Sitting of 7 May 2003

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

  TRANSAS GROUP BILL (By Order)
  Order for Second Reading read.
  To be read a Second time on Wednesday 14 May.

Oral Answers to Questions
  INTERNATIONAL DEVELOPMENT
  The Secretary of State was asked—

  Zimbabwe
  Sir Nicholas Winterton: What overseas aid projects she is supporting in Zimbabwe in 2003. [111516]
  Mr. Derek Wyatt: What plans she has to increase aid to Zimbabwe; and if she will make a statement.[111520]
  The Secretary of State for International Development (Clare Short): In Zimbabwe, my Department has provided £51 million for humanitarian needs—mostly food, but also basic medical supplies in the past 18 months. We are also spending £26 million on an HIV/ AIDS programme over the five years to 2005. The humanitarian crisis in Zimbabwe cannot be resolved without political and economic change, but we must do all that we can to support its people until that change comes about.
  Sir Nicholas Winterton: I am grateful to the Secretary of State for that rational and full reply, and I commend her for the work that she is doing in Zimbabwe in trying to reduce the chaos and tragedy of Mr. Mugabe's Government. Does she accept the view expressed yesterday in the House by the Foreign Secretary, who said that Zimbabwe is now affecting regional security? Does she not therefore believe that we should internationalise the problems of that country and that the United Nations should become more involved so that we can get people from other countries on the
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  ground to realise the chaos and catastrophe of Mr. Mugabe? The sooner he can be got rid of by his own people, the better for them.
  Clare Short: I certainly agree with the latter sentiment. Things seem to be mounting up. The mass stay-aways have been big and the pressure from Africa seems stronger. The disaster is terrible in terms of the destruction of the economy, thuggery, hunger and suffering. My instinct is that the end is coming and that the forces are mounting, but it cannot happen too soon.
  On the effects on security in the region, many people are moving out of the country and the crisis affects the region's economy very severely. The drought is less bad in neighbouring countries, so the humanitarian crisis is also less bad there, although it is serious in Zimbabwe. The UN has been involved, especially in the humanitarian crisis.
  We need new tools in the international system. When dictators destroy their countries, we do not have the tools to deal with them. I hope that when the International Criminal Court is set up, we can start indicting and arresting some of those individuals, instead of having to wait for the country to fall apart before the international community can act.
  Mr. Wyatt: Have there been any meetings of the Commonwealth's financial action taskforce, which deals with laundered money? Zimbabwe is a member of the taskforce and we have observer status.
  Clare Short: I do not know whether that taskforce has held a meeting, but I shall certainly find out and let my hon. Friend know. As I should have told the hon. Member for Macclesfield (Sir Nicholas Winterton), the Commonwealth has also been actively involved, so there is international engagement, but the process is taking longer than we would all like.
  Sir Patrick Cormack: Does the right hon. Lady not agree that it is grotesque that this tyrant, who is depriving his people of their lives and his country of its prosperity, should still carry a high British honour? Will she advocate its immediate removal?
  Clare Short: I agree with the hon. Gentleman's depiction of President Mugabe. The suffering and destruction that he has brought upon his people—a wealthy nation and an educated people—are unbearable. I am not an expert in honours, but I shall convey his view to the appropriate authorities.
  Mr. Win Griffiths: What planning is my right hon. Friend's Department doing? While Mugabe is still in charge in Zimbabwe, the crisis will obviously continue. Until normal relations are restored in the country, there will be no proper planting or food production. Has she given any thought to how many years this crisis will continue?
  Clare Short: I am afraid that I cannot predict exactly when tyrants will fall. We all know when it is coming. When Milosevic fell, it went on for longer than we would have hoped but we knew that it was coming. In the meantime, we must plan flexibly against nature, which is

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  why assessments are being made of the current harvest. That makes a difference, but it is not enough, because the fundamental wreckage of the economy is political rather than a result of the drought.
  We must also plan for flexibility. As soon as there is some sort of legitimate Government with whom the international community can work—I hope that a Government of national unity will start the reform process—the whole international community will be able to engage and help the people of Zimbabwe to start rebuilding.
  Mrs. Caroline Spelman: I am sorry that the House will have to put up with a solo act, as my hon. Friend the Member for Salisbury (Mr. Key) is with his Select Committee in Washington this week.
  The Secretary of State said that pressure from Africa was getting stronger, but despite the fact that a high-level delegation of African leaders went to meet President Mugabe behind closed doors on Monday, there has been no apparent progress. What measures is her Department taking to buttress the efforts of the Movement for Democratic Change to bring an end to state-sponsored violence? Does she share the MDC's view that regional powers are shielding Mugabe from international censure?
  Clare Short: I agree with all who have said that pressure from African neighbours and from African countries generally has been very disappointing, but that is partly because Mugabe was such a hero, especially in southern Africa, for his stand against the Ian Smith regime with people who were living under apartheid. His reputation was such that people were unwilling to believe the truth of what he was doing to his country. He also confused Africa by claiming that the issue was all about white farmers with excessive land; and there was indeed a case for stronger land redistribution. Consequently, pressure from Africa has been much less than it should have been. The voices are getting stronger and the pressure is getting greater, although it remains behind closed doors.
  As the hon. Lady knows, we are an international development agency. We support the efforts of the Foreign Office to bring pressure to bear throughout the system on state-sponsored violence, but we make no conditions in terms of feeding those who are to be fed—humanitarian aid cannot be used for political purposes.
  Mr. Bill Olner: Surely we can do more to put pressure on the international community to ensure that Mugabe does eventually go. What are we doing to ensure that people in Zimbabwe know that there is a better life in front of them when Mugabe has gone?
  Clare Short: I do not honestly think that we can do more: everything that can be done in the international community has been done. That action has been led by my right hon. Friends the Foreign Secretary and the Prime Minister, and I have joined in whenever I can. The frustrating aspect of situations where dictators are wrecking their countries is that the tools that the international community can bring to bear are limited. The people of Zimbabwe have no doubt about how terrible the situation is there is cruelty and
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  dictatorship. Their power to bring about change is limited, but they are struggling to do so, despite the intimidation, as the results of the recent by-elections showed.

  Afghanistan
  Sir Teddy Taylor: If she will make a statement on aid being provided to Afghanistan. [111517]
  The Secretary of State for International Development (Clare Short): At the Tokyo conference on Afghanistan in January 2002, donors pledged $4.5 billion over one to five years for the reconstruction of Afghanistan. Last year, more than $1.8 billion was disbursed, and another $1.8 billion will be provided this year. It is widely suggested that Afghanistan has not had the resources that were promised. That is not true, but one of the problems is that because the authority of the Government in Kabul does not extend right across the country, some resources are flowing through the UN and other agencies. Getting security and order across Afghanistan is essential in moving on to further development.
  Sir Teddy Taylor: My friends in the area tell me that following the magnificent crusade to establish liberty and democracy in Afghanistan, the only optimism is in the heroin industry, which has been freed of the Taliban restrictions. Can the Secretary of State say how she is endeavouring to circulate aid in a country which, outside Kabul, seems to be run by warlords and mini-dictators? I do not in any way blame her for that, but is there an answer?
  Clare Short: There have been improvements in the lives of the people of Afghanistan. More children are in school, people have been fed, and the drought is coming to an end, which is a blessed relief. The UN system kept up the feeding right through the crisis and has done so ever since. Many children have been immunised. However, I absolutely agree with the hon. Gentleman's fundamental point. The whole economy is based on narcotics, and it is run outside Kabul by warlords, who were strengthened during the conflict. People have been fed, the basics have been improved, and Kabul is safe and secure, but we now need to build a national army, to demobilise the warlords' fighters, and to assert the Government's authority across the territory.
  Provincial reconstruction teams are being put in place in the big cities; my right hon. Friend the Defence Secretary is to make an announcement about the UK's contribution to that. We must secure authority across the country and disarm the warlords; otherwise, the narcotics industry will continue to flourish.
  Mr. Tom Clarke: The House will understand that despite the dreadful problems with warlords, drug barons and so on, good progress has been achieved by working with UNICEF

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  and others to deliver humanitarian aid and to develop and encourage education, especially for girls. Does my right hon. Friend agree that that progress can continue?
  Clare Short: My right hon. Friend is right. The fact that an enormous amount remains to be done should not deter us from congratulating the international system on the progress that has been achieved. The lives of people in Afghanistan are better. For example, many children are back in school; many women are back teaching; a Loya Jirga has taken place; work is progressing on a new constitution; and many children have been immunised. Further improvement depends on progress on order, building a national army and disarming the warlords. Progress on tackling the narcotics trade also depends on that. We have reached a point where there must be order outside Kabul or we will not move much further.
  Dr. Jenny Tonge: The right hon. Lady will remember her words to the Select Committee on International Development in December:
  "Security is now coming outside Kabul, the international community is not going away, American power is not going away. The government will be strengthened, there will be a national army."
  We have already heard that that has not happened and that the position is worse. When will there be adequate security in Afghanistan to allow progress on reconstruction and public services? When will asylum seekers be able to return willingly and without compulsion? Will Iraq suffer the same fate as Afghanistan, or will the presence of oil make the difference?
  Clare Short: Afghanistan is not worse, as I made clear. If the hon. Lady reads the briefings, the details make that clear: people are being fed, children are in school and being immunised and people are back at work. The position is not worse, but the country was wrecked by 20 years of warfare. It is desperately poor—one of the poorest countries in the world. [Interruption.] It is no good the hon. Lady sighing; rebuilding a wrecked country takes time and a lot of effort.
  Agreement has now been achieved. It has taken longer than I would have liked, and the United Kingdom has played a part in applying pressure for the formation of a national army. There are many powerful vested interests in the warlords, and some of their power is influential in the country's Ministry of Defence. Agreement must be followed by demobilising many fighters. The process is beginning to progress, as are the provincial reconstruction teams. However, the country will not move forward without persistent engagement and we need to drive forward on security outside Kabul in the next months and years.
  Mrs. Caroline Spelman: Can the Secretary of State confirm that, as part of continuing security operations in Afghanistan, some coalition troops are conducting operations in civilian clothing while armed, and claiming to be humanitarian workers? Does she accept that British aid workers' lives are being put at risk by the blurring of the distinction between aid workers
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  and soldiers? What is she doing to raise that with the Secretary of State for Defence and members of the US Administration?
  Clare Short: I am not aware of that serious allegation of a complete breach of the Geneva convention. If it is true, it would endanger the work of humanitarian workers; indeed, a worker from the International Committee of the Red Cross died near Kandahar I believe, speaking from memory. I have heard nothing about such an allegation; I shall look into it and get back to the hon. Lady.

  Southern Africa
  Mr. Huw Edwards: If she will make a statement on the relief of poverty in southern Africa. [111518]
  The Parliamentary Under-Secretary of State for International Development (Ms Sally Keeble): The 14 countries of southern Africa contain some 200 million people, of whom approximately 40 per cent. live on less than $1 a day. The region is heavily affected by HIV/AIDS, and has also suffered a food crisis. In the past year, my Department spent £260 million to support poverty reduction in those countries.
  Mr. Edwards: Has my hon. Friend noted the conclusion of the Select Committee on International Development report on southern Africa? It states that Africa is the only continent that is moving backwards on attaining the millennium development goals for relieving poverty. Does she agree that some of the major challenges in southern Africa are the health crisis caused by AIDS, the underdevelopment of agriculture, and the political regimes of countries such as Malawi and especially Zimbabwe? Those countries could be a solution to the problem in southern Africa rather than a major cause. How are the Government working with the international community to tackle those challenges?
  Ms Keeble: My hon. Friend is right about Africa's problems, especially the fact that the region will not generally reach the millennium development goals, although the performance on some is worse than on others.
  The hon. Gentleman is also right to identify governance and HIV/AIDS as two of the main barriers to development. The United Kingdom Government have been in the lead in tackling those problems, and in working internationally to do so—through the G8 Africa plan and also through our support for the New Partnership for African Development. Most important are our proposals for an international financing facility to raise the extra funds needed to achieve the MDGs both in Africa and elsewhere.
  Mr. Andrew Mackay: Can the Minister confirm that the southern African country in which poverty has increased most is Zimbabwe, owing to the disgraceful behaviour of its illegal Government? The Secretary of State mentioned the welcome aid money that would be sent to Zimbabwe for food. Is the

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  Minister entirely satisfied that that food is getting through to all people in Zimbabwe, not just—as is alleged—to Government supporters?
  Ms Keeble: I am not sure whether Zimbabwe is the country in which poverty is increasing fastest, but the right hon. Gentleman is right to point out that a once strong economy has collapsed. Inflation is rampant, and I believe that growth is now negative. The right hon. Gentleman is also right in thinking—I suspect—that whenever the Government in Zimbabwe change, rebuilding the economy will take many years, and people will suffer for a long time as a result of the damage to the economy.
  There are stringent safeguards to ensure that food sent through the international community is not used for political purposes. As well as food, we give Zimbabwe about £15.3 million of other aid, and do a substantial amount to tackle HIV/AIDS.
  Ms Oona King: The Department has persuasively linked conflict and poverty. Does the Minister agree that a resolution of the conflict in the Democratic Republic of Congo would significantly reduce poverty in southern Africa? What measures will the Government take to secure peace in a conflict in which more than 3 million have died?
  Ms Keeble: My hon. Friend is right about the impact of conflict on a country's economic performance. About one fifth of people in Africa are affected by conflict, and it costs the continent about 2 per cent. a year in economic growth. The elimination of poverty is therefore a major problem. My hon. Friend is also right to pinpoint the DRC as one of the areas in which the problem is most acute.
  As my hon. Friend will know, we are supporting the introduction of a transitional Government. We have also supported the UN observers in the area, and we look forward to the arrival of Bangladeshi troops in, I think, June. We will support the peace process as a key part of our ethical conduct policy.
  Mr. Stephen O'Brien: It is common ground that the HIPC—heavily indebted poorest countries initiative is failing to meet expectations, even in countries where in some respects it has been completed. What is the Department doing to tackle the greatest deterrent to increasing trade in poor countries and relieving poverty? I refer to the collapse of the commodity prices on which those countries' trade depends so much.
  Mr. Speaker: Order. There is far too much noise in the Chamber. It is difficult to hear either the questions or the answers.
  Ms Keeble: I do not agree that the HIPC initiative has failed. It has provided substantial relief for a number of countries. There is unsustainable debt in some countries that have completed the initiatives, but we are considering ways of tackling that.
  The hon. Gentleman is of course right about the need to support trade. My right hon. Friend the Secretary of State and other Ministers throughout Government have
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  been extremely supportive of the Doha agenda which will secure the reforms that are needed to increase trade. That, ultimately, is where the solution will lie.

  Iraq
  Mr. John MacDougall: If she will make a statement on the humanitarian situation in Iraq. [111519]
  The Secretary of State for International Development (Clare Short): The humanitarian situation in Iraq is improving, but there are still serious challenges. Progress has now been made in restoring water, power and health services in many areas. Order is being restored, but it is still a significant problem. The World Food Programme is building up supplies of food and working to reinstate the distribution system of the oil for-food programme. Sixteen million people depend on that, and they might start running out of food in the middle of this month. Getting salaries paid so that health, education and police services can be reestablished is also an urgent priority.
  Mr. MacDougall: I congratulate my right hon. Friend and her Department on the excellent efforts that they are making in relation to humanitarian aid, under difficult circumstances. Does she have any information that she can share with the House today on UN plans to establish a permanent set-up in Iraq?
  Clare Short: I am very pleased to be able to tell my hon. Friend that the UN has now returned to the north, with, I think, 90 international staff. Local staff are also in the region. In addition, we have 21 international staff in Baghdad, and we have 50 staff in the south. We will shortly be taking over responsibility for co-ordinating humanitarian efforts from the US Office of Reconstruction and Humanitarian Assistance. It is very important and good news that the UN is back in Iraq, and matters should move forward from that.
  Mr. Elfyn Llwyd: What precise efforts are being made to clear up the cluster bombs used in Iraq?
  Clare Short: The hon. Gentleman draws attention to a very important question. There are reports of lots of serious accidents, and of lots of children losing limbs and being injured by explosions from unexploded ordnance. The UN is trying to map the locations of such ordnance in the country and to give priority to beginning the removal process, starting with the most dangerous areas. The return of the UN should speed up that work. However, the situation is very urgent, and we must do better.
  Mr. John Smith: Is my right hon. Friend aware of the number of Iraqi reconstruction groups being set up in Britain, primarily by Iraqi exiles in this country? Is her Department in a position to help those organisations in any way? Does my right hon. Friend know when telecommunications with Iraq will

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  be re-established, so that those groups will be able to contact their families and others, and help in the reconstruction programme?
  Clare Short: I am aware that there are a lot of such groups. I also know that my hon. Friend has one in his constituency, and he has been in touch with me about it. We urgently need agreement in the UN Security Council to bring into being an internationally recognised interim Government in Iraq. We will then get the International Monetary Fund, the World Bank and the Asian Development Bank involved, and real reconstruction can begin. I am sure that all the groups to which my hon. Friend refers can bring lots of skills and ability to the reconstruction of their country. The failure to get political agreement is slowing that process. We must all work to try and get the international community to unite, as my right hon. Friend the Foreign Secretary its doing.
  Similarly with telecommunications: major reconstruction depends on the sort of political progress that I have described. I suggest that any individuals unable to get in touch with their families should contact the Red Cross, whose staff can usually find out how people are, and where they are.
  Mr. Roy Beggs: Does the Secretary of State agree that it is important that representatives of Iraq should be encouraged to take part in all international events? Will she lend her support and encouragement to our Government to facilitate the travel of the Iraqi special Olympics team, so that they can come and compete in the international special Olympics event being held in Dublin in June?
  Clare Short: I certainly agree that we should do all we can to get Iraqi people engaged in such events. It is a matter of urgency that they take up their rightful place, in their own country and in the international system. I have no personal information about the special Olympics team. Does that involve people with disabilities?
  Mr. Beggs indicated assent.
  Clare Short: I should be grateful for any information that the hon. Gentleman can give me on the subject, and I shall certainly do what I can to facilitate matters.
  Mrs. Caroline Spelman: I have just returned this morning from a visit, with the British Limbless Association—(Interruption.]
  Mr. Speaker: Order. We must have order in the House.
  Mrs. Spelman: I was visiting Kuwait to see the Iraqi children who had been evacuated there as a result of their injuries. The children are receiving excellent treatment from the doctors in Kuwait, but I am all too aware that they are just the tip of the iceberg. An unknown number of Iraqi children have no chance of getting such treatment. Will the Secretary of State make a commitment to establish, as part of the reconstruction
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  of Iraq, a centre dedicated to the treatment and rehabilitation of other victims, so that they can lead the independent lives that they want?
  Clare Short: There is no doubt that the reconstruction in Iraq is about rebuilding lives and I share the hon. Lady's commitment to that. I have discussed the issue at length with Jacob Kellenberger, president of the International Red Cross, which takes the view that the level of skills and the talented doctors in Iraq mean that, by and large, children do not need to be brought out of the country. We need to get the Iraqi systems up and running and reinforce them. If children cannot be treated there, they should be kept in the broader region, if possible. We must take the advice of those who are working in the country. I accept the hon. Lady's objective to help Iraqi children and reconstruct their lives, and we should organise in the best possible way to achieve that.

  The Prime Minister was asked—

  Engagements
  Ql. [111502] Helen Jackson: If he will list his official engagements for Wednesday 7 May.
  The Prime Minister (Mr. Tony Blair): This morning I met the Australian Prime Minister, John Howard. I know that the whole House will want to welcome him to the Palace of Westminster today, and I am delighted to pay tribute to the brilliant contribution made by Australian forces alongside British and American troops in securing the liberation of Iraq—[HON. MEMBERS: "Hear, hear."] After that moment of consensus, in addition to my duties in the House I will have further meetings with ministerial colleagues and others later today.
  Helen Jackson: But does my right hon. Friend agree that no industry underpins our manufacturing more than the steel industry—particularly the special engineering steel that constitutes 80 per cent. of our exports of aerospace steel? That industry is based in my constituency and I believe that it may be at risk from the announcement made by Corus last Tuesday. Will my right hon. Friend not ask, but insist, that the new management and leadership at Corus work in partnership with the Government and with the representatives of the work force to ensure a proper, viable potential plan for steel in this country that builds on new markets and does not squander opportunities?
  The Prime Minister: My hon. Friend is right in saying that it is important to work in partnership with the company, the unions and, indeed, our Dutch counterparts. That is exactly what my right hon. Friend the Secretary of State for Trade and Industry is doing. I also welcome the Select Committee on Trade and Industry inquiry into the future of the steel industry, which starts today. For any people who lose their jobs,

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  we will put in place every possible measure to ensure that they find fresh jobs and acquire the training and skills necessary to get them.
  Mr. lain Duncan Smith: I join the Prime Minister in welcoming the Australian Prime Minister to the House: he is a true ally of this country.
  However, with hundreds of schools budgeting for deficits and threatening to sack teachers, will the Prime Minister tell the House whether his education department passed on all the available money to schools last year?
  The Prime Minister: The Department for Education and Skills has passed on a record increase—some where in the region of 12 per cent. in cash terms. The Department has just published an analysis of what local education authorities have and have not passed on. The 12 per cent. cash terms increase that we are giving to education stands in stark contrast to the 20 per cent. across-the-board cuts in education spending that the right hon. Gentleman wants to see.
  Mr. Duncan Smith: The Prime Minister failed to answer the question. The Department for Education and Skills held back £1 billion from schools last year. Last Friday, the Prime Minister had the cheek to blame councils for underspending. After five Labour education Bills, three Labour Secretaries of State for education and all the moneys raised in taxes, schools are in deficit and teachers now face the sack up and down the country. Turning to the health service, will the Prime Minister tell us whether there are more bureaucrats or beds in the NHS today?
  The Prime Minister: First, on education, we are putting about £2.5 billion extra into education. May I remind the right hon. Gentleman that there are now more teachers in our education service, more classroom assistants and support staff and more capital investment going into schools, which, again, stands in contrast to his commitment to cut that spending?
  As for the national health service, what he says on beds and bureaucrats is complete nonsense.
  Mr. Duncan Smith: According to the Prime Minister's own Department's figures, there are now more bureaucrats than beds. After the fifth reorganisation of the health service in six years, hospital admissions are now falling, treatments are flat, and a record number of people now have to seek treatment outside the NHS.
  Turning to crime, will the right hon. Gentleman tell us whether violent crime is rising or falling?
  The Prime Minister: I can see why the right hon. Gentleman wants to leave these subjects pretty quickly, given the answers that he gets. I will deal first with the national health service: he made some comments and I think they should be answered. Let me point out to him what the extra investment has bought: 750,000 more elective admissions since 1997; a 37 per cent. rise in heart operations; a 56 per cent. rise in cataract operations; 1.4 million more out-patient appointments a year; 96 per cent. of people who are diagnosed with cancer seeing a
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  specialist within two weeks; and 50,000 extra nurses. Let that stand in contrast to a rise of 400,000 in waiting lists under the Conservatives.
  As for crime, it has fallen, not risen, under this Government.
  Mr. Duncan Smith: The Prime Minister's own Department's records show that violent crime is up by 20 per cent. in the last year alone, and gun crime under this Government has doubled. The Prime Minister therefore failed to answer that question, too. The point is that he has had 14 criminal justice Bills and a £5 billion increase in the Home Office budget, against which that failure stands in stark contrast.
  On transport, can the Prime Minister tell us whether traffic congestion has risen or fallen under his Government?
  The Prime Minister: First, let us deal with crime. We should carry this exchange forward, and I look forward to talking to the right hon. Gentleman in a moment about mortgage rates, jobs, inflation and several other things. In relation to crime, it is correct that violent crime has been going up for around 15 years. Overall, however, crime has fallen, not risen, under this Government. As the right hon. Gentleman talks about stark contrast, I will give him the stark contrast: under this Government, crime has fallen, whereas under the Conservatives, it doubled. That is the stark contrast. Incidentally, I thank him for the opportunity of pointing out that we have more police officers today than we have ever had. As for transport congestion, it is true that that has risen.
  Mr. Duncan Smith: The Prime Minister knows that six years ago his Government promised an integrated transport strategy and his own deputy pledged to get people out of their cars. There has been a rise of 7 per cent., however, and the reality is that a quarter of trains now do not run on time. Given that record of failure, will the Prime Minister tell the whole House how much extra he plans to take from taxpayers this year?
  The Prime Minister: First, in relation to the tax burden, it has fallen in the last year. It is absolutely correct that the national insurance rise has been introduced this year to pay for a massive increase in national health service funding. If the right hon. Gentleman does not support that rise, let him tell us how he intends to match the extra investment going into the health service.
  Mr. Duncan Smith: It has not just risen—this year alone, it will rise by £26 billion. After six years of Labour Government, the tax burden is up for every household by £5,500—an increase. In return, taxpayers have received teacher redundancies, falling hospital admissions, more violent crime and a transport system in chaos. For all the Prime Minister's talk of reform in the public services, is it not the case that after six years of Labour Government all we have is more tax, more waste and more failure?
  The Prime Minister: Let us look at the results. In respect of schools, we have the best primary school results the country has ever seen. We have the best

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  GCSE results the country has ever seen. We have the largest hospital building programme under way since the beginning of the 1948 NHS. Never mind that the right hon. Gentleman talks about more bureaucrats, we have more nurses in our health service. Every waiting list and waiting time, nationally, is in a better position than in 1997; and crime is down, not up.
  I am delighted that the right hon. Gentleman mentioned the economy. I shall mention it for him, too. In respect of the economy. we have the lowest mortgages for 40 years; we have the lowest unemployment for 30 years; we have the lowest inflation for 30 years; and we have the highest employment ever. That is the difference between Labour and Tory.
  Mr. Gareth Thomas: My constituents are seeing genuine improvements in the quality of their health service locally: Northwick Park hospital, which serves my constituents, is in the top 10 according to The Sunday Times good hospital guide and a £15 million investment programme in maternity services is due to start shortly. However, there is real concern locally about the possible move of the regional cancer centre from Mount Vernon hospital, which also serves my constituents, because of the possible break-up of the excellent clinical team that operates from the hospital. If the proposal should survive and land on Ministers' desks, can my right hon. Friend assure me that, before they take a decision, the appropriate Minister will meet me and a delegation of my constituents?
  The Prime Minister: I am sure that a Minister will do so if it comes to the point that my hon. Friend describes. My understanding is that those proposals have been put forward by the strategic health authority; they are now under consultation not only by local clinicians but by local people. My hon. Friend is absolutely right to say that overall there has been a substantial increase in investment in cancer care, and that has yielded significant results for cancer treatment in this country. I am sure that there will be all sorts of local debates about the best way to configure that provision and I assure my hon. Friend that, before any decisions are taken, his representations will be taken fully into account.
  Mr. Charles Kennedy: Returning to the earlier exchanges, the only thing that seemed to be missing from the comments of the leader of the Conservative party was that his cat had died under a Labour Government.
  The genuine case for local decision making, decentralisation and reform within the health service is valid, but the proposal for foundation hospitals will inevitably create two-tierism in our national health service. What does the Prime Minister have to say to the staff and patients who will find themselves left behind?
  The Prime Minister: I would simply say that the best answer is that given by health service professionals and workers in the health service, who support the idea of greater devolution and also the idea that it should be on an earned basis, so that we ensure, before the extra freedoms and powers are given, that those hospitals are at the highest possible standard. We are then putting a substantial sum of money into other hospitals in order
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  to raise them to the same standard. It is completely absurd for the right hon. Gentleman to say that he is in favour of local devolution and then to oppose the very proposals that give it.
  Mr. Kennedy: The Prime Minister is focusing on the issue of foundation hospitals, but he must reflect on the fact that he has a set a target for 2004 that will involve 3,000 fewer hospital beds than when he came into office six years ago. How does he explain that away to the British people?
  The Prime Minister: We are actually increasing the number of hospital beds at present. It is true that they were declining for a long period. Sometimes, that could be for good reason: people could decide to carry out day care cases rather than have patients stay overnight in hospital. At the moment, however, we are increasing the number of beds in the hospital service. It is absolutely right to say that, as a result of the additional investment that we are putting in—the largest-ever investment in the health service—we shall be increasing the number of staff working in the health service, the number of beds, the number of GP premises, the number of hospital refurbishments and, indeed, of entirely new hospitals. The important thing is to ensure that, at the same time as we are making that massive investment in the health service, the public see real reform taking place, because that is the basis on which they are prepared to support funding the health service.
  Mr. David Marshall: Perhaps my right hon. Friend has not yet had time to study last week's results of the elections to the Scottish Parliament. Is he aware that the election of list members under a complicated system of proportional representation has had a bizarre outcome, to say the least? Will he therefore guarantee that he will never introduce any form of PR for elections to this Westminster Parliament?
  The Prime Minister: I have no doubt that there will be an ongoing debate on this subject, and I can assure my hon. Friend that I will listen very carefully to it.
  Norman Baker: Does the Prime Minister recall that in written answers to me and in an oral answer to the hon. Member for Thurrock (Andrew Mackinlay) last week. he confirmed that he adheres to the Wilson doctrine relating to the telephone tapping of Members? When that doctrine was outlined on 17 November 1966 to one of my predecessors as MP for Lewes, Sir Tufton Beamish, it was indicated that there would be "no tapping whatsoever", and that if there were to be a change of policy, the then Prime Minister would make a statement to the House.
  It now seems that at least one MP has been subject to telephone tapping, yet no statement has been made. Will the Prime Minister therefore state quite categorically whether any Member of Parliament has been subject to telephone tapping since 1997? This is an important constitutional matter and needs a straight answer; indeed, the Wilson doctrine requires that he give it. Will he do so now?
  The Prime Minister: I am sorry to disappoint the hon. Gentleman but I have nothing to add to the answer that I gave last week.
  Mr. Tony Lloyd: Will the Prime Minister join me in congratulating the Attorney-General on his successful appeal against lenient sentences for the notorious Pitt Bull Crew, a drugs and gun gang in Manchester that is responsible for murder and violence? Does he also agree that if we are to defeat the gun gangs in our cities, we must not only offer ways out of the gun and gang culture for those young men who want to get out, but ensure that the courts hand down sentences that are warranted for those involved in murder, extreme violence and witness intimidation?
  The Prime Minister: First, I pay tribute to the work that my hon. Friend has done in Manchester in respect of this issue. I know that it has troubled many of his constituents over a number of years, and he has played a significant part in shaping the Government's proposals in this area. Obviously, I support strongly what the Home Secretary said in relation to sentencing principles earlier today. In respect of gun crime, too, my hon. Friend will know that, as a result of the amnesty, we reckon that something in the region of 25,000 guns and more than 500,000 rounds of ammunition are being or will be being handed in to the police. But that has got to come alongside tougher sentences—in particular, a mandatory five-year sentence for anyone convicted of illegal possession of, or distribution of, prohibited firearms. I hope very much, both in respect of what the Home Secretary said and of gun crime, that these proposals have the support of the whole House.
  Mr. David Laws: If the Prime Minister is serious about genuine reform in the NHS, why is he not supporting the Health Secretary against the Chancellor in the debate on the borrowing powers for foundation hospitals?
  The Prime Minister: The proposals are those set out in the Bill; therefore, those proposals should be supported—and will be supported—by everybody. But let me put the question to the hon. Gentleman, since he will be voting against these proposals today. How can he say that he is in favour of local devolution of the health service, and then vote against the measure that actually delivers it? That simply shows that one part of the Opposition is against the investment and the other part of the Opposition is against the reform; only this side stands for investment plus reform.
  Mr. Harry Barnes: The Prime Minister will be aware that the Foreign and Commonwealth Office has issued an appeal to the International Labour Organisation and to the International Confederation of Free Trade Unions to involve themselves in the creation of a democratic trade union movement in Iraq. Will he have words with President Bush to establish that the President also
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  presses for this, and supports the development of a labour movement as part of the democratic movement in Iraq?
  The Prime Minister: One of the great advantages of the liberation of Iraq is that the people there should be able to enjoy the same human rights as people enjoy in other countries that have a greater history of democracy and representative government. One of those essential freedoms and rights is the right to be a member of a trade union, and I have no doubt at all that that will form part of the dispensation in the new Iraq that is being created.
  Mr. James Gray: I am sure that the Prime Minister, having recently visited the base, will join me in saluting the airmen and airwomen o f RAF Lyneham in my constituency, whose Hercules aircraft are the first and last out of every conflict. Does he agree that a significant part of the outstanding success of Operation Telic in Iraq recently was down to the fact that the Hercules were able to take the stores and personnel in and out? Does he also agree that all future conflicts will equally depend on RAF Lyneham?
  The Prime Minister: I think that I know the point behind the question, having visited the base. First, let me express my thanks and gratitude to the hon. Gentleman's constituents, to all those who work at RAF Lyneham and to the families of the servicemen and women, because they have been extraordinary in their support for our armed forces. In respect of RAF Lyneham, I have nothing to add to what I said when I was there, but I accept and understand the very important role that it has played in previous conflicts and, I have no doubt at all, will play in future conflicts, too.
  Mr. Barry Gardiner: The Prime Minister will know that British consumers now owe £48 billion in outstanding debts to credit card companies—twice the public sector borrowing requirement. Does he agree that consumers need to be able to compare and contrast the complicated fees and charging structures offered by different card companies? Will he back moves to introduce an honesty box to standardise the presentation of those charges across the industry, so that consumers can choose the best credit card to match their needs and reduce their burden of debt?
  The Prime Minister: I know that my hon. Friend takes a particular interest in this issue, and it is a very serious issue, which is why the Financial Services Authority is looking at it at the moment; indeed, the Government are also looking at it in the context of the review of the provisions of the Consumer Credit Act 1974. Ahead of that, I can tell him that the Department of Trade and Industry has been meeting the credit industry, the regulators and consumer groups to chart the right way forward, and there is indeed enthusiasm for the so-called honesty boxes referred to by my hon. Friend, to set out in advertisements or application forms the key

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  applicable interest rates and charges. I have no doubt at all that that will be an important way to ensure that, when people borrow, they borrow responsibly.
  Mr. Robert Jackson: I do not doubt the Prime Minister's commitment to public services. May I draw his attention to one of the most basic of all public services—waste disposal—where it seems that the Government are on a strategy that is drifting towards a disaster that will make the fridge mountain look like a molehill? May I ask him to read paragraphs 77 and 80 of last week's all-party Environmental Audit Committee report on that point and to reflect personally on the very serious implications of what that Select Committee has found?
  The Prime Minister: I will certainly reflect on the Environmental Audit Committee's report, and I certainly hope that we have learned some lessons from the attempt to implement previous European Union directives. Perhaps I can get back to the hon. Gentleman and correspond with him on the particular point that he raises.
  Fiona Mactaggart: How will my right hon. Friend recognise, reward and thank the teachers and support staff up and down the country who have helped thousands more children to learn to read, to get good GCSEs and to qualify for university?
  The Prime Minister: There has been a lot of talk, obviously, about the difficulties that schools and local education authorities have had. One reason for that is the substantial additional increments in pay and the support for pensions that we are putting into the system, and the simple and best way to support teachers is to try to create the environment in which many good schools develop and in which they are happy to teach, because they perform a magnificent job for our children, which is shown in the results that we are achieving. As one earnest of our commitment to our school system, in virtually every constituency—certainly in my own, but I am sure in my hon. Friend's also—we can see the results of the large capital investment programme in primary and secondary schools up and down this country.
  Mr. George Osborne: Spain has a Conservative tax-cutting Government, with real foundation hospitals. Does the Prime Minister understand why my constituents David and Victoria Beckham might be considering moving there?
  The Prime Minister: The principle of not-for-profit hospitals is also known in Germany, which has a social democratic Government.
  Dr. Phyllis Starkey: Before Easter, I participated in a conference in Qatar on democracy in the Arab world, which included representatives from all across the Arab and Muslim world. There are very big moves among people in those countries to improve democracy and accountability. Can the Prime Minister assure me that his Government will provide help and support to
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  women and men in those countries who are working for more democratic government that is consistent with their countries' traditions and the principles of Islam?
  The Prime Minister: I assure my hon. Friend that we work on our own account and also inside the European Union to promote democracy, good governance and civil rights. It is worth pointing out that, just in the past year or so, there have been elections in Yemen, Bahrain and Morocco, and a referendum has been held in Qatar to approve the new constitution. There are also forthcoming parliamentary elections in Jordan. There is, therefore, a continuing programme of work happening. We and our European partners will do everything that we can to shape the emergence of democracy in the Arab world and to support it, although ultimately these decisions must be for the Arab people themselves.
  Mr. Nick Gibb: The 1997 Labour manifesto said of comprehensive schools:
  "Children are not all of the same ability, nor do they learn at the same speed. That means 'setting' children in classes to maximise progress".
  Will the Prime Minister explain why, six years later, two thirds of lessons in the first three years of secondary school still take place in mixed ability classes?
  The Prime Minister: In the end, these decisions have to be for the teachers and head teachers themselves, but we have done everything that we can to encourage them. The hon. Gentleman will find that to be the case particularly in the new specialist schools, which are getting superb results up and down the country. In opening up the diversity of supply in our education system, we are indeed catering for children of different abilities, and perhaps the best response is to point out yet again that, over the past few years, we have had the best set of school results that this country has seen. According to a recent international report on education, this country now ranks third in terms of how our 11 year-olds are taught in our schools. That is surely something on which we should congratulate our education system.
  Keith Vaz: The Prime Minister will know the case of Catherine Meyer, whose two sons were abducted by her German husband nine years ago. My right hon. Friend kindly wrote to the German Chancellor about the case, but received a very unhelpful reply. Will he please write again to Chancellor Schröder and remind him that it is wrong in principle for individuals to use the German courts to deny a mother access to or contact with her children for almost a decade? Surely we expect better from an EU partner.
  The Prime Minister: My hon. Friend has made numerous representations on Lady Meyer's behalf and, as he rightly says, I have raised the case with Chancellor Schröder. I will reflect carefully on what my hon. Friend has asked me to do, but I should point out to him that we are in touch with the German authorities and discussing a whole range of issues to do with family cases. Obviously, we have to be sensitive about the

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  degree to which we seek to interfere in the jurisdiction of another country, but, subject to that, I will certainly reflect on what my hon. Friend has said.
  Rev. Martin Smyth: The Prime Minister will have read the report from the European Central Bank about the impact on the national health service if we were to go into the euro. Will he be prepared to defend the euro, or the national health service and our whole social service structure?
  The Prime Minister: With the greatest respect to that report, I believe that the maintenance of the national health service is entirely compatible with Britain being part of the single currency. Whether we are part of the single currency depends, as the hon. Gentleman knows, on the five tests.
  Ms Karen Buck: Parents are understandably confused about school finances this year. In Westminster city council, funding for education has gone up by 65 per cent. since 1997, yet schools are in serious difficulties this year. Meanwhile, the council has found £21 million to spend on other priorities, including a new call centre, while not passporting all the money through to schools. Will my right hon. Friend do what he can to ensure that money is passed through to schools and, when that is done, will he act sympathetically towards those authorities facing broader financial difficulties because of factors such as the census and the mainstreaming of the school standards fund?
  The Prime Minister: The answer is yes to both points. We have obviously put a series of questions to local education authorities, including the one mentioned by my hon. Friend, and it is extremely important that we get proper and detailed answers to them. We can then
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  work out exactly what action to take. She is absolutely right to say that, overall, there has been a massive increase in the investment going into education in this country, which is why it is important that that money is passported through to the schools.
  Mr. John Wilkinson: Following the Prime Minister's answer to the hon. Member for Harrow, West (Mr. Thomas), who referred to the outstanding cancer centre at Mount Vernon hospital in my constituency, which is regrettably under threat of closure, will he consider the future of the equally outstanding Harefield hospital in my constituency? Its Anzac centre was recently opened by His Excellency Michael L'Estrange, the Australian high commissioner, in honour of the brave Australian soldiers who were treated there during the great war. The hospital has performed more heart transplants than any other in the world. If the Prime Minister wishes to reform the NHS and provide a foundation for progress, keeping Harefield hospital open would be a good place to start.
  The Prime Minister: I entirely understand the concerns that the hon. Gentleman raises but I hope that he would agree with me that, at least in the first instance, decisions on how we configure local health care should be taken by the local strategic health authority itself. Therefore, it is important that proposals are first made by the locality and followed by a consultation with local people and others who may use the services before finally the decision comes to the Government. If the hon. Gentleman talks to people involved in cardiac care in the country, he will find, as with cancer care, that there has again been a substantial improvement to cardiac treatment. Waiting times are significantly down and there is an increased number of consultants. That again is, of course, because of the additional investment what we are putting into the health service.

Traveller Law Reform
12.31 pm
Mr. David Atkinson: I beg to move,
That leave be given to bring in a Bill to reform the law in England and Wales as it applies to gypsies and travellers.
Last July, the House allowed me to introduce the Bill that I wish to reintroduce today. Since then, the response that I have received has strengthened my conviction that it represents the right approach to resolve the problems that continue to be experienced in many hon. Members' constituencies because of unauthorised encampments of travellers and the antisocial behaviour that can occur when large groups of travellers congregate. My Bill would establish, for the first time in a legal framework, the right of gypsies and travellers to lead a nomadic way of life. It would also establish the responsibilities and obligations that they owe to others when exercising that right.
Since I introduced my Bill, I acknowledge that the Government have responded to the issue of travellers in several ways. However, they have not yet got to grips with the central issue: ensuring that sufficient sites for travellers are established to avoid the use of unauthorised sites. That is also the aim of my Bill.
Let me remind the House where I am coming from. Over Christmas 2001 and the new year, the national media gave widespread coverage to the unauthorised occupation of Kings park, a public park in my constituency, by a large group of travelers—800 people of all ages in some 200 vehicles and caravans. They said that they intended to stay throughout the entire holiday period, and so they did, despite a county order for their eviction and the requisite notices that were served. I shall not dwell on the effect that the travellers' presence had on the residential neighbourhood during that period—it is on the record—save to say that the experience cost the local community more than £100,000 and affected it in many ways that my constituents never want repeated.
The experience happened at the end of a year in which there was the largest ever number of unauthorised encampments on public parks and open spaces in our borough of Bournemouth. Such encampments continue regularly; Kings park was occupied on a much smaller scale just before Easter, despite measures that had been taken to avoid that happening.
Parliamentary initiatives that many hon. Members continue to take to raise the issue show just how widespread the problem of travellers' unauthorised encampments is. More of us tabled questions on the subject last year than ever before, and several Adjournment debates and ten-minute Bills have called for local authority and police powers to be strengthened to allow travellers to be evicted more effectively and to tackle antisocial behaviour.
In January, my hon. Friend the Member for Billericay (Mr. Baron) introduced a Bill to address another subject related to travellers: those who buy designated green belt land to develop without planning permission. Six weeks ago, the Minister responsible for the issue, the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Harrow, East (Mr.
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McNulty), told the local government conference on gypsies and travellers of the initiatives that the Government have recently taken: more cash for the gypsy sites refurbishment grant; a consultation paper on operational guidance on managing unauthorised encampments; and research commissioned from the university of Birmingham on the provision of sites—the report is expected next month—which is in addition to a study by the Institute for Public Policy Research on unauthorised sites.
None of those initiatives will achieve what I believe is necessary—the establishment of the rights and responsibilities of gypsies and travellers within the law. Nor will any of the Government's proposals to date help local authorities such as mine in Bournemouth, which has run out of land to develop, including sites for travellers, and is rightly protecting its public parks and what is left of its green belt to prevent further urban sprawl. For such authorities, the Government propose no new powers to deal with the problem of unauthorised encampments. The fact is that section 61 of the Criminal Justice and Public Order Act 1994 cannot be used when there are no alternative sites; nor does the Government's new draft housing Bill reflect their proposals for sustainable communities that should apply to travellers. Indeed, it appears that gypsy and traveller organisations were not even consulted on the Bill.
My Bill responds to all those issues. It is based on the work of the Cardiff law school and is the culmination of four years' consultation between gypsies and other travellers' organisations, statutory and voluntary bodies such as the police and local authorities, and lawyers and planners who face the problems that arise. Its main provision, in clause 1, is the establishment of a gypsy and traveller accommodation commission, with the principal task of ensuring that there is adequate accommodation for gypsies and travellers in England and Wales. It would be representative of the communities concerned as well as of interested public bodies, local authority and voluntary organisations. It would be expected to respond to problems of antisocial behaviour and unauthorised encampments, such as we have experienced in Bournemouth.
The Bill would require local authorities to facilitate the provision of sites for gypsies and travellers. The Housing Corporation would be empowered to make grants to registered social landlords to enable them to provide and manage such sites. Where, as in Bournemouth, there are no longer any appropriate sites to develop, the commission would explore appropriate sites with and in neighbouring authorities to serve the entire area. The new powers provided to the police to deal with unauthorised encampments could then be applied to all the local authorities in that area, which is not what the Government propose today.
The Bill would require local education authorities to develop strategic programmes to improve the educational attainment of gypsies and travellers and their children. It would also clarify the scope of the Race Relations Act 1976 by acknowledging that Irish travellers constitute a racial group, as do Scottish and Welsh gypsy traveller communities. It would also contain other appropriate provisions.
I submit that my Bill represents a carefully considered approach that provides equality of opportunity and equal access to civic life and social services for travellers

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and gypsies. It acknowledges that the threat of continuous eviction does nothing for the health and welfare of families, or for the education of children; that only 2 per cent. of travellers live to see the age of 65; and that the traveller infant mortality rate is nearly three times the national average. It recognises that where local authorities have offered suitable land sites, good relations have developed and school attendance and health have improved. A schedule to the Bill would propose a code of conduct for travellers, based on best practice and in consultation with local authorities and traveller groups.
The Bill responds to the recommendation of the Parliamentary Assembly of the Council of Europe passed last year for member states to resolve the legal status of gypsies and travellers. The alternative is to continue to rely on laws to prevent unauthorised encampments, which the police and local authorities are at their wits' end trying to enact. I commend my Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. David Atkinson, Mr. Terry Davis, Mrs. Annette Brooke, Mr. John Butterfill, Mr. John Battle, Mr. Henry Bellingham, Nick Harvey, Julie Morgan, Michael Fabricant, Andrew Mackinlay, Mr. John Randall and Mr. Kevin McNamara.

