted earlier and in his letter demonstrate that. They show not that the level of reserves was necessarily dangerously low in a large number of authorities but perhaps that there is a difference of opinion between local authorities and their auditors about what is an adequate level of reserves.
  The question we should ask is in how many cases did that create problems in the following financial year for local authorities. Clearly, running down reserves to a ridiculous level could create serious problems—and no one is advocating that—but how do we define what the level of reserves should be? Is it a percentage of total spending? Does that cover schools' budgets? Schools also have their own reserves, which they keep. In a sense, if we do that we are double counting that particular amount of education spend.
  Without stating that some authorities are more reckless than others, those of us who know local authorities could state that some are more careful about budget monitoring than others. So those authorities—the auditor would probably endorse this—could have a lower level of reserves because they have a very finely tuned system of monitoring the budget. If things started to get out of kilter they could rapidly bring them into line. Clearly that sophistication is probably not available to the Office of the Deputy Prime Minister to be able to understand that particular case.
  In future Ministers may regret this clause. They may regret having to impose minimum reserves on local authorities and getting themselves into endless wrangles. In how many cases will this be a significant problem?
  Lord Rooker: This is another clause which we sincerely hope we do not have to use. On the other hand, it is nonsense to say that the local electorate are in charge—we are talking of local governments which are elected once every three or four years—as though they can influence what happens with reserves on a yearly basis. That is nonsense. It is paying lip service to a mythical system of local democratic control by the electorate. I will not have that.
  If there were annual elections and if local government raised 100 per cent of its money, then there would be real accountability, but it is not like that.
  Lord Smith of Leigh: It is in metropolitan districts.
  Baroness Maddock: In the authorities to which I referred it happens every year.
  Lord Rooker: It is not like that all over the country. The metropolitan districts have a year off and I know what happens in that year off. So there are not debates every year, even where they have third elections.
  As I said, we hope that we do not have to use this clause. No one who has spoken has made the point—perhaps because they do not agree with it—that guidance to local authorities on this subject of minimum levels of reserves has been available for many years from CIPFA.
  I presume that that is irrelevant and it is up to the local authority to decide what its reserves should be. No one has said, "Oh, by the way, we have the Audit Commission, which was put there to do a job and is as independent from government and local government as possible. That gives the electorate, the population, a degree of comfort". Its recent report, to which I referred, states that 12 per cent of authorities have inadequate reserves, not low reserves, and that the proportion is the highest among the largest authorities. Twenty-one per cent of English county councils were assessed as having inadequate reserves, and 31 per cent, almost one-third, of the London boroughs. That is an unacceptably high level.
  Lord Hanningfield: Perhaps—
  Lord Rooker: I shall give way in a moment. Having got that information from the Audit Commission, if the Government then put through a local government Bill and did nothing about it, and did not take some reserve powers if things were to go wrong, the electorate would say, "You saw this coming. You were warned about it by the Audit Commission. You did nothing about it. We have this difficulty"—this situation might arise; we hope that it does not—"and you, the Government, did nothing about it. Yet you knew about it; you were told about it by the Audit Commission and you did nothing about it". We will not be in that position.
  We want to have the power on the statute book so that it is there if needed. We hope that it is not, but we have to send a signal to local government that the auditors are there for a purpose. We should like CIPFA's guidance to be followed and it is not being
  GC240
  followed. I cannot believe that I am more or less hearing—it is not being said but it is being implied—"Don't bother with CIPFA's guidance. Do what you want yourself". I shall give way to the noble Lord.
  Lord Hanningfield: I am rather sad to hear the Minister make those comments. He does not really understand how local government works. I want to go back to the comments of the noble Lord, Lord Smith. I do not like quoting my own example, but we have a budget of £1.2 billion. We have reserves of only £15 million. Sometimes our auditors say we should have a bit more but we have £70 million of cash in the bank for road maintenance and building maintenance. If things do not go quite right, as has just been said, we review our budgets every month and we might use some of that cash for the reserves. So, although we have £15 million nominal reserves, we have £65 to £70 million. Our schools have £50 million in reserves. So, there is a lot of money in the system.