TRAVELLER LAW REFORM
Mr. David Atkinson accordingly presented a Bill to reform the law in England and Wales as it applies to gypsies and travellers: And the same was read the First time; and ordered to be read a Second time on Friday 20 June, and to be printed [Bill 102]
Mr. Speaker: Before I call the main business, I inform the House that there is a limit of eight minutes on Back-Bench Members' speeches. That is because there are so many hon. Members who wish to speak. It is therefore not a day for hon. Members to come to the Chair to ask where they are placed on the list

Orders of the Day

  Health and Social Care (Community Health and Standards) Bill
  [Relevant document: The Second Report from the Health Committee, Session 2002–03, on Foundation Trusts, HC 395.]
  Order for Second Reading read.
  12.41 pm
  The Secretary of State for Health (Mr. Alan Milburn): I beg to move, That the Bill be now read a Second time.
  Mr. Speaker: I should inform the House that I have selected the amendment in the name of the hon. Member for Wakefield (Mr. Hinchliffe)
  Mr. Milburn: Three years ago we set out our policy on the health service in our 10-year national health service plan. Last April, following the Budget of my right hon. Friend the Chancellor of the Exchequer, I published in the House a follow-up Command Paper, entitled "Delivering the NHS Plan". The Bill implements those plans.
  Underpinning the Bill is this diagnosis: the principles of the NHS are right: service is free at the point of use, based on the scale of patients' need, not the size of their wallets. Those are principles to which at least we on the Government Benches hold firm.
  Today's health service, however, is the product of decades of under-resourcing. It is the product also of the age in which it was born. If it is to keep pace with demographic change, and indeed with social change, it too must change. The NHS plan sets out the investment and the reforms that are needed to give patients the modern responsive services that they rightly expect. These are clear national standards, devolution of resources, choice for patients and flexibility for staff. It is these reforms that the Bill takes forward.
  The Bill strengthens national inspection and the NHS complaints procedure. It modernises NHS dentistry and the welfare food scheme. Should general practitioners vote for a new contract in a ballot, the Bill will legislate for it. The Bill puts power and resources in the hands of local staff and local communities by strengthening primary care trusts and creating NHS foundation trusts. These reforms match the resources that are now going into the NHS and that are bringing about improvements for patients.
  Our national health service is the fastest growing health service of any major country in Europe. While in the year before we came to office the NHS budget fell in real terms, by 2008 its budget will have doubled in real terms. That is the difference between a Labour party that is committed to building up the NHS and a Conservative party that is always committed to cutting it back. The hon. Member for West Chelmsford (Mr. Burns) shakes his head, but the situation could not be clearer. The Conservative party's policy document—hideously misnamed "Leadership with a Purpose"—was published at last year's Tory party conference. It boasted:
  "Conservatives do not support the tax and spending increases the Government has announced."

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  Not only do they not agree with that extra spending, they voted against it when they had the opportunity to do so. They now plan to cut that spending by 20 per cent. across the board. That is the Conservative policy for the health service. Members of the Conservative party must be the only people who believe that we can get more out of the health service by putting less in.
  The fact that resources are rising in the national health service means that staff numbers are rising too. Nurse numbers are up by 50,000 and vacancy rates are down. For the first time in decades, general and acute beds in hospitals are now growing in number. Waiting lists and waiting times are both falling. That is why the recent report from the independent Modernisation Board rightly argued that the NHS is turning the corner.
  This is not the time to cut back the NHS. It is the time to continue to invest in the NHS, and it is also the time to keep pace on reform. The question is how best to go about it. Here again, there is a choice between those of us who believe in reforming the NHS and others who believe that the NHS should now be abandoned. The Bill chooses the former over the latter.
  Like all my right hon. and hon. Friends, I stand foursquare behind the principles of the national health service. I do so for the following reasons. With the NHS, we all share in the security-Nye Bevan called it the serenity-of knowing that we all pay in when we can so that we can all take out when we need to, the health of each of us depending on the contribution of all of us. Those were the ideals that inspired the generation of Bevan and Beveridge and they remain our inspiration today. Indeed, in many respects, the case for the national health service, its system of funding and values is stronger today than it has ever been. Now more than ever, we live in a world where health care can do more, but costs more. Since none of us knows when we will fall ill, how long it will last or how much it will cost, having a national health service that pools risk because it is funded through general taxation and is free at the point of use, based on need not ability to pay, is the right way forward for our country. That is the Labour principle.
  There is another principle of course. It was spelt out by the hon. Member for Woodspring (Dr. Fox) at the Conservative spring conference just a few weeks ago. It is the principle that the patient pays. As he put it himself, his party plans to develop
  "the pay-as-you-go market where patients pay for a single procedure or item of care."
  There has been much talk in relation to the Bill of two-tier care. That Conservative policy is two-tier care, and would provide a fast track to treatment for those who can afford to pay and a slower service for those who cannot. Charging for health care is a Conservative policy—it is not a Labour policy. I can tell the House that not one clause of the Bill is about introducing Tory charges. Every clause is about maintaining the NHS as a universal service, free at the point of use and based on need, not ability to pay.
  Mr. Henry Bellingham: certainly agree with the last thing that the Health Secretary said, but is he aware that in my constituency there is a serious problem with GP shortages? Two
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  practices are short of a couple of GPs, and it is now taking a long time to see a GP. What is there in the Bill to try to address that problem?
  Mr. Milburn: Specifically, depending on how and whether GPs vote in a ballot, the Bill makes provision for a new GP contract. When many GPs look at the detail of what is on offer along with the 33 per cent. increase in resources for primary care, they will conclude that it is a good deal for the national health service, and in particular a good deal for GPs. However, may I make one general point to the hon. Gentleman? He said that he supports what I said. The problem for him is that he supports the principle but did not vote that way. When he had the opportunity to back extra resources, precisely to get more GPs into the national health service, he and his colleagues all voted against it
  It is not the principles of the NHS that need to be changed it is how it works in practice. One approach is about ends, the other is about means. The Bill preserves NHS values and does so by changing NHS structures. Let me just tell my right hon. and hon. Friends who have concerns about certain aspects of the Bill that the Conservatives want it to be opposed for three simple reasons. First, so that they can claim that Labour could not reform the NHS; secondly, the NHS itself is therefore unreformable; thirdly, as a result, the very first principle of the NHS—care for free—must now go. Whatever they say, the Conservatives do not want NHS reform to happen—they want it to fail. That is their strategy for this Bill, but ours is about strengthening the national health service. The Bill does so, first, by building on the framework of national standards that we have already put in place. It establishes a new Commission for Health Care Audit and Inspection to inspect and raise standards in health care across our country. Patients have the right to know the standards of care in every NHS hospital, and I believe that it is time people knew the standards of care in every private sector hospital too.
  For the first time, the new commission will provide independent inspection to common standards in both public and private sector hospitals. With more resources going into the NHS, people have the right to know what they are getting out of it. Far from adding to bureaucracy, as the reasoned amendment argues, the new inspectorate will merge into a single organisation the health functions of the Commission for Health Improvement, the National Care Standards Commission and the Audit Commission, to report on the state of the NHS, the performance of all parts of it, and indeed the use to which NHS resources are being put.
  The Bill establishes a sister organisation, the Commission for Social Care Inspection, to do a similar job in social services—to guarantee standards of care for some of the most vulnerable people in our society, and in particular children and the frail elderly. Both commissions are more independent than the structures that they replace. They will both be under a duty to work together to bridge the historic divide between health and social care, which has remained unreformed for too long, so that we have what many of my right hon. and hon. Friends have long argued for: not health care competing against social care, but a single, seamless system of care.

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  The new commissions, like the National Institute for Clinical Excellence and the national service frameworks that we have introduced, will help raise standards of performance in all parts of the NHS.
  Mr. Ronnie Campbell: I am puzzled, and one or two constituents have phoned me, about the lower-paid workers in the health service—the porters, cleaners and maintenance workers. They are afeard that when foundation hospitals come into being, privatisation will take over, they will be thrown to the wolves-or perhaps I should say dogs, as wolves is not a good word right now and their wages will be halved. Can my right hon. Friend give them a guarantee that that will not happen, and that their present wages will be guaranteed?
  Mr. Milburn: Yes, indeed. I do not know what the allusion to wolves was. My hon. Friend was being slightly wolvist. As regards the agenda for change, which is the new pay system for people in the national health service, that will apply in all aspects of the national health service, across every foundation trust. Every part of the national health service will implement it. As my hon. Friend knows, the new pay system that we have negotiated with the NHS trade unions is very good, particularly for low-paid workers. It will guarantee, for the first time in the national health service, not the national minimum wage that applies across other industries, but an NHS minimum wage that will guarantee workers a minimum of £10,000 a year. For many of us, that is not a handsome reward. For very many cooks, porters and cleaners, it represents a real improvement, and it has come about because of the policies and investment that the Labour Government have put in place.
  The framework of national standards is a means to strengthen the equity that my hon. Friend asks for in the NHS, to ensure that the quality of care that people receive does not rely on the lottery of where they live.
  Mr. Nick Gibb: Will any of that result in digital hearing aids being available to my constituents, who have been told that they will not have them until 2005? The Secretary of State says that the postcode lottery will no longer apply, but my constituents cannot get that important facility until 2005.
  Mr. Milburn: The technology for digital hearing aids to be introduced on the national health service has existed for 20 years. It is only under a Labour Government that digital hearing aids have been made available on the NHS, so before the hon. Gentleman starts bleating, he should persuade those on his Front Bench that the best thing to do is what the Labour Government have done, and commit to investment in the NHS.
  National standards are helping to overcome the divide between rich and poor-the lottery of care that has existed for too long. It is kick-starting the process of
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  improvement that was long overdue, but ultimately improvement is delivered locally, not nationally, by front-line staff in front-line services.
  Helen Southworth: On the lottery of care and the action that my right hon. Friend is taking to remove it, will he give me an assurance that North Cheshire hospital trust will not be disadvantaged by the proposals, and that the hospitals, and in particular Warrington hospital, will receive all the resources that they need to provide essential patient services?
  Mr. Milburn: I know that my hon. Friend works closely with the local health service in Warrington, and she knows that in the past I have visited her town and gone with her to see the local hospital. I can give her those guarantees, because the system of funding will continue to work in the national health service as it does now. The funding will go from the Department of Health down to the primary care trusts. It will be for the primary care trust then to determine which hospital, if it wants to commission services from local hospitals, should get the resources. In most places, such as my hon. Friend's constituency and mine, there is one local hospital, so it would be pretty surprising if the local hospital did not continue to benefit from the extra resources that are going into the national health service.
  Where the power needs to be located in the NHS nowadays, alongside the extra resources that we are putting in, is among local people, in order that we get more responsive local services.
  Linda Perham: May I ask my right hon. Friend about independent lay monitoring of foundation trusts? I understand that patients forums will not be attached to foundation trusts. Can he give me some assurance about lay monitoring?
  Mr. Milburn: I know that my hon. Friend has been concerned about these matters in the past and continues to be so. NHS foundation trusts will have an entirely different accountability structure from the present one, where accountability is all upwards to the Department of Health, bureaucrats and Ministers. In future, with NHS foundation hospitals the accountability will genuinely be to local people and to local staff, so it will be an improved form of democracy and accountability within the national health service. Even then, of course, there needs to be some independent scrutiny of how the NHS at local level works.
  I can give my hon. Friend the assurance that the local PCT patients forum will have precisely the sort of powers and responsibilities that it needs to ensure that the standard of services in each of the NHS foundation hospitals is as high as possible. That must be right, and we must learn from the scandals of the past, when all too often, because there has not been independent scrutiny and oversight, problems that have occurred and that everybody has known about have not been picked up and properly dealt with.
  Lynne Jones: Foundation hospitals will be inspected by the Commission for Health Improvement, will be regulated by the regulator, will form legally binding contracts with the PCTs, and

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  will also be answerable to the governing body that is elected from self-appointed people in a catchment area, or from patients and staff. Will my right hon. Friend clarify for my constituents how they will know who will be responsible for which decisions? Surely that is at the heart of accountability.
  Mr. Milburn: Yes. My hon. Friend's constituents will directly elect the governing body. If she thinks that the current structure of appointments from Whitehall, whether by a Minister or by an independent appointments commission, in any way, shape or form represents meaningful local accountability, I would be surprised. Like her, I am a democrat. I believe in the democratic principle. I am the first to admit that democracy is not always perfect in practice, but it is a pretty good principle.
  John Mann: Is my right hon. Friend saying that when 35,500 of my constituents voted in a ballot in February, when all the non-executive directors were against what the local population wanted, those 35,500 people would be able to vote in their own directors if they disliked the way in which our hospital trust was going?
  Mr. Milburn: I am well aware of the situation in my hon.
  Friend's constituency, and of the part that he played in that successful ballot in getting the hospital to change its mind about some of its proposals. That is a good thing, not a bad thing. If we are honest, every hon. Member knows that all too often in the national health service—the public service to which the public are more attached than any other—the way that local services have gone about public consultation has been shameful.
  Richard Burden: I am sure that my right hon. Friend is genuinely interested in trying to promote greater local accountability, but will he reflect on the fact that there was a good deal of argument about community health councils, and a good deal of discussion of the new patient and public involvement forums, patient advice and liaison services and so on, and that there is a good deal of concern and confusion in some areas about how they are being introduced? There is concern that the Bill could add lo the confusion about how independent patient monitoring vis-à-vis the foundation trust, not vis-à-vis the PCT, would work. Does he acknowledge that that concern is widely shared and needs more thought, if the Bill goes through tonight and proceeds to Committee?
  Mr. Milburn: There is no reason why those detailed issues cannot be considered in Committee or on Report, but let me make one general point to my hon. Friend. Under these proposals, individual NHS patients and members of the community—and, what is more, local members of staff—will for the first time have the opportunity for which they have been clamouring for many years: they will have a say in how their local health service is run. We do not object to that principle for social services, so why should we object to it for health services?
  Huw Irranca-Davies: The Secretary of State just mentioned the community representatives in
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  hospitals. I welcome the proposals, but does he recognise that people who migrate towards a particular hospital, either across England or from Wales to the English counties, to take advantage of services there, are part of that community? When we come to the detailed consideration, if the Bill passes into Committee, how will those people be represented?
  Mr. Milburn: Obviously, the measures governing NHS foundation trusts apply only to England. The way in which the national health service is run in Wales is a matter for the Welsh Assembly, and rightly so. However, where there is patient movement, it is perfectly possible that patients from Wales who have been treated in English hospitals will have the opportunity to have a say, to vote and to exercise a democratic right. With public services, that must be a good principle, not a bad one.
  Mr. George Howarth: Does my right hon. Friend accept the fact that there are many of us on the Government Benches who, although we are minded to give the Bill a Second Reading, still have some concerns that need to be addressed—specifically, those involving unfair advantages in staff recruitment, the speed with which all hospitals will be brought up to foundation status, and the arrangements for democratic accountability? Will he give an undertaking that he will continue to address those concerns during the later stages of the Bill's progress?
  Mr. Milburn: I give my hon. Friend that assurance. He and I have discussed this issue; he has spoken about his local area and I know that he has concerns because, rightly, he wants to ensure that if there are opportunities for NHS local services to be improved, that improvement should be available not just in some areas but in every area. Of course we will consider the proposals that are made and the discussion that takes place.
  Jean Corston: Can my right hon. Friend tell me what is in the Bill for the people whom I represent in Bristol—an area of considerable inequality in health—when the United Bristol Healthcare NHS trust has no stars, and people in the south of Bristol, which forms part of my constituency, have been campaigning for at least 30 years for a community hospital? Will he confirm that the regulator will not have the power to top-slice the NHS investment budget, thus giving foundation trusts an undue share of the cake?
  Mr. Milburn: On that specific point, I can give my hon. Friend an assurance, but, if she will allow me, I will come to that subject later; she has raised it before, and so have other hon. Members. She asked me what was in this for Bristol. Many of the other measures in the Bill, most notably the new Commission for Healthcare Audit and Inspection, will make a real difference, particularly in areas such as hers. She has often spoken to me about the problems in Bristol and the wider Avon area, and she knows that we try to put additional assistance in there, and that we shall make further assistance available, especially in areas such as hers, where some hospitals are struggling at the moment.

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  One of the great myths that sometimes pervade the debate about the national health service is that we have a one-tier health service today. We do not. Some hospitals are good, some are poor and some, sadly, need to improve. Each of them has a different starting point, so we need a different approach. It is perfectly reasonable to say that those who are doing reasonably well and have a track record of success have the ability to exercise freedom responsibly. Others, including some in my hon. Friend's area, need help and support and, where necessary, more intervention, including extra financial assistance—and that is what we plan to provide.
  Mr. Robert Jackson rose—
  Mr. Milburn: I shall give way to the hon. Gentleman, and then I shall move on.
  Mr. Jackson: The Government are going in the right direction, but there is some poetic justice here, in that the Secretary of State is being attacked in the same terms as the Labour party used to attack us when we were trying to free up the system. On reflection, does he not think that we should take that into account when we conduct our debates on this matter in the House? He is facing exactly the same charges about privatisation and two-tierism as we did.
  Mr. Milburn: Support from the hon. Gentleman is about as welcome as myxomatosis in a rabbit hutch—although I hope that it does not have the same deadly consequences. The fundamental difference between what happened then and what is happening now is that in the internal market there were no national standards, the resources were not going into the national health service, and there were not the means to improve every NHS hospital. That is what we have put in, and that is what the Bill continues to do. It is simply not the case that this is some sort of reinvention of the Conservative internal market. For reasons that I shall come to in a moment, this is not about more competition; it is about ensuring co-operation and raising standards across the whole NHS.
  Mr. Mike Hancock rose—
  Mr. Milburn: I shall give way to the hon. Gentleman, and then I shall make some progress.
  Mr. Hancock: What would the Secretary of State say to constituents of mine in the greater Portsmouth area whose hospital, despite the best efforts of the staff and the management, who are trying to turn round a failing situation, is still carrying forward an inherited deficit that is retarding patient care? What is in it for them, when they have been told that they cannot aspire to foundation status for at least five years? What assurances can the right hon. Gentleman give to the people of the Portsmouth area to give them the confidence that they ought to have in their health service the confidence that their resources will not be cut, but that resources will be put in to improve their situation?
  Mr. Milburn: It is slightly premature for the hon. Gentleman to say that his local hospital has been told
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  that it will not become an NHS foundation hospital for another five years. Nobody has been told that. Thirty-two hospitals have applied at the moment, and I will consider those before too long. Then, no doubt, there will be further waves of NHS foundation hospitals. In the meantime, we will try to get extra resources and support to hospitals that are struggling a bit at the moment, so that they all have the opportunity to acquire the freedoms that go with NHS foundation trust status. That must be right. This policy is not just for an elite few; I want to see it available for every hospital, including the hon. Gentleman's local one.
  Mr. David Cameron rose—
  Dr. Desmond Turner rose—
  Mr. Milburn: If the hon. Gentleman and my hon. Friend will give me a minute, I will make a little more progress; they can come in later.
  Sustaining improvements in NHS performance can happen only when staff have more control and local communities have a greater say in how services are run. Different communities in our country have different needs. They are not uniform; they are multifaceted and multicultural. For all the great strengths of the NHS, too often the poorest services have been in the poorest communities. For those of u—on the Government side of the House, at least—who believe in the principle of social justice, it is a scandal that, for 50 years, health inequalities between the wealthiest and the poorest in our country have got wider, not narrower. For 50 years, uniformity of provision has not guaranteed equality of outcome.
  The best way of tackling this unfairness is to give local people and local staff a greater say over how the health service is run. We have local councils to run local services precisely because we recognise that needs differ between communities. That is why we created primary care trusts and devolved power to them, and why they now control three quarters of the total health service budget.
  Far from weakening the role of PCTs, as the amendment in the name of some of my right hon. and hon. Friends argues, the Bill strengthens that role. For example, it gives PCTs control of NHS dentistry and the £1.8 billion that goes with it. It gives them a duty to secure the provision of primary dental services, which they can do either through contracts with dentists or by providing dental services directly themselves.
  I believe that the provisions in the Bill will help to plug the existing gaps in dental services. The Bill will also give PCTs new powers to focus on health prevention as well as treatment. The reason for devolving control over health services in that way is to get more responsive services for patients. That is as much the case for hospitals as it is for primary care.
  Kate Hoey: My right hon. Friend has mentioned democracy and PCTs. If democracy, in terms of community involvement, is so important, why are we not starting the other way round and going for the election of PCTs?
  Mr. Milburn: As I have said to my hon. Friend in the past, I have no objection in principle to that. However,

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  the issue is one of timing. She knows that in her area as well as mine, the primary care trusts are just up and running. They are new organisations and many of them are embryonic. They have to be able to commission services. Otherwise, the resources going into the national health service will not achieve the right results locally. Primary care trusts must have the ability to decide where services are going, whether that is the acute, community or primary sector. Frankly, they are not at a suitable stage of development to allow them to do that. Down the line, I have no objection whatever to the idea of applying the democratic or foundation principle to primary care trusts. All I would say is that the biggest risk in doing so now is destabilising precisely the organisations that I know she is committed to building up.
  Mrs. Anne Campbell: I welcome the proposal on foundation hospitals and look forward to my local hospital, Addenbrooke's, becoming a foundation trust in the first wave. However, I seek reassurance about the excellent collaborative networks that have been set up, including, in particular, the East Anglia cancer network. Can he assure me that devolution to local control will not result in the dissolution of those very good networks?
  Mr. Milburn: Yes, I can give my hon. Friend that assurance. I want to deal with some of the details in a moment, but suffice it to say for now that, under clause 27, there are obligations that will apply to each NHS foundation trust. This approach is not about: establishing a series of little islands in the national health service, but about ensuring that we raise standards of care across the whole service. I have always enjoyed visiting Addenbrooke's, and, as she rightly says, it is clear that its clinicians and managers want to collaborate with others to improve care for patients. Nothing that we do will get in the way of such collaboration or co-operation.
  Mr. Cameron: Does the Secretary of State agree that one of the elements of our multi-tiered NHS is that 300,000 people last year had to dip into their savings, without insurance, to pay for their own operations? That represents a threefold increase since the election. Does he agree that the Government's health policy will not have succeeded unless that number is reduced by the next election?
  Mr. Milburn: That is precisely why I want to solve the dilemma of people who are forced to choose between waiting for treatment and paying for it. The problem for the hon. Gentleman is that that is his party's policy—it wants more people to pay for treatment. That is what the hon. Member for Woodspring set out in his speech and it is what the Conservative party believes in.
  Mr. Stephen McCabe: Is it not the case that the hon. Member for Woodspring (Dr. Fox) not only wants people to dip into their own pockets, but wants other taxpayers to subsidise them?
  Mr. Milburn: Not for the first time, my hon. Friend is absolutely right. It is sorely tempting to pursue that
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  point in detail and at length, but given the other issues that we have to deal with it would probably be wise not to give way to that temptation.
  Mr. Gerry Steinberg: Will the Secretary of State give way?
  Mr. Milburn: I shall do so in a moment, but let me make a little bit of progress, if I may.
  Mr. Steinberg: That is one more vote you have lost.
  Mr. Milburn: I give way. [Laughter]
  Mr. Steinberg: It is still not certain that my right hon. Friend will get that vote, to be quite honest.
  One of the problems that I have encountered over the years is that the consultants and surgeons have far too much power and determine the success of a hospital. In my constituency, when consultants and surgeons see somebody in their hospital and tell them that there is a nine-month waiting list, they often also tell them that they can see them three weeks later in a private hospital. Is it not about time that we took away some power from such consultants? How will foundation hospitals achieve that? It seems to me that they will give consultants more power, not less.
  Mr. Milburn rose—
  Mr. John Bercow: The right hon. Gentleman should not: have bothered.
  Mr. Milburn: I shall reserve judgment on that matter.
  I know that my hon. Friend has a close working relationship with Dryburn hospital in Durham city and that, like me, he is full of admiration for the work of its consultants. Overwhelmingly—this is not true of everybody in any walk of life—consultants do a very good job of work for the national health service and NHS patients. However, if this is a public service, it must be right that the public receiving it have a greater opportunity to have a say about how it is run. Services should not be run only by professionals. I agree with him. I think that the professionals should have a say and that we should have some humility about that. I do not treat a single patient; thank heavens for them as well as for me! I do not manage a hospital or a health centre. The people out there do that, and it seems to me that they should have some more power and control. Equally, surely the communities that receive these public services must have a greater opportunity to have a say. That is precisely what the NHS foundation trusts are all about.
  Several hon. Members rose—
  Mr. Milburn: I should like to move on, if I may, because I have taken a lot of interventions.
  Mrs. Gillian Shephard rose—
  Mr. Milburn: It is very tempting to give way to the right hon. Lady, but I wish to move on.

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  In this country, the NHS has for 50 years provided good care to millions of people, but it was formed in the era of the ration book. People expected little say and had precious little choice. Today, we live in a different world. Whether we like it or not, this is a consumer age. People demand services that are tailored to their individual needs. They want choice and expect quality—we all do it and we all know it. Those changes cannot be ignored, they are here to stay and they challenge every one of our great public services.
  There is a choice about how we meet that challenge. Some say that we can do so only through the market mechanism of forcing patients to pay for their treatment. For reasons of equity and efficiency, we say that patients should not be forced out of the NHS to pay for themselves, but should be able to stay with a tax-funded NHS that is reformed and capable of providing the more responsive and modern health care services that people rightly expect.
  Today, however, the NHS is controlled from the top down. If it is to be more responsive, it needs to be run from the bottom up. It cannot be right that while Whitehall is free to direct every hospital to do everything from how to cook turkeys to how to wash the bed linen—such instructions have been issued in the past—hospitals are not free even to appoint their own doctors or nurse consultants without approval from somewhere else further up the command chain. An organisation employing more than 1 million of the most highly trained, dedicated people in our country simply cannot be run in that way. Day in, day out, we put our trust in the hands of those front-line NHS staff to provide services. It is surely time that we trusted them with greater control over how those services are designed and run. It is time that we trusted local communities, too, so that they can hold those services to account. Together, NHS staff and the communities that they serve are in the best position to deliver the more responsive patient-focused services that the modern world demands.
  Ms Joan Walley: I agree with everything that my right hon. Friend says about the importance of having more flexibility in the NHS and that local decisions should not have to be agreed nationally. However, he still has not convinced me that his way of doing that is the right way in respect of foundation hospitals. Surely, we have self-governing trusts at a local level. Why cannot we start where the inequalities are greatest, in areas such as north Stafford shire, where we have experienced inequality of health and are waiting to add to the investment that we have already received from our Labour Government? Why can he still not convince me that foundation hospitals are the right model to proceed with?
  Mr. Milburn: Perhaps I shall do so when I come to that section of my speech.
  Mrs. Shephard rose—
  Mr. Milburn: The right hon. Lady is already on her feet, but if I can take fewer interventions for now, perhaps I shall make a little progress.
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  My hon. Friend will find that when we give the go ahead—I want to be able to do so—for the first wave of NHS foundation hospitals, many of them will be in precisely the sort of areas about which we should be most concerned. They include the poorest communities, such as Liverpool, Bradford, Sunderland and Doncaster. Those are hardly the most affluent parts of the country. She is right about local health inequalities, but if we are to address them the issues must be dealt with locally and not nationally. With the best will in the world, we have tried for 50 years to deal with them from the top down with a one-size-fits-all approach, but what has happened to health inequalities? The gap has become not narrower, but wider.
  Mr. Andrew Lansley: I should like to refer back to the issue of networks. Addenbrooke's hospital is situated in my constituency. If it or other NHS trusts want to work with other hospitals and bring them together in a network, as an alternative to individual NHS trusts becoming individual foundation trusts, will the legislation permit them to do so? As it stands, it suggests that one NHS trust equals one NHS foundation trust, and I want the Secretary of State's assurance that networks are able to seek foundation status.
  Mr. Milburn: The hon. Gentleman has read the Bill carefully, and he knows that as drafted it does not permit that. If it is a matter that he wants to address, we shall consider it. It is wise, however, to caution him that we should not run before we can walk. We want to establish the principle, to ensure that it works, and to make it widely available across the national health service. There may be different ways of applying it—I do not know—but at this stage, on Second Reading, the Bill is about establishing the very principle of how we move forward with NHS foundation hospitals.
  Judy Mallaber: My right hon. Friend will be well aware of the concern that foundation hospitals may be able use their flexibilities to poach staff, thus damaging other hospitals. Will he give an assurance that if my local Derby hospitals achieved that status, they would operate the "Agenda for Change" agreement in the same way as other hospitals? In particular, would they be required to consult the other local hospitals that my constituents use if they were to employ the flexibilities within "Agenda for Change" to seek to improve rewards for staff, so that there would be co-operation about the local staffing network in local hospitals?
  Mr. Milburn: My hon. Friend, who is concerned about these issues, knows that the "Agenda for Change" pay system is a very good deal, and, like me, welcomes the fact that in their ballots the Royal College of Nursing voted for it by more than 80 per cent. and the Royal College of Midwives voted for it by more than 90 per cent. I look forward to the other trade unions, including my hon. Friend's union—Unison—and Amicus, getting on with their ballots so that we can get the "Agenda for Change" pay system implemented as soon as possible. When it is implemented, it will apply

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  across the piece in every part of the national health service, whether in an NHS foundation trust or an NHS trust.
  With our national frameworks of standards and inspection in place, our reforms are about opening up the system—
  Dr. Desmond Turner rose—
  Mr. Milburn: I shall not give way to my hon. Friend for a moment or two, if he does not mind.
  Our reforms are about opening up the system so that it becomes more responsive to the patients who use it. NHS foundation trusts are part of that wider reform programme. They are about giving the staff who provide the services—doctors, nurses, managers and other front-line staff—greater control over how they are designed, delivered and run. They are about giving local communities a bigger say. They are about getting more responsive services for patients. That is why organisations such as the British Association of Medical Managers and the NHS Confederation so strongly welcome NHS foundation trusts. It is why doctors such as the renowned Oxford cancer specialist, Professor David Kerr, told us:
  "Foundation status will make it much more likely that senior clinicians will become engaged in service improvement; that local solutions will be found to overcome the barriers that stand in the way of optimal care; that patients and corers can have a voice that helps shape their service."
  And it is why in places such as Doncaster in Yorkshire, Addenbrooke's in Cambridge, and UCLH—University College London Hospitals—medical committees and staff-side organisations are backing their local hospitals' efforts to become NHS foundation trusts. The policy came about through discussions with staff and managers in the NHS. It has been developed in discussion with NHS hospitals. They say that what they want is greater freedom to innovate—not outside the NHS, but inside it.
  I first outlined this policy more than a year ago. Since then, several concerns have been raised about it. Following dialogue and discussion, including with many of my right hon. and hon. Friends, the Bill attempts to address those concerns. Throughout, it gives more freedom to NHS hospitals, but balances those new freedoms with appropriate and necessary safeguards.
  First and foremost, NHS foundation trusts will be NHS hospitals. They will treat NHS patients according to NHS principles, but they will have greater freedom to run their own affairs. Freeing NHS foundation hospitals from day-to-day Whitehall control will improve care for patients by encouraging greater local innovation in how services are delivered. As one senior nurse, Hazel Gregory from Aintree hospital, put it last week:
  "morale is really high here but if we are allowed more freedom to do the things we want, I can see it going even higher".
  I reject the notion advocated by some that the only place where enterprise flourishes is in the private sector. There is a spirit of enterprise in the public sector, inside our national health service, but for too long it has been held back. Releasing the innovation and imagination of NHS staff requires greater freedoms for NHS hospitals.
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  The Bill frees NHS foundation trusts from powers of direction from Whitehall that have been in place for umpteen years. That will give NHS hospitals the freedom to employ their own staff and to control their own assets. The Bill also gives them the ability to borrow—either from the public sector or from the private sector.
  Dr. Desmond Turner: The first wave of foundation trusts is supposed to be a list of the highest-performing hospitals—three-star hospitals. However, given that the three-star system does not reflect clinical performance, what confidence does the Secretary of State have that his choice of the first trusts to receive the privileges of foundation trusts is the right one? Is he confident about the selection system and assessment by the very Whitehall civil servants whom he has criticised?
  Mr. Milburn: Do I have confidence in the system? Yes, I do. As I have said to the Select Committee on Health on many occasions, the star rating system is far from perfect. Any system of performance rating in any organisation, in any industry, anywhere in the world, is far from perfect. For the first time, however, the star rating system is making transparent what we already know: that some hospitals are better than others. That is a fact of life that we must address. The way to do that is to ensure that those who are capable of exercising more freedom get the opportunity to do so, then to provide extra help, support and resources into NHS organisations that have fallen behind.
  Mr. Derek Foster: Speaking as a Whitehall-watcher of 40 years' standing, is not this an historic occasion, in that never before has Whitehall striven so hard to devolve and decentralise with so much resistance from so many of us who purport to represent localities?
  Mr. Milburn: My right hon. Friend, in his inimitable manner, makes an extremely good point. Nye Bevan once said that the purpose of getting power was to give it away, and that is the principle that must be right in our public services if they are genuinely to be in tune with the needs of the local communities and more responsive in the way that people nowadays rightly expect.
  Mr. Martin Salter: I note from the amendment that we are being invited to decline to give the entire Bill its Second Reading instead of waiting to see the nature of the Bill that emerges from Committee on Report. That is perhaps a strange way of going about parliamentary business. Can the Secretary of State advise me as to what my constituents would lose if other parts of the Bill unrelated to foundation trusts were to be lost?
  Mr. Milburn: They would lose the whole Bill. They would lose the new inspectorate, the new provisions for NHS dentistry, and the new cost recovery scheme that ensures that it is no longer the taxpayer that pays for wrongdoing, but the wrongdoer, which is precisely the principle that Labour Members have long argued for. The Bill contains a raft of measures. I readily admit that some are more popular than others, but none the less it

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  is a Bill that is about modernising and strengthening the whole national health service, and doing so on the basis of NHS principles.
  Mr. Bercow: Given that the Secretary of State, backed by the Prime Minister, originally appeared to support the principle that foundation hospitals should be free to borrow on the open market, outwith central control, in order to fund the necessary expansion of services, but that he has now submitted to the imposition of a Treasury straitjacket, can he tell the House whether he and the Prime Minister came to be persuaded that the Chancellor was intellectually correct upon this subject, or did they just think it politically expedient to give in to him?
  Mr. Milburn: The Bill gives NHS hospitals substantial new freedoms to borrow. They did not have the right to borrow from the private sector in the past but they will have it in future. Hospitals told me that they want to use the extra capital that they will get through borrowing to invest in new scanners, more efficient equipment—
  Several hon. Members rose—
  Mr. Milburn: I shall give way shortly, but I have given way many times and many other colleagues want to speak. [Interruption.] I am generous and I hope that others will reciprocate later.
  Hospitals have told me that they will use the extra resources to invest in new services not only in the hospital but in the community. Clause 12 provides that they can borrow only what they can afford to repay. To those who say that that will mean robbing Peter to pay Paul, clause 3 makes it clear that the independent regulator, who is charged with policing the way in which NHS foundation trusts work, will have to take account of the impact of their borrowing on the wider health service.
  In discharging his functions, clause 3 provides that the independent regulator will have to take account of the Secretary of State's wider obligations under the National Health Service Act 1977, which a previous Labour Government passed to
  "provide a comprehensive health service and the effective provision of health services which also must be free of charge".
  Dr. Jenny Tonge: Will the Secretary of State give way?
  Mr. Milburn: No, not for a moment or two. I have given way a lot.
  Some of my hon. Friends have expressed anxiety that NHS foundation trusts undermine the new primary care trusts. I want to reassure them that that is not the case. National health service foundation trusts will rely on PCTs for their income in the same way as every other NHS hospital. Primary care trusts will continue to have the power to use their resources as they see fit. To strengthen the hand of primary care in general, especially PCTs, they will also be represented on each NHS foundation trust's board of governors.
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  Hospital will not be forced to compete against hospital. The Bill enshrines co-operation, not competition. When my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) first introduced a legal duty of partnership in the Health Act 1999, he said on Second Reading:
  "The Bill will give all the national health service organisations a duty of co-operation, in place of the competition that the Tories tried to force on them".—[Official Report, House of Commons, 13 April 1999; Vol. 329, c. 41.]
  I can give the same commitment today. The legal duty of co-operation for which the Bill provides is exactly the same as that in the 1999 Act. Just as the duty applies to NHS trusts now, it will apply to NHS foundation trusts in future.
  Mr. Michael Clapham: On Friday, I met representatives of my local primary care trust and my local hospital trust in Barnsley. I asked them how they believed that foundation hospitals would affect the community. They said that they thought that they would be detrimental because the PCT has a substantial deficit, which was carried over from the previous area health authority before we moved to strategic health authorities. The debt is approximately £13 million, which has to be brokered each year. That means that there is less money to go round. They fear that if a neighbouring hospital receives foundation status, it will attract people from Barnsley, who will rightly expect to receive the better treatment. That will draw resources from the area, to the detriment of—
  Madam Deputy Speaker (Sylvia Heal): Order. The hon. Gentleman should conclude his remarks. I think that the Secretary of State understands the question.
  Mr. Milburn: The Bill does not alter the power of the primary care trust in any way, shape or form. The PCT holds the power. I have found that, in life generally, and especially in the case of public services, those with more money have a bit more power. The PCT will decide where the money goes in my hon. Friend's constituency as it does in mine and in every other constituency.
  Mr. Frank Dobson: I did not intend to intervene on my right hon. Friend, but since he has mentioned me, I shall ask a question. If the proposition that all parts of the national health service should co-operate is to continue to apply, why did he tell primary care trusts that he wanted hospitals to compete for their business?
  Mr. Milburn: With all due respect, my right hon. Friend knows that that is not the case. He was partly responsible for introducing primary care trusts. They rightly argued that we should have one local organisation that could commission services in a way that was appropriate to the needs of the local community. It is up to the primary care trust to decide where best to deploy its resources. That must be right otherwise we will never get the best services for NHS patients. The Bill's purpose is to ensure that we get the right services to patients.
  Dr. Liam Fox: The Secretary of State has just said that power lies with the primary care trusts.

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  In that case, why will the Bill "democratise the providers", to use his words, and not the commissioners of health care?
  Mr. Milburn: I believe that the hon. Gentleman has been present for most of my speech. Perhaps he was asleep for part of it. [Interruption.] It is a long speech because I have tried to answer a lot of question, including many from Opposition Members. I answered the hon. Gentleman's question when I replied to my hon. Friend the Member for Vauxhall (Kate Honey), who is my local Member of Parliament. It was right to answer her question because I ask her many questions. I said that I had no problem with applying the principle of democratisation to primary care trusts but that now is not the right time to do it because the PCTs are not new.
  Mr. Stephen Dorrell: The Secretary of State says that he has no objection in principle to introducing a democratic mandate into the primary care trusts when they are more established institutions. However, is not he creating a dilemma that cannot be resolved? There will be two democratic mandates—one in the NHS foundation trusts and the other in the PCTs. Which will prevail?
  Mr. Milburn: The right hon. Gentleman makes a reasonable point, which I shall try to answer reasonably. It depends on the form of democratisation that one would select for primary care trusts. For example, in the Bill, we have opted for a membership structure because the people who become members of an NHS foundation trust will incur specific legal obligations. It must therefore be right for them to opt into those obligations, which would otherwise be imposed on them. There are other forms of democratisation. For example, for primary care trusts, we could choose a model that was based on a local authority area, not least because many PCTs are now coterminous with local authority areas. The right hon. Gentleman looks startled, but coterminosity exists between PCTs and local authorities. If he wants such a proposal to be taken forward and the principle entrenched, I hope that he will vote for the foundation principle. I suspect that the hon. Member for Woodspring will tell us that Conservative Members will vote against it.
  Mr. Dorrell rose—
  Mr. Milburn: I presume that the right hon. Gentleman wants to make a personal statement.
  Mr. Dorrell: I am grateful to the Secretary of State for giving way a second time, but if he was genuinely trying to persuade us to vote for the Bill on the basis that it is more radical than the policy that we introduced in 1990, he might find a ready constituency on these Benches. The problem with the Bill and the right hon. Gentleman's answer is that he is not persuading us that the measure is an effective vehicle for implementing the policy that he claims to espouse.
  Mr. Milburn rose—
  Andrew Mackinlay: Ask him when we will see him again.
  Mr. Milburn: My hon. Friend has done that job adequately. I have not argued the case that I suspect the
  714
  right hon. Gentleman would like me to present. The Bill is not about reinvention in the internal market. He is painfully aware that there were no national standards in 1990—after all, he was Secretary of State at the time and had to grapple with precisely the same problems of trying to devolve power and ensure equity. Every health care system in the world is trying to find ways in which it can ensure equity through national standards and greater responsiveness through local control. The right hon. Gentleman knows that getting the balance right will ensure that health services in this country are more modern, just as people in other countries try to achieve that.
  Dr. Tonge: Will the Secretary of State give way?
  Mr. Milburn: No. I have given way many times and I shall not do so again.
  Dr. Tonge: Even though I have worked in the NHS?
  Mr. Milburn: No. I thoroughly respect the fact that the hon. Lady has worked in the health service. However, I shall not give way.
  NHS foundation trusts will not be able to make a profit or pay a dividend. There will be a legal lock on their NHS assets, ensuring their continued use for NHS patients, and the proportion of income that foundation trusts can earn from private patients will be capped at current levels. This is the first time that that has happened in the NHS.
  NHS foundation trusts will strengthen public ownership, not weaken it. They will be owned and controlled by the public locally, not nationally, so that the relationship between local hospitals and local communities can be strengthened. In no way can the Bill be reasonably described—as some have argued—as privatisation or a step in that direction, through the front door, the back door, or the side door. This is not privatisation; it is democratisation of the way in which our health service is run.
  For the first time, instead of the centralised system of Government appointments to hospital boards, there will be direct elections of hospital governors by local people and local staff. Strengthening public ownership by making NHS foundation trusts more locally accountable will particularly help services in poorer areas. It is true that we are starting with existing three-star NHS hospitals, but, as I have said, in time the foundation principle will be extended not just to primary care trusts but to mental health trusts. So far 32 NHS hospitals have applied. I shall make decisions about those applications shortly, and I hope to be able to approve the vast majority.
  I am also introducing a new hospital improvement programme, including extra financial support, to help each and every NHS hospital to become an NHS foundation hospital during the next four to five years. By autumn this year, each NHS trust will have a clear timetable. This policy is for all NHS hospitals, not just some. It is not about elitism or two-tierism. It is about levelling up, not levelling down. It is about raising standards in every NHS hospital.
  These are the principles on which the Bill is built: community empowerment, staff involvement and democratisation. But money alone cannot deliver the

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  modern, responsive health services that our nation needs. To obtain the best from the money, the NHS must be properly organised. I have heard it said that as the extra investment is now paying dividends in the NHS, no further reforms are needed. It is true that those resources are tackling the historic capacity problems that the NHS has faced for decades, but it is equally true that the NHS must change if it is to give the public the more responsive services that they rightly demand nowadays. That is not because the national health service has failed; it is because the world has changed.
  Collectively funded public services are challenged as never before. The right in politics and in the media say with ever-growing conviction that the only way in which to make services more responsive is to force patients to pay for their treatment. They want to prove that the NHS must fail. Our job is to show that it can succeed—to prove that an NHS based on traditional Labour values can give patients a modern, responsive service.
  Reform has always been difficult in the national health service. The pioneers who created that service found that. The job of re-creation will be no less difficult, but it is no less necessary. We would be failing both the public and, I believe, ourselves if we did anything other than press ahead with these reforms. This is the era of public service investment. It must also be the era of public service reform.
  I commend the Bill to the House.
  1.43 pm
  Dr. Liam Fox: Notwithstanding the huge interest on the Labour Benches, there can seldom have been a Bill whose importance has been so over-hyped. I know that nowadays everything that the Prime Minister says must be tinged with messianic overtones, but to describe this Bill as being of monumental historic importance is ludicrous.
  We need to see the Bill in its proper context. The language of new Labour usually refers not to the treatment of patients but to the patient's journey—although from where to where has never been very clear. Perhaps the more important journey to talk about in the context of today's debate is new Labour's journey. Back in 1997, Labour's manifesto stated:
  "Under the Tories … the market system has distorted clinical priorities … Labour will end the internal market in healthcare … The Tory attempt to use private money to build hospitals has failed to deliver."
  Now we see the creation of a different internal market— and, far from being abandoned, the private finance initiative has been elevated to near-religious status under this Government.
  Shortly after he took office, the Secretary of State himself famously told a meeting of health chiefs that he would
  "come down like a ton of bricks on anyone who has anything to do with the private sector".
  He then oversaw the introduction of the concordat with the private sector, and the expansion of primary care trusts to enable the private sector to tender for NHS work. How people change.
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  In June 2001, the Secretary of State told the House
  "by and large, we thankfully have one monopoly provider and that is the NHS. As long as a Labour Government are in power, that will remain the position."—[Official Report, 26 June 2001; Vol. 370, c. 500.]
  By January 2002, the language had changed somewhat. He told the New Health Network
  "This middle ground between state-run public and shareholder-led private structures is where there has been growing interest in recent years. Both the Right … and the Left have been examining the case for new forms of organisation such as mutuals or public interest companies".
  That is a welcome conversion, if we assume that the actions match the rhetoric.
  Mr. Robert Jackson: I agree with the point that my hon. Friend is making. The Secretary of State has tried to make out that this is radically different from the thinking that we were developing in the early 1990s. It is not, in fact, but if we support the basic direction in which the Government are going, why do we not vote in favour of Second Reading, try to amend the Bill in Committee and then, if necessary, vote against Third Reading?
  Dr. Fox: As I proceed, I think that it will become increasingly clear to my hon. Friend that, when we believe something is the right thing to do, as we did in the case of Iraq, we give the Government our full support, whereas when we believe that the Government are going wrong—in this case, legislating not just for a timid imitation of what I hoped foundation hospitals might be, but for something that might be to the detriment of patient care—we will not give them our support.
  Mr. Patrick Hall: The hon. Gentleman says that the Government's proposals are timid. Does that mean that the Conservative preference is for NHS foundation trusts that leave the NHS?
  Dr. Fox: No. I shall give details later of exactly what we want to see. We were very much in favour of what we saw when we looked at foundation trusts in other countries; it is sad that the arrangements in those countries, which have worked so well, have been so badly nobbled by the Chancellor and the Treasury.
  Mr. Gibb: The section of the Conservative policy consultation document, "Setting the NHS Free" that deals with foundation hospitals states:
  "Where Labour breaks new ground in this area, they will receive our support."
  Why is that?
  Dr. Fox: If the Secretary of State were to make structural changes that might make the implementation of Conservative policy easier, I would welcome those changes. I find it sad, however, that rules and regulations that might accompany such organisational change will move in exactly the opposite direction from that favoured by Conservative policy.
  On 10 April, I asked the Government about potential privatisation plans. I said—[Interruption.]
  Madam Deputy Speaker: Order. The House must come to order.
  Dr. Fox: This is the usual behaviour when the Government do not want to hear things. The Chief Secretary to the Treasury in particular should listen to what I am about to quote.