  The nominal CIPFA reserves, our auditors' reserves, would be £15 million. The auditors come and see me and say, "You should have a nominally higher figure". I would rather put the money into schools. I do not believe in taking money from the council taxpayer and sitting on it in the bank. I believe in providing services. Although we have all this cash around, if there are problems we look at our budget every month. We have taken corrective action and used some of the building maintenance money to bolster reserves temporarily. We are professional people.
  I was sad to hear the Minister make those comments just now because he clearly does not understand, in particular, large county councils and the way we professionally operate. When we saw this clause in the draft Bill I believe that it angered people more than the Minister understands. We are professionals. We have our members and our political element. We decide what we want to do. We are under tremendous pressures now to help schools. Therefore, we are dipping into reserves to do so. That is what local democracy is about.
  I believe the Minister should consider this matter again. It is an offensive part of the legislation. By his comments the Minister shows that he does not really understand how local government operates. The auditors, CIPFA, have their code of conduct and so forth, but we know how much money we have and what we can do with it.
  7 p.m.
  Lord Rooker: I like the term "we noticed" the CIPFA code of conduct. We are expecting local government to operate to those professional codes. It was the very purpose of our first few debates. We want to operate to independent codes of advice. Local government must do more than notice CIPFA's codes. The provision was not a surprise to anybody. Let us not talk about the draft Bill; the proposal was in the White Paper. It did not appear from nowhere. It has been opposed all the time. But there has not been a substantial argument against it that has caused us to

  GC241
  change our opinion, bearing in mind the report from the Audit Commission, which we cannot ignore. We do not want to use the power. We have included it in case authorities do not remedy the deficiencies set out in auditors' assessments, in which case action could be taken. We are working on the basis that the regulations would apply only to authorities that disregarded the advice of their chief financial officers.
  That gives a long-stop measure to local government, not just the Audit Commission and the auditors. If the chief financial officer has told an authority that it is ready for serious trouble but it ignores the warning, action can be taken. I cannot conceive of a local council doing that. Just because we cannot conceive of it happening—with reasonable professional people, as the noble Lord said—does not mean that it will not happen. There have been financial difficulties with some authorities. I am not saying that the problems would be strictly analogous.
  I do not wish to wind up the noble Lord, Lord Hanningfield, any further but I cannot accept that, when a little local problem arises, the authority should stop running the roads. Just because another difficulty has arisen, we should not knock out a service that people expect and that their council tax has paid for.
  Lord Hanningfield: I did not say "knock out"; I said that you might reduce expenditure elsewhere if there was a problem. For example, if an authority were spending £50 million on road repairs, it might spend £48 million and put £2 million into reserve. That is why flexibility is built into our system. Authorities take the advice of their professional officers. That is why we do not need such a clause. We must trust local government more. I thought that part of the legislation was about freeing up local government and trusting it more.
  Lord Rooker: So what is the problem? If the authority followed the advice of the chief financial officer we would not operate the clause. I do not see the problem. If, in certain circumstances, an authority ignores the advice of its chief financial officer—we shall not name authorities—bearing in mind what we know about the inadequacy of reserves, we are duty bound to do something about it. If an authority follows the advice of the chief financial officer, there is not a problem.
  I could make a much longer speech, but obviously I have upset people. It is being put across that I do not understand how local government works, is it not? I speak here on behalf of the Minister for Local Government and the Regions. I know enough about how local government works, having spent 27 years in another place, to know about how treasurers and others manipulate accounts. I know how budgets get raided. Education budgets get raided, as do social services budgets for building grandiose projects. I have seen it happen and its effects on people. Nobody understands what is happening to start with because of the accounting method.
  GC242
  I am not saying that that approach is wrong or bad. But there is such an enormous amount of flexibility that things can go wrong. When the Audit Commission produces a report about the inadequacy of reserves, we can say that we are including the provision just as a long stop. If there were a problem, we would rather not have to rush through emergency legislation.
  If an authority operates prudent financial management processes, and its chief financial officer says that it is doing OK, we will not operate the clause. I do not see the problem. There is no extra burden, nor any need for the Local Government Association or anyone else to be worried about the provision. It is a little sensitive that the Audit Commission has picked on an area and said that it thinks that the operating reserves are inadequate. They are on a big scale, given the London boroughs and the overall effect of English and Welsh local government. We must take some action in the form of this precautionary legislation. It is precautionary legislation; it is not intended to operate, save in the most exceptional circumstances.
  We consulted local authorities as we said we would do in the White Paper. We would argue that different levels would be set for different authorities—we are not talking about the situation if that were ever the case. Relevant factors include the ability of larger authorities to spread risk more than smaller ones, as the noble Lord has said, and on which he gave an example. Some types of authority have services that carry high levels of financial risk.
  The power in subsection (3) to specify which reserves would be subject to control would be used to exempt reserves that cannot be adjusted as part of the process of deciding the council tax. The examples would be school balances and housing revenue accounts. Immediately that gets rid of the argument about schools, as they would not be covered. The clause does not cover schools, so what is the problem? There is not a problem.
  These red herrings are being raised simply because we are taking a precautionary approach. Local government feels "offended"—that was the word—that we have had the temerity to say that a problem has been identified that may affect a few authorities and that we need to include a clause in the Bill. We hope that the clause will not be necessary, but it is a safeguard against the risk that some authorities, in spite of all the statutory duties and professional guidance, continue to allow their reserves to fall to dangerously low levels. If the Government did not include the clause, they would be failing to fulfil their duties.
  Baroness Hanham: We will clearly return to the matter on Report. There are no draft regulations on what minimum reserves should amount to. Everyone will have a different view on what the adequate minimum reserve should be. It would be extremely helpful if the Audit Commission indicated what it believed a minimum reserve should be—the proportion of any local authority budget—and the factors that it should take into account. Should it take

  GC243
  into account, as the noble Lord, Lord Hanningfield, said, budgets for road works? All sorts of reserves are put aside for specific purposes? The draft regulations do not contain anything relating to this clause. It might help the Minister's blood pressure—I rather doubt it—if we could have an indication of what the regulation might amount to. If the regulation is not there, it will be a case of the Audit Commission's judgment against that of local authority members as to what the reserve should be.
  Again, I think that the Minister's blood pressure was probably getting away on him, as people were not saying that all Members of Parliament are accountable to those who elect them. But, in the interim, between elections, they must act in their democratic role. We said that there was democratic accountability within local councils on the making of budgets and on decisions about reserves. The Government have made those functions more directly the responsibility of a directly elected councilor—one person is now responsible rather than the whole council, as was the case in the initial stages.
  There are also restrictions whereby the full council could call in any budget about which it was concerned. The Audit Commission is dipping into only one small area. There are areas of financial concern that might be far greater than this. I am astonished that the Audit Commission has got itself stuck on this issue. We ought to know what it thinks it is talking about.
  Lord Rooker: May I give another example? In the same Audit Commission report, it noted that councils had been slow to address risk management issues. Fewer than one in five councils had adopted a risk management policy, and only half of those had reported on risk management to their members. That must be a failure. The Audit Commission is doing a much more rounded job than simply looking at reserves. Action must be taken.
  Baroness Hamwee: I was going to make the point about regulations that the noble Baroness just made. I was also going to ask whether we could hear more about the role of the chief finance officer. The Minister referred to that officer's position and gave his opinion. I plead for draft regulations, for the assistance not only of the Committee and in due course the House, but—as I said at our previous sitting—of those who will operate the system.
  The noble Lord. Lord Bassam, agreed with me that we are just through the most recent budget-making process at local level, and therefore inevitably at the start of the next one. The point was made to me in the Greater London Authority—it could have been made in a local authority—that officers are very concerned that they do not know what rules they should work to for next year. As it happens, that could be a very considerable problem within the GLA, because it has not been possible over a short period to get the reserves of the functional bodies up to the level with which, frankly, we would all be comfortable. I entirely accept that there is a problem with at least two of the functional bodies.