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  When, on 10 April, I asked the Government about potential privatisation plans, I said:
  "I should like to tell the Government about privatisation. The involvement of the private sector is important. We must set the parameters for future partnerships we will need between tax-funding and personal contributions … We should he opening up health care … to a mixed economy … and be willing to experiment with new forms of co-payment in the public sector."—[Official Report, 10 April 2003; Vol. 403, c. 494.]
  The Chief Secretary to the Treasury, who is now in his place, immediately shouted, "That sounds like charges." Sadly, I had to agree that it did sound like charging, but they were not my words. They were the words that the Prime Minister used in his February 2003 lecture entitled, "Where the Third Way Goes from Here". The Opposition have not discussed co-payment in relation to the public services. The Prime Minister has very specifically introduced the idea in relation to those services.
  Hugh Bayley: My right hon. Friend the Secretary of State mentioned the cancer specialist Professor David Kerr. He told me last week that, despite the progress made with the NHS cancer plan, it can still take between four and six months in some hospitals for a patient with a cancer who has been referred by a GP to get to the point of treatment. A similar patient in an American hospital could go through the patient journey, to use the modern jargon, in four to six days. Professor Kerr told me that he needs the changes in this Bill to allow hospitals to reorganise their cancer services to meet the better standards. Why are the Opposition standing in the way of consultants such as David Kerr, who want to drive up standards?
  Dr. Fox: I suggest that, for every consultant in favour of foundation hospitals, the hon. Gentleman will find many who oppose them, but he makes an interesting point. If he is suggesting that foundation hospitals move in the direction of the American health care system and the benefits that it brings, that is an interesting point of view. I think that he will find that his views are in stark contrast to some of the remarks made by the Chancellor of the Exchequer.
  Sadly, the Chancellor of the Exchequer cannot be with us today. Cocooned in his time warp, he opposes what he considers to be dangerous ideological ideas, and the Prime Minister has neither the courage to remove him nor the strength to face him down. The Chancellor, either directly or indirectly, has sought to rubbish any reforming ideology before systematically emasculating any specific policy proposals.
  The gap between the Prime Minister and the Chancellor is very clear. I shall give the House the best example of that. In his speech to the Social Market Foundation in February, the Chancellor said that, in health,
  "not only is the consumer not sovereign, but a free market in health care will not produce the most efficient price for its services or a fair deal for its consumer."
  The Prime Minister said in his speech to South Camden college that choice mechanisms
  "enhance equity by exerting pressure on low-quality or incompetent providers. Competitive pressures and incentives drive up quality, efficiency and responsiveness in the public sector."
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  Both views cannot be correct at the same time. It was into that heady and toxic mix, the battle for the soul of and—perhaps more importantly—the succession in new Labour, that the idea of foundation hospitals was introduced.
  Mr. Milburn: Which view do the Opposition agree with?
  Dr. Fox: Our view on competition and markets is, of course, much closer to that of the Prime Minister. That is because his view is far closer to ours than it is to that of his own Chancellor of the Exchequer. The Opposition have always been supportive of the concept of foundation hospitals as developed in Spain and Sweden, for example. We have visited those countries to look at the foundation hospitals. An incoming Conservative Government would be comfortable with the models developed there, but we do not see them as an end in themselves. Such hospitals would be among the building blocks that we would use to create a more diverse provision of health care that was increasingly independent of state control.
  Andy Burnham rose—
  Dr. Fox: It is therefore sad to see the emasculated version of foundation hospitals presented in the Bill.
  Mr. John Redwood: Will my hon. Friend tell the House which extra freedoms he thinks that foundation hospitals should enjoy, compared with the garbled model presented by the Government? That may calm Labour Members' impatience, as I think that they have not yet grasped his argument.
  Dr. Fox: My right hon. Friend—[Interruption.]
  Madam Deputy Speaker: Order. The House must come to order.
  Dr. Fox: My right hon. Friend should know that we can explain the matter to Labour Members, but that we cannot understand it for them.
  Andy Burnham rose—
  Dr. Fox: The emasculated version of what has been established in other countries that is contained in the Bill is not the programme of a bold and reforming Prime Minister. It is a timid and pale imitation of what works elsewhere.
  Mr. Jon Owen Jones rose—
  Dr. Fox: Of course, the radical rhetoric will remain, but the sad reality will change insufficiently. As ever, the proposal has been spun wonderfully, but it will not be sufficient to turn the NHS around. It may well produce the worst of both worlds for the Government, whose overblown rhetoric maximises anxiety about change but whose lack of delivery still further frustrates voters whose taxes have risen but who have seen no clear benefits.

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  In answer to the question posed by my right hon. Friend the Member for Wokingham (Mr. Redwood), I shall look at the details of the proposed foundation trusts. The first area for concern is borrowing. In May 2002, the Secretary of State said that the intention was that foundation trusts would
  "have greater freedom to decide what they can afford to borrow and … be able to make their own decisions about future capital investment."
  What will foundation trusts in fact get? They will have a limit imposed by the regulator, and that limit will be reviewed annually. If a foundation trust were a freestanding organisation in the voluntary sector or the private sector, there would be no one imposing a limit. Each borrowing need would be reviewed on its merits, and the lenders would decide whether to advance the money. In the private sector, limits are negotiated, not imposed—at least, they are not imposed on well-run organisations.
  An annual limit is just laughable. What about the longer-term security and planning that we were promised? What happens if the foundation trust comes up with a good idea to expand services during the year? Before it can proceed, a hospital wanting a new MRI—magnetic resonance imaging—scanner, for instance, will have to tell patients that it must wait until the following year to find out what borrowing the regulator will allow. What kind of freedom is that?
  When a foundation trust gets its borrowing limit—determined by the regulator—where can it go for money? It can borrow money, but it has little real freedom as to where and how it borrows. How does that compare with the freedoms in the voluntary and private sectors? The private sector can create floating charges over its assets. Foundation trusts will be debarred from that. The private sector can enter into asset financing deals, but foundation trusts will have to ask permission from the regulator if the assets are protected property. Will scanners, for example, be protected property? Will foundation trusts have to get the regulator's agreement every time they want to improve medical equipment through the year?
  Given those restrictions, it would be very surprising if foundation trusts could borrow from the private sector, as the Secretary of State has suggested, unless the Secretary of State was willing to underwrite their liabilities. That may have been what he wanted originally, but the Chancellor of the Exchequer denied him that.
  The real damage produced by the borrowing restrictions will be found in the effect that the system will have on non-foundation trusts. The Chancellor's emphatic ruling that foundation hospitals will be able to borrow only within the total NHS budget has confirmed the fears on all sides as to what the Bill would mean in practice. The Chancellor has made it perfectly clear that, if any foundation hospital wants to borrow more, other hospitals inevitably will get less. The Bill will create a dog-eat-dog culture, in which financial growth in foundation hospitals will mean cuts in the budgets of hospitals elsewhere. Progress in foundation hospitals will inevitably be at the expense of patients elsewhere.
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  I had expected Labour Members to want to intervene at that point, but none seems to want to do so.
  Mr. Stephen McCabe: I shall intervene on the hon. Gentleman, as I have a simple question for him. Will he confirm that, in his wonderful world of free, independent and privatised medicine, he wants foundation trusts to have completely unregulated borrowing capacity? Will he confirm that he wants them to be utterly unfettered? When they borrow to the point that they go bust because they cannot make the repayments, what will he do to protect patients?
  Dr. Fox: When the model of foundation hospitals was first proposed, the freedom to borrow was exactly what the Prime Minister put forward as one of the biggest attractions for hospitals in becoming foundation trusts. The Chancellor of the Exchequer nibbled the Prime Minister's plans, and that is why we have the version in the Bill today.
  The second real disappointment is the independent regulator. Ostensibly, that office is meant to diminish the influence of the Government on foundation trusts. However, the Secretary of State appoints the independent regulator and can remove them from office. He also sets the pay and conditions and determines the pension allowances and gratuities of the independent regulator, who must report to the Secretary of State as he may require. A trust may apply to become a foundation trust only if the Secretary of State supports the application. In short, the regulator is hired, paid and fired by the Secretary of State: in what sort of new Labour parallel universe could that ever be described as independent?
  Mr. Kevan Jones: Many hon. Members know that I have reservations about the Bill. However, the hon. Gentleman seems to argue for a system in which hospitals are entirely free from Government control. Under that system, would hospitals be allowed to charge for health care?
  Dr. Fox: No, we want hospitals to have the freedom to borrow according to their own plans and their ability to persuade lenders to supply the money on that basis. That is what happens in other countries. It is absurd to suggest that those who run hospitals in this country are incapable of being subject to the same financial discipline as in other countries, where foundation hospitals have much more freedom and often produce better care than in the United Kingdom. The first two elements of foundation hospitals overseas—the ability to borrow and freedom from political interference—are missing from the Bill.
  What about the next criterion—the ability to determine pay and conditions? The scope of the freedoms in the Bill is entirely unclear in practice. The Secretary of State has told managers that they will have
  "the freedom and flexibility within the new NHS pay system to reward staff appropriately";
  but in talking to the trade unions, the clear impression is given that any such freedoms will be strictly limited. The position of consultants and GPs remains utterly unclear, as a result of the Department of Health's mishandling of the negotiations.

  721
  How will the new foundation trusts be run? It is all very simple, so let me explain it to the House with reference to paragraphs 3 to 5 of schedule 1, which set out the minimum eligibilyty criteria for the membership of a foundation hospital. Members must include individuals drawn from the public, "the public constituency", and0individuals from the staff, "the staff constituency". The public constituency may include members who are eligible because they have attended an NHS foundation hospital as a patient or a carer. No time limit is specified in the schedule.
  Schedule 1 also requires foundation hospitals to have a board of governors. Paragraph 7 stipulates that the public and staff constituencies should elect representatives to the board of governors—[Interruption.] I am explaining the position because the House might find it interesting to find out where it goes from here: how will it work, who can stand for election, who can vote, qnd what will the constituencies be? I shall provide an example.
  The hon. Member for Bristol, East (Jean Corston) is no longer in her place, but earlier she mentioned the hospitals in her constituency. If the Bristol royal. infirmary were successful yn achieving foundation status, how would local governance work? The hospital takes patients from my constituency of Woodspring, from Weston-super-Mare, Northavon and Kingswood, as well as the four Bristol constituencies, so presumably anyone who has ever been a patient in those areas could stand for the board and have a vote. Presumably, anyone who had ever been a carer for anyone in those constituencies could do the same. The hospital serves several primary care trusts, so presumably anyone in those areas could also stand or vote in the election for the board. Doctors from outside the area might have referred patients to the hospital, so they could presumably stand and be voted on to the board, too. That could be repeated for all three hospitals in the city—chaos three times over and all because there are no definitions in the Bill. Who on earth will determine the electorate? It is not clear in the Bill. Who will organise and pay for the elections and how much will they cost? No one will have time to treat patients or run the hospital because everyone will be running for election.
  It is illogical to have elections for the provider, but not for the commissioner. If there is a role for local governance, it should be for the commissioners of health care—the primary care trusts—which have a clearly defined constituency. They should be the elected body. As was pointed out, however, the Bill will create local governance for the providers—though it is unclear how exactly that will happen—which is later likely to lead to a clash with the body that genuinely represents the commissioning process. The Bill is entirely upside down. It is completely the wrong way round and will result in absolute bureaucratic chaos.
  We are concerned about two further issues. First, the relationship with the private sector is utterly at odds with the Government's stated intent. Clause 15 states that the proportion of income that a proposed NHS foundation trust can derive from private charges must not increase from what it is now—not from the present level, which is what the Secretary of State said, but from the present proportion. That means, for example, that if a foundation trust borrowed to install an MRI scanner and wanted to sell any extra available time to the private
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  sector, it could not do so if it exceeded its current proportion. However, a private hospital could install an MRI scanner and sell any extra time to the NHS. Surely that is not what the Government intended, but it is exactly the consequence of what is in the Bill.
  The final issue is eligibility. We were first told that only three-star trusts—perhaps a dozen—would be eligible, on the basis that only they would have the necessary management skills. From the outset, the Conservative party called for all trusts to be given the opportunity to take part. Pressure was applied and the number was increased to about 30. Then came the accusations of a two-tier system from Government Back Benchers, and the Government then announced that all trusts attaining three-star status could join in. This week we heard that all trusts would be able to join in because they will all have reached three-star status by 2008 and that the Government will give £200 million to the management to ensure that they all do—no doubt by fiddling the criteria. What a charade. Why not simply dump the pretence of the star-rating criteria, admit that all trusts should be eligible and consider each on its merits?
  As with all Bills, some elements—for example, the single regulatory body, which Conservatives have called for since the Government reforms began—will gain support from all parts of the House. We welcome the extension of the Commission for Health Improvement, but we believe that it is not sufficiently independent of the Government. If the Bill secures a Second Reading, we shall work with other parties to attempt to alter the provisions substantially here and in the other place. We want to explore the recovery of charges further and we also believe that the provisions on dental care require further consideration.
  Overall, we believe that health care should be much more responsive to the individual wishes of patients as consumers, and that politicians should be taken out of the running of the NHS. We believe in greater diversity of provision and greater freedoms for health professionals to utilise their skills free from the target culture that is suffocating the service. We wanted foundation hospitals with real freedoms to borrow, real freedoms over pay and conditions and real freedom from Government interference.
  I have long wanted to see in this country the successful adoption of methods used abroad to produce better health outcomes than we, sadly, have in the UK. Some have urged us to say, on tactical grounds, how wonderful the Bill is, to maximise dissent on the Government Back Benches, but we will not do so. The Bill fails to provide the real reform that we need. Foundation hospitals cannot borrow freely and cannot set their own pay and conditions. They will be run by a regulator who is entirely controlled by the Secretary of State and they will be governed by undefined people elected from undefined constituencies by undefined voters. They will still be subject to suffocating Government targets through the star-rating system and the emasculation of borrowing powers will create a dog-eat-dog culture within the system. Worse, they will create a bureaucratic nightmare. The Bill is a wasted opportunity. Money will be spent without the necessary reform. Hopes and morale will be dashed. The Government should have the courage to think again and go back to what they originally intended. We cannot support the Bill.
  Madam Deputy Speaker: I remind right hon. and hon. Members that Mr. Speaker has imposed a time limit of eight minutes on all Back-Bench speeches.
  2.10 pm
  Mr. David Hinchliffe: I beg to move,
  That this House declines to give a Second Reading to a Bill which, by establishing Foundation Trusts and introducing other layers of bureaucracy, would increase disparities between hospitals and detract from the Government's commitment to a primary care led NHS, free from excessive bureaucracy, and believes that alternative ways of encouraging accountability in the NHS should be considered and a consensus established before legislation is introduced.
  This is a wide-ranging Bill, and I want to make it absolutely clear that there are elements in it that I support strongly: certainly, the dentistry element reflects many of the Health Committee's recommendations. The dilemma that I and a number of my colleagues have is that, because we oppose certain principles in the Bill as it relates to foundation trusts, we are forced to put forward this amendment, as it is impossible to amend the Bill to address principles that, in our view, are at fault.
  If I receive, as Chairman of the Health Committee, one clear message from national health service staff, it is that the Government have delivered record, massive levels of funding, to their great credit. The message to me is: now let us get on with the job; the last thing that we need is more restructuring. If Members have limited time today and cannot read the whole of the Health Committee report, they should just look at pages 9 and 10, which set out the major restructurings in the health service over the last 20 years—there have been 18 different significant restructurings. That is one of the reasons why the results do not reflect what the Government deserve from the investment and the efforts being made currently. Permanent revolution is impacting on performance at a local level. One witness to the Health Committee described the NHS as "an organisational shanty town", with structures and systems cobbled together hastily in the knowledge that they will be torn down again straight away.
  The pace of change is so fast that new structures are being abolished even before being introduced: for example, patient forums. When community health councils were abolished, we had a long discussion about patient forums, which have been abolished before they have been introduced. That concerns me, because I was given certain clear assurances at the time of the abolition of community health councils.
  The Government's central policy objective in health is for a primary care-led national health service, and I congratulate the Government on their success in going in a direction that should have been taken 50 years ago when the health service was introduced. It is the right direction, and one of the problems that the health service has had, over many years, is that we have never taken that direction. My right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) started those reforms and the current Secretary of State for Health followed on. That is to their great credit. We are seeing the results, slowly but surely, of that direction of policy.
  724
  Suddenly, however, we have a U-turn: the headline at the weekend was, "Superhospitals for all". To me, increased empowerment of hospitals undermines, or will undermine, that central plank of policy, and it entrenches divisions that we need to address rather than make worse.
  A little while ago, the Health Committee produced a report on delayed discharges. We came up with the solution that the answers to pressures on the hospital sector lay within primary and community care, not within reforms in the hospital sector. Last summer, I went to my local hospital, Pinderfields general hospital in Wakefield, and I found that, according to the consultants, a third of the people occupying beds did not need to be there. They were not all delayed discharges, although some were; the majority were people who could have been treated, and should have been treated, within primary care. That is the direction that we should take. My personal view is that we are suddenly doing a U-turn and going in completely the opposite direction. I agree with the central point of my hon. Friend the Member for Vauxhall (Kate Hoey), who intervened on the Secretary of State: primary care is surely the natural starting point for new models of social ownership by local people.
  Dr. Phyllis Starkey: Will my hon. Friend give way?
  Mr. Hinchliffe: No, not when I have only eight minutes. I apologise.
  I support the idea of local governance. I imagine that none of my colleagues has spent more time in this Chamber arguing for local governance than I have. I have argued for that solidly, in every speech that I have made, for the past 16 years. I find the current proposals superficially attractive, but when I look at the detail as the Health Committee looks at it, the proposals are unclear and unspecific. The constituency is unknown; we spoke about Bristol earlier, and as has been mentioned, Chepstow people—Welsh people—could end up controlling a Bristol hospital. We do not know how the system will work. It worries me that on Second Reading we lack the detail to which we are entitled from the Government on such important issues. The Health Committee's criticism in respect of this area of governance was about channelling patient involvement and enthusiasm into acute hospitals, as we believe that that will undermine the step change towards primary and community care—a step change that the Government are to be commended on making.
  To go to the heart of my concerns, I am a member of the Labour party because I believe in the Labour position on the national health service. I am proud that my party introduced the national health service. I am proud that the core of our thinking is the fundamental equity principle. I worry that the proposals under discussion today will increase disparities between hospitals rather than reduce them. The Secretary of State has offered a number of concessions. For example, we have a five-year roll-out. My view is that that will add to many of the problems. Over that five-year period, in the middle of which we will have a general election, we shall see those disparities occur. Resourcing will be affected. Foundation trusts will have privileged access to capital, and will have the right to retain operating

  725
  surpluses. The Health Committee asked whether borrowing by foundation trusts would count against departmental spending limits and therefore restrict capital resources available to non-foundation trusts. Last Wednesday, the Chancellor gave the answer loud and clear to the Treasury Committee: yes, it would do so. Just like the internal market, we will have winners and losers. That worries me, and it is not the direction that I expected from my Labour Government.
  On staffing, it is not just a matter of rewards. If more rewards are offered, we will see more disparities. Poaching will not just be on the basis of terms and conditions; staff will be attracted to other advantages to be given to foundation trusts. As the Health Committee said:
  "Areas of high mobility and workforce shortages will face problems."
  Just as school league tables have resulted in the more articulate, middle-class and mobile parents moving their children, foundation trust status will result in more mobile patients being attracted from non-foundation trust hospitals. That will mean lost income and lost services in some non-foundation hospitals.
  In the limited time that I have been afforded, I shall conclude with the Health Committee's conclusion that the proposals are
  "not … fair, consistent and need to be rethought."
  My view is that the policy is wrong. It is a departure from our commitment to a primary care-led national health service, and it resurrects the competitive market ethos, which the Government were elected to get rid of.
  2.18 pm
  Dr. Evan Harris: The Secretary of State for Health is fond of saying that only he is in favour of reform. He concedes that other parties are in agreement with the extra resourcing that he is putting in, but he must accept that some on his side are not in favour of reform. The Conservative party may sometimes say that it is in favour of reform, but its proposals dare not speak their name, and certainly dare not speak their price. I therefore hope that the Secretary of State will concede that, in setting out our opposition to his plans, we have at least put forward an alternative, not only in our reasoned amendment but in the policy that we published last year. I have invited the Secretary of State to debate those proposals with us previously, and we started that debate today when we discussed what we will do about democratising and decentralising primary care.
  Our proposals are essentially fivefold. We set the Government the following tests in relation to the Bill. Will the reforms concentrate sufficiently on the three Ps: primary care, prevention and health promotion? There is no evidence that this Bill will do that. Will the Government put in place measures to increase capacity in the NHS? Capacity constrains the ability of the health service to provide patients with what they need. At the top of patients' agenda is not more structural change but functional improvement in capacity.
  Will there be adequate decentralisation and democratisation of the commissioning side of the health service? That is where the key decisions are made on what to buy, where it is bought and how much to buy in the internal market that still exists in our health service.
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  Will we see the end of targets, and of the distortions of resource allocation and clinical priority that go with them? Will we see true freedom for all parts of the health economy, with tax-varying powers locally? There is no sign of that in the Government's measure. Yes, we want to see a mixed market in providers, but without either the false elitism or the beggar-thy-neighbour approach that is inherent in the Government's foundation hospital proposals.
  Rob Marris: May I take the hon. Gentleman back a couple of sentences? He mentioned targets. His comments and the proposed Liberal Democrat amendment suggest that he and his hon. Friends are opposed to any targets at all and that they want accountability for massive spending on the NHS to be taken away completely from the Secretary of State? Is that the hon. Gentleman's view?
  Dr. Harris: There are two points in relation to performance monitoring. First, there should be adequate measures of quality so as to assess the impact on patient outcomes. In the end, that is what matters, not statistics but patient outcomes. Secondly, on the political targets that the Government have imposed for their star-rating system, the Government have never offered a shred of evidence of clinical support for good outcomes related to the achievement of those targets. I invite the Secretary of State to tell me whether there is any evidence in the literature to suggest that meeting his targets leads to a solid improvement in patient outcomes, or whether, in fact, the opposite applies.
  Mr. Milburn: I can give the hon. Gentleman a concrete example. It is estimated that 500 patients die every year waiting for a heart operation in the NHS. The shorter the waiting time, the fewer people die. That has come about precisely because of setting a target, focusing effort and getting the good will and commitment of NHS staff. That is why, after 40 years of rising waiting times in the NHS, waiting times are starting to fall, with improved outcomes for patients.
  Dr. Harris: I am grateful to the Secretary of State for choosing cardiology. He should know that the people who die while waiting for their procedure are the urgent cases—those with critical ischaemia, left main-stem disease or severe valvular disease. Clear evidence is emerging that people with those urgent conditions are being forced to wait longer. Instead of waiting for only days, they have to wait for weeks because so many slots have been given over to less urgent cases, the long waiters who also need to be treated but who are political rather than clinical priorities. I can cite for the right hon. Gentleman cardiologists up and down the country who know that their patients are now more at risk due to his maximal waiting-time target. Surely, it is straightforward for the right hon. Gentleman to see that the sickest are not being treated the quickest, because his maximum waiting time targets apply only to the least urgent cases. He must accept that there is a distortion of clinical priorities, and the hon. Member for Wolverhampton, South-West (Rob Marris) should realise that one can have quality inspection and quality standards without distorting either resource allocation or clinical priorities. That is what we want, not the political targets imposed on hospitals.

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  The Bill shows the Government's obsession with secondary care. It is clear from their language—from schools to hospitals; and it starts with the sham decentralisation and democratisation of the secondary care sector providers. It is sad that secondary care issues dominate the Government's agenda and the Bill. For example, the GP contract is central to the future delivery of primary care, as Ministers will agree, and we expect resolution of that negotiation, through a ballot, while the Bill is still in Committee. Will Ministers give us an undertaking that, if the Bill is still in Committee when GPs agree the new contract—as I suspect they will—the House will give Government amendments proper Standing Committee scrutiny; or is it true, as we have heard, that Government amendments to insert critical clauses on the new GP contract will receive only inadequate scrutiny on Report? I should be grateful if Ministers would give that undertaking when they reply to the debate.
  The Government have missed a golden opportunity to do something about the desperate need to increase capacity. I sometimes think that the Secretary of State, having announced that he is putting in more resources, is complacent about capacity. Even if the Government meet their target for 2004 of increased numbers of NHS beds, they will still end up with 3,000 fewer beds than they inherited in 1997.
  The Government know that huge amounts of their resources are spent on paying agency nurses over the odds, instead of being adequately used to recruit and retain nurses in the health service. There is a massive backlog of hospital repairs: £3.4 billion, or £117 for every taxpayer in the country. Six years after the Government came to power, less than half the people of this country are registered with a GP.
  There is a huge amount to do on capacity. If the Secretary of State is interested in the secondary care sector, why does he not start by legislating to prevent the giving over of vital NHS capacity, through pay beds, to paying patients who jump the queue and thus distort clinical priorities? At a time when the limiting factor is the number of NHS beds available to treat patients, how can the right hon. Gentleman justify, even on the questionable ground that it raises revenue, giving over thousands of NHS beds—the equivalent of three district general hospitals—to treat patients more quickly simply because they have the money? That cannot be right, especially at a time when the Secretary of State is forcing trusts with pay beds to pay over the odds to the private sector to treat NHS patients. That is crazy. The Health Committee told the right hon. Gentleman that it was crazy, yet nothing in the Bill would reverse that situation. Merely keeping stable the proportion of income in foundation trusts from private payers does not tackle that distortion and the unethical situation whereby people jump the priority queue.
  What will the Secretary of State do about the commissioning side of the health service? Surely he accepts that the critical decisions in health economies are made in the planning and purchasing of care. There is little point in a sham democratisation of hospitals if commissioners—the buyers and planners of health care—remain unaccountable. In response to a pertinent intervention from the hon. Member for Vauxhall
  728
  (Kate Hoey), the right hon. Gentleman announced that he is now against that reform. He is against democratising and decentralising control over primary care trusts. That sounds as though he is simply against reform.
  There was support for measures that we proposed for the decentralisation and democratisation of PCTs from the right hon. Member for Charnwood (Mr. Dorrell) and, perhaps, from the hon. Member for Woodspring (Dr. Fox), yet the Secretary of State has said that that is no longer his priority. There will not be decentralisation now and the hospital sector will take priority. That is a big mistake.
  Mr. David Drew: I have been in the Chamber since the debate began and I am not sure that the Secretary of State actually said that. He said that he would wait until things had bedded down properly. Does the hon. Gentleman agree that there is nothing wrong in principle with the concept of mutuality in health? Although I have some sympathy with his comments about PCTs, why should we not mutualise the hospital sector? Is he prepared to admit that that is a fundamental and new direction, and that it should be followed?
  Dr. Harris: Yes, I am prepared to do that. I shall come to that point in a moment. However, on PCTs, does the Secretary of State accept that, by the time he gets round to some form of democratisation of commissioning, it will be too late? As the hon. Member for Woodspring and the right hon. Member for Charnwood rightly said, there will be an alternative competing democratic interest—a quasi or sham democratic interest—in the hospital sector. Why will the Secretary of State not consider merging the local commissioning function of health care with the existing local authority commissioning function for social services? If he believes that local authorities are fit to commission social services care, why does he think that they cannot commission health care? We supported the integration of commissioning at local authority level. Will he say—he was unclear about this—whether the giving of commissioning powers in health care to local authorities is a model that he supports? He said that it would be destabilising to do so, but I—let alone his own Back Benchers—can think of no policy that is destabilising the NHS more than his own policy of a sham democratisation of foundation hospitals.
  If the Secretary of State believes that providers need freedom from overweening Government control through choking targets, why does he not simply drop the targets? If his argument is that foundation hospitals deserve that status only if they are dragged towards a three-star rating by his centralisation, how can it be appropriate to leave them alone once they have achieved foundation hospital status? The truth is—
  Mr. Milburn: How, then, would the hon. Gentleman guarantee any form of equity in the system? How can equity be guaranteed if we do not have a National Institute for Clinical Excellence, and if cancer drugs are available in one part of the country but not in another? I thought that he was opposed to that.
  Dr. Harris: The Secretary of State knows that we support NICE. If he is asking a legitimate question

  729
  about what to do if, under a system of local authority commissioning, people in one area voted democratically for their local authority to have priorities that differed from those in another area, my answer is that that would not necessarily be a bad thing, so long as local commissioners had tax-varying powers to raise resources, if required, from local people. The Secretary of State cannot have it both ways, which is what we are seeking to avoid. He cannot say that he wants local discretion over commissioning, yet the same provision everywhere in the country. We have accepted that if there is democracy locally and tax-varying powers for commissioners, differences will inevitably exist throughout the country, just as they do in the provision of social and other services by local authorities. What is critical is that patients who are rationed against have the ability, with their families, to vote to end that, and that the people with the power to make those decisions have the means and the discretion to raise the resources to meet that local need.
  Dr. Fox: Does the hon. Gentleman agree that the most important factor in considering whether a trust should move to foundation status should be the quality of care that it gives and the clinical outcomes? The basic problem is that the star-rating system is largely a management tool that is concerned with management of trusts, rather than with quality or outcomes as they apply to patients.
  Dr. Harris: Yes, I am more than willing to endorse that entirely. I shall come to the question of what the Commission for Healthcare Audit and Inspection is supposed to be doing in a moment.
  For those of us who want hospitals freed from central control, one of the many problems with the Government's proposals is that there are at least three ways in which they are still controlled. In order to get foundation hospital status, they are forced to follow Government bidding on the star-rating system, which relates only to Government political targets and has nothing to do with clinical outcomes. Secondly, they will still be subject to inspection by the new Commission for Healthcare Audit and Inspection, which will be forced to measure performance according to the star-rating system, and according to standards and priorities that are set nationally, so there is no escape. Thirdly, such hospitals will be forced to enter into contracts with commissioners, who are subject to exactly the same national priority setting and political target setting as the rest of the hospitals. So there is nowhere for foundation hospitals to hide from the overweening control of central Government, despite this veneer of freedom.
  This point is recognised by the NHS Confederation itself, which one would have expected to be particularly eager to acknowledge the freedoms that the Government offer. Its briefing states:
  "Foundations appear still to be subject to most DH data collection and star ratings, and PCTs, CHAI and the regulator will be responsible for a very rigorous oversight of the organisation."
  Again, that is through the star-rating system. So there is a problem with the way in which the Government monitor performance, and nowhere in this Bill is that more clearly demonstrated than in the flawed proposals for the CHAI, which will not be an independent body.
  730
  The Bill makes it clear that it will be forced to assess hospital performance according to criteria laid down by the Secretary of State. They will not be clinical criteria, and there will still be not a shred of the clinical support that is needed for the performance indicators.
  I shall give the Secretary of State another example in addition to that of cardiology. Would it give him pause if he read in the published literature that the two-week wait policy for breast cancer patients was damaging their welfare because they were not being referred and had to wait much longer than they used to wait before he introduced that policy? King's College hospital has provided clear evidence that about 40 per cent. of breast cancer patients who are not referred under the two-week wait policy—because diagnosis is difficult, or because some suspicion exists in respect of primary care—have to wait 12 weeks, as they do not qualify under that policy. Potentially, that is killing patients, and the Secretary of State must say whether he will stop the star rating of quality assessments if he is given clinical evidence that it damages patient outcomes. It is a simple question: if he is shown evidence that targets kill patients, will he stop insisting on those targets? [Interruption.] He can answer that question yes or no. His refusal to do so suggests that he has made up his mind that he will carry on no matter what.
  What does the Secretary of State do when a hospital with a three-star or two-star rating is subject to a scandal, a bad Commission for Health Improvement report or a very low rating from Dr. Foster? Does not the star-rating system get torn up whenever CHI condemns a hospital for failures? Is not the Secretary of State a man with three watches? He has the league tables from Dr. Foster, which his Department partly sponsors, CHI performance ratings and inspections, and the star-rating inspections. Those three never match because only one—the existing, independent Commission for Health Improvement and its rigorous inspections—has any credibility.
  I turn to the issue raised by the hon. Member for Stroud (Mr. Drew). We want a mixed economy of providers in the mutual sector, but we have several criteria. That status must not be imposed by central Government; they must not be seen as an elite that is better than everyone else; they must not be given powers to poach staff until all local health economies—through the ability to raise resources locally via tax-varying powers—are able to respond in kind if there is competition through pay at local level for staff. That is the sort of system that we want. We have already put in print our wish to see more mutuals providing services, but they must come forward; the system must not be imposed in a falsely elitist way from the centre. That has been the problem with the Government's approach.
  We have set out our policy, and the Government can disagree with it—I know that the Secretary of State agrees with large chunks of it—but it cannot be said that we do not have an alternative reform policy. We have set out the ways in which we disagree with significant parts of the Bill, particularly in respect of the Commission for Healthcare Audit and Inspection and the foundation hospitals proposal. We look forward to working in Committee on those aspects of the Bill about which we agree, but I hope that the Government will change significant parts of it. We will oppose it on Second Reading because there are certain measures in it that we

  731
  are against. [Interruption.] The Conservatives have not explained what their policy is—we have. The proposals in the Bill differ from our policy, which is why we oppose it.
  I pay tribute to the Health Committee, the hon. Member for Wakefield (Mr. Hinchliffe), and the proposers of the reasoned amendment that was selected for debate. All the criticisms were made in measured terms, and we share many of those made in the reasoned amendment by the Select Committee, and by the hon. Member for Stroud and the right hon. Member for Holborn and St. Pancras (Mr. Dobson) in previous contributions. For that reason, we will support the amendment in the Lobby tonight.
  2.39 pm
  Mr. Frank Dobson: It is always worth reminding the House that, whatever the problems are with the national health service as it stands, it is the most popular institution in the country—more popular than any politician, more popular than the BBC, more popular than the Church, more popular than the monarchy, more popular than the Co-operative movement and more popular than elected local authorities.
  I believe that the Government's proposals for foundation hospitals are the very last thing that the NHS needs, first, because they would impose another round of structural upheaval on the NHS, when most of its managers and staff just want to be left alone to get on with their jobs.
  Secondly, I believe that foundation hospitals would harm non-foundation hospitals and set back the integration of hospitals with local primary and community health services. Thirdly, foundation hospitals represent part of a reintroduction of competition into the NHS, deliberately setting hospital against hospital in a way that, sadly, reflects the lamentable and failed policy of the Conservatives, who introduced division and expense into the NHS.
  Endless reorganisation has harmed the NHS for years. Each round of structural upheaval has followed so hard on the heels of its predecessor that NHS management and staff have seldom been able to concentrate on treating patients. Instead, their efforts have been diverted into contemplating and taking part in another reorganisation. That has caused staff a great deal of stress and dissatisfaction, and it has harmed patients.
  We know that change consumes resources and management attention in any organisation. When an organisation is reorganised, output is likely to fall during the process, and to rise again when people get used to the new system. If the reorganisation is a good idea, output may, in fact, rise above the original level, but in the NHS, time and again, just as performance is beginning to pick up, someone comes along with another demand for modernisation, reorganisation and reform, and the whole debilitating process starts all over again.
  Since 1997, the Government have introduced revolutionary changes in the NHS—with, I emphasise, the support of the professions. For the first time in the history of the health service, local management is
  732
  responsible for promoting high-quality treatment. National standards have been introduced for treating illnesses such as heart disease and diabetes, or for caring for patient groups such as the elderly, integrating primary and hospital services to the benefit of patients.
  The Commission for Health Improvement has been introduced to monitor, advise and help. Primary care trusts have been established in an effort to give all GPs the advantages once enjoyed only by fundholders, involving nurses and social services in setting local priorities both for themselves and for local hospitals. The training and career development of nurses and midwives has been modernised. The medical profession has accepted the concept of revalidation, keeping doctors up to date with recent developments.
  Everyone working in the NHS is now committed to making those things work. Wherever I go, staff say, "Give us a break. For God's sake, just let us alone to get on with the job. We may or may not like the new structure, but we just want to be left alone." They want to be spared another reorganisation and, as far as I can gather from most people who approach me, they certainly do not want this one.
  Foundation hospitals would be a cuckoo in the local health nest. With more funds, they would be able, in the Government's own words,
  "to offer new rewards and incentives to staff",
  attracting from non-foundation hospitals staff who were valuable to those hospitals, thus getting better at the expense of their neighbours. We are told that, with the new, flexible terms and conditions, every hospital would be able to offer better terms and conditions, but that is like saying that everyone can dine at the Ritz— people may have the ability to offer those better terms and conditions, but it is not much use if they do not have the money to do so.
  It has also been said that foundation status will be available to everyone in four or five years' time, so that is all right then. Well, it is not. Let us consider this as a marathon race. The back markers will only get to the start line in five years' time, but they are apparently expected to catch up with Paula Radcliffe, who starts in about a year's time, and I do not think it likely that they will do so. She will be permanently in front, and so will the foundation hospitals.
  If foundation hospitals' borrowing, which has been mentioned already, counts against the NHS global total, the more that they can borrow, the less will be available for everyone else. If they get their borrowing wrong—we know that some of them will—other parts of the NHS will have to give up money to bail them out of their problems.
  That brings me to the problem of competition. If we look at what happened when the Tories introduced their internal market, we can see the damage that competition can do to the NHS. When they introduced the internal market, the bureaucratic costs of hospitals doubled, waiting lists exceeded 1 million for the first time in the history of the health service and hospitals stopped cooperating with neighbouring hospitals. I remember going with my fellow MPs from Camden and Islington to meet the chief executives of the various local hospitals. When I asked, "Why can't you co-operate on this?", I was told, "It's dog eat dog now in the national health service, Mr. Dobson." It will be dog eat dog again if we go through with this.

  733
  There is a lot of talk about how the present system stifles innovation. I do not think that it stifles innovation. If hon. Members go to practically any hospital in this country, they will see someone doing something new. The health service's problem is spreading the useful innovations, and evidence shows that competition stifles the spreading of innovations. If a new technique was developed at a hospital, management often believed that it gave the hospital a competitive advantage, so they kept quiet about it; they did not spread it to the next hospital in case that undermined their competitive advantage.
  Worst of all, there has been only one reputable academic study of the impact of the internal market on the NHS. It was undertaken by Bristol university, which looked at death rates following emergency admissions after heart attacks, and those who undertook the survey said:
  "Our central finding is that competition is associated with higher death rates—in other words, competition is associated with lower quality."
  They do not claim that that applied in other spheres; they had not conducted research into other spheres, but neither had any advocate of competition or foundation hospitals. The case for competition and foundation hospitals is largely based on assertion, not on evidence. I do not think that there is much to suggest—I say this as someone who is Labour through and through—that a Labour competitive model is likely to be much better than a Tory competitive model.
  Madam Deputy Speaker: Order. The right hon. Gentleman's time is up.
  2.47 pm
  Mr. Stephen Dorrell: I have been attending health debates for quite a long time now and have spoken in debates before and after the right hon. Member for Holborn and St. Pancras (Mr. Dobson). I have seldom agreed with him, and I am afraid that I did not agree with him this afternoon.
  I want to start from the point of view of someone who spoke in January this year in support of the Secretary of State's initiative for foundation hospitals. I have no doubt at all that the policy for greater freedom for NHS trusts that he described when he spoke last May is correct. It is worth reminding ourselves of the words that he used to describe that policy, because he made it clear that his policy was designed to take the freedoms ascribed to NHS trusts beyond what he described as the halfway house established by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) when he was Secretary of State for Health in 1990.
  Last May, the Secretary of State said:
  "NHS trusts were supposed to guarantee self-governing status. In fact they were at best a half way house and at worst a sham. Trust status promised independence but in practice didn't guarantee it. In reality their legal status—with direct accountability to Ministers—meant that Whitehall continued to hold on to the purse strings … The challenge now must be to genuinely free the very best NHS hospitals from direct Whitehall control."
  When I read that, I found myself inwardly cheering, but the problem with the Bill is that it does not follow through the boldness of the Secretary of State's words. The test he established last May was to move the
  734
  freedom of NHS foundation trusts an order of magnitude beyond the freedoms that were established by the 1990 reforms.
  I wholeheartedly agree with the Secretary of State that the lesson of the period between 1990 and 1997, for a large part of which I shared responsibility for the NHS, was that those reforms needed to be taken an order of magnitude beyond the position established by the National Health Service and Community Care Act 1990. The problem with the measures in the Bill is that they do not follow through the logic of what the Secretary of State said last May, nor do they learn the lessons of the history of the period between 1990 and 1997.
  It is worth reminding ourselves of the two arguments, both of which I find wholly persuasive, for the words that the Secretary of State used last May. He made clear the first argument in that same speech, when he referred to a visit that he had paid to Spain. He had visited a hospital in Madrid and
  "was struck by the fact that the greater independence it enjoyed from the rest of the state run health system had given patients there faster waiting times and improved outcomes despite dealing with a more severe case mix than comparable state run hospitals."
  He had been impressed by the benefits for patients, and the clinical outcomes, that resulted from a more diverse, more locally managed model. He was seeking to learn that lesson in health care, and I applaud him for that.
  Beyond that—and this is part of the reason that the forces of conservatism are so heavily arrayed on the Labour Benches today—is the fact that this policy is not just about the NHS; it is also, as the Prime Minister has made clear, about a model for reform for public services as a whole. The forces of conservatism have understood the message and are drawing what is, from their point of view, the right conclusion. The Prime Minister has put the Secretary of State for Health in the front line of what he hopes will be a major reform of public services, along the lines of the Secretary of State's speech last May.
  I shall quote the words of the Prime Minister in an article published this year entitled "Where the Third Way Goes from Here". It has not gone far yet, but we are always hoping:
  "On public services, we need to explore the usefulness of choice and contestability".
  The only concession to the right hon. Member for Holborn and St. Pancras is that "competition" is renamed "contestability". The Prime Minister is clear, however. He sees choice and contestability as powerful agents for the modernisation of public services, and goes on to say that
  "the principles underlying Alan Milburn's espousal in the UK of community-owned Foundation hospitals need to be applied far more systematically across the public sector."
  If the Secretary of State were following through on the power of the ideas that he articulated last May and the hopes that the Prime Minister invests in him, no amount of lines from the Opposition Whips Office would have kept me out of the Secretary of State's Lobby this evening, because that is a great and important cause. I know which side I am on, and it is not the same side as the 100 Labour rebels representing the forces of conservatism. The problem for the Secretary of State is that, unfortunately, the promise of his speech and of the Prime Minister's rhetoric is not followed through in the Bill.