  GC244
  On Monday, the noble Lord, Lord Bassam, was not able to give us any news. Can the Minister give us any assurances about when the further draft regulations will be available? They will not only help us at the next stage—indeed, when we debate the next clause—but assist those who will be affected in reality.
  Lord Rooker: Reading the clause again and my own notes, I am not sure why draft regulations are expected on a clause that we do not want to operate. I have already referred to the fact that CIPFA guidance has been out for years. There is an Audit Commission report. What is the purpose of draft regulations when we clearly do not want to operate the clause? We are not planning to issue any.
  The policy intent of Clause 26 is perfectly clear. There is no secret about that. There are no draft regulations, because it is a reserve power. We hope that we do not have to use it. It is not a question of central government once more spoon-feeding local government to tell it how to do its job—the job that it already ought to be doing. That clearly relates to what was identified by the Audit Commission.
  We have not invented anything. The CIPFA guidance has been available for a considerable period. I am not quite clear why more regulations are required. I have already explained the circumstances in which we would operate the clause, probably quite inadequately, but I have done my best. I have no doubt that we shall come back to it on Report, but the message will not change. Going back even to the White Paper, our preference has been not to make use of the powers. However, we would not hesitate to do so if it emerged that authorities were failing to remedy deficiencies or were running, down reserves against the advice of their finance officers. That was in paragraph 10.19 of part 2.
  The regulations would be made only if a minimum were imposed, but the intention would be to exclude reserves, and I have already said that the housing revenue accounts and school balances are not subject to adjustment. Subjects that have been raised, especially education, are red herrings, as they would not be affected.
  Baroness Hamwee: Regulations may refer to a CIPFA code. If there are clauses in the Bill on which the Government do not intend to issue regulations, it would be helpful to have a list of them. I refer the Minister to Clause 27, which requires the chief finance officer to report to the authority if it appears to him.
  "that a controlled reserve is or is likely to be inadequate".
  For that purpose,
  "a controlled reserve is a financial reserve of a description specified by regulations under section 26(3), and…a reserve is inadequate if the balance…at the end of the…year…is less than the minimum…determined in accordance with regulations under section 26(2)".
  7.15 p.m.
  Lord Rooker: I have referred to the policy guidance. I have not checked the box, but, at the beginning of Monday's sitting, I said that the draft regulations and

  GC245
  draft CIPFA code were available in a box in the Library. My noble friend and I checked the box to make sure that they were there. I made the point of saying that they were contained in a box on the Bill. A free-standing note was deposited along with the draft regulations, the bids guidance and the other Bill material. The single-page note on Part 2, which deals with financial administration, relates to the power to make regulations under Clause 26. Clause 27 comes into effect only if Clause 26 regulations are made in the first place. They would be made only if we needed to operate the clause. We do not want to operate it, in which case Clause 27 will not operate anyway.
  Baroness Hamwee: Obviously we need to think the matter through. Without asking to be spoon-fed, it was helpful to receive materials including copies of draft regulations during the Recess—even if there was only one set per party, as I think it was. Many of us do not spend the whole working day in this building. May I request that, in accordance with normal practice, Front-Bench Members are informed if items are put into the box? It is simply not practicable to check. I entered the building at 8 a.m. today to collect the Marshalled List before going on to City Hall for 8.20 a.m. I do not intend to whinge; it is just a fact of life.
  Lord Hanningfield: I did not make clear initially the following point about what would happen if we were to have the reserve powers. At the beginning of the year, we take advice from our treasury officer in setting the budget and projecting the level of reserves expected at the end of the year. That is public knowledge and it is included in the budget. During the year, a letter from the auditors might say that the reserves should be higher. That would be a public document that all members of all parties would be able to debate. It seems odd, then, that the Government want to take retrospective action once the reserves have gone right down. That is akin to shutting the stable door once the horse is out. If the Government wanted to have such powers, they should make controls at the beginning of the year when they can see problems arising.