  735
  The simplest way to illustrate that problem in a short time is to invite the House to compare the status of a foundation hospital under the Bill with a British university in the time of Lady Thatcher. I know of almost no one who would argue that universities under Lady Thatcher enjoyed unrestrained freedom or that they suffered from too much freedom to get on with their own affairs without constraint from Whitehall. It is surely the case—I certainly believe it to be so—that the last Conservative Government imposed too tight a straitjacket on British universities to allow proper institutional development of higher education in this country. I am pleased to say that my party is learning the lesson of that history and is seeking to support a more liberal regime for universities.
  If we compare the freedoms that the universities had in the 1980s with the freedoms that the Secretary of State promises foundation hospitals now, whether it is the freedom—or lack of it—to pay people to do the job that they want to do, the freedom to raise money to develop their institutions for the future, or the freedom to decide their own clinical or educational priorities, we realise that the truth is that universities had greater freedoms in the 1980s than the Secretary of State is promising hospitals now. If this were a first offence for this Government in terms of the gap between rhetoric and reality, I would give them the benefit of the doubt, but they are serial offenders and I do not want to be responsible—
  Madam Deputy Speaker: Order. The right hon. Gentleman's time is up.
  2.55 pm
  Dr. Jack Cunningham: I rise to support the Second Reading of the Bill and the speech of my right hon. Friend the Secretary of State. I do so based on my experience of the hospital in my constituency, which my right hon. Friend knows very well because he visited it recently, and more generally on the experience of North Cumbria Acute Hospitals NHS trust. Like my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), I want to begin by paying a warm tribute to the hospitals in my constituency, including the ancillary workers, the technicians, the paramedics, the nurses, the doctors and the managers, because every day of their lives those thousands of dedicated people do their very best for all the patients who come into their care.
  have had more meetings about the hospital service in my constituency since the general election of 2001 than about any other two issues put together, because, in spite of much excellent work, the huge and considerable improvement, and the massive increases in investment since 1997—initiated courageously, first of all, by my right hon. Friend the Member for Holborn and St. Pancras and carried on by my right hon. Friend the present Secretary of State—we know that all is not well in the hospital service. That is an inescapable conclusion.
  We all understand now, if we did not before, that securing better, more consistent high standards of performance in the hospital service requires much more
  736
  than simply providing enormous increases in cash. Such increases have been provided and will continue to be provided, as the Government have made clear, but that will not be sufficient in itself to get the health service that we are all striving to achieve. Thanks to Government initiatives, we now have a much clearer picture of performance in our hospital service. We know that the present management systems are not delivering consistently within hospital trusts, let alone between trusts. A point that is often missing from these discussions is that the systems' failures not only affect the level of care for patients but inherently prevent hospital staff from giving patients the level of care that they want to provide.
  That is why we cannot preside over an inadequate status quo, and this is where I depart from the argument advanced by my right hon. Friend the Member for Holborn and St. Pancras. We know that the best-performing hospitals in our system are excellent; they are outstanding by any international comparison. We also know, however, that there are too few of them, that others struggle, and that some fail to meet the standards that the public, rightly, increasingly demand.
  I did not expect in 1997, or again in 2001, that we would be hearing people defend the status quo in a debate about the health service. I am not in the Labour party to defend the status quo, and I am certainly not content with the level of service on offer to many of my constituents at present. It is true that the health service has changed and is changing. I believe that it must continue to change, and those working in it, more so than we in this House, know that, too. They know that, in many cases, they are simply unable to provide the levels of care that they are so dedicated to providing.
  There are other reasons for change. We have more knowledge of illness and medicine than ever before, and better medical science, technology and diagnostic systems than ever before. We have increasing numbers of key people in the service, thanks to the policies of this Government. We have the largest hospital building programme in living memory—again, thanks to this Government. All those things are producing sweeping changes in the health service, and the argument that, in the fact of that, management systems can stay exactly as they have been is untenable.
  Patients and staff together are rightly demanding better performance and choice. I am afraid that I must tell my hon. Friend the Member for Wakefield (Mr. Hinchliffe), who has long dedicated himself to health policy issues—I commend him for that—that if patients are able to identify a better-performing hospital and choose to go there, who can blame them and say that that is wrong? I would not condemn someone for doing that. That does not undermine the health service: it makes other hospitals perform better and drives up standards. General practitioners and patients should choose the better provision because they are entitled to do so. We need to drive up the performance of hospitals that do not meet the standards, and we are not here to defend them if they do not do so.
  There has been much talk of a two-tier system, which would represent a big step forward. I think that we have a four or five-tier system at present. We have some of the best hospitals in the world, but there are some

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  dysfunctional hospital trusts at the other end of the scale, which is simply unacceptable. Staff make the same point. If Labour Members have a fundamental ideological point, it is surely that we demand the best possible care, on the basis of clinical need, that is free for all at the time of use. That is the basic ideological difference between Labour and Conservative Members. The Conservative case descended into confusion and disarray within five minutes of the start of the speech made by the hon. Member for Woodspring (Dr. Fox), although that was not because of anything that we said but because of what his colleagues said about the Tory Opposition's untenable position.
  The public do not care how the service is organised and managed. That issue is not fundamental for them, and nor is any ideology. People care passionately about better access, better care and better performance by the hospitals that they rightly admire and love. They rightly believe that all public services should be delivered for the benefit, support and convenience of users, not providers. Some of our managers and trade unions understand that, but, sadly, others do not.
  We are told that foundation hospitals will undermine the NHS, but my right hon. Friend the Secretary of State demolished that myth during his speech and support what he said. Several Governments and numerous Secretaries of State for Health have tried to undermine or diminish the national health service in one way or another. It survives and has seen them off and is still here long after they have gone. It is a robust, popular and much-loved Labour creation that is vigorous, durable and more necessary for people today than ever before. We must work to drive up performance for all patients, as many others, including the King's Fund, have made clear. If I have one reservation about the Bill, it is whether the proposals are too modest. My worry is that people in the health service and trade unions will try to frustrate the proposals—
  Madam Deputy Speaker: Order.
  3.3 pm
  Mr. Francis Maude: This has been a rather frustrating debate in lots of ways. It should have been rather interesting with cross-currents and dynamics working within it. Instead, rather oddly, we have heard a Labour party with a centre of gravity that is rather out of sympathy with the principle that underlies the Bill argue for the Bill, while the Liberal Democrats and the Conservative party have argued against it, although their centres of gravity support its direction. That is all very confusing for a simple chap such as me. The Bill is flawed and imperfect, despite the fact that its intentions are good. My hon. Friend the Member for Woodspring (Dr. Fox) made a telling case for how it must be dramatically improved.
  Stephen Hesford: Will the right hon. Gentleman give way?
  Mr. Maude: I am sorry but I really do not have time.
  The Bill will probably not succeed on foundation hospitals because it is too beset by red tape and interference. It will not liberate people in hospitals that
  738
  achieve foundation status to create the improvements of which I believe that they are capable and that the Secretary of State hopes for. A good idea will end up being damaged by being inadequately effected.
  The question of where an institution is accountable has little to do with formal structure and the debate about how the governance structures will affect foundation hospitals is something of a red herring. What matters is where people feel that accountability lies. I was struck by how little difference the creation of supposedly self-governing trusts under Conservative reforms in the 1990s made to accountability in reality. People continued to feel that the system was centrally planned and bureaucratically driven. When I returned from a sabbatical from politics, I was surprised to learn how little the culture of the national health service had changed as a result of the reforms.
  There was, however, a dramatic improvement to the accountability of fundholding general practices. Most were small enough and close enough to the patients whom they served to mean that people thought that they were more genuinely accountable. There was no pretence at any democracy, but to echo the vivid way in which the right hon. Member for Copeland (Dr. Cunningham) put it—he would not call it competition but he described something that sounded like Competition—there was a competitive process because general practitioners needed to keep their patients. They responded immediately to what their local patients required.
  The Government have drawn the wrong lessons from experiences in the 1990s and the Bill represents a failed opportunity. It contains a good idea that is hamstrung by a lack of faith in it. We have heard about the patients' journey, and the Secretary of State has made a journey in, by and large, the right direction. He talked about that in an article that I found on a website. He said:
  "Over these last six years, however, I … have been through a steep learning curve. Whitehall dictat does not and cannot deliver public service improvement"—
  that is so right. In the same article, he mentioned his visit to a hospital in Madrid to which my right hon. Friend the Member for Charnwood (Mr. Dorrell) referred. He pointed out how that hospital had delivered dramatic improvements by being given precisely the freedoms that he claims that the Bill will deliver, although we are sceptical of whether that will happen.
  There is real gut hostility in the Labour party to the principle that underlies the Bill, and that comes out in the most repellent phrase in the new Labour lexicon: earned autonomy. That phrase is a contradiction in terms because it like saying, "Yes, you can have the key to the door but only if you promise to be back by 10 o'clock every evening and meet only the people who I say you can meet." Earned autonomy is not genuine autonomy because those who have the supposed autonomy will always be on the end of a string that can be twitched at the Secretary of State's diktat, to use his phrase.
  Mr. Dorrell: My right hon. Friend might not have noticed that while he made his analogy about keys and returning by 10 o'clock, there were many nods of approval among the forces of conservatism on the

  739
  Labour Benches. Those Labour Members think that the state has a parent-child relationship with the citizen, and that is a telling fact.
  Mr. Maude: That is very revealing. The Bill is a real muddle that will not deliver the benefits that it is designed to deliver, and that also shows why the worries of the Labour rebels who signed the amendment are misplaced: because the Bill will not work. If it did work in the way that is planned, many of their concerns would be justified because it would then remove any pretence of central Government's ability to guarantee equity and the equality of outcome, although that cannot actually be done.
  The fact is that if the most highly rated hospitals are given their freedom first, which is what is proposed, and they do much better because of that liberalisation from central control, they will not be catchable-up-with—I think that was the phrase used by the hon. Member for Manchester, Central (Mr. Lloyd) yesterday—by other—hospitals. The aim of the Labour model seems to be to cap the good hospitals to prevent them from getting any better so that the others can catch up, but what sort of outcome is that? It seems that there is something reprehensible about good hospitals getting even better, but I want good hospitals to get much better. We should want all hospitals to improve and genuine freedom will enable that to happen.
  One of the Bill's flaws is that the proposal is the wrong way around. If the Secretary of State believes that freedom will liberate and allow improvement, he should liberate the worst hospitals first. That would allow him to appease some of his hon. Friends who are so worried about the Bill, because those hospitals would be able to catch up. The problem is, however, that the Bill will not allow any hospital to do much better. It is a wasted opportunity. If the right hon. Gentleman is to implement his change, he should at least discover the courage of his and the Prime Minister's new convictions and go back to what he said a year or so ago about central diktat not working. What does work is liberating people. If he believes that, let him act on it, because the Bill will not achieve that.
  3.11 pm
  Mr. Robin Cook: I am conscious that my last speech in the House was not received with universal welcome on the Government Benches. I rise today in the modest hope that what I am about to say in support of the Bill will be more welcome.
  I was the Opposition health spokesman in the 1980s when Lady Thatcher was Prime Minister, which was an immensely rewarding time to be in that role. We used to scour Britain and return to the House with cases of individual patients who had been badly treated and turn them into household names overnight. Now that I am in a more reflective phase of my career, I recognise that although that activity had immense value as a campaigning tool, I am more doubtful about its value as a contribution to national policy.
  It is not our job to micro-manage hospital services. Whether we are in Westminster or Whitehall, it is our job to get the structure and funding right and then to
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  provide the maximum local freedom to local NHS units to get on with the job. The nub of the debate is how much local freedom we can provide while recognising—I say this candidly to my hon. Friends—that there will be differences if we give them maximum freedom. We cannot provide local freedom and then deny hospitals the right to be different—not necessarily better, but different.
  My right hon. Friends the Secretary of State and the Member for Holborn and St. Pancras (Mr. Dobson) have made immense changes for the better in the NHS. It is remarkable that for the first time in a generation we are experiencing an increase in the number of general acute beds in the NHS, which is dramatically different from the steady decline in the 1980s and 1990s. My right hon. Friend the Member for Holborn and St. Pancras was right to remind us that there have also been major changes of structure. The creation of primary care trusts and the transfer of three quarters of NHS funds into the hands of GPs and community services were particularly strategic changes. They reflect a remarkable shift of power to the people who are most representative of the patient and most commonly in touch with them.
  The rational background of the debate is that the NHS is improving and will continue to improve, but can be made better. It is important that we have that background fixed in our minds because nothing makes the staff more demoralised or resentful than the sense that their immense strides of progress are not recognised politically or in public. That background is also important to inform our debate in the House, and in particular, perhaps, on the Labour Benches. What worries some of my hon. Friends is that the rhetoric of reform occasionally appears to imply that the NHS model is failing rather than succeeding. They worry therefore about supporting reform because to do that might be seen as rejecting the basis of the NHS, which they support and to which their electors are greatly attached. I argue, however, that we should support the Bill precisely because the NHS is strong and successful, and the proposals will continue that improvement.
  I have every confidence that a public health service free at the point of use will continue to be popular throughout the century. I have to say that I am less confident that any state-run institution will command affection for the rest of the century. The Bill addresses two fundamental issues that the NHS must face if it is to retain that affection. First, we need to give it more local identity and less of a national image, and that is done in the Bill. One of the Bill's most radical elements is that it transfers control and ownership of local hospitals to local bodies that are locally accountable. I do not think that it is fair to argue that that is a step towards privatisation. If any future Government wishes to privatise those hospitals, the first thing that they will have to do is to introduce a Bill to nationalise back the buildings and hospitals. I do not think that it would be politically feasible for any Government to attempt that.
  The second issue that the Bill addresses, which is essential to the NHS, is that it provides for local hospitals to exercise more initiative. I read a lot of twaddle in the press in recent years about the superiority of private sector management. The last decade is littered with some spectacular collapses of private sector companies in which the private sector management have

  741
  appeared to walk away with pay-offs that are in inverse proportion to their success in managing the company. If any one of those scandals had occurred in the public sector, the Government in office would have been swept out of office in a tide of public outrage.
  The strength of the NHS is that it has an ethos of professional commitment. It attracts staff by the sense of reward of serving fellow citizens. I am not saying that that ethos is superior to the private sector, but it is valuable. It is worth preserving and should not be reformed out of the system. But the private companies have one strength that we should try to bring to the public service: they have a model that provides the capacity to permit initiative and to promote innovation. The model in the Bill of a public benefit corporation, providing a form of mutual social ownership, is an interesting worthwhile stab at a model that will give local management more room for manoeuvre, wider space for initiative and greater flexibility to reward and encourage innovation by the hospital staff. It is commonplace to complain that there are too many targets in the NHS, but my right hon. and hon. Friends flood the NHS with targets because the only way to get change in a top-down management system is to set national targets. If we want fewer national targets, we have to encourage more local initiatives.
  I understand my hon. Friends' concern about the original proposals promoting two-tierism. I encourage them to recognise that they have made progress by getting the commitment to provide more resources and support to underperforming hospitals within five years so that they, too, can become foundation hospitals in that time scale. Frankly, if we want to address the problem of underperforming hospitals, I suggest to my hon. Friends that the best way to get the leverage to do that is to support the Bill. That will force the issue on the Government as a greater political priority and ensure that they tackle underperformance and enable every hospital to have the same chance.
  I have spent much of my time—indeed, lately rather more of my time—travelling in Europe visiting our sister parties. I know well the parties of the left in Scandinavia, Germany and the Netherlands. Most of them regard themselves as well to the left of the Labour party, and I leave it to individuals to decide whether that is something to celebrate or regret. But all those parties will be mystified at the idea that handing hospitals over to mutual social ownership is abandoning leftist principles. Most of them have done precisely the same thing. Indeed, I suspect that some of them might welcome such a move as a sign that Blairism is moving to the left, although I would not want to get my right hon. Friend the Secretary of State in trouble by suggesting that that might be true. However, there is nothing in the Bill to cause us trouble by undermining our principles or by being hostile to the values of the NHS.
  I want the NHS to be there for the rest of my life. The Bill will give us a better prospect of an NHS that is popular throughout that period and able to fulfil its potential. For that reason, I support the Bill and urge my hon. Friends to do the same.
  3.20 pm
  Sir George Young: Many right hon. and hon. Members were sorry to see the former Leader of the House return to the Labour Back
  742
  Benches. However, it has enabled us to listen to him speak without the discipline of collective responsibility on a range of issues on which he has always taken an interest. I agree with much of what he said, although I would go slightly further and veer towards the more adventurous approach of the right hon. Member for Copeland (Dr. Cunningham), who thought that the Bill might go a little further.
  I agree with the Secretary of State and many others that reform is needed to complement the extra money that is going into the national health service. On the one hand, we all listen to Ministers telling us how much more money is going into the service. On the other hand, I receive letters like this one, dated 28 April, from the chief executive of my local NHS trust. It reads:
  "We have around 100 children waiting for therapy and at present children over 5 years old are waiting 27 months to be seen."
  That is five-year-olds waiting more than two years just to be seen. The letter goes on to explain that that is
  "the rationale behind deciding what cuts to make."
  That is why the public are not always convinced by the rhetoric that we hear from the Government that the NHS is getting better.
  The problem in my constituency, which neither the Government nor the Bill addresses, is that we get about £84 of NHS money per person, as opposed to the £100 average for England. Sadly, my constituents are not 16 per cent. healthier than average. Until there is recognition that the underlying revenue stream is inadequate and that the formula needs review, changing management structures and giving freedoms on pay and access to capital will make little difference.
  I want to caution the Government about the claims that they are making for foundation trusts on bureaucratic freedom, local accountability and access to capital. On freedom, I re-read over the weekend the "Guide to NHS Foundation Trusts", which was published last December. It is peppered with phrases such as "interference from Whitehall" and
  "disempowered by top-down control in the NHS."
  Yes, under the Bill, the Secretary of State drops out of the picture, but it is not until page 9 that the independent regulator appears. It is like Beethoven's opera "Fidelio", where the hero does not make an appearance until the second act.
  The explanatory notes continue the fiction on freedom. In page 2, paragraph 6 states:
  "Part 1 of the Bill establishes NHS foundation trusts—a new form of NHS organisation. NHS foundation trusts will not be subject to direction … instead, an Independent Regulator will monitor their performance."
  There is a certain economy of truth in that statement. We have only to read clause 14(3), for example, to find that the regulator can require—in other words, direct—a foundation hospital to provide goods and services. We have only to read subsection (7) to see how detailed that direction can be. The regulator can direct what services are to be provided, where they are to be provided and for how long they are to be provided. The independent regulator could be every bit as intrusive as the Secretary of State, though I am sure that he would carry out his duties more politely.

  743
  The absence of control from Whitehall is balanced by the sentence in paragraph 1.31 of the December document that reads:
  "An NHS Foundation Trust will be required to submit reports and information to the Independent Regulator."
  If all that happens is that the address on the envelope containing the endless statistics and reports is changed, administrators will not cheer the Secretary of State for releasing them from administrative burdens. There are about 20 different inspectorates, but it is not clear in the Bill how many of them will be removed. A pinch of salt is appropriate on the freedoms that are claimed under the Bill.
  That brings me to accountability. In his foreword to the December document, the Secretary of State claims that NHS foundation trusts
  "will be able to gear their services more closely to the communities they serve."
  However, as we have heard in the debate, the services provided by the foundation trust will continue to be commissioned by the local primary care trust, not by the board of the foundation trust. People reading what the Secretary of State wrote there, and listening to some of his more extravagant claims, might be forgiven for thinking that the board of governors of the trust will decide what services will be provided.
  I was reading the Secretary of State's Social Market Foundation speech last week. He said that the trusts will
  "give more responsive services and ensure community services are better met."
  They will not. The primary care trust will be giving the more responsive services, if, indeed, that is what they do.
  It is also absurd to play with words and call one thing "central control" and the other "local accountability". Local control has the potential to be every bit as intrusive or destabilising as central control if it is not done well. What is proposed in the Bill is a leap in the dark. It is a management style that is virtually untried in this country outside the Co-operative movement and Network Rail. It might be better but it could be worse.
  It has been argued that the Government are democratising the wrong body: the trust that manages the hospital, rather than the trust that commissions the services. It is as if the Government had said that the management of my local Tesco should be elected locally; but that the product range, quality and price and the frequency of delivery will continue to be dictated by Tesco headquarters. As my right hon. Friend the Member for Charnwood (Mr. Dorrell) said, there is a risk of the trust being pulled two ways—one by the primary care trust and the other by the governing body. The governing body will claim a democratic mandate and try to reorient the hospital to meeting what it sees to be local need. However, the PCT, which has the cash and the contracts, will be governed by national frameworks, targets, ministerial priorities and the regime from Whitehall. There is a real risk of crossed wires under the proposed regime.
  744
  Finally, I shall say a few words on financial freedom, which is likely to be far less than the rhetoric has implied. We are told in the document to which I have referred that trusts will be able to access capital
  "based on financial performance and not on the basis of national or local capital rationing by the Department of Health or SHAs."
  However, there is some economy of truth there. The capital borrowed by foundation trusts has to come out of the total pot available for health investment, so it must inevitably be constrained by national rationing.
  I have tried to work out whether my local hospital will be able to borrow more under the new regime than it receives now in capital from the Department. Under what the Department is pleased to call a transparent-ratio-driven-credit ratings methodology using key ratios benchmarked with leading analysts, my hospital could borrow £12 million in year 1, but it could not do that every year. It is by no means clear whether this will be more or less than is available at the moment.
  There could be advantages in the regime, but the Chancellor of the Exchequer and other Labour Members would water them down. I fear that what is left will not deliver the step change in NHS performance that we would all like to see.
  3.27 pm
  Mr. John Denham: This, of course, is a Second Reading debate. As a Minister, I introduced several Bills, including a couple of health Bills. All those Bills proved well capable of amendment and improvement after I had introduced them. I am sure that this Bill will be capable of amendment and improvement. However, on Second Reading, it is important to consider whether the strategy that lies behind the Bill is right.
  The question of how to manage the national health service has been present since the inception of the NHS; that is, to manage the immense resources and to manage the staff, who range from some of the most poorly paid but most motivated public servants to some people who, frankly, are largely motivated by money, to some of the most senior and best clinicians in the world, and to professional managers, who often see themselves as professionals in political football. However, it is not simply a managerial challenge. It is also a political challenge.
  There have always been those who want the NHS to fail, so as to be able to replace it with a real private insurance market alternative. With the record resources that are going into the NHS today, both the managerial and the political challenges are as alive as ever. If the Government fail to show that the NHS can deliver, despite the extra resources, those who want to bring down the NHS—people who are quite quiet in the public debate—will be back into the debate with a vengeance.
  Foundation trusts represent a radical step. It is one that I think is overdue. It follows from what we have already achieved as a Government, but recognises that what has worked since 1997 will not be sufficient to deliver the quality of services that the patient wants.
  The NHS that we inherited in 1997 was chaotic and fragmented. Many parts of it had no NHS identity. Strategic planning was being abandoned and the capital building programme had collapsed. The two-tier NHS was a reality, and not only in terms of variations

  745
  between institutions. Neighbours in the same street with the same condition were receiving different treatment in the same local hospital. That was the situation produced by the previous health reforms.
  In theory, it may have been possible to go from what we inherited in 1997 to something like what is being proposed now. One could imagine building on the successes of local commissioning groups of GPs by going straight to primary care trusts, giving them more freedom to concentrate nationally on inspections, high clinical standards and so on. On reflection, I believe that a little more could have been done earlier in that direction. However, the truth is that the NHS, as we inherited it, needed a central shock to get it back on course. As I saw in overseeing the emergence of PCTs, the divisions and suspicions between, for example, fundholding and non-fundholding GPs could not be overcome overnight to bring people together to form primary care-led bodies that could take over commissioning from health authorities—that was bound to take time. We had to be able to challenge a culture in which every piece of poor performance was always blamed on the shortage of resources, no matter what the real reason was, and in which the component parts of the NHS did not work with each other or even accept responsibility for doing so.
  The impact of targets and, yes, central direction was needed then to bring about improvements in waiting times and accident and emergency services, to establish NHS Direct and walk-in centres and to develop cardiac and cancer strategies. Only central direction could make public-private partnerships work and give us the largest ever hospital-building programme. That is why, in every part of the NHS, we see a significant improvement in the NHS that we inherited from the Opposition. However, we must recognise that that approach has its limits. While targets can provide focus and direction, ultimately they stifle innovation and distort performance. Central direction can produce change in key areas of service, but it cannot cover all the multiple challenges of a complex service, nor can it fully motivate staff, whether management, support or clinical, who are now required to take the NHS to its next stage. Indeed, I worry, as some clinicians do, that we are getting to the stage where some things, like the collaboratives, that have produced change will begin to lose their impact and impetus because, at the local level, clinicians do not have the freedom to carry out necessary changes.
  The next stage of NHS reform must therefore enable trusts to take greater responsibility for their own activities and development, and that is why we should support the Bill. However, the Bill goes further, as it opens up new possibilities in the NHS for greater community ownership and control. There has always been a wing of the Labour party interested in social ownership, social entrepreneurship, decentralisation and co-operation. Many of us were able to pursue that in local government but have not seen a great deal of it in central Government. Now that we have done so, we should seize the opportunity to put it at the heart of a great public service and advance it further.
  The Bill does not do everything, and I shall mention briefly three things that it does not tackle. First, it is important that foundation trust status is offered to all hospitals, but the Bill does not deal directly with failing hospitals. I welcome the promise from my right hon.
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  Friend the Secretary of State of extra money and support for the Modernisation Agency. Both those things will help, but we must still recognise that there is a need to deal with very poor hospitals. I simply remind him and hon. Members on both sides of the House that the Health and Social Care Act 2001 provided powerful mechanisms for dealing with genuinely failing hospitals where encouragement, support and guidance had failed to deliver. We do not need new legislation to deal with that problem—we need to use the legislation that we have when all else has failed.
  Secondly, we need to do more on strategic planning. At the moment, no one is entirely responsible when things go wrong. It is not quite the hospital management, the trust board, the PCT, the strategic health authority or the Secretary of State. If we are not careful, we will still have a system in which PCTs plan from the bottom up, and strategic health authorities sort out problems from the top down. There is a lack of clarity about accountability that needs to be thought through. I simply suggest to my right hon. Friend that if he put PCTs collectively in charge of the work of strategic health authorities so that the jobs of planning from the bottom up and sorting out problems from the top down were brought together, a lot of reservations about fragmentation could be dealt with easily and lines of accountability would be clearer than they otherwise would be. However, those are points that can be considered in Committee. The Bill's strategic direction is right, and many Labour Members will regard it not as a shift to the right but as bringing some good, left Labour ideas on to the agenda for the first time in many years.
  3.35 pm
  Hywel Williams: Last year, in a reply to me, the Secretary of State said that it is an abiding joy for him that he is
  "not responsible for all things Welsh".—[Official Report, 22 January 2002; Vol. 378, c. 739.]
  He also said that he does "not do Wales". Well, the Bill does Wales to a certain extent. I welcome its provisions on review and inspection, as they address quality issues. I hope that the provision of service in the medium of Welsh will be considered, as it came up in a recent conference in Cardiff and was certainly an issue for the outgoing Minister for Health and Social Services in the Assembly.
  Under the Bill, Wales will have no foundation hospitals—we have that on the authority of no less a personage than Mr. Rhodri Morgan, newly triumphant in the polls, who said that Wales will be a foundation hospital-free zone. Over the weekend, the Prime Minister, promising a "fairer and better Britain", defended the principle of foundation hospitals—presumably, he meant foundation hospitals in Britain. As we know, he wants all hospitals to be foundation hospitals within five years. I would therefore be grateful if, at the end of our debate, the Minister of State would say whether Mr. Morgan is right that Wales will not have foundation hospitals, or whether the Prime Minister is right that we must have them if we are to have a fairer and better Britain? They cannot both be right—or was the Prime Minister merely saying "Britain" while he lay back and thought of England?

  747
  Before the recent election in Wales, Mr. Morgan famously said that he would push for "clear red water" between Cardiff and London. The people of Wales deserve an explanation of the exact place of foundation hospitals in the new Labour push for independence for Wales.
  Linda Gilroy: Will the hon. Gentleman share with us his thoughts on foundation hospitals? Does he consider it surprising, given the lead that Wales has taken on the water utility and housing stock transfer by adopting mutual models, that there is not greater enthusiasm for them?
  Hywel Williams: I shall refer to that later in my speech. Unfortunately, given the recent election results, my party is scarcely in a position to think in those terms. If the Prime Minister is right and we are to have foundation hospitals in Wales, I do not see how that can be achieved in the face of opposition from the Labour party in Wales and my party.
  We might wonder what the red water of independence might mean for Mr. Morgan. No slouch at spin, he made much in Wales in the past few weeks of the value of political congruence between Cardiff and London. Only a Labour Administration in Cardiff, he said, could work properly with a London Labour Government. But with foundation hospitals, we have an apparent split—a parting of the ways, a downside.
  If there is to be clear red water between Wales and England on health, let it be properly thought out. Hon. Members may be reminded of Macbeth's speech in the Scottish play when, after he has killed Duncan, he muses whether he should kill again. He says of the red water:
  "I am in blood
  Stepped in so far that, should I wade no more,
  Returning were as tedious as go o'er."
  Macbeth gave it some thought, and look what happened to him. Mr. Morgan might give it some thought as well.
  Establishing foundation hospitals in England, particularly in the western part of the country, will have a profound effect on the NHS in Wales. Foundation hospitals will be in a much better position to compete with Welsh hospitals. They will be able to offer better conditions and possibly more advanced clinical work. Given the shortage of medical staff, they will no doubt attract staff from Wales, where individual hospitals' freedom of action is constrained.
  One obvious example is the Countess of Chester hospital—an excellent hospital which has three stars, and which will no doubt opt for foundation status soon. What effect will that have on the Wrecsam Maelor and ysbyty Glan Clwyd? The hon. Members for Wrexham (Ian Lucas) and for Clwyd, West (Gareth Thomas) may have something to say about that, although they are not present today. A similar process may take place in the south-east of my country.
  We in Wales have a shortage of medical staff, and the National Assembly has responded by extending medical training to the north and to the west. Some newly qualified staff will stay in the locality, but others will move over the dyke. That has always happened. Young
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  people in Wales, newly qualified, will go where the work is. It is a process to be welcomed. Producing and training people such as teachers, doctors and nurses who go on to serve elsewhere has been our historical experience in Wales. That is one thing, but it is quite another deliberately to set up a system that will draw doctors and nurses away from Wales, where health is the worst in the UK. Our fear is that the development of foundation hospitals in England will undermine the policy and strategy of the National Assembly in Cardiff.
  What of the effect on patients? A critical mass of patients is required to justify new and expensive treatments. If part of the required critical mass is drawn away from Wales, how will hospitals such as ysbyty Gwynedd, ysbyty Bronglais and Withybush justify spending large sums of money on the latest treatments, when many of their potential patients are drawn over the border?
  Some hon. Members will probably say, "So what?" People from north Wales have long been used to travelling for medical treatment to Liverpool, Manchester, Clatterbridge and Gobowen. A constituent of mine recently heroically undertook a £400 taxi drive to Scotland to have a pacemaker fixed. It is an historical fact that we have had to travel far to get anything like equality of treatment, but historical fact is no reason to establish a new system that will entrench that historical inequality—at least, not without a policy response from Cardiff, which is sadly lacking.
  A reasonable solution might be found to these problems that would allow policy in England and Wales to differ, while sustaining the less advantaged hospitals in Wales. However, I fear that such solutions are going by default. Hon. Members will know that in establishing the NHS, Aneurin Bevan's great slogan was "Freedom from fear"—freedom from fear that the doctor would not call, freedom from fear that the medicine would be too dear, freedom from fear that proper hospital treatment was not for the likes of us. Our NHS has given us freedom from those fears. We now have access to medical treatment.
  Establishing foundation hospitals in England, with no policy response from Wales other than saying no, will not destroy the NHS in Wales, but it will endanger a principle that is close to my heart and the heart of our people—the principle of equity of access. That is reason enough for my party to reject the Bill.
  3.43 pm
  Mr. Kevin Hughes: Although the debate has so far focused on the establishment of foundation trust hospitals and will no doubt continue to do so, there are other issues in the Bill that will greatly improve health and social care for my constituents. I shall say something about foundation trusts, but first it is worth mentioning a couple of the other aspects of the Bill, which I hope are overwhelmingly welcomed by hon. Members.
  Part 2 deals with the important matter of quality standards and sets up new health care and social care inspectorates. Lifting standards and the quality of care, inspecting and auditing will be the main function of the Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection. This Government have done more than any other to drive up standards and improve the quality of care, and these measures will continue those improvements.

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  We all know about the problems with NHS dentistry. The Bill seeks to address those problems by making it the duty of primary care trusts to provide primary dentistry services and promote oral health. The welfare food scheme is somewhat out of date and does not meet the nutritional needs of its beneficiaries. The Bill will broaden the nutritional basis of the scheme to include fruit, vegetables and cereal-based foods in addition to liquid milk, thus ensuring that children from less well-off backgrounds have access to a healthy diet.
  The main question in the debate—at least, it is the main question among Labour Members—is about the proposals for foundation hospitals. I was convinced by the arguments that the proposals would create a two-tier health service, pit hospital against hospital and nurse against nurse, and result in some hospitals poaching staff. I believed that patients would have to travel out of area for less lucrative health care, and that the proposals would be the thin end of the wedge leading to privatisation. Before my right hon. Friend the Secretary of State faints on the Front Bench, however, let me add that I had been convinced by those arguments over a decade ago when we were advancing them against the trust status that the Tories introduced.
  I want to tell the House what has happened to health services in Doncaster since those changes were introduced more than a decade ago. They have improved out of all recognition. The Doncaster royal infirmary has changed from what was not a very good hospital to one of the best in the country, achieving three-star status and continuing to improve. I pay tribute to its doctors and nurses—and yes, to the management, too—for taking forward those improvements and delivering a better health service for the people of Doncaster.
  The arguments were wrong more than a decade ago, and they are out of date, tired and wrong now. This time I shall not campaign against the changes; I shall support a bid from the Doncaster royal infirmary to become a foundation trust hospital. Having seen the improvements in Doncaster over the past decade, I want to ensure that my constituents continue to enjoy the best health care possible, and foundation status should lift the standard and quality of care to yet new heights.
  Set within the national framework of standards, but responding to local needs, foundation trust status will help to tackle the inequalities in South Yorkshire. Freedom from Whitehall control should mean freedom to deliver and develop services in the way that best suits patient needs in Doncaster. I have every confidence that the three primary care trusts in Doncaster, in partnership with the Doncaster royal infirmary as a foundation trust, will drive the local agenda forward and respond to local needs more directly and positively.
  Social ownership of local hospitals, with direct elections involving local people, will ensure that local decisions are more responsive to community and individual patients' needs. Doncaster's doctors and nurses will be able to use their talents to innovate and develop new locally based health care services—the services that they know local people require.
  I can sit down in my local travel agent and book, months in advance, not only a hotel in just about any country in the world and a flight to get me there, but a taxi to take me from the airport to the hotel. Why, then,
  750
  can I not sit in my GP's surgery and book an appointment at my local hospital for elective surgery at a time that suits both the health care team at the hospital and me?
  The freedom given by foundation status should be able to drive us towards that goal and release our NHS staff down an ever more innovative road. Foundation status is not a recipe for a two-tier service, nor will it lead to privatisation. It is a plan that should take our health care system to a higher level—a level that our constituents demand, and surely deserve. My right hon. Friend the Secretary of State can look forward to my presence in the Lobby supporting him tonight.
  3.50 pm
  Dr. Andrew Murrison: It is a great pleasure to follow the hon. Member for Doncaster, North (Mr. Hughes) and to have witnessed his conversion to consumerism. I am sure that most hon. Members who have the interests of their constituents at heart will welcome many aspects of the Bill in its drive to improve standards. It is often important to realise that the NHS is not an ideological tool, but is there for one purpose and one purpose only—to deliver services for constituents. I hope very much that aspects of the Bill will move us in that direction. None the less, this is an atherosclerotic sort of Bill. It appeared to start well, but somewhere between No. 10 and No. 11, it managed to become furred up. I hope that we will be able in Committee to unclog a great deal of the Bill and turn it into something vaguely useful.
  Last week, I had personal experience of the national health service as a patient. I attended for a minor procedure at the district general hospital serving my constituency and was faced with a monumental form. It was a consent form that had been dreamt up by some bright spark in Richmond house, it ran into two sides of A4 and it brought home to me what we must do as we try to work towards a 21st-century national health service—unclog the NHS of much of the bureaucracy that has acted as a dead hand, a great deal of which comes from the centre. The form was presented to me by the consultant concerned, who also gave me a copy of the previous consent form that he had drawn up in his department. It was considerably shorter, and he told me rather sadly that as a result of the new form that had been presented to him from the centre and Richmond house, he had had to cut the number of patients whom he was seeing. The form was so bureaucratic that he had had to reduce from 10 to nine the number of patients whom he saw every morning. Given that the sessions cost £700,000 a year, that form alone had cost £70,000. That is a salutary example of what we need to do in the national health service to drive up standards—reduce bureaucracy. If the Bill goes some way towards achieving that, I for one will be very pleased.
  The intentions of the Secretary of State, however, have been shown to be in stark contrast to his actions in the Health Act 1999 and the Health and Social Care Act 2001, in which he increased the number of directions and his direction-giving powers for NHS trusts. Here is a Secretary of State who says he has at heart the reduction of central control of the national health service, but is inherently inclining towards an increase in the number of directions that he issues from the centre.

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  I have a parochial concern—the Royal United hospital, Bath. The Minister of State, Department of Health, the right hon. Member for Barrow and Furness (Mr. Hutton), has described the RUH Bath as his No. 1 headache. It has certainly caused politicians locally and nationally much headache in recent months and I fear that it lurches from crisis to crisis. Despite that, it continues to give a first-rate clinical service to my constituents, which I welcome both as a patient and as a local representative.
  It is very difficult to see how the Bill will act in the interests of my constituents, given that foundation hospitals will borrow against departmental expenditure limits. It is difficult to see how the capacity of hospitals such as the RUH and others to dig themselves out of the financial morass in which they currently find themselves will be improved, bearing in mind the increased powers that hospitals selected as foundation hospitals will be given to borrow against that departmental expenditure limit. I have to say, therefore, that the message from my constituents is that the Bill is unlikely to serve them particularly well.
  Although I welcome the £200 million that the Secretary of State announced to encourage no-star and low-star hospitals to work towards foundation status, it is woefully inadequate and has to be set against historic debt—in the case of the RUH, a debt of some £20 million. Without addressing that, I am afraid that the RUH will not move on at all.
  I welcome the Secretary of State's proposal to roll out "Agenda for Change" across the national health service, but I have a concern—again, perhaps parochial—that the piecemeal roll-out of foundation hospitals will lead to the migration of staff from low-star and no-star hospitals to those that are three-star and have an expectation of becoming foundation hospitals. The NHS is nothing if it is not the staff who work within it. Members such as me who represent areas served by low-star and no-star hospitals fear that hospitals that are rated fairly low on the criteria set by the Secretary of State may start to do even worse. We live in a funny old world in which Ministers focus first and foremost on hospitals that are apparently doing extremely well, anointing them as foundation hospitals, without first concentrating on hospitals that are flagging. It is a great pity that they do not focus more heavily—first and foremost—on hospitals that have been identified as performing less well. In my area, I would particularly identify the Royal United hospital, Bath.
  The Local Government Association has sent right hon. and hon. Members some information that I hope Ministers will take into account. The LGA has huge experience in the running of elections, and it is extremely concerned about the hotch-potch of elections that could be created under the Bill and what might happen subsequently. At the moment, we have a robust set-up for electing district councils—many of us have been through that procedure recently—and it is a great pity that we cannot work on that to create constituencies around primary care trusts. I firmly believe that we need to build on the good work that the Government have done in promoting primary care by focusing heavily on
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  primary care trusts and being less exercised by acute trusts. That would ease some of the difficulties that I am sure will emerge in Committee about the democratic accountability of the new structures, and rescue the Government from the mess that they will get themselves into by trying to elect bodies to run acute hospitals. I urge Ministers—
  Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman has had his time.
  3.58 pm
  Linda Gilroy: I speak as the chair of the parliamentary group of Co-operative MPs, but I want to preface my remarks with some points from my constituency. People are three times more likely to die from circulatory diseases before the age of 75 in the inner-city wards of Plymouth than in its leafy suburbs, and twice as likely to die from cancer. For me, therefore, any change in the health system must add real value.
  I enthusiastically supported the Government's programme to get more money and capacity into the health service. That is certainly delivering in Plymouth, where we have 700 more nurses in the former South and West Devon health authority area than in 1997. We have several new cardiac theatres, which are treating more than 2,000 patients a year, compared with some 500 patients in 1997. The buildings for the new Peninsula medical school are going up as we speak, and more than 200 of the 1,000-plus extra doctors in training nationally will be there by this September.
  In addition to more money, people, buildings, beds and equipment, we have for the first time the means to compare our local hospitals' performance. We also have sure start, healthy living centres and the new deal for communities, which help to tackle inequalities. They are underpinned by the significant shift that the new primary care trust framework provides. It will be patient and doctor led, but with other stakeholder involvement, and PCTs will soon spend 75 per cent. of the health care budget on our behalf. Such measures give us the means to identify and close the gap in what is not a two-tier but, as other hon. Members pointed out, a multi-tiered health service. Step by step, they are changing what many of us believed was an ill health service into a genuine health service.
  The atmosphere in our acute hospitals, however, continues to feel like that of a pressure cooker. Sometimes it appears as though the pressure has been turned up rather than down—ironically, as a result of some of the changes that I mentioned. Most staff work their socks off and give of their best—often more than can reasonably be asked—to the hospitals. As other hon. Friends have said, up to a point targets have their place in achieving that, but their shelf life is limited.
  Top-down plans and targets can dampen the enthusiasm, energy and experience of staff. We emphasised the targets in the early years of our determination to rescue our health service from the Tory legacy of underfunding and lack of ambition and commitment. The freedoms and flexibilities for foundation hospitals have the potential to build up the spirit of public enterprise to harness what existing structures do not fully realise in new and, more important, sustainable ways.

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  Those who claim that the plans will lead to privatisation are simply wrong. Public interest companies, which are run along mutual lines, have nothing to do with the private sector. They are the natural territory of the centre left, as some hon. Friends have said. They empower people rather than deflate them with top-down, state-knows-best, one-size-fits-all approaches.
  Local public interest companies are the essence of the way in which we can achieve more through the strength of common endeavour than alone. Lively debate has already improved the Bill and I hope that my hon. Friends will continue to talk to the Co-operative movement and draw on its experience of good governance for co-operative and mutual frameworks that work rather than fail, although some co-operatives fail. It would be good to place a legal duty on every trust to promote the recruitment of members from all sections of the local communities and communicate with its members and the wider community to specified standards.
  I should like a choice of the most appropriate mutual and co-operative model. Such models include public benefit corporations, industrial and provident societies and community interest companies. I look forward to that debate in Committee. I should like the hallmark of successful co-operative ventures—education—to be properly resourced to empower stakeholders in the health community to seek election to the new boards and be accountable in robustly democratic ways. Again, a commitment to that in the primary legislation or attendant regulations would be good.
  The foundation hospital proposal is a vital piece of the NHS reform jigsaw. It is a piece that, once identified and put in the right place, enables the rest of the picture to form a whole. However, it is a piece that is difficult to place. If it is viewed in the wrong way and put in the wrong place, it will make the puzzle look and feel wrong.
  I ask hon. Friends who are uncertain about the overall picture to give the Bill a Second Reading. It would be short-sighted to strangle or delay a measure that could unlock the public service dividend of our national health service in new ways. Achieving hospitals need the means to advance further now. They need to be free to pioneer ways of releasing an even greater public service dividend for those who are working hard to emulate them.
  The commitment to a timetable that allows all to use such a framework is welcome. It would be lacking in vision to deny debate about the way in which the proposal could get traditional NHS values to survive and thrive in the challenging modern setting of the 21st century. It would be to forgo the opportunity of forging a unique British model that might just have greater relevance to others, including underdeveloped countries trying to grapple with ways of organising their health care in the future. Denying the chance of debating that model could rob them and us of a robust 21st-century alternative to the harsh privatised reality of the American-style system under which millions of people lose out.
  Labour Members tempted to discard or delay the placing of this piece of the 21st-century NHS jigsaw put our constituents at a greater, not a lesser, risk: the risk
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  that a future Tory Government—were there to be such a thing—intent on privatisation, with all its horrible consequences, might succeed.
  In an article on foundation hospitals that appeared in The Guardian earlier this year, my right hon. Friend the Member for Makerfield (Mr. McCartney) said, with his usual panache and enthusiasm,
  "Keep your nerve: this is the rebirth of popular socialism".
  That should certainly give pause for thought to Labour Members who see foundation status in a different light. I urge my hon. Friends to heed my right hon. Friend and, while scrutinising the detail of the Bill, improve it. I urge them not to think they know so much about it at this stage that those of us and of our constituents who can make a contribution to innovate and help us to achieve—
  Mr. Deputy Speaker: Order. Time is up.
  4.6 pm
  Dr. Richard Taylor: I am privileged to be called so early in this important debate. I am happy to agree with several things said by Members on both sides of the House. The right hon. Member for North-West Hampshire (Sir George Young) emphasised the need for reform; the right hon. Member for Charnwood (Mr. Dorrell) emphasised that greater freedom for NHS trusts was the correct policy; but the right hon. Member for Holborn and St. Pancras (Mr. Dobson) and the hon. Member for Wakefield (Mr. Hinchliffe) said that this was not the right time for another upheaval. As the hon. Member for Wakefield pointed out, NHS staff have been hit by 17 reorganisations since 1982. Surely primary care trusts are due a certain amount of time to get used to their new role before having to contend with another new organisation in the form of foundation trusts.
  I have to examine my conscience. If there were still a hospital trust in my constituency, I could well be speaking on the other side of the argument. The trust that was in my constituency was a high-performing trust, which would have seen the undoubted advantages of foundation status. I do not have to examine my conscience very hard, however, because if the hospital trust were still in my constituency I would not be here: I would be on one of the gorgeous Worcestershire wildlife trust reserves, observing the first two avocets that are attempting to raise a family on an English lake.
  Let me return to the matter in hand. An eminent consultant who favours the change has already been quoted. An equally eminent consultant wrote to The Times—the letter was published only yesterday:
  "Foundation hospitals may be a manager's dream but, if ever established, they will be the clinician's nightmare. The main flaw in the concept is that they will prevent sensible planning of health services for a community."
  Why do the Government think introducing the Bill is so tremendously urgent, given their own admission that primary care trusts would not be ready to take on foundation status themselves?
  One must admit that the Government have achieved tremendous improvements in the NHS already. The Secretary of State talked about the falling waiting lists for cardiac surgery, and the establishment of the National Institute for Clinical Excellence is most

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  exciting. Tomorrow and the day after, NICE will host the second meeting of its citizens council, a pioneering effort to see whether ordinary citizens can influence decisions in the health service.
  As I said, the Government have devolved powers to PCTs, and that is crucial. They have made it possible for overview and scrutiny to be conducted by local authorities. They have even produced a document about reconfiguring hospital services—another innovation that would mean that I did not need to be here as a Member of Parliament. However, instead of rushing the Bill through, the Government should concentrate on supporting the existing initiatives, improving morale, management and the relations between managers and clinicians, and taking overview and scrutiny forward.
  The Bill is wide ranging. Much has been said about the formation of foundation trusts, but little about other aspects of the proposals. I shall say a few words about chapter 2 of part 2, which deals with quality in health care. I feel very strongly about the matter, as there is a big gap in the assessment of patient perception of quality of care. Some hon. Members have touched already on the fact that clinical outcomes are not measured adequately.
  The present performance ratings are based on nine key targets—waiting times, cancellations, cleanliness, financial position, and so on—which decide a hospital's star status. The patient focus is supposed to be taken into account by a weird thing called the balanced scorecard approach. Very few people seem able to explain it, but the results of the in-patient survey across a wide range of trusts bear looking at. The in-patient survey contains six elements, each of which can score a maximum of five points. For the six items in the survey, therefore, the maximum score is 30.
  Trusts with three-star status scored nine to 26 points out of the possible 30-point maximum. One-star and no-star trusts scored between seven and 24 points out of 30. To me, and to the other hon. Members who have remarked on the matter, that shows that the present performance ratings do not really appear sufficiently reliable when it comes to taking into account clinical outcomes, and the considerations of the patient. The ratings are not the best basis for selecting which hospitals should benefit from the tremendous changes being proposed.
  The guide to good hospitals prepared by Dr. Foster for The Sunday Times is also rather odd. The paradox with the list is that the hospital with the worst mortality rate is also one of the three-star trusts. Measurements of quality leave much to be desired, and that is another argument in favour of delaying the introduction of foundation trusts. I am waiting to see whether the Commission for Health Improvement places more emphasis this time around on the assessment of patients' idea of quality.
  Finally, the Medical Protection Society is very worried about the health care complaints proposals in chapter 9. It says that clause 109(2)(e) leaves the way open for the introduction of secondary legislation that would link complaints to compensation. The society says that that could cost the NHS vast sums of money.
  I hope that we will be able to ask the Government to delay the implementation of the proposals in the Bill.
  4.14 pm
  Mr. Stephen Byers: Introducing change to the NHS has never been an easy task for the Labour party, as today's debate demonstrates. However, that should come as no great surprise. The Labour party created the NHS, which is perhaps the greatest achievement of Labour in office. Any change is bound to be difficult and will lead to the sort of conflict and debate that we have seen this afternoon and in preceding weeks. Most importantly, the national health service makes real and underpins the values of the Labour party—care and concern for the most vulnerable members of our society, and the belief that we can achieve far more by working collectively than as isolated individuals. The NHS is based on contributions from all and on securing the well-being of each of us. That is what the NHS is all about, and those values are as relevant today as they were in 1948, when the NHS was formed.
  There is nothing in the Bill that undermines those values, and the fact that Conservative Members will vote against Second Reading demonstrates that point well. However, the NHS cannot remain in aspic; it has to move with the times. People have different aspirations and new demands are being made on the service. Renewal and modernisation of the NHS is not therefore a betrayal, but essential if the NHS is to remain the popular provision that my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) mentioned.
  Change is needed and should be viewed as a bringer of opportunity, not a threat. Money alone will not secure the significant necessary improvements. Incremental changes will come from the additional moneys being made available, but that will not be enough. When people pay more taxation, they will not want only incremental changes to their national health service or other public services, but radical and fundamental improvements. Reform must be underpinned by consistent values and principles and I believe that foundation trusts fully reflect those values and principles.
  My right hon. and hon. Friends have articulated concerns this afternoon, particularly about the danger of creating a two-tier system. We must recognise that not all hospitals are the same. They do not all provide the high-quality service that we should expect. However, we cannot improve standards in underperforming hospitals by holding back the best. Rather, we should intervene with support and assistance, and the Secretary of State's announcement this week of an extra £200 million to assist underperforming hospitals is surely the right way forward. The Secretary of State is proposing a twin-track approach, not the creation of two tiers. He wants new freedoms for the best hospitals, but, equally, intervention, support and assistance to raise standards in those that need to improve.
  One of the great strengths of foundation trusts will be their ability to allow more decisions to be delegated to front-line staff, based on the recognition that they are in the best position to meet the needs of local people. It is no longer a one-size-fits-all approach but the introduction of choice and diversity, based on recognition of the fact that the needs of my constituents in Tyneside, North are different from those of constituents in north Surrey and north London.

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  Yesterday the Prime Minister said:
  "For those who believe in public services, reform is fundamental to their future. To turn our backs on it would be a collective mistake of absolutely historic proportions."

  My colleagues will not be surprised to hear that I believe that he was absolutely right, but for the electorate, it is actions—not words—that really matter. To achieve significant improvements in our public services, some difficult and tough decisions will have to be taken. If they are avoided in the face of hostility and cries of betrayal, by the time of the next election, the Government will not face the accusation that they have implemented too much reform, modernisation and renewal. On the contrary, the charge will be that the Government have done too little, and that they have been too timid and too cautious in their approach to public service reform. Let there be no doubt: time is running out for the Government. The public are already paying more in national insurance to increase spending on the national health service. People want to see a return on their investment through improved services. If the Government fail to deliver that, they will pay a heavy political price, and rightly so.
  I therefore say to my right hon. and hon. Friends that while the status quo can appear to be an attractive option, it would be a mistake. There are times when change needs to be embraced. The measures before the House this evening do not represent a revolution in the national health service. This is a sensible and pragmatic set of proposals. They do not betray our core beliefs as a political party—I believe that they reflect them in a modern setting, devolving power away from state central control to local public ownership. That is what a community-based Labour party should be all about. That is made real in the Bill before the House this evening, which puts the interests of patients first. It is a measure that renews and refreshes the national health service.
  If we care about that service, we must move with the times, which is exactly what these proposals do. There are occasions when we need to be bold, but not just for the sake of it. We need to look at how we can update the way in which we do things to reflect our core beliefs, values and principles as a political party and as a Government. This Bill does precisely that. That is why I will support it this evening, and I urge my hon. Friends to do likewise.
  4.22 pm
  Mr. David Amess: This Bill marks the beginning of the end for this dreadful Government. The reason that I say that is that the Chancellor of the Exchequer and the Prime Minister have clearly fallen out big time. Were I to look back on the Conservative years in government, I would reflect that things were never quite the same when our Prime Minister and our Chancellor fell out. As I watched presidential questions on the monitor in my room in the House of Commons, it was interesting to observe the body language between the Prime Minister and the Chancellor of the Exchequer when foundation hospitals were mentioned. It was clear that the Chancellor did not want anything whatever to do with the proposals.
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  Of course, what we are seeing today is a complete charade—the Labour party is split from top to bottom and it has only itself to blame. Having observed closely its 18 years in opposition, it was clear that all that it used to do was to use the health service as a political football. As soon as an adverse outcome occurred, it would blame the Conservatives. Of course, Labour Members of Parliament were past masters at spreading poison. We heard that from a speech a little while ago when the word "privatisation" was mentioned. What absolute hypocrisy. If Labour Members are worried about voting for this Bill because they think that it is privatisation, they do not know the first thing about privatisation. There is no doubt about it: the Government have got themselves into this mess because of the way that they behaved during 18 years in opposition.
  The star ratings system for hospitals, as the Secretary of State knows only too well, is a complete fiasco. It is one of the biggest Government fiddles that I have ever seen. I have absolute proof of that from managers: how is it possible for a hospital to achieve a three-star rating when the same consultants work at other hospitals that are given one or two-star ratings? The system is absolutely meaningless.
  Of course, this dreadful Government are completely obsessed with targets. It is a pity that the Secretary of State did not set himself a target for what he has done since he took over from the right hon. Member for Holborn and St. Pancras (Mr. Dobson), who made a very interesting speech. When the right hon. Member for Holborn and St. Pancras spoke, Labour Members fell quiet. They seem to remain quiet when one of their number makes a speech that is anti-Government but when a Conservative does so there is some noise—[Interruption.]
  The proposals are completely watered down, and the reason is that the Secretary of State has spent all his time in little meetings with his colleagues, listening to their concerns and trying to find out how to buy off the 124 Members who signed the early-day motion. The result will be interesting. The Bill will do nothing to improve patient care.
  I am proud to be a member of the Select Committee on Health. Our excellent Chairman, the hon. Member for Wakefield (Mr. Hinchliffe) is not in the Chamber at the moment. The Secretary of State's evidence to the Committee on 4 March was wholly inadequate. When I challenged the right hon. Gentleman on NHS staff, he dismissed the point as though all was well. I mentioned that "Agenda for Change" specified that
  "while zero and one star trusts will be limited to any extra recruitment and retention premiums they are able to pay staff and two and three stars will not be limited but will have to consult other local trusts, foundation trusts will not be subject to any of these safeguards."
  I asked him how poorer-performing trusts would be able improve when the balance was tipped so firmly against them. With the disarming technique that the right hon. Gentleman employs when he comes before the Select Committee, we got between 10 and 15 minutes of soft soap but absolutely no answer. I am still waiting for the Secretary of State to write to me, as is my hon. Friend the Member for Woodspring (Dr. Fox), who posed the right hon. Gentleman several questions during the debate on 9 January. My hon. Friend has tabled 50 parliamentary questions, many of which have not yet been dealt with.

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  Earlier, the hon. Member for Wakefield mentioned four points from the Health Committee's report. If hon. Members do not have time to read the whole report, there is a one-page summary. The whole all-party Committee agreed the report and our concern about the outcome of the Government's proposals was obvious.
  We all applaud the national health service, but the idea that the Labour party invented and continues to sustain the NHS—[Interruption.]
  Mr. Deputy Speaker: Order. The House must do the hon. Gentleman the courtesy of listening to him.
  Mr. Amess: The idea that only the Labour party supports the NHS is completely disingenuous. Labour Members should be absolutely ashamed of their behaviour over many years. Of course, the challenges are enormous, but the Government came into power suggesting, "Vote Labour and you'll save the national health service". They have signally failed to do that. Members will have read the castigatory briefing from the Royal College of Nursing, which criticised the Bill, especially the fact that the regulator will not be independent.
  As usual, we hold our debates in the House and pat one another on the back for our speeches supporting the Government or otherwise. However, last Thursday, we had the local government election results. In Essex, we went Conservative. Labour was thrown out in Castle Point and in Basildon, and the Liberals were thrown out in Chelmsford. People no longer trust this—
  David Taylor: On a point of order, Mr. Deputy Speaker. I wonder whether you could interpret the relevance of these comments to the subject under debate.
  Mr. Deputy Speaker: The hon. Gentleman can leave these matters to the Chair.
  Mr. Amess: People no longer trust this Government. Yes, socialism was defeated in 1992, but the third way has been well and truly rumbled by the British people. This is a rotten Bill and I hope that the House will vote against it.
  4.30 pm
  Mr. George Stevenson: I should begin by placing on the record my concern about what may, I suppose, be a quite inadvertent campaign of misinformation, some of which has been repeated here this afternoon. It has been said that those of us who support the amendment in the name of my hon. Friend the Member for Wakefield (Mr. Hinchliffe) and others are somehow in favour of the status quo and against reform. However, anyone who looks at the record of those of us who have enthusiastically supported the Government in their tremendous NHS reforms would begin to be sorry if they made such statements. I want to make it abundantly clear that, in the eight minutes available to me, I shall not argue for the status quo. I want more reform in the health service, and better services for my constituents and throughout the
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  country. The question is, will the foundation hospitals proposal provide that? Like many of my hon. Friends, I am seriously concerned about whether it will, and I should like to highlight some of our worries.
  There are those who say that the foundation hospitals proposal is a natural progression of the Government's modernisation agenda. On asking about the intellectual rigour of this proposal, I have been told, "It is part of modernisation," to which I have replied, "Fine, but you'll have to be more specific than that if you're going to get my support for what I believe to be a very important and profound change." There are also those who worry that this proposal questions the very ethos of the health service, which we on the Labour Benches hold so very dear.
  At best, this proposal is a dangerous distraction; at worst, it will fragment the health service even further and add to existing inequalities. When I tried to intervene on my right hon. Friend the Secretary of State, he said that he hoped that I would be generous to him when called to speak. I will, and I shall also be generous to my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). I want to congratulate the Government: a wonderful job is being done in the health service because their focus to date has been absolutely right. They have focused on primary care, and tried to ensure that the top-down health service that has existed since 1948 becomes bottom up. That is why I, along with many others, supported the primary care trusts proposal; but we also need to ensure a laser-like focus on those areas of the health service that are not performing as we would like them to do.
  I have profound doubts about the view of those who argue, whether from the Government or the Opposition Benches, that by allowing the so-called best hospitals to float away and become free-standing corporations—on reading it carefully, that is what this Bill is about—the standards of everything else in the health service will be raised through some magical, trickle-down effect. I do not believe that for a moment. I did not believe in trickle-down when it was the Thatcherite economic principle, and I do not believe the argument that if we make the best better, standards will be raised, through some magical formula, throughout the entire health service.
  This is a profound measure, because it shifts the Government's focus away from where it has been and should be—on ensuring that our health service provides the best for all our citizens—and turns it towards those few hospitals that, in their view, are the best and should therefore be given advantages.
  I am all in favour of embracing, applauding and supporting the best, but I am equally in favour of ensuring that the best is available to all our citizens through the NHS, so there is a fatal flaw in this proposal. What are we really being asked to agree? What is the basic objective of foundation hospitals? It is more freedom for the best performers.
  My right hon. Friend the Secretary of State referred to equity. That is a very important word in my constituency and area of the world in north Staffordshire, because my constituents are not interested in structures; they are interested in equity of access to services. They wonder why they have to wait for services rather longer than they thought, and they are looking to the Government to improve that.

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  I congratulate all those in the health service and the health family in north Staffordshire on doing a tremendous job in ensuring that the NHS will be improved, but, unfortunately, I cannot find the word "equity" anywhere in the Bill. I see that the general duty of a foundation trust is to
  "exercise its functions effectively, efficiently and economically."
  I do not see the word "equity" there at all. That speaks volumes. The inequities in the NHS are more likely to be exacerbated than reduced by the Bill.
  I am not against changes or reform—it is wrong that we should argue about that—but making all hospitals foundation trusts in five years recognises the strength of the argument of those of us who say that the proposal will increase the inequalities. We will have to wait five years before those inequalities are faced up to. That is not acceptable, because tremendous advantages will be built up during those five years.
  Foundation hospital trusts will recreate competition at the expense of progress and co-ordination and will not enhance accountability. If accountability and mutuality are to be enhanced, it should be done through primary care trusts. Why do we not address those issues where it really matters, given that 75 per cent. of health service expenditure will be exercised by PCTs? The Government have got this entirely the wrong way round. Indeed, the powerful regulator will be the antithesis of accountability. Foundation hospital trusts will not be accountable to the Secretary of State or to their local communities; they will have their eyes on the regulator. They will keep the regulator happy, not the people whom they are there to serve.
  The Government should ensure that all our NHS services are raised to the best possible standards, and not be distracted by an irrelevant and damaging distraction.
  4.38 pm
  Mr. Nick Gibb: Although I have concerns about my party's stand on this issue, I also have reservations about foundation trusts themselves. One is that foundation trusts simply will not address the real management problems in the NHS but are an extension of the 1990 policy that put in place the NHS trusts. The proposal is based on the notion of localism: that making state-run organisations more and more accountable to some amorphous group of local representatives will somehow make them better managed and more responsive to local needs. All parties seem to have latched on to that notion in desperation at any other attempt by politicians to reform the public services.
  In my view, that notion is profoundly wrong. It confuses two separate and distinct principles, the first of which is about giving local managers the freedom, discretion and responsibility to manage. That is a good principle, and it works. It motivates and enables managers to innovate. It is a clear tenet of modern management methods in the private sector and elsewhere. Managers' performance is monitored, but they are allowed to get on with their jobs, and those managers are accountable on a range of measures to more senior managers further up the line and, ultimately, to those at the very top of the organisation.
  Policy makers have confused that principle with the notion of local accountability, which is entirely different. We do not need local accountability to give a
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  local manager discretion and the freedom to manage. Under the notion of local accountability, the manager will be responsible not to a more experienced manager but to a local group of representatives. The idea behind foundation trusts is that they will somehow free the manager from the avalanche of targets and directives from the Secretary of State, while making him more accountable to the local board for his performance. The management will, of course, still be subject to the independent regulator, to the new inspectorate and to the Commission for Health Improvement, and will still have to co-operate with other NHS bodies and consult the public on their plans. The membership of the public interest body will have their own views on the direction of policy, as will the board of governors.
  I do not believe that foundation trusts will work, because the manager will still be hamstrung by such interference. More fundamentally, however, they will not work because, in essence, they perpetuate the same dispersed structure that is one of the prime causes of our poorly performing public services. Since its inception, the NHS has always had layers of local accountability, in the form of area boards, regional boards, health authorities, and trusts. It is currently made up of more than 600 different organisations, each with its own board and chief executive. Because of this structure, it is impossible for the NHS to adopt modern management methods that are centralised in structure but which would give the local manager genuine discretion and the responsibility to manage.
  Recent generations of politicians have been frustrated that their attempts to reform the NHS have not resulted in better management. Health policy experts believe that there is a 20 per cent. productivity gap in the NHS, which means that one fifth of spending is wasted. Frustrated by not having any direct means of reform, Secretary of State after Secretary of State has had to use indirect methods to implement change, including a plethora of ever more demanding and conflicting targets, the invisible hand of the internal market, whole lever-arch files of guidelines that managers have to read, and 20-odd different inspectorates. Management by target is no way to manage. That inundation by bureaucratic and wasteful intervention from Whitehall is not caused by the NHS being over-centralised but is a consequence of it being a dispersed group of more than 600 separate semi-autonomous organisations. One of the prime reasons for people's disillusionment with politicians is their failure to deliver the reforms that they promise, but it is often the very structure of our public services that makes it impossible for them to deliver.
  Another key reason for people's disillusionment with politicians is that politicians sometimes treat politics as a game. Although I have my own reservations about foundation trusts, I had thought that my own party's position on this matter was quite clear. The Conservative consultation document, "Setting the NHS Free", was published in March this year. It states:
  "Foundation Hospitals are among a number of building blocks we will use to create a more diverse provision of health care … Where Labour breaks new ground in this area, they will receive our support, so long as they move in our preferred direction of greater pluralism."

  I understand the point made by my hon. Friend the Member for Woodspring (Dr. Fox) that many of the freedoms have been removed from the Bill, but the

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  principle still remains, as does the structure, and it would remain open to an incoming Conservative Government to add those freedoms to the structure already in place.
  My fear is that the reason for my party's opposing the Bill this evening is to try to score political points against Labour, and possibly even to inflict a defeat or at least damage its majority. This is really about being oppositionist, and showing that we can bash Labour after having given so much support to the Government during the war. It is this culture of opposition for opposition's sake that so dismays the public and adds to the cynicism and disillusionment with politics. Indeed, this culture will have been a contributing factor to the very dilution of the Bill that so many of my hon. Friends are dismayed about. During the last Parliament, we were whipped to vote against the privatisation of the air traffic control service for much the same reason. I promised myself then that I would never again vote in that way for those kinds of reasons. That is why, despite my own reservations about foundation trusts, I shall abstain rather than follow my hon. Friends into the No Lobby.
  4.45 pm
  Mr. Derek Foster: I am delighted to be called to speak in one of the most important debates of the whole Parliament. I shall support the Government tonight because the Bill goes right to the heart of the reform—a strange word—of the public service. The debate is crucial to how the Labour party will improve performance across the whole spectrum of the public service over the next few years.
  I want to say a brief word on accusations that we might create a two-tier service, although they have already been pretty well demolished by the arguments to which I have listened. In the pursuit of excellence, every hospital approaches excellence at a different pace. Indeed, every hospital department approaches excellence at a different pace. I rather agree with my right hon. Friend the Member for Copeland (Dr. Cunningham), who jokingly said that a two-tier service would be a vast improvement on what we have now. We need not give that much more consideration.
  The only reason why I would be persuaded to vote against the Government tonight is that as I get older, I become less enthusiastic about reorganisation. Productivity drops for two years before a reorganisation, and two years are needed after a reorganisation to allow it to bed in, which means that productivity remains low. If the public service underperforms—I do not accept the argument that it does—one reason could be politicians' and administrators' penchant for perpetually reorganising. I do not approach the Bill with any enthusiasm for reorganisation. Reorganisation titillates politicians and administrators because it produces the semblance of action. If nothing can be done, reorganisation can make it look as though something is being achieved.
  The reorganisation suggested by the Bill is fundamental because it is unusual for Whitehall to relinquish power easily—it is pretty well unprecedented in my experience. Why have the Government concluded
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  that it should happen? I believe that it is because the Secretary of State and others like him have reached the view that we have explored the concept that change can be micro-managed from the centre almost to self-destruction. That argument has been won, and the argument on the Labour Benches is about how we should decentralise and devolve, not whether we should do it.
  I have always had a horror of being among the forces of conservatism, which is why I am delighted to support the Government. I am inclined to agree with the view of my right hon. Friend the Member for Southampton, Itchen (Mr. Denham) that the Bill shifts the Government's centre of gravity nicely to the left by decentralising and devolving to local organisations, which I support.
  I shall turn briefly to the economic context of the debate. The Government have delivered low inflation while simultaneously delivering low unemployment, continuous economic growth for six years and unprecedented investment in the public service. No Labour Government in the history of our movement have achieved that. Indeed, I argue that no Government for the past 100 years have achieved all those things simultaneously. However, the political context of the debate is that the ground is shifting beneath us. The taxpayer is becoming less and less tolerant of paying more taxes without perceiving that he is getting value for money. In other words, the taxpayer requires more bang for his bucks or an increasing improvement in outcomes per unit of input. That is a demanding requirement for any organisation to meet.
  The Government were right to make it a priority to have evidence of reform before investment could continue to go into the public service. Part of our difficulty is what we understand by the word "reform", and the Government have been inconsistent on that over the years. From time to time, they seemed to want to go in the direction of privatisation, which is rightly an anathema to Labour Members. I do not think that the reform in the Bill is about privatisation. It will not make privatisation easier for an incoming Tory Government to achieve. If it did, I would not support it. Reform should be about delivering far better performance. If that cannot be achieved by targets and micro-management, it ought to be achieved by setting people free—by liberating them from the dead hand of bureaucracy—to produce better outcomes at the sharp end.
  I once witnessed a remarkable example of a company in the private sector that had managed to liberate the creativity of the work force to achieve far better performance. The managing director explained it by saying that the company discovered that with every pair of hands came a free brain. I see no evidence that micro-management from the centre has discovered the brain power at the sharp end. I am talking not about the brain power related to specific specialisms, but about the brain power of those people who work at the sharp end and who know best how to improve the service to the patient. The patients have not featured large in the debate, but they, the staff and the citizen as taxpayer need to drive the reform of the public service.
  4.53 pm
  Mr. Andrew Lansley: I am glad to have the opportunity to contribute, albeit briefly, to the debate. Along with some of my right hon. and hon. Friends, I spoke in the debate initiated by the hon. Member for South Swindon (Ms Drown) on 7 January and in the Opposition day debate on 8 January, when I commented on the nature of foundation hospital status. Time does not allow me to reiterate those remarks today.
  Some of the points on the inappropriateness of local accountability delivered through foundation hospital status as distinct from other options, such as locality commissioning that the hon. Member for Stockton, South (Ms Taylor) mentioned, are interesting and relevant to how we vote. The hon. Member for Leigh (Andy Burnham) made similar remarks in the same debate. My right hon. Friend the Member for Charnwood (Mr. Dorrell) made it clear on 8 January that introducing mutualisation status for primary care trusts might be a more appropriate mechanism to influence the service patterns of the NHS in an area than by doing that initially through foundation hospital status. I agreed with him then, and I agree with him again today.
  What is interesting in that context is whether Conservative Members—I cannot speak for Labour Members—should accept the rhetorical direction that the Secretary of State occasionally offers on the Bill and simply vote for it as an empty shell into which good intentions will be poured in Committee and thereafter. I do not think that we should. The good intentions, if they exist, could have been set out in the Bill over the past four months. Time has allowed—I accept that the process has been quite quick since publication in December of the "Guide to NHS Foundation Trusts"— for some of the specifics to be set out in the Bill, and for some of them to be published alongside the Bill so that potential NHS foundation trusts, and we as legislators, would know what we were voting for.
  I do not agree with the principle of the Opposition voting in favour of Government legislation when we cannot see what they intend to do. If I could examine their intentions, that would be fine. All I see now is that the signs above the Addenbrooke's and the Papworth NHS trusts in my constituency will be taken down and replaced by signs saying "NHS foundation trust". I knew that they were both excellent hospitals before they were given three stars. I do not yet know whether that will mean in practice that the managers of the trusts will have greater freedom to deliver what they want to achieve. If I vote for the Bill and the Government do not deliver that, I will have been party to a misrepresentation to those who work in the trusts and try to deliver a higher performance within them.
  I do not know whether the Bill will genuinely deliver local accountability. It is an important and valid issue. If, a few years down the line, my constituents want to influence whether the Papworth NHS trust continues in its present location or shifts to a location alongside Addenbrooke's—that is a major investment issue involving large capital expenditure—they may conclude that because they are members of those NHS trusts, they can determine the issue. However, if we examine the proposed structure—the service level agreements with the primary care trusts as commissioners and the role of
  766
  the strategic health authority—it is clear that it will not be susceptible to the control of the local population as members of the NHS foundation trusts. For some of them, perhaps the most important decision that they may take about the design of local NHS services is one over which they have no control. That is completely contrary to the Government's rhetorical ambitions.
  David Taylor: Is not that paradox most perfect? The population of Leicestershire and Rutland is about 1 million. There are three acute hospitals at the centre of the geographical county. Six primary care trusts cover about the same population. Those PCTs have no effective influence over the one large trust that embraces the three hospitals, the University hospital trust. Will they not be calling the shots? Will not the priorities be those of the managers and medics, and not of the people within the PCTs?
  Mr. Lansley: I will not comment on the hon. Gentleman's local circumstances. It is true that in Cambridgeshire, Addenbrooke's is so pre-eminent a hospital that it is important that it be the subject of local accountability. There is a tense and difficult relationship with primary care trusts, not on a personal level but institutionally. There are about 27 commissioning bodies and one dominant hospital. That is precisely why I asked the Secretary of State earlier whether we could look towards foundation status being available not to Addenbrooke's in isolation, but with some of the other hospitals that form part of its network, such as West Suffolk or Hinchingbrooke. The network of hospitals would thus be more susceptible to local accountability because they would be involved in service reconfiguration between different sites.
  That does not mean that I do not believe that the principles underlying the Bill are right. I want to achieve managerial freedom in hospitals, as providers, and I want to generate responsiveness to patients through the NHS. In terms of local services, that could be done through primary care trusts becoming essentially foundation trusts. That would be the first move to make, rather than the establishment of foundation trusts as in the current proposals.
  Some of the steps that the Government are taking will inhibit that transition. For example, the payment-by-results proposals—reforming financial flows and case-mix adjusted commissioning—seem to be an improvement until we realise that NHS trusts will not be able to vary their price according to their relative efficiency. The proposals will not necessarily stimulate the transfer of activity to meet unused capacity. In addition, it will not provide the necessary incentive for the best-performing trusts to increase their capacity by drawing more of the activity to them by virtue of lower prices or by being able to adjust for higher quality. The key issue about expanding the capacity of the NHS may therefore be undermined by the limitations of the Government's proposals on commissioning and the price mechanism in health care transactions. I am afraid that the Government must convince me—they have not yet done so—that the Bill will deliver their rhetoric on localisation and managerial freedom. I do not believe that we should simply vote for it now and then, in a few weeks, after the Bill has been amended in Committee and on Report, decide whether to vote for it on Third

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  Reading. The Government may try to meet the concerns of Opposition Members, but I suspect that for political reasons of their own they will spend more time trying to meet the concerns of those not least on their own Benches who want to retain uniformity in the NHS.
  The hon. Member for Stoke-on-Trent, South (Mr. Stevenson) talked about equity, but I think that he meant uniformity. I am not in favour of uniformity; I am in favour of excellence and standards, which should be raised through greater diversity and the ability to respond to patient choice. That is the direction that we should take. Patient choice has been limited in recent years, but it is time that we had more of it in the system. Although there should be managerial freedom to respond to such choice, and PCTs should have local accountability and commissioning power, simply hoping that the Government will include such provisions in the Bill is not the way to proceed. We should deny the Government our support this evening. By doing so, we will make it more likely that they will make concrete their intentions in the Bill so that we can vote for it later as a realistic measure of managerial freedom in the NHS and local accountability to the public and patients.
  5.2 pm
  Angela Eagle: I wish to concentrate on part 1, which creates foundation hospitals, and explain why I have put my name to the amendment.
  At the last election, Labour rightly put the renewal of our public services at the heart of our agenda, and we have subsequently backed that up with substantial amounts of public money, which is extremely welcome after 25 years of starvation rations. Net public investment as a percentage of GDP fell from 5.9 per cent. between 1963 and 1976 to figures as low as 0.6 per cent. and 0.9 per cent., and remained at that level for 25 years. With that level of financial support, it is hard for any public service to thrive. I agree with Ministers that reform must accompany our welcome investment, but the debate is about what shape that reform should take and what principles should underpin our efforts. The Bill includes some good principles—democratisation and decentralisatio—and some bad ones, particularly the reintroduction of competition and market forces. I believe that the Bill is not about privatisation, but about reintroducing market mechanisms in health care, where they do not belong—hence the spectacle of Tory Back Benchers scrambling to support the Bill, despite the decision of their Front-Bench spokesmen to oppose it. There is a little revolt brewing on their sparsely populated Benches.
  We are at a fork in the road. We can develop an approach to public sector reform that works with the grain and ethos of an integrated, egalitarian provision and is both empowering and decentralising, or we can fall back on a default option that introduces market mechanisms in the vain hope that they will lead to improvement. Unfortunately for the health of the acute sector, the Bill chooses the market route. We have had a great deal of experience of marketisation in our public services in the past 20 years. It has led to fragmentation and wasteful duplication, often giving rise to inflated
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  salaries and reward packages for those at the top and a severe deterioration in pay and conditions for everyone else, with few discernible benefits for users.
  Foundation hospitals are a cul-de-sac on the road to reform. At worst, there is a danger that they will exacerbate the waste inherent in the purchaser-provider split, and add nothing to the effectiveness of the system or value for money. The ongoing costs of the establishment, regulation and monitoring of the system should not be underestimated. That expenditure might not be productive, but it could be very high. The costs of holding elections in local authority areas annually approach £50 million, and some of the election mechanisms suggested in the Bill are more complex than those in local democracy.
  Despite all the warm words about the duty to co-operate, the model of free-agent hospitals implies competitive rather than co-operative behaviour, especially as one of the key freedoms is staff remuneration. In the context of a scarcity that will persist for some time yet, that can only mean poaching staff at the expense of non-foundation parts of the NHS. Thus, improvement in the foundation trusts may be achieved at the expense of non-foundation trusts and may destabilise their progress. That is a dynamic that the Bill introduces, which cannot be prevented by a duty to co-operate or by a regulator.
  The first foundation hospitals might also seek to cherry-pick the treatments that they offer, or the patients whom they wish to treat, leaving the unglamorous and unpopular parts to their non-foundation neighbours. The Bill allows that to happen, and it is the regulator who will decide which treatment or provision any applicant for foundation trust status will be allowed to offer. I also fail to understand why control by a regulator is superior to control by a Secretary of State. It could be worse and more bureaucratic.
  Clause 34 requires that foundation trusts be run effectively, efficiently and economically, but unfortunately it says nothing about equity. That is a worrying omission, as equity always suffers in marketised systems, yet it is a key principle of the NHS—not uniformity, but equity: fairness of access to services. Some have argued that the Labour Government must do as the Bill provides, or the Tories will do it for us. That argument is so staggeringly pessimistic and defensive of Labour's values that it takes the breath away. It implies that there is no distinctive Labour path to reform, merely a watered-down, blue-rinse solution that sooner or later we all have to adopt.
  I would argue that the electorate has given us a second landslide victory and a mandate to reform the public services in line with our values. Some aspects of the Bill indeed do that, particularly as regards democratisation and decentralisation, but I have major trouble with the reintroduction of competition and marketisation. We must renew collective public provision for the next 50 years without introducing markets or quasi-markets. We need to create a new transparency and accountability for the users of our 21st-century public service, and we need to value and empower the staff who have committed themselves to service in the public sector. We need to raise standards throughout the NHS,

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  and I do not believe that we will do that by fragmenting the service, reintroducing competition or letting the few pull ahead of the many.
  Mr. Bercow: I am listening to the hon. Lady's speech with close interest and attention. Given that she acknowledges that the huge increase in expenditure on the national health service has not yet been matched by a commensurate rise in clinical activity, and that she says that she supports reform, albeit not the principal feature of the Bill, what does she think will be the driving mechanism that will close the productivity gap?
  Angela Eagle: The hon. Gentleman should be a little more patient. After many, many years of under-investment, the money is only just going in. I believe that there are great improvements coming. I have suggested creating what I call a monetary policy committee for the NHS, which would ask hospitals to maintain a weighted index of output, rather than creating little balkanised hospitals that behave competitively within the system as a whole.
  After two landslide victories, we ought to be much more confident about our values, and we should be creating a legacy of renewal and reform that stands the test of time, as Nye Bevan's original creation did. I do not believe that fragmenting the system and unleashing competitive forces will deliver the transformation that we wish for. Having the confidence to stick to our principles and banish competition from the NHS will create a stable situation in which reforms can go ahead.
  At the next general election, when we have to be judged on our NHS reforms, progress will have been achieved not by the results of foundation hospitals, which will be in their infancy, but by extra money, by the commitment and hard work of staff and managers, and by the day-to-day hard graft of improvement, which is going on all around us. We should let that process go on. We should decentralise and democratise, but we must say once and for all that there is no place for competition or fragmentation in our NHS.
  5.10 pm
  Mr. Frank Field: The eight-minute limit on speeches, like the prospect of being hanged in the morning, concentrates the mind wonderfully—and like so many of my right hon. and hon. Friends, I would like to concentrate on the fate of Britain's last nationalised industry.
  My right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) was right to say that the national health service is the most popular institution in the country. He cited Gallup polls in evidence of his assertion, but he could have gone on to say that those polls also show that support, although very high, is falling, so we cannot take for granted that that level of support will remain.
  My hon. Friend the Member for Wyre Forest (Dr. Taylor), who spoke earlier, left me flabbergasted. I call him my hon. Friend because he is, in a sense, a sign of the new politics. He is showing Labour Members that taxpayers are now well able to bite the hand that takes money from them. At the general election, he, like a Member who was elected to the Scottish Parliament last week, showed us that health is one of those issues that surmount parties and get people thrown out.
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  We are moving in new and difficult territory. As my hon. Friend the Member for Wallasey (Angela Eagle) rightly stressed, the Government have put huge sums of taxpayers' money at the disposal of the national health service. In doing that, however, we also open up the NHS to the new politics, for in the past its great defence—for despite its many achievements, there were also failings—was that we all put our warm overcoats on, shuffled around and said, "Well, you can't expect much more; the NHS doesn't have the funds." That excuse no longer holds, and it is in that new situation that the Government are trying to direct us in the Bill.
  The Prime Minister exaggerated just a little when he suggested that the foundation hospitals issue was similar to that of council house sales, but there was much truth in what he said. I was pleased that he said that council house sales were a Labour party issue; I must say that it did not feel like that at the time. That idea, like the present debate about who owns the health service, leads to the question of whether we are going to be on the side of taxpayers and consumers, or whether we are going to be backward-looking and defend the past—above all, whether we are going to defend a producer co-operative.
  This is a new era of consumer choice, and it is within that context that we need to consider the Bill. I think that the formation of foundation hospitals will be seen as the most important measure that a Labour Government have laid before the House of Commons to ensure the survival of the NHS as we know it. Quite where that will take us, and where the journey will end, we do not know.
  When I listened to my right hon. Friends the Members for Copeland (Dr. Cunningham) and for Livingston (Mr. Cook), I was reminded of the fact that once we begin to set consumers free, we do not know where the journey will lead, although we can try to guide that journey. My father was a factory worker for the whole of his life. If somebody had said at the beginning of the time that he spent in the Morgan Crucible factory in Battersea that during his life he would own properties and spend holidays abroad, he would have called for somebody with a straitjacket to ensure that that person was calmly and quietly put aside. That is how working people responded when they had the chance to exercise their choice.
  Of course, on foundation hospitals, there is some part of the past to guide us, but nobody has dared mention it; so far, we have all been too polite. None the less, the debate that we are having today is the one that the Attlee Government had in 1948—a debate between those who believed that our hospitals should continue to be owned by local authorities or mutual societies and those who believed that they should be nationalised. I am sad to say that Herbert Morrison lost that debate and Nye Bevan won it. When we lived in the age of ration-book politics, perhaps it did not matter that that was the outcome, but we no longer live in that age, so a ration-book health service is clearly vulnerable.
  If we look to the debates that nationalised our hospitals, which we are now trying to re-establish, we see that one of the charges for why hospitals failed and needed to be nationalised was their pathetic performance in raising funds. Let me remind the House of the amount of funds raised locally in comparison with

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  what came from insurance schemes, which had existed since 1911. The charge against the London hospitals was that they raised only two thirds of their budgets from their local communities. For those of us who represent constituencies outside London, I point out that our areas managed to put up only 40 per cent.
  While we cannot be sure where setting the consumer free within the NHS model will take us, I would put most of my money on one of the outcomes—huge sums will be raised by our constituents once they feel that the hospitals are theirs rather than part of a nationalised concern. If we live in an age of consumer politics, those of us who support the Bill are answering one of the most crucial questions of this debate: if it is not only money that is necessary to win reforms, what are the mechanisms of success? That question has already been raised, and we who support the Government are giving a clear answer. We believe that people who are set free by owning their own hospitals and the ability to make choices will help the Government to drive through the changes that they wish to see.
  I wish to encourage the Government further along those lines. Some of us see patient choice not as the end of the process, but as the most crucial ingredient in ensuring that the reforms that the Government are setting before us win through. While there were small experiments with allowing patients to go abroad or bringing foreign teams here, there was a little reticence on the part of the Government—
  Mr. Deputy Speaker: Order. The right hon. Gentleman is out of time.
  5.18 pm
  Ms Julia Drown: For reasons that I shall outline, I think that the proposals for foundation trusts need significant additional thought. They are not about privatisation or destroying the fundamentals of the NHS, but about asking the House of Commons to legislate for two different structures in the NHS with two different financial regimes, as was the case in respect of GP fundholders.
  I am not against reform and I want to see more power given to patients forums and a larger role given to pharmacists, midwives, occupational therapists and physiotherapists so that they can better meet patients' needs. I want us to tackle the powers of the medical establishment and to do more to bring health and social care together. I want best practice to spread across the health service so that managers and patients can tackle performance that is not as it should be and ensure that those genuine, front-line patient services that are so important to our constituents get better and are of top quality across the country.
  I want to concentrate on what foundation trusts will really mean. The Government rightly say that they want more local freedoms and innovations and for enterprise to flourish, but the one-star or no-star trusts will have to wait until they have three stars—only then can they apply for those freedoms and innovations. We have heard no talk of there being fewer Government targets—all the same ones will be in place. We have heard that foundation trusts will not be subject to
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  central directives, but when I asked on 29 January how many directives had been issued to NHS trusts in the past three months, the answer came back: none. When I asked on 30 January when was the last time a directive had been issued to a trust, I was not given an answer, and I still have not received one.
  For three months the Department of Health has failed to say when it last used a directive of the kind that it says is about to be withdrawn from foundation trusts. NHS foundation trusts will have the freedom to use their capital and to spend their surpluses. However, many people who are concerned about how the NHS should move forward say that investment is most needed at the so-called choke points of the NHS: the places where the development of patient care is not moving forward. No work has been done to suggest that those choke points occur at hospitals that want to be foundation trusts. We should be concentrating on giving the most freedoms to areas where they will best help to deliver the best patient care.
  The Government have said that foundation trusts will not be able to engage in unfair competition in relation to different staff rules, pay and conditions, so perhaps that is not a big issue. But what about the wider freedoms? When people talk about freedoms it sounds marvellous, but what are they? I raised a number of possibilities in my recent Adjournment debate. I asked:
  "Will foundation trusts have to adopt policies such as family-friendly policies and zero tolerance of violence towards staff? Will maternity services have to provide women with the ability to choose where to give birth, and will the collection of maternity data have to be improved? Will the foundation trusts have to adopt catering standards such as providing halal meat, or comply with safety directives such as on the use of disposable instruments?"—[Official Report, Westminster Hall, 7 January 2003; Vol. 397, c. 5WH.]
  The answer that I received from Ministers is that those potential freedoms will still have to be adhered to by NHS foundation trusts. For example, data on maternity services may have to be part of service agreements with PCTs, but possibly not. If maternity data is not to be kept centrally, that raises serious questions for us as Members of Parliament about how we analyse the health service in future.
  I was told that meeting catering standards would be part of good practice guidance. The Government have made it clear that foundation trusts will not have modern matrons, yet only a month ago they introduced modern matrons into accident and emergency departments. Which way are we going? Are there to be more central directives, or not? If foundation trusts will riot have modern matrons, will they have the £10,000 to spend alongside that? Answering some of those more detailed questions will help us to understand whether this is truly the right way forward.
  On the claims regarding two-tierism, I accept that services vary around the country, but we are legislating for two different structures, which has not happened before. Ministers say that the system will be fair and that all trusts will still be there in five years. However, given that there is the same limited NHS capital pot, to say that foundation trusts can effectively have first call on capital borrowing is to say that they have the first chance, which necessarily means that the others will have less. The same applies to surpluses. Professor David Kerr has been quoted a couple of times. He has

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  done excellent work in developing Cancer Network. Having listened to him on two occasions, it seems to me that he wants more patient involvement. He says, for example, that patient forums have not worked, but they have not been up and running for long enough to judge whether that is so. He says that, for him, democracy does not mean electing a few people to represent patients on the board but genuine patient involvement. He should therefore support patient involvement. He says that the star system on which the Government's policy is based is duff and unstable. He also says that he wants the money to be spent on the choke points in the NHS.
  Many hon. Members have mentioned the star system and it is worrying that almost half the acute three-star trusts lost that status in one year. If the policy of patient involvement and empowerment is to work, it must be implemented across the board. Perhaps we should pilot it in a geographical area, and in trusts that are perceived to perform well as well as those that are not.
  I am worried about creating separate legal bodies in the NHS. One of the people who talked to the Health Committee said that they would welcome NHS contracts being put on a legal footing. The idea of both sides spending NHS money on dragging a contract through the courts is shocking. It would be money for lawyers, not patient care.
  The Government are doing good things in the NHS. In Swindon, we have a new hospital, NHS dentistry is back and waiting times are reducing. I am not complacent; I know that much remains to be done. I support the election of non-executives but we should consider that for PCTs. We do not need foundation trusts to do that. I am not sure about restricting voting to only some of my constituents; I should like them all to have a say. In January, the Secretary of State did not rule that out, but it appears that he has done so now.
  I want more freedom for all hospitals and throughout the NHS, including community services, which are as important as the acute hospitals. I do not want my constituents to have to wait five years to have the same access to capital resources as others. We should have freedom for the many, not the few.
  5.26 pm
  Mr. Patrick Hall: I shall confine my remarks to foundation hospitals. It is important to acknowledge the context of the debate: the biggest sustained increase in resources in the history of the national health service. In Bedfordshire, that means that there is a genuine prospect of substantial increases in capacity, about which the strategic health authority is currently consulting the public. That could transform the service that my constituents need.
  However, we are considering not only capital investment or increasing capacity, but recruiting more staff, retaining existing staff and trying to persuade those who have left the service to return. None of those goals can be achieved quickly or easily, but it is absolutely clear to me that the Government are committed to the national health service and have strong ambitions for its future health. I therefore do not regard the Bill with the same suspicion as some hon. Members.
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  I reject the notion that the Government have an agenda—hidden or otherwise—to weaken, fragment or erode the NHS. However, they have a clear agenda to improve it. It is perfectly reasonable for that agenda to include, in addition to money, capacity and staffing, examining the culture of the NHS, its operation and the way in which it needs to operate in future. That drives the proposal for foundation status.
  Of course, it is right to question and scrutinise the Government's proposals. After all, that is why we are here. However, I do not object to foundation status in principle and I shall vote to give the Bill a Second Reading and look to make or support change to the detail on Report, when I hope that we shall deal with some of the many matters that my hon. Friends rightly raised.
  Given the limited time available, I want to make only three points. First, let us consider the injection of local democracy through the board of governors. In principle, it is an excellent idea, but we need to ensure that the membership truly reflects the community, including the section of society that needs the NHS most but participates in organised democracy least.
  Surely, too, staff on the board must include those members of the care team who are sometimes forgotten in the romanticised "doctors and nurses" view of hospitals.
  Secondly, we should consider the relationship between foundation hospitals and the new system of public and patient involvement. I have raised this matter with my right hon. Friend the Secretary of State before. Community health councils will be abolished on 1 September. The replacement system has not got off the ground yet, but the Commission for Patient and Public Involvement in Health is working hard to get it going. Abolishing CHCs was a controversial proposal, but the Government have made the case strongly that the new system must and will be better. Many of us, including people involved with CHCs up and down the land, are engaged in preparations to ensure that that happens.
  If we are to have a better system involving the public and the patient in the NHS—a system rooted in local communities throughout the country—it is surprising to say the least, and I am very disappointed, that the Government's proposals for foundation hospitals ignore the need for those hospitals to establish a patients forum. Given the logic of the proposals—that the whole NHS should acquire foundation status at some point—that is hardly an encouraging message to send the Commission for Patient and Public Involvement in Health.
  Thirdly, let us consider the culture of the national health service. I do not believe that this is just a question of administrative Whitehall centralisation; I think that consideration should include a bold look at the 55-yearold consultants' contract, and the somewhat loose relationship between NHS management and many clinicians that has resulted from it.
  Under the current contract, the deal is that consultants are paid a good salary to undertake their contracted hours. Most are then paid another and better salary to undertake private practice. The majority of consultants have opted for what is called "maximum part-time": they are paid for 10 of a possible 11 working sessions per week. I understand that most undertake six

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  or seven fixed sessions, which include operating on patients. The remaining paid sessions are flexible, and are for administration, research and teaching. Those things are important, and most consultants do a very good job for patients and the NHS, but it is at least suspected in the NHS—I am choosing my words carefully—that some consultants do private work during some of their flexible NHS-paid time. NHS management has problems in holding them to account—problems that private hospital managers, ironically, do not encounter.
  One change in the NHS culture that would have beneficial implications for capacity and waiting times for patients is a new, transparent consultants' contract. Unfortunately the Government have walked away from that idea so far, but I am hopeful that the new foundation trusts will enable the NHS and the Government to return to this neglected but crucial matter with more confidence and determination.
  5.34 pm
  Hugh Bayley: I am a passionate supporter of the NHS. I want a better NHS—one that relieves more pain, saves more lives and improves chronic care services. I think that the Bill is a means to that end, which is why I will support the Government tonight.
  The big question for the NHS is not how hospitals are administered, but what they do for patients. If the NHS were still the best health service in the world, always providing better care and saving more lives than public sector health services in other countries, it would possibly make sense to oppose change; but that, unfortunately, is not the case. I shall offer one example. The medical error rate in the UK is around 10 per cent. Some errors are very major, as we saw with children's services in Bristol, while others are much more minor. However, medical error kills more people in this country than motor vehicles, HIV/AIDS, or breast cancer.
  In some countries, the medical error rate is as low as 3.5 to 5 per cent. The business of driving up standards and avoiding medical errors can and must be helped by national targets. That will be the case in the future as it is now, but the improvement will be driven forward locally. Hospital trusts could respond more often in the way that the York trust is responding to problems with hospital-acquired infection. The trust now requires all doctors who deal with patients face to face to carry an alcohol pack at their waist, so that they wash their hands before they see each patient. That would happen more often if local trusts were more accountable to the local population.
  Opponents of the Government's proposals have voiced a number of concerns, many of which have been addressed by the Government already. In The Guardian last week, Polly Toynbee wrote an article saying that the rebels had won, and that the Government had dealt with some of their concerns about the poaching of staff and the allocation of capital. Other concerns will be addressed when the Bill is considered in Standing Committee. However, if the House throws the Bill out on Second Reading, we will be throwing out as well the benefits that it will bring to patients.
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  The strategic argument made by many of the Bill's opponents is that the foundation trusts proposed by the Government are too like the trusts proposed by the Tories in 1991. However, those opponents are comparing unlike with unlike. When the Tories made their proposals in 1991, they were cutting NHS spending. Reorganisation together with cuts leads to poorer services. In contrast, reorganisation together with a growth budget—and, under this Labour Government, the NHS has the largest growth budget that it has ever had—leads to better services.
  Mr. Lansley: Will the hon. Gentleman give way?
  Hugh Bayley: I will not give way, given the shortage of time. I hope that the hon. Gentleman will forgive me.
  The problem is that a growth budget without accountability leads to inflation in NHS costs, as the hon. Member for Buckingham (Mr. Bercow) noted. That problem must be addressed: if the Government put additional money into the NHS, they want to be sure that it will secure additional treatments for patients, not more costly treatments for patients. It would be an absolute tragedy if, just as Britain's health expenditure is catching up with France's, we were to find that we were still not treating and curing as many patients as other European countries, but merely that the treatment provided here was more expensive than elsewhere.
  Another clinical example that I want to raise is cancer. The best measure of outcome for cancer treatment is the five-year survival rate—whether people are still alive five years after treatment. When Labour launched the national cancer plan, Professor Karol Sikora published an article in the British Medical Journal that revealed that cancer survival rates in the UK were far lower than the average across Europe. Professor Sikora said that 25,000 British people a year would be saved if the UK achieved the same survival rates as the best countries in Europe, and almost 10,000 if the UK achieved the average cancer survival rate in Europe.
  There are two reasons why our NHS performs less well than public sector health services in other European countries. One reason is that we have fewer health professionals. We have fewer radiotherapists per head of population than Poland, and fewer medical oncologists than any country in western Europe. The other reason is the variation between our hospitals in the quality of care.
  The Government are doing a lot in connection with staff shortages. For example, a new medical school has been established at the universities of York and Hull. More staff are being recruited from abroad, but we must also, as my hon. Friend the Member for Bedford (Mr. Hall) said, make better use of doctors already employed in the health service.
  The Government commissioned research on consultant clinical activity rates from the university of York and the results are set out, consultant by consultant, hospital by hospital, across the country. One typical hospital had six general surgeons, three of whom each carry out more than 1,400 procedures per year, with the other three carrying out fewer than 700 each per year. When those figures are adjusted for differences in case mix—that is, the complexity of treatment—the same difference still applies.