  When the Government step in, the problem will have already arisen. That will cause chaos in the authority. Under the proposed system, the Government's power would not have stopped the problems that arose in Hackney and Walsall. That is the point that we have been trying to make. Therefore, the prudent authorities that try to manage themselves well and that take notice of the Audit Commission and other bodies must still make their own local judgments. The information is all there. It is the Hackneys that go dramatically wrong. The Government would be coming in afterwards. That is one of the problems of this whole area of legislation. I ask the Government to look both at the principle and their proposed approach. If we want to catch the Hackneys, they must come in at the beginning of the
  GC246
  year, when the problems start. The legislation is inadequate even if it is going to he used.
  Lord Rooker: That is the point that I made earlier. The action would not be retrospective. If the outcome of a year's budget decisions gave cause for concern, the Government would consider whether to make regulations that would apply to the following year's budget round. That would give time to consult the authorities on the minimum reserve to be set, in accordance with the undertakings in the White Paper, which I have already quoted. It would also allow regulations to be made in good time to be taken into account in authorities' budget-setting processes. The regulations would set out how the minimum for each authority was to be calculated. The method would be a matter for consultation at the time but it is likely to take the form of a prescribed percentage of the budgeted expenditure of the authority. Different percentages might be prescribed for different types and sizes of authority.
  I have already said it, but I shall say it again for completeness: the minimum will apply to controlled reserves, which will be defined by the regulations made under Clause 26(3). The regulations will be made only if a minimum is imposed. The intention will he to exclude reserves that are not subject to adjustment as part of the setting for the authority's call on council tax. The examples that I gave are the housing revenue accounts and school balances.
  In drafting a precautionary clause, we are now accused of doing so after the horse has bolted. In that sense, it makes it more important to draft it; at least it will have been done within a year. I do not know the details of the Walsalls and Hackneys, but they did not occur all in one year. The problems arose, and I know from being in the department the difficulty of sometimes taking action. As a Minister, one is very reluctant to take action against democratically elected local government. By and large, one would say, "No—they have been elected, so let them sort it out. They know what the rules are and what the law is". Sometimes that is not possible and we have to go to the wire.
  Some local authorities are in extreme difficulty. Central government sometimes needs powers to send in commissioners, for example. It is highly contentious to ask people to go into an authority to overrule elected councillors and sort problems out. Of course we leave that until the problems have arisen. In a way, that is the difficulty. However, as soon as the problem is identified as serious, we have to be able to take action. We could not take it retrospectively—that would be wholly unfair—but we must be able to sort a problem out.
  I shall ask my officials, but if anything else is in the box that is likely to be of note on the parts of the Bill on which there is division between us, I shall draw the attention of Members of the Committee to it, and if need be get them copies. The issue is important and, in

  GC247
  some ways, the single sheet from which I have quoted probably should have been in the pack with the letter. It should been referred to at least, so I apologise.
  Baroness Hamwee: I thank the Minister for that, and I do not intend to wind him up further.
  Lord Rooker: I am perfectly all right; I know where I am coming from.
  Baroness Hamwee: Me too. I need to be clear that, when the Minister refers to the regulations under Clause 26 that will be made only if there is a need for them, that applies both to the regulations under subsection (3) that define what a controlled reserve is and to those that deal with the minimum amount. We need to know what the controlled reserve is before the minimum amount is specified. I would like to understand whether it is intended to deal with all those in a compendium of regulations, or to define the controlled reserve beforehand so that one at least has a playing field.
  Baroness Hanham: We have been discussing the whole of Part 2 as though it were a reserve power, and one that, if I understand what the Minister said, would be used in only the most exceptional circumstances. My reading of Part 2 is that it is a generalised part that does not apply only to a poorly run authority. It cannot do so, given its terms. It refers to Sections 32 and 43 of the Local Government Finance Act 1992. Section 32 deals with the,
  "calculation by billing authority of budget requirement for financial year",
  and Section 43 is the,
  "corresponding provision for major precepting authority".