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  The Minister of State is in his place on the Front Bench. He knows that every hospital already collects those figures and I believe that every consultant in the country should be required to validate them for accuracy. The Government should make it a condition on any NHS trust applying for foundation status that it will require all its consultants to validate their activity rates. The figures should be made available to the trustees of the foundation trust, who I hope will make them available to the public.
  We need not only to treat greater numbers of patients, but to ensure that those treated receive the best quality care and survive. Some 140 years ago, Florence Nightingale categorised the outcome of every patient she treated in one of three ways: they were relieved, unrelieved or dead. Outcome measures for every patient continued at Bootham Park hospital in York until 1948, but that is not done today. As a condition for applying for foundation status, a hospital trust should have to publish its outcome rates as well as activity rates doctor by doctor. That would help to drive up the quality of care that our NHS provides to patients.
  5.42 pm
  Mr. Jon Owen Jones: It has been a privilege to hear today's debate and to have the opportunity to speak in it, particularly after my hon. Friend the Member for City of York (Hugh Bayley), who spoke from his experience in the health service. My right hon. Friend the Member for Birkenhead (Mr. Field) and my hon. Friend the Member for Wallasey (Angela Eagle) ably summarised the debate for and against reform, and I want to examine some of the evidence to help come down on one side or the other.
  In 1997, Labour inherited a health service that was slower and less responsive than that of any other western European nation, but it was also cheaper. That year, the NHS cost us only 5.2 per cent. of our gross domestic product—£32 billion—which was less than that of every other developed nation. With decades of under-investment, it is not surprising that the performance of our health service lagged behind that of others. The scale of the underfunding was tellingly brought to the Prime Minister's attention by the knowledgeable comments of Lord Winston in the new year of 2000. The Prime Minister responded by committing our party and Government to the ambitious objective of matching European levels of investment, a commitment that was repeated in our manifesto of 2001. As we build capacity, and train and recruit more health workers, we will gradually see our health service become once again, if not the envy of the world, at least a service in which no British citizen has to wait months or years for treatment.
  There can be no serious argument against the need for investment, though how the Conservative party can support both health investment and a 20 per cent. cut in public spending is a difficult equation, which I am glad to leave them to solve. For most of us, the argument is not about investment, but about the extent to which reform is also necessary.
  The critics of this Bill will, of course, deny being against reform. There are some who genuinely support reform but who have concerns about this particular policy. In general, however, the opposition to
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  foundation hospitals comes from a belief that not much is wrong with the national health service that more money will not cure. Our national health service is one of the few institutions, as my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) has said, that can claim to be loved by the public. It is valued and respected, particularly on the left and in the Labour party. It is viewed rightly as the greatest achievement of Labour, and any Labour politician who might suggest that Aneurin Bevan did not design a perfect system, fit not only for the 1950s but for the 21st century and in perpetuity, does so at his peril.
  How true, therefore, is it that if we give the national health service more money it will deliver a correspondingly better service? Funding is easy to measure but it is less easy to quantify the level of service. I put together the following statistics that give a broad, and, I believe, accurate picture. Between 1997 and 2001, national health service funding increased from £32.9 billion to £43.8 billion—a 33 per cent. increase. During the same period, however, out-patient attendances rose by just 6 per cent. Between 1997 and 2001, funding increased from £36.5 billion to £51.2 billion. During the same period, however, consultant episodes rose by 3.1 per cent. a day, and day cases rose by 5 per cent. Between 1996–97 and 2001–02, funding rose by 55 per cent. Out-patient attendances, however, rose by only 7.7 per cent. For the years for which the figures that I have found are available, therefore, it is clear that the national health service has failed to match investment with service delivery, and that its productivity is declining.
  We should accept, however, that increased activity will lag behind investment, and that it takes time to build capacity and train staff. That is a fair argument for the steady-as-you-go believers. That argument predicts, however, a steep increase in activity as capacity is built. As yet, in this evening's debate, I have heard no analysis of when and how that steep increase in activity is to occur. On the contrary, evidence exists that activity is not rising even when capacity is installed. We have 4,320 more consultants than in 1997—a 20 per cent. increase in capacity, but, as I said, consultant episodes have increased far more slowly than that. That means that, on average, a consultant does less today than his or her counterpart did in 1997. They are roughly 85 per cent. as productive as they were in the mid-1990s. Those statistics lead me to reject the steady-as-you-go argument, and to urge the Government to speed reform. Without reform, this historic investment will be used inefficiently and wasted.
  I believe that the 21 st-century health service should be patient-driven, offering a high degree of choice and convenience for its customers. Health information should be widely available to inform choice. Health service providers should be given freedom to innovate and to respond to local needs. Success should be rewarded and productivity and efficiency improvements encouraged.
  The present system does none of those things. It denies choice. It seeks its own convenience rather than that of patients. It conceals information. It operates on central direction rather than on devolved responsibility. It tolerates, and even rewards, failure and inefficiency.
  For those reasons, I support reform—
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order.
  5.50 pm
  Mr. Geoffrey Robinson: The whole House shares the deep frustration expressed by my hon. Friend the Member for Cardiff, Central (Mr. Jones) that, despite the large resources going into the health service, there is not a proportionate and commensurate response in productivity and efficiency. I do not draw his negative conclusions, but we all need to ask why that is the case.
  There also seems to be general agreement in the House that the monolithic bureaucratic structure of the NHS, especially at the centre, which the Secretary of State himself described as the dead hand of central control, is one of the factors that is holding back local managements and preventing them from getting ahead as they want to do. That is certainly what I hear in all my discussions with trust chairmen and chief executives. When we hear about the stream of e-mails that they receive and the restrictions placed on them, we can all share their natural sense of frustration.
  The immediate reaction to the foundation proposals is that 50 hospitals will be taken outside that bureaucratic structure, so that will, we think, solve the problem. However, in effect, all it means is that 250 hospitals will be left with increased bureaucratic overheads and all the restrictions and difficulties that that will impose on them. The Government have to come to terms with the problem: it is not that we must set up foundation hospitals, but that we must scale down the bureaucratic burden and the central planning and control of the health service.
  Because of the specific proposals on foundation hospitals, I shall abstain on Second Reading. I shall explain some of the reasons, as I have done on previous occasions. The regulator's role is not clear; there is a muddle about the extent of his independence. Why was it proposed that certain hospitals should be allowed to borrow, then that they should not be allowed to borrow or that their borrowing should be capped? None of those points are clear. I agree with Members on both sides of the House who say that if we want to take the democratisation route—as we all do—we should start with the primary care trusts. That seems logical. The whole interface between them and the new foundation hospitals is unclear.
  My biggest problem with the Bill has been set out by many Members: it is yet another reorganisation. The Government can call it reform if they want, but reorganisation and reform do not give us what the measure should be about: improvement. For the first time in a generation, real resources are going into an organisation. If we take the right decisions and ensure that those resources get down to the local hospitals where they can be used, we can expect them to produce really effective results.
  I listened with great interest to the speech made by my right hon. Friend the Member for Birkenhead (Mr. Field). Like him, I read the debates held in the early days, in the late 1940s. Perhaps we took the wrong route by going national instead of local. I have much sympathy for that view, but we must deal with the situation that exists. Given the resources that we are putting in, we need a big increase in the level of service and in its responsiveness.
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  The foundation route will make no significant difference over the next five years. I am sure that the Bill will receive a Second Reading, but I urge the Government to introduce it as a pilot; for example, in two health regions. We could then monitor the process and learn the lessons, to see how to make it work. We should not blindly take that route, thinking that we have found the solution—a new deus ex machina—when all we have is a vague idea.
  There are several reasons—I have mentioned one already—why the foundation hospitals concept could, in general, produce much better results: new local management; local autonomy, which would be welcome and have a very good effect; democratisation and the involvement of the public, which, over time, would also have an effect; a flexible wage policy for different areas of the country, which I would not necessarily oppose in principle; and preferential or increased access to capital.
  I have just listed five criteria, the development of which we could consider through two pilot areas. I assure my right hon. Friend the Secretary of State that if that were the proposal, I would be joining him in the Lobby, but unfortunately it is not. Worse than that, there is no proposal to improve the lot of the 250 hospitals that will be left out of this initial reorganisation. We are putting the cart before the horse. It is underperforming or average hospitals that should be the focus of our attentions and energies; instead, efforts will go into setting up complicated new structures, which will mean millions for lawyers, accountants and consultants. That is where the £200 million that those hospitals can spend preparing to become trusts will go; it will not be spent on front-line services.
  I am sad to see that, in the absence of such a proposal, we are going down the route of another uncontrolled experiment, thinking that we have got it right. Instead, we could conduct this reform in such a way that it did not take up the entire focus of the energies of this House and of the national health service itself, and thereby get to grips with the real problems that we face. As many Members have said, we have the resources: real money; management, professionals, nurses and auxiliaries working together; and the necessary time. We do not have to rush into this particular solution now.
  I am told that we can expect the Bill to come back on Report substantially modified by the other place. I hope that it does and, although I shall abstain tonight, I look forward to perhaps finding it more favourable then. Above all, in the interim, I should like the Government to say what they will do to improve the overall situation, given that they have at their disposal the means to do so.
  5.57 pm
  Tony Wright: When I was listening with great interest to my right hon. Friend the Member for Livingston (Mr. Cook), I remembered hearing him say many years ago—when he was our party's health spokesman—that he would be applauded at meetings even before he spoke because everyone knew that ours was the party of the NHS. Of course, that was an enormous political asset for us, but at the same time it was an enormous political and intellectual disability. It meant that for a long time we did not really need to think seriously about the organisation of the health service,

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  because it was our service. There were no political dividends in fiddling about with it. The resulting problem was, of course, that over the years we accepted a performance from the NHS that we should not have accepted. It had become unsatisfactory, yet we kept defending it and telling people how much we loved the principles embodied in it. Well, we do love those principles, and we want to preserve them and build on them, but that must not lead us always to be the defender of the conservative option that says that we must not alter the way in which the NHS is organised.
  I was very conscious of a particular comment by one of my colleagues, and it is certainly true that the most telling moment during my brief look at the Health Committee's report was when I noticed the table illustrating that organisational change has taken place inside the health service in each of the past 20 years. I have to ask myself—as everyone else doubtless does—whether I would like to be a manager in the NHS, faced with that context. I would not, of course, because I would spend a lot of my time dealing with that change.
  If we set such things to one side of the argument, it is tempting to say—some of my hon. Friends have got close to this—that we are now putting in the money, the capacity is increasing and therefore all will be well. If I thought that that was the truth, I would say that we should not touch further reform, as it would be much simpler all round to take a steady-as-she-goes course. I do not think that that is the case. I just do not think that we can run the service from the centre any more. We need a bold move towards local self-government in the health service. Ironically, we need that alongside a planning system. Those are not alternatives.
  I have listened to today's debate, and it will be almost incomprehensible to the people whom we represent. They will have no idea what we are talking about most of the time. They have no idea who runs the health service. All they know is that the Government are responsible for it, and it is the Government whom they will hold to account—indeed, the Government have said that. But most people have no clue whatever who is responsible for their local services. They do not comprehend all the stuff about trusts and PCTs, and so on.
  My right hon. Friend the Secretary of State says that the power lies with the PCTs. Well, of course, it does in our commissioning model, but, as has been said, that is not the bit that we intend to democratise. We intend to democratise provider units, which is a bizarre way to proceed. I am not sure whether we need to do that, even though we want to develop some kind of local self-management, so there is a difficulty. When people ask, "Who is accountable for what goes on in the health service?", they have no answer at the moment, apart from its being the Government. I am not sure whether they would have a more intelligible answer under the proposed system. That is a real worry.
  I have only one further observation to make. I said that I remembered what my right hon. Friend the Member for Livingston said some years ago; I remembered something else, too. During the days of the Conservative Government, someone came along to an advice surgery one Friday evening with a complaint about the health service and put a copy of the patients charter on the table. We had trouble with the citizens charter. We used to say on one hand that we had
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  invented it and, on the other, that it was a cosmetic irrelevance—what we said depended on which audience we were talking to. I was struck by the fact that that person believed that people had acquired certain rights in relation to the health service. I hope that we can explore that avenue further, and we are beginning to do so now. We now tell people, "If you don't get your heart surgery within six months, you can go elsewhere and we'll pay for it."
  We can argue whether the state is good at running things, but it is very good at raising money to run things. I want to move far more towards a system—it is inevitable in the world that we now live in—where people say, "We are putting vast sums of our money compulsorily into the NHS. We don't want to know just what you're going to do managerially to the NHS or which latest reorganisation you're going to engage in. We want to know precisely what we will get for our money." If we cannot answer that question by giving people some serious public service guarantees, we can talk all we like about managerial changes, but it will not add up to much on the ground.
  6.4 pm
  Dr. Phyllis Starkey: Before I talk about foundation trusts, I want to put the Bill in context. The Labour Government's first election in 1997 and, even more so, their re-election in 2001 were primarily about people's desire for high-quality public services, paid for by taxation. The deterioration in the NHS under the Conservative Administration and the failure of the attempts by the Conservatives, then and subsequently, to encourage people to buy their way out of a deteriorating service through private health insurance were among the reasons that voters switched in large part to Labour in 1997 and 2001. People realised how expensive a private health care system would be, and voted instead for the principles of the NHS: a comprehensive health service, largely free at the point of use and available according to clinical need, not the ability to pay.
  Since 1997, as we all know from our constituencies, the Labour Government have invested heavily in the NHS, and we have all seen the advantages—extra nurses, doctors and physiotherapists, new or improved hospitals and primary care buildings, and extra GPs. Although that extra funding is essential for an improved NHS, it is not sufficient. Alongside the extra money, we need modernisation and a way of reworking the NHS to enable it to respond more appropriately to current conditions and make the maximum use of resources.
  My hon. Friend the Member for Cannock Chase (Tony Wright) said that the public were not interested in managerial matters. I agree absolutely; they are interested in outputs. I am now, however, going to talk about managerial changes, because those changes are necessary to enable us to deliver the outputs on which the public will judge us.
  Innovation within the NHS has already been extremely effective in making the additional resources go further and in providing services that are more appropriate. That innovation has involved introducing different ways of working between social services and the NHS, redistributing tasks to make better use of nurses and nurse consultants, implementing better

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  co-operation between primary care and the hospital sector so as to move out of hospitals those cases that are more appropriately dealt with in primary care, and, in particular, managing more effectively people with chronic illnesses such as diabetes, who need the acute sector and the community sector to work more effectively together.
  Such innovation can be very speedy. Some Conservative Members—not the two who are present at the moment—have cited an example that, they say, illustrates a response to a central diktat: namely, the way in which many GPs have introduced a system under which patients cannot book an appointment for further than 48 hours ahead. In fact, that system was not adopted because of a central diktat. Some GPs tried it out as a way of providing a better service for patients who would otherwise find it impossible to get an appointment within seven or eight days. They found that the system worked, and other GPs copied it.
  That is an excellent example of innovation being picked up and spread through the NHS when it works, but innovation works best when the staff who work in an institution, be it a hospital or a PCT, make the change themselves because they want to, rather than being told from above that a change must be made. Clinicians particularly resent being instructed, but, faced with a problem that affects their own patients, they have every incentive to come up with a solution. I repeat: people change most easily when they want to, not when they are made to.
  That is where foundation trusts come in. They will give local hospitals, and subsequently PCTs, the freedom to innovate without being slowed down by the need to get agreement through the multiple layers of NHS bureaucracy. I make no apology for quoting the much-cited Professor David Kerr, who seems to write particularly good letters. In a letter to me, he wrote:
  "Hitherto, the old monolithic NHS has been good at setting targets but failed completely to provide the means of achieving them. We cannot drive service improvement from the centre. Famously, Frank Dobson likened the NHS to an enormous oil tanker which took an age to turn around. Rather than let the oil tanker run aground, would it not be wiser to invest in a fleet of modern, manoeuvrable ships, which can function in a convoy without loss of individuality? As we develop national standards for cancer and other diseases, it has become crystal clear that we must support, not stifle, local initiative; that we must allow the freedom to reform; that we should raise standards so that all might benefit."
  Foundation trusts are an especially good way of ensuring that such innovation occurs and that, when it does occur, they may be a beacon For the rest of the NHS and encourage others to follow the innovation.
  Some of the opponents of foundation trusts have alleged that they would create a two-tier NHS. Many people, and the report by the Select Committee on Health, have pointed out that we do not have a two-tier NHS because we have always had, despite our and previous Governments' best endeavours, a multi-tier NHS. All of us know of hospitals that provide an excellent service and of others that provide a much poorer service, which is not because they receive less funding than better hospitals but because of poor management, bad staff morale and even personality clashes among staff that stop co- operative working.
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  People who work in the NHS know which hospitals have a good atmosphere and which are plagued by problems, and those problems cause staff to be poached from one hospital by another. They move to hospitals in which they know their work will be appreciated and have a good effect, and away from hospitals in which enormous quantities of energy are wasted because of bitching and inter-rivalry.
  We need to create an environment in which trusts are free to innovate and copy the best practice of others. The NHS bureaucracy must concentrate on helping trusts with problems and bringing them up to the standard required. It is absolute madness for people to suggest that the NHS should continue to micro-manage all trusts regardless of whether they need it, but equally it is not sensible to give greater freedom to trusts that do not make the best use of their human and financial resources.
  The Government have put in place a strong framework of inspections and standards, including such measures as national service frameworks and targets for waiting times. The framework will apply to all trusts—foundation trusts or otherwise—and will ensure that there are overall standards. It sometimes appears that opponents of foundation trusts want to stop some hospitals being better than the current standard only because every hospital cannot be better at once. There was a lot of talk earlier about dogs eating dogs. That epitomises a dog in the manger attitude
  Mr. Deputy Speaker: Order.
  6.12 pm
  Jim Dowd: As a member of the Select Committee on Heath, I am grateful to be able to say just a few things because I know how pressing time is. The Bill has six parts, as most people have pointed out, and although the last five are neither above criticism nor incapable of being improved, they generate nowhere near as much controversy and antagonism as part 1. I am pleased that my hon.—and usually good—Friend the Member for Wakefield (Mr. Hinchliffe), the Chairman of the Select Committee, has returned to the Chamber, because I shall refer to his amendment and the way in which the Select Committee conducted itself when it produced its report.
  My hon. Friend said that he thought that he had to move the amendment because it was the only way to deal with his profound opposition to foundation trusts, despite the fact that much in the rest of the Bill met with his approval. He was either misinformed or being disingenuous, because he would have been perfectly able to wait until the Bill reached a later stage before moving an amendment to delete part 1. His attempt to derail the whole Bill now is not only irresponsible but disingenuous.
  The Secretary of State certainly learned the truth of the maxim that one should never do anything for the first time when he outlined the proposals for foundation hospitals. The humorist H.H. Munro said that one should never be a pioneer because the earliest Christian gets the fattest lion. The Secretary of State got a fat lion today—and before the hon. Member for West Chelmsford (Mr. Burns) says anything, I do not mean

  785
  my hon. Friend the Member for Wakefield.The production of the report was the most difficult thing that the Select Committee had done in the couple of years since the general election. A great deal of time and effort went into it, including three evidence sittings and more than twice as many deliberative sittings. The report is an almost biblical work. I say that not because it is definitive but because it contains parts that may be drawn upon by those who support foundation hospitals and parts that may be drawn upon by those who are implacably opposed to them, such as my hon. Friend the Member for Wakefield. Sometimes our attempts to reach a consensus resembled a dialogue of the deaf. Although all Select Committee reports are theoretically unanimous, to paraphrase George Orwell, some parts of the report were more unanimous than others. It proved to me the truism of the old native American saying, "You cannot wake someone who is pretending to be asleep."
  None the less, we covered all the ground, and the clear mass of oral and written evidence that we received was broadly in favour of the proposal, although it was sceptical, questioning, contained reservations and wanted reassurance and clarification, which to some extent reflects my position. I am broadly in favour of the foundation trust principle, but a great deal more work needs to be done before it can become a usable model. If it is to be rolled out across the NHS, it certainly needs to be much more precise and durable.
  Mr. Colin Challen: Does the Select Committee consider that there are benefits in having a greater sense of public ownership, which will derive from local ownership, of the NHS and that that is better than people thinking that it is a massive nationalised ship that we cannot turn around? For example, surely it would be possible to reduce the rate of missed operations if local people could convey to their communities the fact that not turning up creates longer waiting lists.
  Jim Dowd: We did not consider that latter point, but we looked in detail—the evidence is in the report—at the submissions made by co-operative and mutual organisations on improved management and effectiveness.
  As I said, the majority of evidence was in favour of the proposal. Unison has bombarded most of its members with its views over recent days, but it submitted its evidence late, long after the evidence sessions were closed. However, with my hon. Friend the Member for Wakefield in the Chair, its views did not go unrecorded.
  There was no press conference to launch the report. I am not sure why, especially as it covers such a contentious and interesting issue, but the Chairman did issue a press notice when it was released this morning. The press notice encapsulates the difference between me and my hon. Friend. In it, he says:
  "If Foundation Trusts, through their increased access to resources, are able to develop their services in a way that lowers waiting times or improves quality, GPs and patients will choose to use their services rather than those of poorer performing local hospitals. As money follows patients, poorer performing hospitals will see their revenue streams dry up and will have even less to invest in improving services, locking them into a downward spiral of poor performance."
  786
  I believe that the health service is there to serve patients. It is not the role o f patients to be sent around the organisation for the convenience of those who are incompetent in managing and running it. I would have thought that all Members, especially Labour Members, would share that view.
  I agree that, ideally, we should have started with primary care trusts, and I made that clear in the Select Committee. That would make more sense, but I accept the Secretary of State's argument that they are new and need time to bed down in their current responsibilities before expanding them further. The PCT is no more than a unit of organisation within the health service. Most people—rightly or wrongly—have a much greater sense of identity, inclusion and involvement with their local hospital than they do with the PCT or any other apparatus of NHS bureaucracy. The hon. Member for Wyre Forest (Dr. Taylor) is a tribute to that. He said it himself: he would not be here today if the plan in Kidderminster had been merely to reorganise the PCT. The public are more likely to react to changes to acute hospital services. It is a good idea to try initially to tap into that enthusiasm and support, which my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) spoke about earlier. We do not need to go further into two-tierism. The report deals with it, and plenty of Members have already done so.
  The poaching of staff has been mentioned, and various assurances have been given. Poaching already occurs. There is a problem in my part of south London, where a trust grades its midwives two or three grades higher than the surrounding trusts. Even within current confines it is able to cream off staff in that sense.
  There are plenty of other things that I would like to say, but in view of the time I shall draw my remarks to a conclusion by saying that those of us who support the principles and the values of the NHS must have the courage to reform it, to adapt it and to modernise it. If we do not do those things, we shall leave one of the nation's most valued and valuable institutions prey to Conservative Members, who yet again have expressed their intention to dismantle it.
  6.21 pm
  Stephen Hesford: I am honoured to speak in this important debate. However, I am saddened that I am, in a sense, sandwiched between two of my colleagues from the Wirral. One of the great benefits of living on the Wirral is that there is so much partnership, which works well.
  Some Members have talked about patient pathways, not altogether in glowing terms. To illustrate my support for the Government, I shall talk about the hospital journey that my local hospital trust has made since the early 1990s, to show where we have come from and where we are going.
  The Wirral hospital I rust was a second-wave trust in 1993–94. It worked in relative isolation. There was an element of competition with the hospital down the road, the Countess of Chester. The local health economy was distorted by the closed nature of that reform. At the same time, the trust was starved of funds. That was reform without benefit. That is precisely the opposite of the reform that we are debating. I ask my right hon. and

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  hon. Friends who are worried about this reform to understand that it is precisely different from the one that took place in the early 1990s.
  The hospital in my areas was defensive and rather inward looking. It was less than positive. It was financially sound but waiting lists were growing. Managerially, it was going in the wrong direction. More crucially, because of the system under which it operated as a second-wave trust under the previous reforms, staff felt frustrated. At the same time, they felt a deep sense of unease at their inability to co-operate with their colleagues in the health service.
  What has happened since 1997? The budget of the hospital trust has increased by 50 per cent. Nurse numbers are up, and can be measured in hundreds. There are two new orthopaedic operating theatres and five new orthopaedic surgeons. Waiting lists have been slashed. That is a benefit. That is a step in the right direction.
  In 2001, the hospital trust had two stars, and was going in the right direction. I am delighted to say that in 2002 it was awarded three stars. I put on record my respect and admiration for the management and staff at the hospital for having brought about that change since the early 1990s.
  The hospital board was faced with the choice of how to respond to foundation hospitals, which is the key debate today. Should it apply for foundation hospital status or should it not? It decided not to apply for foundation status on this occasion, and there is some logic in that decision. The same chief executive who was in post in the early 90s, when he took charge of a second-wave hospital trust, is in post now. It remains to be seen what happens next year, but having spoken to him, I learned that the board decided to adopt a cautious approach, as it wanted to be sure on behalf of its patients that the local health economy, which is good, cooperative and collaborative on the Wirral, would not be distorted by a precipitate move—it did not want to rock the boat. It was therefore decided, subject to decisions to be made in due course, not to apply in the first wave of foundation trusts. How can it judge what will happen in the next 12 months to the 12 new foundation trusts? That is the question that I wish to put to the House while supporting the principle behind the Bill.
  My local chief executive and his board could apply five "health interest tests"—my words, not theirs. There should be no diminution in A and E activity for a foundation trust. That is a worry, but I do not believe that there would be. There should be no diminution in the quality of services overall—again, I do not believe that there would be. There should be no backsliding from three-star status. There should be, as the British Association of Medical Manager; believes there will be, a demonstrable managerial gain from achieving foundation status. There should be no diminution in terms and conditions for any staff employed by the trust—that should not be the implicit or explicit result of achieving foundation status. There should be no distortion of priorities in the local health economy—a key area of debate, as we have heard from many hon. Members. Key players in the local health economy on the Wirral as elsewhere are our PCTs, both of which have rightly had 75 per cent. of the budget devolved
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  down to them. The breathing space that my hospital trust has effectively bought for itself will, I believe, be used positively and imaginatively as it and the PCT watch the development of foundation status.
  In summary, foundation status will add value. My right hon. Friend the Member for Livingston (Mr. Cook) said that services should be located more locally, which is precisely what will happen if foundation status is granted to my local hospitals. In due course, subject to the performance of my local hospital trust, which I do not expect to diminish—I expect it to continue to improve—they will, I hope, apply in the second wave.
  6.28 pm
  Mr. Simon Burns: I begin more in sorrow than in anger for the simple reason that I believe that the Secretary of State and the Government have missed a golden opportunity genuinely to free up the health service to enhance patient care and allow a proper decision-making process, with decisions taken from the bottom up rather than imposed from the top down. We have seen, as I shall explain in the course of my speech, the putting together of a higgledy-piggledy collection of ideas that are not properly thought out.
  During the debate, which has been extremely interesting if somewhat diverse, perhaps the most telling comment was from the hon. Member for Coventry, North-West (Mr. Robinson), who called the Bill an uncontrolled experiment, and said that all we had was a pretty vague idea of foundation hospitals and no proposals to improve non-foundation hospitals. He rightly said, as time will prove, that the cart was being put before the horse. That complaint has been expressed in various ways throughout the debate.
  In an excellent speech, my right hon. Friend the Member for Charnwood (Mr. Dorrell) pointed out that our right hon. and hon. Friends support the idea of freeing up the national health service within the framework of the national health service as we know it. Unfortunately, for a variety of reasons, as my right hon. Friend the Member for Horsham (Mr. Maude) also said, the Bill fails to flesh out the details. We are being asked to buy a pig in a poke and take the Government's word that everything will be all right on the night. Far too many of us have a memory far too long to take the Government on trust.
  What we needed was for the Secretary of State, as he travelled round Spain, Sweden and elsewhere studying alternative views, to have fully understood the concept in Spain in particular, and translated it to the British context, but he did not.
  Mr. Drew: Will the hon. Gentleman give way?
  Mr. Burns: I shall make a little progress.
  My right hon. Friend the Member for North-West Hampshire (Sir George Young) highlighted the anomalies in the Bill and the way in which the Government have watered down the original intentions of the Secretary of State, as evidenced by the right hon. Gentleman's writings and speeches last year before he published his Bill. Similarly, my hon. Friend the Member for Westbury (Dr. Murrison) emphasised the dilution of the Secretary of State's proposals.

  789
  In a typically welcome and robust speech, my hon. Friend the Member for Southend, West (Mr. Amess) demonstrated from his experience on the Select Committee on Health some of the pitfalls that the Government are failing to address. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley), with his experience of his hospital, Addenbrooke's, showed that all we are getting from the Government is possibly an excuse for Addenbrooke's to change its hospital notice board, but nothing else.
  Of course, we know why the Bill is in many ways so diluted and so vague. That is because the Government have had considerable problems with many of their own Back Benchers over their proposals. Since the publication of the Bill, there has been a constant barrage of criticism and the highlighting of problems by individual hon. Members who, as trade unionists, are for various reasons concerned about the Bill's provisions. As my right hon. Friend the Member for Charnwood said in what I thought was probably a flattering reference, although the hon. Member for Wakefield (Mr. Hinchliffe) may not consider it so, it was ironically the forces of conservatism on the Labour Benches that were seeking to thwart the Government's bold and imaginative programmes.
  Since their inception, the proposals of the Secretary of State have been interfered with, altered, revised, adjusted, messed around and changed more than Michael Jackson's face.
  During the debate we heard 21 contributions from the governing party, of which five were distinctly anti. There was an impassioned speech by the Chairman of the Select Committee on Health, the hon. Member for Wakefield, who was clear in his view that the programme that had been put before him and his right hon. and hon. Friends was unspecific about aspects of what the Government wanted to do. He said that it was ill thought out and ill prepared in certain areas, especially governance, and the fiasco, which was also highlighted by my hon. Friend the Member for Woodspring (Dr. Fox), of how we will work out exactly who has a vote on the governance issues.
  Mr. Drew: Will the hon. Gentleman tell me whether those on the Opposition Front Bench support the concept of mutuality in health? [HON. MEMBERS: "Answer."] He does not seem to know.
  Mr. Burns: The hon. Gentleman is mistaken. I was consulting my hon. Friends because I did not hear his last words, and I was checking what he had said.
  My answer is that I strongly and passionately believe in a health service free at the point of use for all—a service that provides the greatest improvement in health care for all the people in this country who are eligible, so that they have access to NHS care locally with the minimum of waiting either to see a consultant or for their treatment. [HON. MEMBERS: "Answer."] I also want to ensure that where there is investment in health care, we see significant improvement in outputs and in the treatment of patients.
  As I was saying, during the debate we have had several contributions, not least from the hon. Member for Wakefield. Interestingly, yet again there was a contribution by the former Health Secretary, the right
  790
  hon. Member for Holborn and St. Pancras (Mr. Dobson), who candidly said that in his view the proposals were the last thing the national health service needed, that they would set hospital against hospital, and that foundation hospitals would be a cuckoo in the local health nest.
  From the hon. Member for Stoke-on-Trent, South (Mr. Stevenson), we heard the accusation that what the Government were proposing was a dangerous distraction that could fragment the NHS and increase the inequalities within health care. Rather interestingly, the hon. Member for Wallasey (Angela Eagle) evoked the spirit of Nye Bevan. I have read the speech that the Secretary of State made last year, in which he managed to invoke the image of Nye Bevan, as if to give respectability to what he sought to do, no less than 17 times in 35 minutes, and I have often mused about what Nye Bevan—[Interruption.] I do know how to pronounce his name.
  I have often mused about what Nye Bevan might be thinking if he could look down on proceedings over the past few months, and what is happening to the health service. In fairness to the Secretary of State, I must say that I suspect that he would not be as opposed to the proposals as the right hon. Member for Holborn and St. Pancras and the hon. Member for Wakefield might think. He was a realist, who wanted to see the health service, within the concept that he designed and brought to fruition, make progress and improve, rather than stagnate and thereby fail.
  I shall also comment in passing on two other speeches by Labour Members. One was by the right hon. Member for Birkenhead (Mr. Field), to whom the House is used to listening with rapt attention because of the common sense, intelligence and interest of the points that he makes. His contribution today was no different. Similarly, the hon. Member for Cannock Chase (Tony Wright) made an interesting and sensible contribution to the debate.
  The problem that has blighted what the Secretary of State is seeking to do is the opposition that he has received within his party. He has had to seek to buy off that opposition to a point at which we have ended up with contradictions and ill-thought-out policies. We have seen him constantly having to change. He originally announced that he wanted to free up the national health service and devolve its powers—an aim from which we do not dissent. Indeed, he has rightly commented:
  "you can't run the national health service as if it's the Chinese Red Army from an office in Whitehall."
  Sadly, the detail of the Bill contradicts his claims. The so-called independent regulator holds office on terms directed by the Secretary of State, who appoints him, states how long he can be in office, determines his salary and can also sack him.
  The independence of the Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection is also under threat. The Secretary of State is to appoint the chairman and members of both bodies, which will exist only to advise him on changes that they consider necessary. He will have no duty whatever to act on that advice. Furthermore, he is to decide the number of members of those two bodies, their tenure of office and their remuneration. So the Secretary

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  of State might not be directing the Chinese red army from his Whitehall office, but he is certainly commanding the troops in his army of independent regulators and inspectorates.
  What is more, the Secretary of State claimed that foundation hospitals would be free from Whitehall control, but they can still be subject to the control of the regulator, whom he will appoint and in effect control, and of the star-rating system and Government-imposed targets, including the clinically distorting waiting list targets. Originally, he proposed that only the best hospitals—the three-star ones—would be able to apply for foundation status, thereby guaranteeing a two-tier health system. In the face of opposition, including from Conservative Members, he abandoned that position and said that all hospitals would be able to apply within five years. It now seems℄I should be grateful if the Minister will confirm this—that he is climbing down and may be abandoning the three-star rule all together.
  On borrowing, the Chancellor, that brooding colossus that casts its shadow throughout the Government, has well and truly left the Secretary of State out to dry. The Secretary of State has constantly claimed that foundation trusts will have significant powers to borrow privately, but: on 30 April, in the Select Committee on the Treasury, the Chancellor clearly explained that
  "borrowing by Foundation Hospitals would come off the NHS budget".
  The full implications of that statement immediately became apparent, as I suspect the Chancellor desired. The implication is that whatever money the foundation trusts borrow, less will be available to non-foundation hospitals. As my hon. Friend the Member for Woodspring said, this is indeed the culture of dog eat dog. It is not so much survival of the fittest as of the most advantaged—a two-tier system in which hospitals fortunate enough to have foundation status will deprive other NHS hospitals without such status.
  Yesterday, the Prime Minister categorically stated that "Reform is fundamental to" the public services' future, and said:
  "To turn our backs on it would be a collective mistake of historic proportions."
  In recent years, the Prime Minister has seen everything in historic proportions. I think that I am right in saying that he has felt the hand of history on his shoulder. Given the problems that the Government have had, he must feel that this evening's debate is weighing heavily on his whole body. Sadly, that is due to his machinations and those of the Secretary of State. In seeking to prevent a haemorrhaging of support, they have ended up with a Bill that is the very worst of all worlds. Far from freeing up the NHS to improve the provision of health care, it is more a pastiche that has been cobbled together in an attempt to ensure that the Secretary of State and the Prime Minister save face.
  We know from past examples how Labour rebellions fizzle out, and we are fully aware that tonight's will be no exception, as Labour Members who signed motions and opposed the Government's proposals melt like snow in summer. We have no interest in playing party politics with the issue, but because the proposals are so
  792
  cobbled together and ill thought out, I shall recommend to my hon. Friends that we vote against the Second Reading of a badly drafted Bill that will not achieve what the Government seek to achieve.
  6.45 pm
  The Minister of State, Department of Health (Mr. John Hutton): Some excellent speeches have been made today, but sadly I am not sure that that of the hon. Member for West Chelmsford (Mr. Burns) was one of them. It has been a debate of high quality in the best traditions of this House. I particularly want to congratulate my right hon. Friends the Members for Copeland (Dr. Cunningham), for Livingston (Mr. Cook), for Southampton, Itchen (Mr. Denham), for Tyneside, North (Mr. Byers), for Bishop Auckland (Mr. Foster) and for Birkenhead (Mr. Field). I can say the same of my hon. Friends the Members for Doncaster, North (Mr. Hughes), for Plymouth, Sutton (Linda Gilroy), for Bedford (Mr. Hall), for City of York (Hugh Bayley), for Cardiff, Central (Mr. Jones), for Cannock Chase (Tony Wright), for Milton Keynes, South-West (Dr. Starkey) for Lewisham, West (Jim Dowd)—who gave us a fascinating insight into the preparation of the latest report by the Select Committee on Health; I wish that I had been a fly on the wall—and for Wirral, West (Stephen Hesford).
  We heard, too, from the Liberal Democrats. I am not sure that we were much the wiser for that, although the hon. Member for Oxford, West and Abingdon (Dr. Harris) served one unique purpose—I am sure that it was accidental—by managing to make the speech by the hon. Member for Woodspring (Dr. Fox) look clear and cogent. I do not think that that could have been his game plan.
  We also heard another rendition of the depressingly familiar prospectus of the Conservative party. Some new soundbites, perhaps, but underlying it all were the same old prejudices. Conservative Members remain firmly stuck in the past. They propose subsidised private medical insurance, taking away resources that could be used to build up the NHS, and top-up vouchers for those who can afford to go private. That is what the Tories mean by greater patient choice—the freedom of the few, funded by the many, to opt out of the NHS altogether. That, not our proposals, is what my hon. Friends could fairly describe as a two-tier health care system.
  We now know, too, that the Tories do not support our proposals on NHS foundation trusts. They do not support the cap on private patient income. They do not support our proposals on democratic government arrangements, which the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) thought were a management distraction. It is not: it is called democracy. The NHS is a public service, and it is going to remain so. Conservative Members want NHS foundation trusts to opt out of the NHS altogether. The biggest myth of all is that the Tories support the Bill. Behind that grim facade lurks something even more sinister—a 20 per cent. cut across the board in NHS spending. By starving the NHS of investment, they hope to persuade more people to opt out of it altogether.

  793
  Those are the Tory tactics that we have seen today. Their attitude to the Bill has been the classic combination of opportunism and cynicism that we have come to expect from them. They are devoid of any purpose save one—to undermine the NHS and the values that it stands for. None of my right hon. and hon. Friends should vote with the Tories when the future of the NHS is at stake.
  The debate has been marked by a number of myths and misconceptions about the Bill, especially part 1. That was particularly evident in the speeches of my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) and my hon. Friends the Members for Wakefield (Mr. Hinchliffe), for Stoke-on-Trent, South (Mr. Stevenson), for Wallasey (Angela Eagle), for South Swindon (Ms Drown) and for Coventry, North-West (Mr. Robinson). It was true to different extents of the speeches of the hon. Member for South Cambridgeshire (Mr. Lansley), the right hon. Member for North-West Hampshire (Sir George Young) and the hon. Member for Wyre Forest (Dr. Taylor), who was elected on the basis of extending democratic control to the NHS but is now about to vote against that principle. We had the usual music hall turn from the hon. Member for Southend, West (Mr. Amess).
  The Bill is based firmly on the traditional values of the national health service. It will safeguard what is good and decent about the NHS, and help it to fulfil the new challenges of today's society by giving new freedom to front-line staff and real ownership to local communities. Consequently, there will be less bureaucracy in the NHS, not more as some have wrongly alleged.
  Kate Hoey: The Minister knows that I represent two of the largest three-star trusts in the country. The staff have asked me to ask him a question. Given the 17 reorganisations that have taken place and the fact that the staff would like more control over the way in which they handle matters and to have the Whitehall shackles removed, why cannot the Minister do that without going through reorganisation and spending huge amounts of money on foundation trusts?
  Mr. Hutton: My hon. Friend is wrong about that. We need new front-line freedoms and responsibilities, but they must be matched by new forms of public accountability. Otherwise we would hand over control of the NHS to people who do not pay for it or own the service. Reforms must be matched by changes to principles of democratic accountability.
  The Bill is based on the right principles: devolution, democracy and decentralisation. They will operate within a clear framework of national standards to guarantee equity and universality. It does not, as some of my hon. Friends have mistakenly claimed, herald a return to the old internal market of the Tories. The Government were right to get rid of that because it caused so much damage to the NHS. In those days, there were no national standards to ensure quality and consistency.
  The internal market was based on a crude and clumsy bargain-basement competition throughout the NHS to ascertain who could provide the lowest price. Nothing in the Bill or any of the Government's actions will allow a return to those bad old days. The internal market is dead and buried; the Bill does not bring it back to life.
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  As many hon. Friends said, giving genuine power and responsibility to front-line staff will help to ensure that local services better fulfil the needs of local communities. That must be right for the NHS today, for patients as well as staff. The Bill hands out no favours to some hospitals for which others will have to pay. However, there will and should be more financial as well as operational freedoms for hospitals that have shown by their performance that they can make good use of them.
  In the next few years, all NHS trusts will be able to benefit from the freedoms. That is consistent with the NHS plan and accords with the conclusions of the Wanless report, which my right hon. Friend the Chancellor commissioned. It is the sensible way in which to run any organisation. The freedoms and flexibilities will help to maximise the effective use of resources, facilitate innovation and, with the new governance arrangements, help improve local responsibility for delivery.
  The reforms will help lay the foundations for better public services and improved local control over them, for industrial democracy in the NHS for the first time, for public sector enterprise and public sector values to thrive and prosper in the new century.
  The new financial and operational freedoms for NHS foundation trusts will not be gained at the expense of other parts of the NHS because that would not be fair or equitable. The safeguards in clauses 1, 3, 12, 14, 15, 16, 23, 27, 28, 40, 41, 46 and 47 will ensure that that does not happen. There will therefore be no unfair advantages for some for which others pay. Peter will not be robbed to pay Paul.
  There will be no unfair poaching of staff between foundation trusts and other NHS bodies. I know that many of my hon. Friends are worried about that, but let me make it clear that all NHS foundation trusts will operate in the same pay system as the rest of the NHS. It will be a national pay system. The independent regulator will hold NHS foundation trusts to account under their statutory duty of co-operation. He can intervene under clause 23 when that does not happen.
  The new national tariff means that NHS foundation trusts cannot pass on to primary care trusts the cost of paying high wages. The new freedoms will be matched by new safeguards. Moreover, for the first time the Secretary of State will be allowed to set national standards for all NHS hospitals. That will help to ensure that NHS foundation trusts remain an integral part of the NHS, providing care in accordance with NHS values and NHS principles, helping the NHS to raise standards, and guaranteeing equity.
  The changes are not a distraction, as has been claimed by some—particularly my right hon. Friend the Member for Holborn and St. Pancras and my hon. Friend the Member for Wakefield. The reforms are necessary because society itself has changed beyond recognition since the NHS was established 50 years ago. Because we on this side of the House are committed to the NHS and all that it stands for, the choice facing us relates not to whether there should be further reforms, but to what reforms we decide to make.

  795
  Some, including my hon. Friend the Member for Wakefield, have said today that we need no reform, but then listed a series of existing problems with the NHS. Those whose counsel is no reform must realise that that will lead to a single consequence: the abandoning of the field to those who have already given up on the NHS, and who, as my right hon. Friend the Member for Southampton, Itchen pointed out, claim that it is bound to fail, and should be broken up and sold off. That would be a huge mistake, and we should not make it.
  The choice today, as always, is between Labour values of co-operation and public ownership, which the Bill enshrines, and Tory values of competition and privatisation, which it eschews. Our public services need to be better tailored to the individual needs of patients. A service as complex as the national health service cannot be run from the centre and at the same time provide the necessary degree of localism if it is to be truly responsive to the needs of communities and patients in the way described by my right hon. Friend the Member for Copeland. That is why the new freedoms and flexibilities are so essential.
  There is nothing wrong with the NHS that cannot be put right by those who work in it and care passionately about its future; but NHS staff have not always had the tools with which to do the job properly—a point made very effectively by my right hon. Friend the Member for Livingston. We all know that to be true, and it is what the Bill will begin to put right. It will help the NHS to become the service that we want it to be. Just as important, it will bring our concept of public ownership for the new century up to date, while holding true and fast to the values and principles that it has always represented.
  These reforms will not promote a "pay as you go" health care market. That is the policy of the official Opposition, a policy to which this Labour Government are completely opposed. The reforms that we are making in the Bill—the introduction of new national standards, stronger NHS inspection and new powers for primary care trusts to commission NHS dental services—are based on equity and fairness. They rest on the fundamental assumption that the NHS should provide a consistently high-quality service everywhere, not just for some in our society but for everyone. That is the equity guarantee sought by my hon. Friend the Member for Stoke-on-Trent, South, and it is contained in clauses 1 and 3.
  The way in which we cast our votes tonight will give us an opportunity to set the direction of travel for the national health service in years to come, and the direction we are setting in the Bill is fundamentally right. When we last debated NHS reform in January, my hon. Friend the Member for Stockton, South (Ms Taylor) said that we should not mistake a legacy for a monument. She was absolutely right: we must not view the NHS as a monument. If we do we will not give it a chance to adapt, to reinvigorate itself, and to develop in
  796
  new ways to meet the needs of our country and its people. I agreed with her then, and I hold that view even more strongly tonight.
  Along with the investment and reforms that we have already made, the Bill will help to improve the health service in the constituency of every right hon. and hon. Member. That is why we should give it a Second Reading.
  Question put, That the amendment be made:—
  The House divided: Ayes 117, Noes 297.

  Division No. 177]

  [6:59 pm

  AYES

  Abbott, Ms Diane

  Jackson, Glenda (Hampstead &

  Allan, Richard

  Highgate)

  Allen, Graham

  Jones, Helen (Warrington N)

  Austin, John

  Jones, Kevan (N Durham)

  Baker, Norman

  Jones, Lynne (Selly Oak)

  Barnes, Harry

  Keen, Alan (Feltham)

  Beith, rh A. J.

  Keetch, Paul

  Bennett, Andrew

  Kennedy, rh Charles (Ross Skye &

  Berry, Roger

  Inverness)

  Brake, Tom (Carshalton)

  Kilfoyle, Peter

  Breed, Colin

  King, Andy (Rugby)

  Brooke, Mrs Annette L.

  Kirkwood, Sir Archy

  Bruce, Malcolm

  Lewis, Terry (Worsley)

  Burgon, Colin

  Lloyd, Tony (Manchester C)

  Burstow, Paul

  Llwyd, Elfyn

  Cable, Dr. Vincent

  McDonnell, John

  Calton, Mrs Patsy

  Mahon, Mrs Alice

  Campbell, Gregory (E Lond'y)

  Marsden, Paul (Shrewsbury &

  Campbell, rh Menzies (NE Fife)

  Atcham)

  Clapham, Michael

  Marshall, Jim (Leicester S)

  Coleman, Iain

  Marshall-Andrews, Robert

  Connarty, Michael

  Moore, Michael

  Corbyn, Jeremy

  Mudie, George

  Cotter, Brian

  Naysmith, Dr. Doug

  Cox, Tom (Tooting)

  Oaten, Mark (Winchester)

  Cryer, John (Hornchurch)

  Paisley, Rev. Ian

  Cunningham, Jim (Coventry S)

  Perham, Linda

  Davey, Edward (Kingston)

  Pound, Stephen

  Davidson, Ian

  Prentice, Gordon (Pendle)

  Dean, Mrs Janet

  Price, Adam (E Carmarthen &

  Dismore, Andrew

  Dinefwr)

  Dobbin, Jim (Heywood)

  Prosser, Gwyn

  Dobson, rh Frank

  Pugh, Dr. John

  Dodds, Nigel

  Purchase, Ken

  Doughty, Sue

  Reid, Alan (Argyll & Bute)

  Dunwoody, Mrs Gwyneth

  Rendel, David

  Eagle, Angela (Wallasey)

  Robinson, Mrs Iris (Strangford)

  Efford, Clive

  Robinson, Peter (Belfast E)

  Ellman, Mrs Louise

  Russell, Bob (Colchester)

  Fisher, Mark

  Sanders, Adrian

  Foster, Don (Bath)

  Savidge, Malcolm

  George, Andrew (St. Ives)

  Sedgemore, Brian

  Gerrard, Neil

  Simpson, Alan (Nottingham S)

  Gidley, Sandra

  Smith, Llew (Blaenau Gwent)

  Green, Matthew (Ludlow)

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

  Hancock, Mike

  Kincardine)

  Harris, Dr. Evan (Oxford W &

  Steinberg, Gerry

  Abingdon)

  Stevenson, George

  Harvey. Nick

  Stunell, Andrew

  Havard, Dai (Merthyr Tydfil &

  Taylor, David (NW Leics)

  Rhymney)

  Taylor, Matthew (Truro)

  Henderson, Doug (Newcastle N)

  Taylor, Dr. Richard (Wyre F)

  Heyes, David

  Thomas, Simon (Ceredigion)

  Hinchliffe, David

  Thurso, John

  Hoey, Kate (Vauxhall)

  Tonge, Dr. Jenny

  Holmes, Paul

  Truswell, Paul

  Hopkins, Kelvin

  Tyler, Paul (N Cornwall)

  Hughes, Simon (Southwark N)

  Walley, Ms Joan

  Illsley, Eric

  Wareing, Robert N.

  797

  Webb, Steve (Northavon)

  Young-Ross, Richard

  Williams, Hywel (Caernarfon)

  Williams, Roger (Brecon)

  Tellers for the Ayes:

  Willis, Phil

  Ms. Julia Drown and

  Wood, Mike (Batley)

  Dr. Desmond Turner

  NOES

  Adams, Irene (Paisley N)

  Cranston, Ross

  Ainger, Nick

  Crausby, David

  Ainsworth, Bob (Cov'try NE)

  Cruddas, Jon

  Alexander, Douglas

  Cummings, John

  Anderson, rh Donald (Swansea E)

  Cunningham, rh Dr. Jack

  Anderson, Janet (Rossendale &

  (Copeland)

  Darwen)

  Cunningham, Tony (Workington)

  Armstrong, rh Ms Hilary

  Curtis-Thomas, Mrs Claire

  Atherton, Ms Candy

  Darling, rh Alistair

  Atkins, Charlotte

  Davey, Valerie (Bristol W)

  Bailey, Adrian

  David, Wayne

  Baird, Vera

  Davies, rh Denzil (Llanelli)

  Banks, Tony

  Davies, Geraint (Croydon C)

  Barron, rh Kevin

  Davis, rh Terry (B'ham Hodge H)

  Bayley, Hugh

  Denham, rh John

  Beard, Nigel

  Donohoe, Brian H.

  Begg, Miss Anne

  Doran, Frank

  Beggs, Roy (E Antrim)

  Dowd, Jim (Lewisham W)

  Bell, Stuart

  Drew. David (Stroud)

  Benn, Hilary

  Eagle, Maria (L'pool Garston)

  Betts, Clive

  Edwards, Huw

  Blackman, Liz

  Ennis, Jeff (Barnsley E)

  Blair, rh Tony

  Field, rh Frank (Birkenhead)

  Blears, Ms Hazel

  Fitzpatrick, Jim

  Blunkett, rh David

  Fitzsimons, Mrs Lorna

  Boateng, rh Paul

  Flint, Caroline

  Borrow, David

  Flynn, Paul (Newport W)

  Bradley, rh Keith (Withington)

  Follett, Barbara

  Bradley, Peter (The Wrekin)

  Foster, rh Derek

  Bradshaw, Ben

  Foster, Michael (Worcester)

  Brennan, Kevin

  Foster, Michael Jabez (Hastings &

  Brown, rh Gordon (Dunfermline

  Rye)

  E)

  Foulkes, rh George

  Brown, rh Nicholas (Newcastle E

  Francis, Dr. Hywel

  Wallsend)

  Gapes, Mike (llford S)

  Brown, Russell (Dumfries)

  Gardiner, Barry

  Browne, Desmond

  George, rh Bruce (Walsall S)

  Bryant, Chris

  Gilroy, Linda

  Burden, Richard

  Goggins, Paul

  Burnham, Andy

  Griffiths, Jane (Reading E)

  Burnside, David

  Griffiths, Nigel (Edinburgh S)

  Byers, rh Stephen

  Griffiths, Win (Bridgend)

  Caborn, rh Richard

  Grogan, John

  Cairns, David

  Hain, rh Peter

  Campbell, Alan (Tynemouth)

  Hall, Mike (Weaver Vale)

  Campbell, Mrs Anne (C'bridge)

  Hall, Patrick (Bedford)

  Campbell, Ronnie (Blyth V)

  Hamilton, Fabian (Leeds NE)

  Casale, Roger

  Hanson, David

  Cawsey, Ian (Brigg)

  Harman, rh Ms Harriet

  Challen, Colin

  Healey, John

  Chapman, Ben (Wirral S)

  Henderson, Ivan (Harwich)

  Chaytor, David

  Hendrick, Mark

  Clark, Mrs Helen (Peterborough)

  Hepburn, Stephen

  Clark, Dr. Lynda (Edinburgh

  Hermon, Lady

  Pentlands)

  Hesford, Stephen

  Clark, Paul (Gillingham)

  Hewitt, rh Ms Patricia

  Clarke, rh Charles (Norwich S)

  Hill, Keith (Streatham)

  Clarke, rh Tom (Coatbridge &

  Hodge, Margaret

  Chryston)

  Hood, Jimmy (Clydesdale)

  Clelland, David

  Hoon, rh Geoffrey

  Clwyd, Ann (Cynon V)

  Hope, Phil (Corby)

  Coaker, Vernon

  Howarth, rh Alan (Newport E)

  Coffey, Ms Ann

  Howarth, George (Knowsley N &

  Cohen, Harry

  Sefton E)

  Cook, Frank (Stockton N)

  Howells, Dr. Kim

  Cook, rh Robin (Livingston)

  Hughes, Beverley (Stretford &

  Cooper, Yvette

  Urmston)

  Corston, Jean

  Hughes, Kevin (Doncaster N)

  Cousins, Jim

  Hurst, Alan (Braintree)

  798

  Hutton, rh John

  Murphy, Denis (Wansbeck)

  Ingram, rh Adam

  Murphy, Jim (Eastwood)

  Irranca-Davies, Huw

  Murphy, rh Paul (Torfaen)

  Jackson, Helen (Hillsborough)

  Norris, Dan (Wansdyke)

  Jamieson, David

  O'Brien, Bill (Normanton)

  Johnson, Alan (Hull W)

  O'Brien, Mike (N Warks)

  Johnson, Miss Melaie (Welwyn

  O'Neill, Martin

  Hatfield)

  Organ, Diana

  Jones, Jon Owen (Cardiff C)

  Osborne, Sandra (Ayr)

  Jones, Martyn (ClwydS)

  Palmer, Dr. Nick

  Jowell, rh Tessa

  Pearson, Ian

  Joyce, Eric (Falkirk W)

  Pickthall, Colin

  Kaufman, rh Gerald

  Pike, Peter (Burnley)

  Keeble, Ms Sally

  Plaskitt, James

  Keen, Ann (Brentford)

  Pond, Chris (Gravesham)

  Kelly, Ruth (Bolton W)

  Pope, Greg (Hyndburn)

  Kemp, Fraser

  Prentice, Ms Bridget (Lewisham

  Kennedy, Jane (Wavertree)

  E)

  Kidney, David

  Prescott, rh John

  King. Ms Oona (Bethnal Green &

  Primarolo, rh Dawn

  Bow)

  Purnell, James

  Knight, Jim (S Dorset)

  Quin, rh Joyce

  Kumar, Dr. Ashok

  Quinn, Lawrie

  Ladyman, Dr. Stephen

  Rammell, Bill

  Lammy, David

  Rapson, Syd (Portsmouth N)

  Laxton, Bob (Derby N)

  Raynsford, rh Nick

  Lazarowicz, Mark

  Reed, Andy (Loughborough)

  Lepper, David

  Reid, rh Dr. John (Hamilton N &

  Leslie, Christopher

  Bellshill)

  Levitt, Tom (High Peak)

  Robertson, John (Glasgow

  Lewis, Ivan (Bury S)

  Anniesland)

  Liddell, rh Mrs Helen

  Roche, Mrs Barbara

  Linton, Martin

  Rooney, Terry

  Love, Andrew

  Ross, Ernie (Dundee W)

  Lucas, Ian (Wrexham)

  Roy, Frank (Motherwell)

  Luke, lain (Dundee E)

  Ruane, Chris

  McAvoy, Thomas

  Russell, Ms Christine (city of

  McCabe, Stephen

  Chester)

  McCartney, rh Ian

  Ryan, Joan (Enfield N)

  McDonagh, Siobhain

  Salter, Martin

  MacDonald, Calum

  Shaw, Jonathan

  MacDougall, John

  Sheerman, Barry

  McFall, John

  Sheridan, Jim

  McGuire, Mrs Anne

  Simon, Sion (B'ham Erdington)

  McIsaac, Shona

  Singh, Marsha

  McKechin, Ann

  Smith, rh Andrew (Oxford E)

  McKenna, Rosemary

  Smith, Angela (Basildon)

  Mackinlay, Andrew

  Smith, Jacqui (Redditch)

  McNamara, Kevin

  Smith, John (Glamorgan)

  McNulty, Tony

  Smyth, Rev. Martin (Belfast S)

  MacShane, Denis

  Soley, Clive

  Mactaggart, Fiona

  Southworth, Helen

  McWilliam, John

  Spellar, rh John

  Mahmood, Khalid

  Spink, Bob (Castle Point)

  Mallaber, Judy

  Squire, Rachel

  Mandelson, rh Peter

  Starkey, Dr. Phyllis

  Mann, John (Bassetlaw)

  Stewart, David (Inverness E &

  Marsden, Gordon (Blackpool S)

  Lochaber)

  Marshall, David (Glasgow

  Stinchcombe, Paul

  Shettleston)

  Stoate, Dr. Howard

  Meacher, rh Michael

  Strang, rh Dr. Gavin

  Meale, Alan (Mansfield)

  Straw, rh Jack

  Merron, Gillian

  Stringer, Graham

  Michael, rh Alun

  Stuart, Ms Gisela

  Milburn, rh Alan

  Sutcliffe, Gerry

  Miliband, David

  Tami, Mark (Alyn)

  Miller, Andrew

  Taylor, rh Ann (Dewsbury)

  Moffatt, Laura

  Taylor, Dari (Stockton S)

  Mole, Chris

  Thomas, Gareth (Clwyd W)

  Moonie, Dr. Lewis

  Thomas, Gareth (Harrow W)

  Morgan, Julie

  Timms, Stephen

  Morley, Elliot

  Tipping, Paddy

  Morris, rh Estelle

  Todd, Mark (S Derbyshire)

  Mountford, Kali

  Touhig, Don (Islwyn)

  Mullin, Chris

  Trickett, Jon

  Munn, Ms Meg

  Trimble, rh David

  799

  Turner, Dennis (Wolverh'ton SE)

  Winnick, David

  Turner, Neil (Wigan)

  Winterton, Ms Rosie (Doncaster

  Twigg, Derek (Halton)

  C)

  Twigg, Stephen (Enfield)

  Woodward, Shaun

  Tynan, Bill (Hamilton S)

  Woolas, Phil

  Vaz, Keith (Leicester E)

  Wray, James (Glasgow

  Ward, Claire

  Baillieston)

  Watson, Tom (W Bromwich E)

  Wright, Anthony D. (Gt

  Watts, David

  Yarmouth)

  White, Brian

  Wright, David (Telford)

  Whitehead Dr Alan

  Wright, Tony (Cannock)

  Wicks, Malcolm

  Wyatt, Derek

  Williams, rh Alan (Swansea W)

  Tellers for the Noes:

  Wills, Michael

  Mr. Ivor Caplin and

  Wilson, Brian

  Mr. John Heppell

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading):—
  The House divided: Ayes 304, Noes 230.

  Division No. 178]

  [7:12 pm

  AYES

  Adams, Irene (Paisley N)

  Caton, Martin

  Ainger, Nick

  Cawsey, Ian (Brigg)

  Ainsworth, Bob (Cov'try NE)

  Challen, Colin

  Alexander, Douglas

  Chapman, Ben (Wirral S)

  Allen, Graham

  Chaytor, David

  Anderson, rh Donald (Swansea E)

  Clark, Mrs Helen (Peterborough)

  Anderson, Janet (Rossendale &

  Clark, Dr. Lynda (Edinburgh

  Darwen)

  Pentlands)

  Armstrong, rh Ms Hilary

  Clark, Paul (Gillingham)

  Atherton, Ms Candy

  Clarke, rh Charles (Norwich S)

  Atkins, Charlotte

  Clarke, rh Tom (Coatbridge &

  Bailey, Adrian

  Chryston)

  Baird, Vera

  Clelland, David

  Banks, Tony

  Clwyd, Ann (Cynon V)

  Barron, rh Kevin

  Coaker, Vernon

  Bayley, Hugh

  Coffey, Ms Ann

  Beard, Nigel

  Cohen, Harry

  Begg, Miss Anne

  Cook, Frank (Stockton N)

  Beggs, Roy (E Antrim)

  Cook, rh Robin (Livingston)

  Bell, Stuart

  Cooper, Yvette

  Benn, Hilary

  Corston, Jean

  Betts, Clive

  Cousins, Jim

  Blackman, Liz

  Cranston, Ross

  Blair, rh Tony

  Crausby, David

  Blears, Ms Hazel

  Cruddas, Jon

  Blizzard, Bob

  Cryer, Ann (Keighley)

  Blunkett, rh David

  Cummings, John

  Boateng, rh Paul

  Cunningham, rh Dr. Jack

  Borrow, David

  (Copeland)

  Bradley, rh Keith (Withington)

  Cunningham, Tony (Workington)

  Bradley, Peter (The Wrekin)

  Curtis Thomas, Mrs Claire

  Bradshaw, Ben

  Darling, rh Alistair

  Brennan, Kevin

  David Wayne

  Brown, rh Gordon (Dunfermline

  Davies, rh Denzil (Llanelli)

  E)

  Davies, Geraint (Croydon C)

  Brown, rh Nicholas (Newcastle E

  Davis, rh Terry (B'ham Hodge H)

  Wallsend)

  Denham, rh John

  Brown, Russell (Dumfries)

  Dismore, Andrew

  Browne, Desmond

  Donohoe, Brian H.

  Bryant, Chris

  Doran, Frank

  Burden, Richard

  Dowd, Jim (Lewisham W)

  Burnham, Andy

  Drew, David (Stroud)

  Burnside, David

  Eagle, Maria (L'pool Garston)

  Byers, rh Stephen

  Edwards, Huw

  Caborn, rh Richard

  Ennis, Jeff (Barnsley E)

  Cairns, David

  Field, rh Frank (Birkenhead)

  Campbell, Alan (Tynemouth)

  Fitzpatrick, Jim

  Campbell, Mrs Anne (C'bridge)

  Fitzsimons, Mrs Lorna

  Campbell, Ronnie (Blyth V)

  Flint, Caroline

  Casale, Roger

  Flynn, Paul (Newport W)

  800

  Follett, Barbara

  Linton, Martin

  Foster, rh Derek

  Love, Andrew

  Foster, Michael (Worcester)

  Lucas, Ian (Wrexham)

  Foster, Michael Jabez (Hastings

  Luke, lain (Dundee E)

  & Rye)

  McAvoy, Thomas

  Foulkes, rh George

  McCabe, Stephen

  Francis, Dr. Hywel

  McCartney, rh Ian

  Gapes, Mike (llford S)

  McDonagh, Siobhain

  Gardiner, Barry

  MacDonald, Calum

  George, rh Bruce (Walsall S)

  MacDougall, John

  Gilroy, Linda

  McFall, John

  Goggins, Paul

  McGuire, Mrs Anne

  Griffiths, Jane (Reading E)

  McIsaac, Shona

  Griffiths, Nigel (Edinburgh S)

  McKechin Ann

  Griffiths, Win (Bridgend)

  McKenna, Rosemary

  Grogan, John

  Mackinlay, Andrew

  Hain, rh Peter

  McNamara, Kevin

  Hall, Mike (Weaver Vale)

  McNulty, Tony

  Hall, Patrick (Bedford)

  MacChane, Denis

  Hamilton, Fabian (Leeds NE)

  Mactaggart Fiona

  Hanson, David

  MrWilliam John

  Harman, rh Ms Harriet

  Mahmood, Khalid

  Healey, John

  Mallaber, Judy

  Henderson, Ivan (Harwich)

  Mandelson, rh Peter

  Hendrick, Mark

  Mann, John (Bassetlaw)

  Hepburn, Stephen

  Marsden, Gordon (Blackpool S)

  Hermon, Lady

  Marshall, David (Glasgow

  Hesford, Stephen

  Shettleston)

  Hewitt, rh Ms Patricia

  Meacher, rh Michael

  Hill, Keith (Streatham)

  Meale, Alan (Mansfield)

  Hodge, Margaret

  Merron, Gillian

  Hood, Jimmy (Clydesdale)

  Michael, rh Alun

  Hoon, rh Geoffrey

  Milburn, rh Alan

  Hope, Phil (Corby)

  Miliband, David

  Howarth, rh Alan (Newport E)

  Miller Andrew

  Howarth, George (Knowsley N &

  Moffatt, Laura

  Sefton E)

  Mole, Chris

  Howells, Dr. Kim

  Moonie, Dr. Lewis

  Hughes, Beverley (Stretford &

  Morgan, Julie

  Urmston)

  Morley, Elliot

  Hughes, Kevin (Doncaster N)

  Morris, rh Estelle

  Hurst, Alan (Braintree)

  Mountford Kali

  Hutton, rh John

  Mullin, Chris

  Illsley, Eric

  Munn, Ms Meg

  Ingram, rh Adam

  Murphy Denis (Wansbeck)

  Irranca-Davies, Huw

  Murphy, Jim (Eastwood)

  jackson, Helen (Hillsborough)

  Murphy rh Paul (Torfaen)

  Jamieson, David

  Norris, Dan (Wansdyke)

  johnson, Alan (Hull W)

  O'Brien, Bill (Normanton)

  Johnson, Miss Melanie (Welwyn

  O'Brien Mike (N Warks)

  Hatfield)

  Jones, Jon Owen (Cardiff C)

  O'Hara, Edward

  Jones, Kevan (N Durham)

  O'Neill, Martin

  Jones, Martyn (Clwyd S)

  Organ, Diana

  Jowell, rh Tessa

  Osborne, Sandra (Ayr)

  Joyce, Eric (Falkirk W)

  Palmer, Dr. Nick

  Kaufman, rh Gerald

  Pearson, Ian

  Keeble, Ms Sally

  Pickthall, Colin

  Keen, Ann (Brentford)

  Pike, Peter (Burnley)

  Kelly, Ruth (Bolton W)

  Plaskitt, James

  Kemp, Fraser

  Pond, Chris (Gravesham)

  Kennedy, Jane (Wavertree)

  Pope, Greg (Hyndburn)

  Kidney, David

  Pound, Stephen

  King, Ms Oona (Bethnal Green &

  Prentice, Ms Bridget (Lewisham

  Bow)

  E)

  Knight, Jim (S Dorset)

  Prescott, rh John

  Kumar, Dr. Ashok

  Primarolo, rh Dawn

  Ladyman, Dr. Stephen

  Purnell, James

  Lammy, David

  Quin, rh Joyce

  Laxton, Bob (Derby N)

  Quinn, Lawrie

  Lazarowicz, Mark

  Rammell, Bill

  Lepper, David

  Rapson, Syd (Portsmouth N)

  Leslie, Christopher

  Raynsford, rh Nick

  Levitt, Tom (High Peak)

  Reed, Andy (Loughborough)

  Lewis, Ivan (Bury S)

  Reid, rh Dr. John (Hamilton N &

  Liddell, rh Mrs Helen

  Bellshill)

  801

  Robertson, John (Glasgow

  Thomas, Gareth (Clwyd W)

  Anniesland)

  Thomas, Gareth (Harrow W)

  Roche, Mrs Barbara

  Timms, Stephen

  Rooney, Terry

  Tipping, Paddy

  Ross, Ernie (Dundee W)

  Todd, Mark (S Derbyshire)

  Roy, Frank (Motherwell)

  Touhig, Don (Islwyn)

  Ruane, Chris

  Trickett, Jon

  Russell, Ms Christine (City of

  Trimble, rh David

  Chester)

  Turner, Dennis (Wolverh'ton SE)

  Ryan, Joan (Enfield N)

  Turner, Neil (Wigan)

  Salter, Martin

  Twigg, Derek (Halton)

  Shaw, Jonathan

  Twigg, Stephen (Enfield)

  Sheerman, Barry

  Tynan, Bill (Hamilton S)

  Sheridan, Jim

  Vaz, Keith (Leicester E)

  Simon, Siôn (B'ham Erdington)

  Ward, Claire

  Singh, Marsha

  Watson, Tom (W Bromwich E)

  Smith rh Andrew (Oxford E)

  Watts, David

  Smith, Angela (Basildon)

  White, Brian

  Smith, Jacqui (Redditch)

  Whitehead, Dr. Alan

  Smith, John (Glamorgan)

  Wicks, Malcolm

  Smyth, Rev. Martin (Belfast S)

  Williams, rh Alan (Swansea W)

  Soley, Clive

  Wills, Michael

  Southworth, Helen

  Wilson, Brian

  Spellar, rh John

  Winnick, David

  Squire, Rachel

  Winterton, Ms Rosie (Doncaster

  C)

  Starkey, Dr. Phyllis

  Woodward, Shaun

  Stewart, David (Inverness E &

  Woolas, Phil

  Lochaber)

  Wray, James (Glasgow

  Stinchcombe, Paul

  Baillieston)

  Stoate, Dr. Howard

  Wright, Anthony D. (Gt

  Strang, rh Dr. Gavin

  Yarmouth)

  Straw, rh Jack

  Wrinht David (Telford)

  Stringer, Graham

  Wright, Tony (Cannock)

  Stuart, Ms Gisela

  Wyatt, Derek

  Sutcliffe, Gerry

  Tami, Mark (Alyn)

  Tellers for the Ayes:

  Taylor, rh Ann (Dewsbury)

  Mr. Ivor Caplin and

  Taylor, Dari (Stockton S)

  Mr. John Heppell

  NOES

  Abbott, Ms Diane

  Cable, Dr. Vincent

  Ainsworth, Peter (E Surrey)

  Calton, Mrs Patsy

  Allan, Richard

  Cameron, David

  Amess, David

  Campbell, Gregory (E Lond'y)

  Ancram, rh Michael

  Campbell, rh Menzies (NE Fife)

  Arbuthnot, rh James

  Cash, William

  Atkinson, David (Bour'mth E)

  Chapman, Sir Sydney (Chipping

  Atkinson, Peter (Hexham)

  Barnet)

  Austin, John

  Clappison, James

  Bacon, Richard

  Clarke, rh Kenneth (Rushcliffe)

  Baker, Norman

  Collins, Tim

  Barker, Gregory

  Connarty, Michael

  Barnes, Harry

  Conway, Derek

  Baron, John (Billericay)

  Corbyn, Jeremy

  Beith, rh A. J.

  Cormack, Sir Patrick

  Bellingham, Henry

  Cotter, Brian

  Bennett, Andrew

  Cran, James (Beverley)

  Bercow, John

  Curry, rh David

  Beresford, Sir Paul

  Davey, Edward (Kingston)

  Blunt, Crispin

  Davidson, Ian

  Boswell, Tim

  Davies, Quentin (Grantham &

  Bottomley, Peter (Worthing W)

  Stamford)

  Bottomley, rh Virginia (SW

  Davis, rh David (Haltemprice &

  Surrey)

  Howden)

  Brady, Graham

  Djanogly, Jonathan

  Brake, Tom (Carshalton)

  Dobbin, Jim (Heywood)

  Brazier, Julian

  Dobson, rh Frank

  Breed, Colin

  Dodds, Nigel

  Brooke, Mrs Annette L

  Dorrell, rh Stephen

  Browning, Mrs Angela

  Doughty, Sue

  Bruce, Malcolm

  Drown, Ms Julia

  Burns, Simon

  Duncan, Alan (Rutland)

  Burstow, Paul

  Duncan Smith, rh Iain

  Burt, Alistair

  Dunwoody, Mrs Gwyneth

  Butterfill, John

  Efford, Clive

  802

  Evans, Nigel

  Malins, Humfrey

  Fabricant, Michael

  Maples, John

  Fallon, Michael

  Marsden, Paul (Shrewsbury &

  Field, Mark (Cities of London &

  Atcham)

  Westminster)

  Marshall-Andrews, Robert

  Fisher, Mark

  Mates, Michael

  Flight, Howard

  Maude, rh Francis

  Flook, Adrian

  Mawhinney, rh Sir Brian

  Forth, rh Eric

  Mercer, Patrick

  Foster, Don (Bath)

  Mitchell, Andrew (Sutton

  Fox, Dr. Liam

  Coldfield)

  Gale, Roger (N Thanet)

  Moore, Michael

  Garnier, Edward

  Moss, Malcolm

  Gidley, Sandra

  Mudie, George

  Gillan, Mrs Cheryl

  Murrison, Dr. Andrew

  Goodman, Paul

  Norman, Archie

  Gray, James (N Wilts)

  Oaten, Mark (Winchester)

  Grayling, Chris

  O'Brien, Stephen (Eddisbury)

  Green, Damian (Ashford)

  Osborne, George (Tatton)

  Green, Matthew (Ludlow)

  Ottaway, Richard

  Greenway, John

  Page, Richard

  Grieve, Dominic

  Paice, James

  Gummer, rh John

  Paisley, Rev. Ian

  Hague, rh William

  Paterson, Owen

  Hammond, Philip

  Pickles, Eric

  Hancock, Mike

  Portillo, rh Michael

  Harris, Dr. Evan (Oxford W &

  Prentice, Gordon (Pendle)

  Abingdon)

  Price, Adam (E Carmarthen &

  Harvey, Nick

  Dinefwr)

  Hawkins, Nick

  Prisk, Mark (Hertford)

  Hayes, John (S Holland)

  Pugh, Dr. John

  Heald, Oliver

  Randall, John

  Heathcoat-Amory, rh David

  Redwood, rh John

  Hendry, Charles

  Reid, Alan (Argyll & Bute)

  Hinchliffe, David

  Rendel, David

  Hoban, Mark (Fareham)

  Robertson, Hugh (Faversham &

  Holmes, Paul

  M-Kent)

  Hopkins, Kelvin

  Robertson, Laurence (Tewk'b'ry)

  Horam, John (Orpington)

  Robinson, Mrs Iris (Strangford)

  Howard, rh Michael

  Robinson, Peter (Belfast E)

  Howarth, Gerald (Aldershot)

  Roe, Mrs Marion

  Hughes, Simon (Southwark N)

  Russell, Bob (Colchester)

  Hunter, Andrew

  Sanders, Adrian

  Jack, rh Michael

  Sayeed, Jonathan

  Jackson, Glenda (Hampstead &

  Sedgemore, Brian

  Highgate)

  Selous, Andrew

  Jenkin, Bernard

  Shephard, rh Mrs Gillian

  Johnson, Boris (Henley)

  Shepherd, Richard

  Jones, Lynne (Selly Oak)

  Simmonds, Mark

  Keetch, Paul

  Simpson, Alan (Nottingham S)

  Kennedy, rh Charles (Ross Skye &

  Simpson, Keith (M-Norfolk)

  Inverness)

  Smith, Llew (Blaenau Gwent)

  Kilfoyle, Peter

  Smith, Sir Robert (WAb'd'ns &

  Kirkbride, Miss Julie

  Kincardine)

  Kirkwood, Sir Archy

  Spelman, Mrs Caroline

  Laing, Mrs Eleanor

  Spicer, Sir Michael

  Lait, Mrs Jacqui

  Spink, Bob (Castle Point)

  Lamb, Norman

  Spring, Richard

  Lansley, Andrew

  Stanley, rh Sir John

  Laws, David (Yeovil)

  Steen, Anthony

  Leigh, Edward

  Stevenson, George

  Letwin, rh Oliver

  Streeter, Gary

  Lewis, Dr. Julian (New Forest E)

  Stunell, Andrew

  Lewis, Terry (Worsley)

  Swayne, Desmond

  Liddell-Grainger, Ian

  Swire, Hugo (E Devon)

  Lidington, David

  Syms, Robert

  Lilley, rh Peter

  Tapsell, Sir Peter

  Llwyd, Elfyn

  Taylor, Ian (Esher)

  Loughton, Tim

  Taylor, John (Solihull)

  Luff, Peter (M-Worcs)

  Taylor, Matthew (Truro)

  McDonnell, John

  Taylor, Sir Teddy

  McIntosh, Miss Anne

  Thomas, Simon (Ceredigion)

  Mackay, rh Andrew

  Thurso, John

  Maclean, rh David

  Tonge, Dr. Jenny

  McLoughlin, Patrick

  Trend, Michael

  Mahon, Mrs Alice

  Turner, Andrew (Isle of Wight)

  803

  Turner, Dr. Desmond (Brighton

  Williams, Hywel (Caernarfon)

  Kemptown)

  Williams, Roger (Brecon)

  Tyler, Paul (N Cornwall)

  Willis, Phil

  Tyrie, Andrew

  Winterton, Ann (Congleton)

  Viggers, Peter

  Winterton, Sir Nicholas

  Wareing, Robert N.

  (Macclesfield)

  Watkinson, Angela

  Wood, Mike (Batley)

  Webb, Steve (Northavon)

  Yeo, Tim (S Suffolk)

  Whittingdale, John

  Young, rh Sir George

  Widdecombe, rh Miss Ann

  Younger-Ross, Richard

  Wiggin, Bill

  Tellers for the Noes:

  Wilkinson, John

  Mr. David Wilshire and

  Willetts, David

  Mr. Mark Francois

  Question accordingly agreed to.

  HEALTH AND SOCIAL CARE (COMMUNITY HEALTH AND STANDARDS) BILL (PROGRAMME)
  Motion made, and Question put forthwith, pursuant to Orders [28 June 2001 and 29 October 2002],
  That the following provisions shall apply to the Health and Social Care (Community Health and Standards) Bill:

  Committal
  1. The Bill shall be committed to a Standing Committee.

  Standing Committee
  2. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 19th June 2003.
  3. The Standing Committee shall have leave to sit twice on the first day on which it meets.

  Consideration and Third Reading
  4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
  5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on the day on which proceedings on consideration are commenced.
  6. Sessional Order B (programming committees) made by the House on 28th June 2001 shall not apply to proceedings on consideration and Third Reading.

  Other proceedings
  Any other proceedings on the Bill (including any proceedings on consideration of Lords amendments or any further messages from the Lords) may be programmed.—[Joan Ryan.]
  The House divided: Ayes 326, Noes 204.

  Division No. 179]

  [7.28 pm

  AYES

  Adams, Irene (Paisley N)

  Begg, Miss Anne

  Ainger, Nick

  Bell, Stuart

  Ainsworth, Bob (Cov'try NE)

  Benn, Hilary

  Alexander, Douglas

  Betts Clive

  Allen, Graham

  Blackman, Liz

  Anderson, rh Donald (Swansea E)

  Blair, rh Tony

  Anderson, Janet (Rossendale &

  Blears, Ms Hazel

  Darwen)

  Blizzard, Bob

  Armstrong, rh Ms Hilary

  Blunkett, rh David

  Atherton, Ms Candy

  Atkins, Charlotte

  Boateng, rh Paul

  Austin, John

  Borrow, David

  Bailey, Adrian

  Bradley, rh Keith (Withington)

  Baird, Vera

  Bradley, Peter (The Wrekin)

  Banks, Tony

  Bradshaw, Ben

  Barron, rh Kevin

  Breman, Kevin

  Bayley, Hugh

  Brown, rh Gordon (Dunfermline

  Beard, Nigel

  E)

  804

  Brown, rh Nicholas (Newcastle E

  Foster, Michael Jabez (Hastings

  Wallsend)

  & Rye)

  Brown, Russell (Dumfries)

  Foulkes, rh George

  Browne, Desmond

  Francis, Dr. Hywel

  Bryant, Chris

  Gapes, Mike (llford S)

  Buck, Ms Karen

  Gardiner, Barry

  Burden, Richard

  George, rh Bruce (Walsall S)

  Burgon, Colin

  Gerrard, Neil

  Burnham, Andy

  Gilroy, Linda

  Byers, rh Stephen

  Goggins, Paul

  Caborn, rh Richard

  Griffiths, Jane (Reading E)

  Cairns, David

  Griffiths, Nigel (Edinburgh S)

  Campbell, Alan (Tynemouth)

  Griffiths, Win (Bridgend)

  Campbell, Mrs Anne (C'bridge)

  Grogan, John

  Campbell, Ronnie (Blyth V)

  Hain, rh Peter

  Casale, Roger

  Hall, Mike (Weaver Vale)

  Caton, Martin

  Hall, Patrick (Bedford)

  Cawsey, Ian (Brigg)

  Hamilton, Fabian (Leeds NE)

  Challen, Colin

  Hanson, David

  Chapman, Ben (Wirral S)

  Harman, rh Ms Harriet

  Chaytor, David

  Healey, John

  Clark, Mrs Helen (Peterborough)

  Henderson, Ivan (Harwich)

  Clark, Dr. Lynda (Edinburgh

  Hendrick, Mark

  Pentlands)

  Hepburn, Stephen

  Clark, Paul (Gillingham)

  Hesford, Stephen

  Clarke, rh Charles (Norwich S)

  Hewitt, rh Ms Patricia

  Clarke, rh Tom (Coatbridge &

  Hill, Keith (Streatham)

  Chryston)

  Hodge, Margaret

  Clelland, David

  Hood, Jimmy (Clydesdale)

  Clwyd, Ann (Cynon V)

  Hoon, rh Geoffrey

  Coaker, Vernon

  Hope, Phil (Corby)

  Coffey, Ms Ann

  Howarth, rh Alan (Newport E)

  Cohen, Harry

  Howarth, George (Knowsley N &

  Cook, Frank (Stockton N)

  Sefton E)

  Cook, rh Robin (Livingston)

  Howells, Dr. Kim

  Cooper, Yvette

  Hughes, Beverley (Stretford &

  Corston, Jean

  Urmston)

  Cousins, Jim

  Hughes, Kevin (Doncaster N)

  Cranston, Ross

  Hurst, Alan (Braintree)

  Crausby, David

  Hutton, rh John

  Cruddas, Jon

  Illsley, Eric

  Cryer, Ann (Keighley)

  Ingram, rh Adam

  Cummings, John

  Irranca-Davies, Huw

  Cunningham, rh Dr. Jack

  Jackson, Helen (Hillsborough)

  (Copeland)

  Jamieson, David

  Cunningham, Tony (Workington)

  Johnson, Alan (Hull W)

  Curtis-Thomas, Mrs Claire

  Johnson, Miss Melanie (Welwyn

  Darling, rh Alistair

  Hatfield)

  Davey, Valerie (Bristol W)

  Jones, Helen (Warrington N)

  David, Wayne

  Jones, Kevan (N Durham)

  Davidson, Ian

  Jones, Martyn (Clwyd S)

  Davies, rh Denzil (Llanelli)

  Jowell, rh Tessa

  Davies, Geraint (Croydon C)

  Joyce, Eric (Falkirk W)

  Davis, rh Terry (B'ham Hodge H)

  Kaufman, rh Gerald

  Dean, Mrs Janet

  Keeble, Ms Sally

  Denham, rh John

  Keen, Ann (Brentford)

  Dismore, Andrew

  Kelly, Ruth (Bolton W)

  Donohoe, Brian H.

  Kemp, Fraser

  Doran, Frank

  Kennedy, Jane (Wavertree)

  Dowd, Jim (Lewisham W)

  Kidney, David

  Drew, David (Stroud)

  King, Andy (Rugby)

  Eagle, Maria (L'pool Garston)

  King, Ms Oona (Bethnal Green &

  Edwards, Huw

  Bow)

  Efford, Clive

  Knight, Jim (S Dorset)

  Ellman, Mrs Louise

  Kumar, Dr. Ashok

  Ennis, Jeff (Barnsley E)

  Ladyman, Dr. Stephen

  Farrelly, Paul

  Lammy, David

  Field, rh Frank (Birkenhead)

  Laxton, Bob (Derby N)

  Fisher, Mark

  Lazarowicz, Mark

  Fitzpatrick, Jim

  Lepper, David

  Fitzsimons, Mrs Lorna

  Leslie, Christopher

  Flint, Caroline

  Levitt, Tom (High Peak)

  Flynn, Paul (Newport W)

  Lewis, Ivan (Bury S)

  Follett, Barbara

  Liddell, rh Mrs Helen

  Foster, rh Derek

  Linton, Martin

  Foster, Michael (Worcester)

  Lloyd, Tony (Manchester C)

  805

  Love, Andrew

  Rammell, Bill

  Lucas, Ian (Wrexham)

  Rapson, Syd (Portsmouth N)

  Luke, lain (Dundee E)

  Raynsford, rh Nick

  McAvoy, Thomas

  Reed, Andy (Loughborough)

  McCabe, Stephen

  Reid, rh Dr. John (Hamilton N &

  McCartney, rh Ian

  Bellshill)

  McDonagh, Siobhain

  Robertson, John (Glasgow

  MacDonald, Calum

  Anniesland)

  MacDougall, John

  Roche, Mrs Barbara

  McFall, John

  Rooney, Terry

  McGuire, Mrs Anne

  Ross, Ernie (Dundee W)

  McIsaac, Shona

  Roy, Frank (Motherwell)

  McKechin, Ann

  Ruane, Chris

  McKenna, Rosemary

  Russell, Ms Christine (City of

  Mackinlay, Andrew

  Chester)

  McNamara, Kevin

  Ryan, Joan (Enfield N)

  McNulty, Tony

  Salter, Martin

  MacShane, Denis

  Savidge, Malcolm

  Mactaggart, Fiona

  Shaw, Jonathan

  McWilliam, John

  Sheerman, Barry

  Mahmood, Khalid

  Sheridan, Jim

  Mallaber, Judy

  Simon, Siôn (B'ham Erdington)

  Mandelson, rh Peter

  Singh, Marsha

  Mann, John (Bassetlaw)

  Smith, rh Andrew (Oxford E)

  Marris, Rob (Wolverh'ton SW)

  Smith, Angela (Basildon)

  Marsden, Gordon (Blackpool S)

  Smith, Jacqui (Redditch)

  Marshall, David (Glasgow

  Smith, John (Glamorgan)

  Shettleston)

  Soley, Clive

  Martlew, Eric

  Southworth, Helen

  Meacher, rh Michael

  Spellar, rh John

  Meale, Alan (Mansfield)

  Squire, Rachel

  Merron, Gillian

  Starkey, Dr. Phyllis

  Michael, rh Alun

  Steinberg, Gerry

  Milburn, rh Alan

  Stevenson, George

  Miliband, David

  Stewart, David (Inverness E &

  Miller, Andrew

  Lochaber)

  Moffatt, Laura

  Stinchcombe, Paul

  Mole, Chris

  Stoate, Dr. Howard

  Moonie, Dr. Lewis

  Strang, rh Dr. Gavin

  Morgan, Julie

  Straw, rh Jack

  Morley, Elliot

  Stringer, Graham

  Morris, rh Estelle

  Stuart, Ms Gisela

  Mountford, Kali

  Sutcliffe, Gerry

  Mullin, Chris

  Tami, Mark (Alyn)

  Munn, Ms Meg

  Taylor, rh Ann (Dewsbury)

  Murphy, Denis (Wansbeck)

  Taylor, Dari (Stockton S)

  Murphy, Jim (Eastwood)

  Taylor, David (NW Leics)

  Murphy, rh Paul (Torfaen)

  Thomas, Gareth (Clwyd W)

  Naysmith, Dr. Doug

  Thomas, Gareth (Harrow W)

  Norris, Dan (Wansdyke)

  Timms, Stephen

  O'Brien, Bill (Normanton)

  Tipping, Paddy

  O'Brien, Mike (TV Warks)

  Todd, Mark (S Derbyshire)

  O'Hara, Edward

  Touhig, Don (Islwyn)

  Olner, Bill

  Trickett, Jon

  O'Neill, Martin

  Truswell, Paul

  Organ, Diana

  Turner, Dennis (Wolverh'ton SE)

  Osborne, Sandra (Ayr)

  Turner, Dr. Desmond (Brighton

  Palmer, Dr. Nick

  Kemptown)

  Pearson, Ian

  Turner, Neil (Wigan)

  Perham, Linda

  Twigg, Derek (Halton)

  Picking, Anne

  Twigg, Stephen (Enfield)

  Pickthall, Colin

  Tynan, Bill (Hamilton S)

  Pike, Peter (Burnley)

  Vaz, Keith (Leicester E)

  Plaskitt, James

  Ward, Claire

  Pond, Chris (Gravesham)

  Watson, Tom (W Bromwich E)

  Pope, Greg (Hyndburn)

  Watts, David

  Pound, Stephen

  White, Brian

  Prentice, Ms Bridget (Lewisham

  Whitehead, Dr. Alan

  E)

  Wicks, Malcolm

  Prescott, rh John

  Williams, rh Alan (Swansea W)

  Primarolo, rh Dawn

  Wills, Michael

  Prosser, Gwyn

  Wilson, Brian

  Purchase, Ken

  Winnick, David

  Purnell, James

  Winterton, Ms Rosie (Doncaster

  Quin, rh Joyce

  C)

  Quinn, Lawrie

  Woodward, Shaun

  806

  Woolas, Phil

  Wright, Tony (Cannock)

  Wray, James (Glasgow

  Wyatt, Derek

  Baillieston)

  Wright, Anthony D. (Gt

  Tellers for the Ayes:

  Yarmouth)

  Mr. Ivor Caplin and

  Wright, David (Telford)

  Mr. John Heppell

  NOES

  Ainsworth, Peter (E Surrey)

  Fox, Dr. Liam

  Allan, Richard

  Gale, Roger (N Thanet)

  Amess, David

  Garnier, Edward

  Ancram, rh Michael

  Gidley, Sandra

  Arbuthnot, rh James

  Gillan, Mrs Cheryl

  Atkinson, David (Bour'mth E)

  Goodman, Paul

  Atkinson, Peter (Hexham)

  Gray, James (N Wilts)

  Bacon, Richard

  Grayling, Chris

  Baker, Norman

  Green, Damian (Ashford)

  Barker, Gregory

  Green, Matthew (Ludlow)

  Baron, John (Billericay)

  Greenway, John

  Beggs, Roy (E Antrim)

  Grieve, Dominic

  Beith, rh A. J.