  If Part 2 is a reserve power, it must be headed as a reserve power. If it is not—if it is a requirement for all local authorities, which it seems to be—we also need to be sure that we have access to what the proposed regulations will be.
  Lord Rooker: What is the answer to that? It is an important question, and I cannot find the answer. Somewhere towards the end of the Bill, there will be a procedure to operate the clauses. We are debating Clause 26; I shall not go on to the others at the moment. We do not want to operate Clause 26. The Government would choose to operate it at a specific time. To that extent, it is reserved. There will be commencement orders and all kinds of stuff at the back of the Bill about when provisions come in and how the Government operate the clauses. If the clauses were not operated, the rules and regulations would not
  GC248
  apply, and therefore we would not publish any regulations under Clause 26. It is our intention not to use the powers under Clause 26 and not to publish regulations. We hope to do it by consent. That is the general answer to the question asked by the noble Baroness.
  Lord Hanningfield: We have had a long and somewhat lively discussion on this issue. Although we are having plenty of discussion, certainly there are good parts of this legislation which are welcomed by local government.
  Lord Rooker: The noble Lord remembers that?
  Lord Hanningfield: I remember that. I am trying to be nice now. I know that the Minister has good intentions on that. As he understands now from Members of the Committee, this is probably the most contentious part of the legislation. I am sure that we all want to free up local government so that it can do its job. It has a difficult time when it is told that it must give a certain amount of money to schools or that it must keep its council tax down. For local government to believe that another regulation is being proposed which will stipulate the level of reserves is a nightmare. That is why we are having this rather difficult discussion.
  The Minister says that it is going to be a reserved power and I accept that. But local government is frightened that if this power is in the Bill, suddenly a Secretary of State will come along and say that local government has to keep 3 per cent of its money in reserves. I do not mean this Secretary of State, but local governments are frightened that a future Secretary of State or Government might implement this power, saying that it is sitting on cash rather than providing services.
  That is why we should like the Government to think again on this issue. I am sure that the Government can obtain what they want to deal with the Hackneys and Walsalls. We all accept that perhaps commissioners have to go in and give assistance. In the local government world we have the IDA to try to self-help those types of organisations. I hope that the Government might think again on this issue. Obviously, we shall return to this matter at later stages in the Bill.
  Clause 26 agreed to.
  Lord Rooker: This might be a convenient moment for the Committee to adjourn until Tuesday 10th June at 3 p.m.
  The Committee adjourned at half past seven o'clock.

  China: Population Control
  China: Population Control
  Cyprus
  Cyprus
  Naval Recruiting and Training Agency
  Naval Recruiting and Training Agency
  Gurkhas
  Gurkhas
  Prison Suicides
  Prison Suicides
  Human Remains
  Human Remains
  Death Certification and Coroner Services
  Death Certification and Coroner Services
  Queen's Golden Jubilee Awards
  Queen's Golden Jubilee Awards
  Race Relations Act Section 19D
  Race Relations Act Section 19D
  Parliamentary Commissioner for Administration
  Parliamentary Commissioner for Administration
  Light Pollution
  Light Pollution
  Local Government Bill Clause 71
  Local Government Bill Clause 71
  Armed Forces: Emergency Fire Cover
  Armed Forces: Emergency Fire Cover
  Medieval History
  Medieval History
  Schools: Broadband Connection
  Schools: Broadband Connection
  Business: Information Technology Pilot Projects
  Business: Information Technology Pilot Projects
  3.4GHz Fixed Wireless Access Licences
  3.4GHz Fixed Wireless Access Licences
  e-Europe
  e-Europe
  Businesses : Data and Information Technology System Security
  Businesses : Data and Information Technology System Security
  Olympic Games 2012
  Olympic Games 2012
  Overseas Commercial Industrial Investment
  Overseas Commercial Industrial Investment
  Greenhouse Gas Emissions
  Greenhouse Gas Emissions
  Hepatitis C
  Hepatitis C
  NHS: Patient and Public Involvement
  NHS: Patient and Public Involvement