  Gummer, rh John

  Bellingham, Henry

  Hague, rh William

  Bercow, John

  Hammond, Philip

  Beresford, Sir Paul

  Hancock, Mike

  Blunt, Crispin

  Harris, Dr. Evan (Oxford W &

  Boswell, Tim

  Abingdon)

  Bottomley, rh Virginia (SW

  Harvey, Nick

  Surrey)

  Hawkins, Nick

  Brady, Graham

  Hayes, John (S Holland)

  Brake, Tom (Carshalton)

  Heald, Oliver

  Brazier, Julian

  Heathcoat-Amory, rh David

  Breed, Colin

  Hendry, Charles

  Brooke, Mrs Annette L,

  Hermon, Lady

  Browning, Mrs Angela

  Hoban, Mark (Fareham)

  Bruce, Malcolm

  Holmes, Paul

  Burns, Simon

  Horam, John (Orpington)

  Burnside, David

  Howard, rh Michael

  Burstow, Paul

  Howarth, Gerald (Aldershot)

  Burt, Alistair

  Hughes, Simon (Southwark N)

  Butterfill, John

  Hunter, Andrew

  Cable, Dr. Vincent

  Jack, rh Michael

  Calton, Mrs Patsy

  Jenkin, Bernard

  Cameron, David

  Johnson, Boris (Henley)

  Campbell, Gregory (E Lond'y)

  Keetch, Paul

  Campbell, rh Menzies (NE Fife)

  Kennedy, rh Charles (Ross Skye &

  Cash, William

  Inverness)

  Chapman, Sir Sydney (Chipping

  Kirkbride, Miss Julie

  Barnet)

  Kirkwood, Sir Archy

  Clappison, James

  Laing, Mrs Eleanor

  Clarke, rh Kenneth (Rushcliffe)

  Lait, Mrs Jacqui

  Collins, Tim

  Lamb, Norman

  Conway, Derek

  Lansley, Andrew

  Corbyn, Jeremy

  Laws, David (Yeovil)

  Cormack, Sir Patrick

  Leigh, Edward

  Cotter, Brian

  Letwin, rh Oliver

  Curry, rh David

  Lewis, Dr. Julian (New Forest E)

  Davey, Edward (Kingston)

  Liddell-Grainger, Ian

  Davies, Quentin (Grantham &

  Lidington, David

  Stamford)

  Lilley, rh Peter

  Davis, rh David (Haltemprice &

  Llwyd, Elfyn

  Howden)

  Loughton, Tim

  Djanogly, Jonathan

  Luff, Peter (M-Worcs)

  Dodds, Nigel

  McIntosh, Miss Anne

  Dorrell, rh Stephen

  Mackay, rh Andrew

  Doughty, Sue

  Maclean, rh David

  Duncan, Alan (Rutland)

  McLoughlin, Patrick

  Duncan Smith, rh Iain

  Malins, Humfrey

  Evans, Nigel

  Maples, John

  Fabricant, Michael

  Marsden, Paul (Shrewsbury &

  Fallon, Michael

  Atcham)

  Field, Mark (Cities of London &

  Mates, Michael

  Westminster)

  Maude, rh Francis

  Flight, Howard

  Mawhinney, rh Sir Brian

  Flook, Adrian

  Mercer, Patrick

  Forth, rh Eric

  Mitchell, Andrew (Sutton

  Foster, Don (Bath)

  Coldfield)

  807

  Moore, Michael

  Spring, Richard

  Moss, Malcolm

  Stanley, rh Sir John

  Murrison, Dr. Andrew

  Steen, Anthony

  Norman, Archie

  Stunell, Andrew

  Oaten, Mark (Winchester)

  Swire, Hugo (E Devon)

  O'Brien, Stephen (Eddisbury)

  Syms, Robert

  Osborne, George (Tatton)

  Tapsell, Sir Peter

  Ottaway, Richard

  Taylor, Ian (Esher)

  Page, Richard

  Taylor, John (Solihull)

  Paice, James

  Taylor, Matthew (Truro)

  Paisley, Rev. Ian

  Taylor, Dr. Richard (Wyre F)

  Paterson, Owen

  Taylor, Sir Teddy

  Pickles, Eric

  Thomas, Simon (Ceredigion)

  Portillo, rh Michael

  Thurso, John

  Price, Adam (E Carmarthen &

  Tonge, Dr. Jenny

  Dinefwr)

  Tredinnick, David

  Prisk, Mark (Hertford)

  Trend, Michael

  Pugh, Dr. John

  Trimble, rh David

  Randall, John

  Turner, Andrew (Isle of Wight)

  Redwood, rh John

  Tyler, Paul (N Cornwall)

  Reid Alan (Aravll & Bute)

  Tyrie, Andrew

  Rendel, David

  Viggersi, Peter

  Robertson, Hugh (Faversham &

  Watkinson, Angela

  M-Kent)

  Webb, Steve (Northavon)

  Robertson, Laurence (Tewk'b'ry)

  Whittingdale, John

  Robinson, Mrs Iris (Strangford)

  Widdecombe, rh Miss Ann

  Robinson, Peter (Belfast E)

  vviygin, Wilkinson, John

  Roe, Mrs Marion

  Willetts, David

  Russell, Bob (Colchester)

  Williams, Hywel (Caernarfon)

  Sayeed, Jonathan

  Williams, Roger (Brecon)

  Selous, Andrew

  Willis, Phil

  Shephard, rh Mrs Gillian

  Wilshire, David

  Shepherd, Richard

  Winterton, Ann (Congleton)

  Simmonds, Mark

  Winterton, Sir Nicholas

  Simpson, Keith (M-Norfolk)

  (Macclesfield)

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

  Yeo, Tim (S Suffolk)

  Kincardine)

  Young, rh Sir George

  Smyth, Rev. Martin (Belfast S)

  Younger-Ross, Richard

  Soames, Nicholas

  Spelman, Mrs Caroline

  Tellers for the Noes:

  Spicer, Sir Michael

  Mr. Mark Francois and

  Spink, Bob (Castle Point)

  Mr Desmond Swayne

  Question accordingly agreed to.

  HEALTH AND SOCIAL CARE (COMMUNITY HEALTH AND STANDARDS) BILL [MONEY]
  Queen's recommendation having been signified—
  Motion made, and Question put forthwith, pursuant to Standing Order No. 52 (Money resolutions and ways and means resolutions in connection with bills),
  That, for the purposes of any Act resulting from the Health and Social Care (Community Health and Standards) Bill, it is expedient to authorise—

  (a) the payment out of money provided by Parliament of—

  (i) any expenditure incurred by the Secretary of State by virtue of the Act, and

  (ii) any increase attributable to the Act in the sums payable out of money so provided under any other Act; and

  (b) the payment of sums into the Consolidated Fund.—[Joan Ryan.]

  Question agreed to.

  CRIME (INTERNATIONAL CO-OPERATION) BILL [LORDS] (PROGRAMME) (No. 2)
  Motion made, and Question put forthwith, pursuant to Orders [28 June 2001 and 29 October2002],
  That the Order of 1st April (Crime (International Cooperation) Bill [Lords](Programme)) be amended by the substitution in paragraph 2 (time for conclusion of proceedings in Standing Committee) of the words '26th June' for the words '22nd May'.—[Joan Ryan.]
  Question agreed to.

  PETITION

    Beecroft Lower School
    7.41 pm
    Andrew Selous: I present a petition signed by some 300 of my constituents, principally from Dunstable, about the parking and dangerous driving outside Beecroft lower school in Dunstable. It is a danger to the children, and parents and staff at the school are very concerned about it.
    The petition reads:
    The petition of residents living near Beecroft Lower School.
    Declares that haphazard parking of cars outside the school causes danger at the time when people are dropping children off or collecting them.
    The Petitioners therefore request that the House of Commons urge the Council to consider road safety measures such as the erecting of bollards or the painting of double yellow lines on the length of road immediately outside the school.
    And the Petitioners remain, etc.
    To lie upon the Table.

  Housing (Wales)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heppell]
  7.42 pm
  Mr. Dominic Grieve: I am grateful for the opportunity to raise a matter of considerable concern to me and of great concern to my constituent, Mrs. Tolfree, and her sister. It is a case in which I believe there has been serious maladministration by Gwynedd county council in its operation of section 157 of the Housing Act 1985. It concerns a property called Argraig at Maentwrog in Gwynedd.
  My constituent's parents purchased the property from the council in 1983. It is a small house on a hillside, accessible by 56 steps from the street and by a small track that runs behind the village. Following the death of the second of her parents in 2001, the first parent having died in 1988, Mrs. Tolfree and her sister, having no further need for the property, wished to sell it. They placed it on the market in March 2002.
  When the property was sold by Merioneth council in 1983, it was made subject to a covenant under the Housing Act 1980, as amended by section 157 of the Housing Act 1985. This measure was designed to ensure that, in national parks or other rural areas where scope for new building is very limited, local people should not be deprived of housing by second homes and holiday cottages, or by an excessive number of people moving in for their retirement. It presumably did not bother the council in 1983 because it was happy to sell the property as a house to be used during someone's retirement.
  I wish to make it clear at the outset that I have no dispute with the principles underlying that. They are applied in Wales and they are also applied in parts of England, including the Lake district, and other locations.
  The Act provides for local rules to be issued, and Gwynedd council has published its own. They are rather unusual in my view. First, they provide that if there is an application to buy the property from someone whose place of work or principal home is within 20 miles of the property or in the county of Gwynedd, the covenant restricting the sale will not apply. A local connection to the proposed purchaser is satisfied if there is also a relationship to a parent, child, brother or sister. There is also an armed forces provision, and a further provision asking whether a housing association might be interested in taking over the property. I should make it clear that in this case the housing association has no interest in taking over the property whatsoever.
  Seven criteria are to be applied: first, the local connection of the prospective buyer; secondly, the lack of houses for local people in the area where the house is situated; thirdly, the price compared with that of similar houses: fourthly, the length of time that the property has been on the market; fifthly, the reasons for applying and selling; sixthly, any effects on the local community; and, seventhly, and perhaps most importantly, the Welshness of the area and the benefit to the community. It is clear
  810
  that that list gives the council's area committee, which deals with such matters, considerable powers of discretion, which must be exercised fairly and properly.
  When the property was first marketed, a purchaser came forward in April 2002. The council was informed and the intended purchasers completed a questionnaire. The council responded in June, refusing the application to sell to them, claiming that in its opinion the property would be used only as a summer home, even though the purchaser disputed that vigorously. The matter was not even put before the area committee until pressure was put on the council. A repeat attempt in July led the area committee to reject the application on the 13th of that month. No reason was given. On 26 July, following pressure from her solicitors, my constituent was told that the purchasers did not comply with the guidelines. No further indications were given.
  In August last year, a new purchaser appeared. The property was originally marketed at about £75,000. The purchaser offered £71,500, later reducing that to £60,000 because the property was already showing signs of damp and dry rot, having been unoccupied for nine months. My constituent and her sister accepted that offer in September. The questionnaire was filled in. It is noteworthy that the purchasers wanted to work locally, and the husband had a job lined up at Minffordd. The couple were Welsh, but were not Welsh-speaking. Significantly, in filling out the form—this is the first time that I have seen such a form—they felt constrained to say:
  "The people who speak Welsh in our family are mainly our older relatives, but being taught in a Welsh school, myself and a lot of close family members … speak Welsh on a basic level."
  One set of family members came from Tredegar in south Wales and the other from near Wrexham. The couple wished to install themselves in the house and live and work in the area. By then, it was clear, as I said earlier, that local housing associations were quite uninterested in the property, which was unsuitable for their needs. No local purchasers had expressed any interest in the property whatsoever.
  On 17 October 2002, again after a delay when pressure was applied to the council to respond, it refused permission to sell and said that
  "it was felt that the circumstances of the proposed purchasers were insufficient to enable the Council to approve the application, in particular the length of time that they had been connected with the area."
  On that basis, no one would be able to move into an area at all—until one is there one will not have a local connection.
  At that stage, my constituent contacted me, and I wrote to the Secretary of State in early November, outlining the facts and expressing my grave concern at what appeared to be the council's arbitrary and capricious actions. I thought that such actions were unreasonable, given the lack of local interest either by a purchaser or housing association, the nature of the property, the time that it had been left empty, and the problems experienced by my constituent. I am extremely grateful to the Secretary of State for the speed with which he took the matter up and for his response. He wrote in one of his letters to me:
  "I share your views on the local council's reluctance to sell this property as being a bit strange."

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  I took it from the letter that the right hon. Gentleman was being characteristically diplomatic. He also sought on my constituent's behalf to influence the council to change its view. He corresponded with the council and also, I believe, with the Welsh Assembly.
  It was all to no avail. The council refused. I corresponded with the council as well, and it told me that it was refusing because there was a lack of local connection. It repeated that mantra.
  Llew Smith: The hon. Gentleman is highlighting the bigotry that prevails in the nationalist community towards people coming into Wales. [Interruption.] Would he like to respond to the suggestion made by the previous leader of the nationalist party, Dafydd Wigley, who believed that people moving to Wales should be forced to pay twice the going rate for properties? He said:
  "No matter how wealthy people are, they are not going to pay £100,000 for a house worth £50,000."
  Mr. Grieve: The hon. Gentleman makes an interesting point. I shall come on to my views about the council in a moment, if he will bear with me.
  Mr. Elfyn Llwyd: Repeat them outside the Chamber.
  Mr. Grieve: There has been one further development. In February this year, a lady resident in Machynlleth—not exactly a million miles away—who had been long resident there indicated that she wished to buy the property. However, she, too, was turned down in April because of the absence of a local connection, even though the property was being offered to her at a reduced price.
  We are now 14 months from the original marketing of the property. In the past week I have been told that another purchaser may be available, but of course we have no idea what the council's response may be. The property is deteriorating, the interior walls are coated in mould, and it is difficult to keep it heated, maintained and insured. It is a problem for the executor, a problem for the beneficiaries and a source of deep anxiety to them.
  I hope the Minister will agree that what has happened is intolerable. Section 157 of the Housing Act is being grossly misused. Its intention is laudable: to protect local people and give them the opportunity to obtain housing themselves or through a housing association. I do not quarrel with that, because of the difficulty of providing housing in a national park. It was not the intention of the legislation to keep properties empty for 14 months and to deny access to incomers wishing to live and work in the area when housing is available for them, and/or to destroy the value of the property, which, as I said, is causing my constituents great anxiety.
  Such a policy appears to be at the very least grossly incompetent. The incompetence is all the more manifest as the matter has been brought to the attention of the council on repeated occasions, not only by me but by the Secretary of State, who seems to be of the same mind that the situation should not be allowed to continue. It
  812
  also raises in my mind, particularly when I look at the questionnaire that I mentioned earlier, with the questions that it asked and the way in which the applicant felt constrained to answer, the possibility that a local system of apartheid is in operation for local political advantage. I very much hope that that is not the case.
  When I consider what is happening to the value of the property, it also raises in my mind the possibility of the rather unpleasant taint on the local authority that an eventual local purchaser could greatly benefit financially from obtaining a property at a severely undervalued price—suitably beholden, I suppose, to the council and its representatives. I hope I am wrong in allowing such a thought to enter my mind, but if I may say so to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), who intervenes repeatedly from a sedentary position, those who exercise discretionary powers that are given to them should take great care to view themselves as others might view them in the context of the powers that they have. Therefore it is particularly important that in such circumstances they should be seen to be acting fairly throughout. Keeping a property empty for a long time does not seem to me to serve anybody's interest.
  Out of courtesy, I kept the hon. Member for Meirionnydd Nant Conwy informed of this matter from the outset, but he showed not the slightest interest, and considered the actions of the council perfectly appropriate. I have to say that I completely disagree with him.
  Mr. Llwyd: May I remind the hon. Gentleman that the language provisions were accepted by the Welsh Office, and have been adopted by the National Assembly for Wales? In opening his speech he used the word "maladministration". If that genuinely represents his belief, I urge him to advise his constituent to send the matter to the ombudsman without delay. I agree that we do not want properties to stand empty, but as for his scattergun approach, accusing a decently run council of maladministration, he should follow that along, put his money where his mouth is and give the case to the ombudsman, so that he can find out.
  Mr. Grieve: I appreciate the hon. Gentleman's point, and of course that may happen.
  Mr. Nigel Evans (Ribble Valley): Does my hon. Friend agree that the council may not be as well run as others suggest, because keeping the property empty for 14 months means that several hundreds of pounds in council tax has been lost to the community?
  Mr. Grieve: I entirely agree.
  I hope to hear from the Minister about the specific issue, and about what he and the Secretary of State will do—if he agrees with me, which I think he might—to try to move things along and get Gwynedd council to act properly, without recourse to the ombudsman. However, I feel that there is also a wider issue, about which the Secretary of State should be concerned.
  As I said, I believe that the Housing Act has an important role to play in helping rural communities, but it has to be viewed in the context of the Human Rights

  813
  Act 1998, and when I look at the sections that deal with the local identity of the area, and the way in which the guidelines are set out, I wonder whether that complies with the first protocol to article 1, on the protection of property—
  "Every natural or legal person is entitled to the peaceful enjoyment of his possessions"—
  and article 14, which expressly prohibits discrimination on the grounds of, among other things,
  "sex, race, colour, language, religion, political or other opinion".
  I do not say that that should vitiate or lead to the abolition of section 157 of the 1985 Act, but it needs to be viewed, and properly applied, in that context.
  May I say to the hon. Member for Meirionnydd Nant Conwy that the danger is that if that does not happen, the provision will fall foul of the Human Rights Act, and at that stage the Government, the hon. Gentleman himself, and others who seek to protect rural communities will find that the abuse of that protection by a local authority such as Gwynedd means that it will be withdrawn? I do not wish to see that happen, but the present situation troubles me very much.
  I have already raised the matter with the Secretary of State, and I would be grateful if the Minister could give some indication of how his right hon. Friend views the compatibility of that provision with the Human Rights Act. I feel that there are ways in which it comes, to say the least, very close to the edge.
  For example, I appreciate the fact that Wales has particular features, but if in one of the villages in my constituency a provision was used to discriminate in favour of Englishness, and that was used to prevent the Asian community in Slough from moving into my constituency, I think that the Commission for Racial Equality would be extremely exercised about that—and rightly so. I therefore hope that local protection can be seen to apply impartially to all people, irrespective of their origins, and I look forward to hearing the Minister's reply.
  7.59 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): I congratulate the hon. Member for Beaconsfield (Mr. Grieve) on securing this debate on a subject that is obviously causing considerable distress to one of his constituents. Of course, it is primarily a local authority matter, but I compliment him for the assiduous attention that he is paying to the interests of the people whom he represents.
  At the heart of this matter is the fact that the qualifying tenants in rural areas have a right to buy—a policy introduced by the hon. Gentleman's party when it was in government. However, landlords have power to impose a covenant restricting resale in rural areas under section 157 of the Housing Act 1985. That power predates the 1985 Act, which consolidated earlier legislation introduced under the Conservative Administration.
  When right to buy was introduced in 1980, the then Secretary of State for Wales made an order designating many communities in the former counties of Dyfed and Gwynedd as rural areas for the purposes of section 157. Other areas were designated in rural parts of England. The hon. Gentleman's constituents inherited a property
  814
  in the village of Maentwrog that was formerly purchased under right to buy. Maentwrog is located in the Snowdonia national park. When disposing of property in 1983 under right-to-buy regulations, the local authority decided to impose a restrictive covenant under section 157.
  A covenant can operate in two ways. The owner can be required to sell to someone who has lived or worked in the area for the previous three years. Alternatively, for a period of 10 years, the property may not be disposed of unless the landlord is given the opportunity to repurchase at market value. Under section 157, the covenants can be applied in the following areas: national parks, areas of outstanding natural beauty and areas designated as rural by the Secretary of State or the National Assembly for Wales. Although a covenant imposed under section 157 binds the purchaser and his or her successors in title, it is open to the local authority to remove that covenant at any time if it wishes.
  Following problems in the rural economy and an increase in house prices, concerns grew about the ability of local people in rural areas to buy affordable housing. That is perfectly understandable. In response, the National Assembly for Wales consulted in 2001 about extending the list of designated areas for the purposes of right to buy. The criterion proposed for designation was that communities should have a population density of two persons or fewer per hectare. Following the receipt of comments and further consultation, the Assembly decided also to include communities with populations of 3,000 or fewer. It also decided to exclude some communities that met the criteria, but were considered by local authorities to be areas without significant problems in access to affordable housing. The purpose of designating rural areas was to assist local people in accessing such housing. A new order was debated by the Assembly in January and came into effect on 7 February this year. The section 157 powers have been used selectively to prevent local hardship and are not seen as simply a means of excluding migration from beyond borders.
  I certainly sympathise with the owners of the property and understand the distress that they experienced in their protracted attempts to sell, but Gwynedd council has acted fully within the letter of the law. It is for others to judge whether, in the present circumstances, it is acting in the spirit of the law, but it is certainly acting within the law itself. In fairness, the council's area committee has considered the issue on several occasions and indicated its willingness to reconsider lifting the covenant if circumstances change. My right hon. Friend the Secretary of State has been in communication with the council and has been seeking to persuade it to lift the covenant. On February 10, he wrote expressing disappointment that the housing committee did not see fit at that stage to lift the covenant, and I strongly support him in that respect.
  There have been accusations that the authority has been racist in seeking to prevent an influx of English second-home buyers. I have no evidence of that, and I am sure that all hon. Members would be concerned if there were any such evidence in relation to this case. It has been suggested that the actions of the council may have been discriminatory and therefore contravened the European convention on human rights. What does the

  815
  European convention on human rights actually say? Article 14, to which the hon. Gentleman referred, deals with the prohibition of discrimination. It states:
  "The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status."
  Article 14 works only to protect from different treatment in exercising other convention rights. It does not give a general right to protection from different treatment in all areas of life.
  So what other articles might conceivably be involved in the matter that the hon. Gentleman has raised? Article 8 covers the right to respect for private and family life. It says:
  "Everyone has the right to respect for his private and family life, his home and his correspondence."
  Article 8 is a "qualified" right, thus allowing some interference by the state. Interference must, however, have a clear legal basis, which is provided by section 157 of the Housing Act 1985. That said, as no one is living in the property, describing it as a home might be difficult to justify in terms of the way in which the European convention on human rights is applied in this case.
  Article 1 of the protocol covers the protection of property. It states:
  "Every natural or legal person is entitled to peaceful enjoyment of his possessions."
  The state is, however, permitted to interfere with how property is used if the law specifically permits that and such interference is justified and proportional.
  Mr. Grieve: That is the nub of it, is it not? Any such interference that is provided for by the statute must be exercised reasonably and proportionately. As the Minister may agree, the nub of this matter is whether there has been reasonable and proportionate action by the council in denying the sale for a 14-month period.
  Mr. Touhig: My right hon. Friend the Secretary of State and I wrote to the council, as did my colleagues in the Assembly, to try forcefully to bring that home to it.
  In an effort to attract local buyers, the price was recently lowered. An outside buyer appeared, and the local authority was asked to approve. Unfortunately, it rejected the proposal on the basis that insufficient time
  816
  had elapsed since the price drop to permit serious local expressions of interest. More time has elapsed, and the area committee has the opportunity to reconsider.
  Mr. Grieve: It should perhaps be put on the record that although officially the price had been lowered, it had been lower since July last year. Anybody who rang up the estate agents would have been told, "It is not what appears in the window—the actual asking price is £60,000." A letter from the estate agents to the council explained that it deemed that the time that had passed was insufficient.
  Mr. Touhig: I take note of the hon. Gentleman's point, and I have no doubt that it will be brought to the attention of Gwynedd council in due course.
  I hope that the area committee will now reconsider the matter. My right hon. Friend the Secretary of State and I will, of course, keep a watchful eye on developments. Meanwhile, the vendors have the opportunity to seek permission from the local authority to rent the property to non-locals, thus avoiding further deterioration and possibly establishing a local residency status for a potential future purchaser.
  Dr. Julian Lewis: Before the Minister concludes, can he throw some light on the rather strange fact that the council appears to be discriminating not only against people who are not Welsh, but against people who are Welsh but are not quite as fluent in the Welsh language as they might like?
  Mr. Touhig: I cannot comment on that matter in this context, but it is something that all hon. Members would be concerned about.
  I sympathise with the vendors' desire to resolve the issue as speedily as possible, and I sincerely hope that a local purchaser can soon be found to buy the property at the new asking price. Failing that, I hope that the area committee will feel able, within a reasonable time, to remove the covenant. Although it is right to use the right-to-buy legislation to protect local communities and to give local people the opportunity to acquire property in their home communities, ultimately we have to take a reasonable view of such matters. I hope that if no other alternative can be found, the council may be persuaded of the strength of the argument and remove the covenant so that the matter can be resolved.
  Question put and agreed to.
  Adjourned accordingly at nine minutes past Eight o'clock.

Preamble
[MR. EDWARD O'HARA in the Chair]

Mental Health
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Caplin.]
9.30 am
Mr. Tim Boswell: I am delighted and honoured to introduce a debate on the provision of mental health services, a matter of general concern to all hon. Members. We know from statistics and claims made by specialist organisations that a significant proportion of people—probably more than one in five of the population—will be afflicted by mental illness at some stage in their lives. If we add to that the multiplier of their families and carers, it means that almost all of us will have a direct involvement in such illness, either as patients or carers.
Hon. Members will know from their constituency postbags that, although the matter is not the most vocal or immediately dramatic of our worries, it is very important. I am delighted to welcome to the debate the Under-Secretary of State for Health, the hon. Member for Tottenham (Mr. Lammy). I am used to debating learning disability with the Minister of State, the hon. Member for Redditch (Jacqui Smith), but I am sure that the hon. Gentleman will add an interesting angle to our discussions.
I can say genuinely that I do not intend to approach the matter in a partisan spirit; it is too important for that. I shall be critical of the Government's performance in some areas, but that is not the primary purpose of my discourse. We sometimes do ourselves disservice in this place by suggesting that there is a year zero when a Government start with a clean sheet and change everything. The history of social progress in this country—I speak with my specialist knowledge about disability—is one of improvements. People see a problem, or one develops. People then lobby and press for legislation. They press Governments and when such matters are brought to a head—a difficult process beginning with an improvement in understanding— we can move on to changes, either through private Members' or Government-inspired legislation. If we are really successful, the resources to support that legislation will be provided, too. It is not a guaranteed process, but one that has served us over the years.
It is worth pausing for a moment to consider the sensitive matter of mental illness and disability, and to consider how many light years we have come from the understanding of such matters of a century ago. I will not use the easy trick of complaining about our forebears but, at that time, "lunatics" were put away out of sight in an asylum, often for long periods and with minimal resources. It was a case of "out of mind, out of sight", a completely unacceptable approach.
I wish to emphasise the wide range of conditions of mental illness. I speak not as a doctor, but as an engaged layperson. This should not drive the debate completely,
218WH
but let us consider the comparatively few situations when a patient in the community poses a risk to members of the public, a risk that is aggravated in most cases if medication is not taken regularly.
I ought to stress before I continue—it is easy to be misunderstood in this sensitive area—that the population that I have in mind is not identical to that with a clinical diagnosis of schizophrenia, although it has been suggested that schizophrenia might affect 1 per cent. of people at some stage of their lives. The people I am talking about—they are not exactly the same as those diagnosed with schizophrenia, although there are some similarities—are patients who pose some risk to themselves, but not to third parties.
Yet that is by no means the whole story, or even the most important part of it. Various types of anxiety and depression are prevalent, and seem to be becoming more so. I notice that the submission from YoungMinds referred to

"an unrelenting rise in teen mental illness".

I also note that in the short period of two years between 1999 and 2001, bridging the millennium, pharmacists reported that there was an increase in the number of prescriptions for antidepressants of more than 25 per cent. to an annual figure of some 25 million. That is a huge increase in a short time, and I hope one that will not be sustained.
We also need to consider the important impact of the ageing process, and the fact that a much greater number of older people are surviving to a great old age. Soon, there will 2 million people over the age of 85. Many of those—by no means all of them—will have some form of Alzheimer's or dementia problems. The fact that longevity is aggravating the problem requires particular kinds of provision.
Some Members know that I have been involved in a Front-Bench capacity—in which I do not speak today—in some aspects of disability and the benefits system. Mental illness is well on the way to becoming the major factor in disability issues, and in incapacity to work. For example, the overall figures for claiming incapacity benefit are not much worse than they were in 1997, but they were supposed to have fallen. The Prime Minister described the figure of 2.7 million claimants last year as a scandal, but I do not intend to go on about that this morning.
It is interesting to unpack the causes of those figures. The traditional main problems are muscular, skeletal and, to some extent, circulatory. Yet those are increasingly taking a back seat in favour of mental illness and stress problems. Within a more or less stable figure, the number off sick with mental illness has risen by a quarter. Of claimants of disability living allowance, which is obviously a wider category, the number claiming on account of mental illness has risen by some three quarters since 1997. I make no causative accusations about the nature of the Government during that period, but we face something of a stress epidemic. Stress is the characteristic disease of our time. It is significant, not only because of the distress that it causes families in the way of personal tragedies, but in the economic cost that it represents to the nation in working days lost and talents run to waste.
I realise that the Minister cannot give me final answers, but I hope that he will reflect that the benefit system is still not sensitive enough to encourage people

219WH
who have a problem or history of mental illness back to work. I know that Ministers in the Department for Work and Pensions have acknowledged the importance of changing that, and I think that they are genuinely committed to working on the problem within the "Pathways to work" strategy. I acknowledge that there have been some genuine improvements in, for example, the linking rules, which apply when a person's benefit entitlement has been broken by a partial return to work.
However, I hope that Ministers will bear in mind three points, and that Ministers in the Department of Health will share them with their colleagues in the Department for Work and Pensions. First, there is a need to make sure that assessment doctors are not only trained in physical disability but have a sensitive understanding of the problems caused by mental illness or depression. Secondly, there is still a need for more flexible rules on part-time working. If someone has had a stress problem, it is not realistic to assume that they will just go back to work. The benefits system still has two modes; one is either on benefit or at work, and the two are mutually exclusive. That is not the way to get people with a history of mental illness or stress problems back to work.
Thirdly, Ministers need to be alert to any hidden deterrents to the resumption of work. It is all very well to say, "You can come off benefits because you are no longer incapable", but how about people who are understandably concerned that they may lose their disability living allowance automatically as a result? That would be difficult for them.
I should like to mention learning disability. I have said in the past, and will say again for the avoidance of doubt, that learning and mental disabilities are often confused with mental illness. Of course, they are not the same at all. We know that learning disabilities are long-term conditions. The Minister and I have several times constructively debated the "Valuing People" White Paper. I hope that we will shortly debate the Government report on that.
Although learning disability is completely different from mental illness, a learning disability, or indeed certain physical disabilities, may well predispose people to mental illness because of the frustration involved or the sheer agony of managing their lives. There is therefore a connection, and Mencap pointed it out to me. I pay tribute to it and other organisations for their briefings and, more generally, for their hands-on work in widening employment opportunities for people with such problems. As Mencap reasonably points out, the more that people find they have problems in comparison with their non-disabled peers, the more likely they are to run into mental health problems as well. I hope that the Minister will take that point back to his colleague.
On the "Valuing People" strategy, there are still problems with access to child and adolescent mental health services. Perhaps the Minister would like to say a little about how that strategy is being developed. Mencap and many others are worried about getting the right definitions into the new mental health legislation, and have specifically expressed concerns about informal detentions. The Minister is probably more familiar than
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I am with the Bournewood case. I hope that he can assure us that the gap will be filled, and that the issue will be adequately dealt with.
More generally in connection with draft mental health legislation, I attended a meeting in the House last autumn on the draft Mental Health Bill, introduced by the Government. I can fairly and moderately say that, in the 15 years that I have been in the House, I have never seen a piece of Government legislation that was so completely excoriated by professionals for being unsatisfactory. I hope that lessons have been learned from that about, first, the importance of adequate consultation with specialist interests; secondly, the need to be sensitive to the wide range of mental health conditions that I have referred to; and thirdly, and above all, the need for Ministers to make sure that any drastic remedies, including the removal of liberty, are confined only to the most pressing cases and those that pose the most urgent danger to the public.
I am sure that Ministers will think hard about the lessons that they should have learned from that. They will consider a well-amended Bill and make progress on that and on what they are planning. That would be helpful. They also need to remember the parallel legislation that is required about mental capacity and the ability to make decisions, which is extremely important.
Before turning to medical services, I want to touch on areas of vital support to people with mental illness and in which Ministers should take an interest from a departmental viewpoint. I hope that the Minister will comment. The first is the interface with social service provision. I refer not only to emergency situations, but to what happens on a day-to-day basis. The importance of housing provision is an integral part of the "Valuing People" strategy for people with learning disabilities. The strategy is even more necessary in the context of mental illness, particularly of a relapsing or remitting sort, and when housing for the mentally ill is to be put in residential areas. The proposals and the adequate safeguards must be explained. I have faced difficulties in my constituency, as I am sure have other hon. Members. The guidelines of the Department are helpful in that respect.
I turn now to the formal subject of the debate, which is health service provision of services for mental illness. I think that Ministers should report to us on their progress in meeting targets. The national service framework on mental health is the earliest of its type—the prototype—and it is now more than three years old. That is plenty of time for something to have happened. I notice that the national committee of the pharmaceutical service in a recent report comments that progress on implementing the standards is patchy. It refers to a recent report from the King's Fund—dealing only with mental health services in London—which states that only one third of primary care trusts have completed evidence-based guidelines. It is no good Ministers saying that they require evidence-based information, but that, for whatever reason, they have not received it.
The study also reports that implementation has been skewed towards handling severe mental illness, rather than to primary care for mental health. One of the points that is made several times—and rightly so—is that early intervention is critical in warding off some of

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the problems before they become serious, clinical matters that might even require hospitalisation. The Minister will know that community pharmacies are a sensitive issue for many of us. They have an essential role to play in ensuring that, when patients are living in the community, the drugs that they are prescribed are taken, as a result of which the community is safeguarded. That point must be highlighted.
I turn now to the NHS plan targets. I hope that the Minister will comment on the Department's claims in meeting them. I note that the mental health mapping atlas, which was published in June last year, pointed out that there were particular problems in providing a 24-hour service for mental health crisis resolution teams. Fewer than half the teams then established—52, from memory—were meeting that requirement. We all know that mental illness does not operate on a nine-to-five basis—even if the office does. A problem may become acute in the small hours of the night. It is simply no good fulfilling targets nominally, but not meeting them in substance. That is a major area of concern.
Finally, in this area of health provision, the Minister may like to comment on the progress in reshaping the service. For example, I note that in my own county, the Princess Marina site in Northampton will require expensive guarding for several years as the work has migrated elsewhere. That will result in a huge cost to the health service. I am not suggesting that it should not happen, but it is an example of the difficulties of restructuring.
In conclusion, I am sure that there is no lack of good will in this Chamber for making improvements in the provision of mental health services. There is certainly no shortage of ministerial warm words and initiatives on the matter. However, in our hearts, I think that hon. Members recognise that this is not a glamorous area of medical practice; it is perhaps not even one that clinicians would collectively place emphasis on in the absence of a steer from Ministers. Indeed, that was the point of establishing the separate mental health trusts and ring fencing the money allocated to them. We must shout—and the sector must shout—loud and long to get an appropriate share of resources. Ministers will be judged not only on their words, whether spoken or in documents, but on their ability to deliver effective services to meet a rising tide of demand and to deal with some real distress in the community.
Society will be judged by its commitment to include, support or care for those who are suffering and in much distress, and on whether patients, or those who care for them, share our common humanity.
9.50 am
Mr. David Drew: I congratulate the hon. Member for Daventry (Mr. Boswell) on securing this important debate. It is good to talk about health delivery, rather than about systems and structures, which we shall discuss later. No matter what approach we take to how we do things, it will make little difference unless we implement them on the ground.
This service has traditionally been regarded as the Cinderella service. I do not come to it with any special expertise, but all hon. Members have their own experiences, whether through family and friends, of those who have undergone a period of mental illness.
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For the past two years or so, I have been meeting a group of mental health professionals who have taken me through the subject. I have, on the back of their advice, been able to talk subsequently to clients and carers about some of the issues. Matters came to a head over the Government's learning experience of its draft—I will not use the words "ill-fated"—Mental Health Bill, which contained serious weaknesses and was full of lost opportunities. Most people said that incapacity was the most important area for which to legislate; they said that we should try to define what was meant by incapacity and how we could help people who were so defined.
I shall draw on my experience of talking to a group of professionals, but I will do so generally, because those discussions are confidential. We have discussed matters across a wide terrain, including legal issues such as how and what happens when people are sectioned. That is the most difficult and the most extreme way of dealing with someone with a mental health problem. We have also discussed employment benefits, modern psychiatry and some of the issues relating to that and the supporting people approach, which is a good move in the right direction. I shall say more about that later.
I welcome the changes in the structure of the health service in my county, inasmuch as learning disabilities and mental health have been joined under the heading of the partnership trust. For all the possible criticisms of how primary care trusts were set up and how acute hospitals have been brought together, it makes eminent sense for learning disabilities and mental health to be dealt with jointly. The matter is approached differently in different parts of the country. Nevertheless, unless we give clear leadership on such matters, the resources will always go elsewhere and the perception will be that this is a Cinderella service. Some good things have come on the back of the changes. It is rare for a politician to hear universal acclaim for changes, but I have never heard anyone argue against how the trust has been created. The evidence suggests that the trust is working well, notwithstanding the usual budgetary constraints and the difficulty in attracting staff.
I will quickly touch on supporting people. I agree with the hon. Member for Daventry that issues such as housing cannot be underestimated in considering the quality of life of someone recovering from mental illness. Such issues are more than part of the process because people's quality of life entirely depends on them. I welcome the Government's initiative on supporting people, although there is a misconception that it largely concerns older people. I was fortunate enough to secure a debate in this Chamber to examine the initiative, which has led to a new approach to the elderly but also involves bringing together different services such as health, housing, employment and social care for vulnerable people—including those who suffer from mental health problems. One aspect of the initiative that seems to be working well on the ground is the proactive policy of finding supported lodgings, which are the only way to get people who have almost lost everything back into the community.
I shall now look at some of the problem areas. I make no apology for examining some of the ground covered by the hon. Member for Bosworth—[Interruptionj Daventry—I will get the constituency right in a minute. We must examine the different issues that need to be highlighted and prioritised. He has already touched on

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that of children and mental health. There have been dramatic increases in resources and prioritisation, but we are corning from a long way back. In the past, parents of children with mental health problems believed—this was also the authorities' answer—that the best approach was to ignore the problem for as long as possible in the hope that children would either get better or become so seriously affected that a dramatic solution would be needed. That was simply unacceptable.
Mr. Boswell:Yesterday, I went to a meeting of the parliamentary group on autism, where Baroness Ashton, who is a Minister, emphasised—it is no breach of privilege to say this—the extreme importance of early intervention. I am with the hon. Gentleman in saying that it is absolutely wrong to put such problems off because they need early examination and assessment, even if early action may not be necessary. It is essential that we change that mindset.
Mr. Drew:I agree with the hon. Gentleman and apologise again for getting his constituency wrong. I will get back on train now.
Counselling services are vital. They often struggle to find money to keep going, and the Cinderella service in that regard is counselling for young people with mental health problems. I hope that the Department of Health will pay attention to that issue because counselling traditionally exists within the domain of local government in general and social care in particular, but it is linked with health.
On drug treatment, we must feel pleased that, as the hon. Member for Daventry said, there have been dramatic improvements in the diagnosis and treatment of mental health over not only the past 100 years but the past decade. We can be proud of that achievement, but it has come at a price. Psychotropic drugs are often the most expensive because they are initially introduced in quite a specialised field. It costs a lot of money to bring them forward and the drugs budget often goes over any boundary intended to keep it within reasonable limits. We have no alternative but to find that money. That is important.
I never cease to be taken aback by the role of psychiatrists. Unlike in other areas of medicine, psychiatrists are still at the centre of all mental health treatment. That is a good thing. Clearly, it is a domain in which specialist knowledge is important. However, there must be accountability. As MPs, we have all had experience of people who feel that they do not get on with their psychiatrist. They believe that it is difficult to get second opinions, particularly in relation to tribunals, to turn around what such people see as a system that is stacked heavily against them.
On sectioning, I hope that, when the Government bring back the mental health legislation, we will consider carefully and sensitively the support on which an individual in the most extreme of situations is able to call. There has been quite an argument about who can be the "friend" of the person being sectioned and about what rights they both have. Given the somewhat difficult position of the community psychiatric nurse—
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who is in the position of issuing the order but is also there to advise the patient or client—the question is how to make things as feasible as possible without making them invidious. Those are big issues.
Thankfully, sectioning happens quite rarely. However, as the hon. Member for Daventry made clear, we know that on the back of our community approach to mental health there are difficulties when people do not agree or do not keep to their regimes of taking medicines. That means that a very difficult situation sometimes has to be faced.
On benefits and employment, I never cease to be amazed—I have shared this with my local citizens advice bureau—about the complexity of the system for people who are affected by mental health problems. It appears that, when people lose an appeal, more often than not it is because of the change in circumstances that appear in terms of the doctor's diagnosis—the person from the Benefits Agency Medical Service—added to what somebody may have put on their form. I would always argue that someone who has had mental health difficulties needs careful support in relation to how they fill the form in and access the benefits system. It is often very hard—although not a matter of life and death; I do not want to he that dramatic—when someone who has had an appeal turned down is reconsidered. We all know what happens. People tend to exaggerate their rate of improvement in the belief that that is the honest and right thing to do, but doing that can adversely affect them.
In one session, I was impressed by the work of the disability advisers and by how much more they try to bring people into the world of work through the stepping stones of voluntary activities, supported employment and then, let us hope, part-time and full-time work. It is a long-term process. We are not talking months; we are often talking years. That means a lot of engagement and a great deal of support.
Much has been done and much more needs to be done. The debate comes at a fortuitous time. There are three issues to consider. First, how can we put more genuine resources into the service so that we give it its correct priority, given the number of people affected? Secondly, how can we continue to change attitudes so that perceptions of mental health are no different from those for any other form of health? We all know that that problem bedevils this issue. If we see mental health as something that we do not want to talk about, it will always be seen as something not worth spending money on.
Thirdly, how can we continue to measure and gain the benefits of medical improvements, notwithstanding the fact that we are moving into an era of much more choice? When I talk to people who are suffering, I never cease to be amazed at how much they are aware of their choices. They want choice over drugs regimes and the type of treatment that they are getting. That can prove difficult, because this is the one illness for which people can be compelled to undergo a period of treatment to which they might not agree. However, that has to be done in as accountable a way as possible, so that when those people get better, they have some choice over how their regime is moved to a conclusion. If we can do that,

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we will have performed a great service to the people suffering from this illness and have moved the whole service into the 21st century and to where it ought to be.
Mr. Deputy SpeakerOrder. Before we proceed, it may be helpful if I point out to Members wishing to speak that it is desirable for the first of the Front Bench spokespersons to be called not later than 10.30.
10.5 am
Mr. Mark Francois: I begin my remarks by congratulating my hon. Friend the Member for Daventry (Mr. Boswell) on securing this important debate.
I should like to take the opportunity to raise specific constituency issues relating to the provision of mental health services. Before the debate I managed briefly to give the Minister private notice of one of them. Two mental health trusts operate in my constituency, the North Essex mental health trust and the South Essex partnership trust. The latter currently has its major facility in my constituency at Runwell hospital, which was first constructed in the inter-war years and added to later. The facility is rather long in the tooth, and plans have been outstanding for several years to provide alternative provision at Runwell and other sites in south Essex.
To summarise, three principal elements are involved in what is usually known as the Runwell re-provision programme. The first is to build a purpose-built low and medium-secure site at Runwell. It has accommodated low and medium security mental health patients for many years, so there is nothing new in that. The re-provision is taking place via the private finance initiative mechanism and the Minister will be aware that such things take rather a long time. There have been negotiations and discussions about the programme for years but construction has not yet started, although it appears that matters are finally beginning to gather momentum.
Secondly, acute services, currently based at Runwell, will be moved to Rochford hospital, just over the boundary of my constituency, in the constituency of my hon. Friend the Member for Rochford and Southend, East (Sir Teddy Taylor). A major refurbishment is intended for Rochford, which will allow the upgrading of a number of old wards so that acute patients can be moved to that facility. A planning application was recently approved by Rochford district council to allow that to go ahead.
Thirdly, what are colloquially known as EMI—elderly mentally infirm—services will be moved from Runwell to two new purpose-built facilities, one in the Southend area and the second in Rawreth in my constituency. Much of the remaining Runwell hospital site will then be sold off for housing redevelopment. That is, in outline, what will transpire.
Two specific issues arise from that, and I should like to take the Minister through them, having orientated him to this point. The first relates to the EMI facility at Rawreth. As I understand it from briefings from the trust, the idea is to have a modern purpose-built facility to cater for, as the name suggests, elderly mentally infirm patients, many of whom are physically quite weak and many of whom will be suffering from conditions
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such as the advanced stages of Alzheimer's disease. The trust already has planning permission for the facility, and construction is due to begin later this year.
I should declare a personal interest as the site is located in the local government ward in which I live—Downhall and Rawreth. Despite that, I say to the Minister that I am not being a nimby about the development, and I did not raise strong objections to it per se. However, I have one particular residual concern that I want to raise with the Minister. A local primary school is scheduled to relocate in a few years to a brownfield site adjacent to the EMI site at Rawreth. That means that primary schoolchildren will be playing in the playground not that far away from the facility.
I do not want the Minister to think for one moment that I am attempting to be alarmist about the matter, because I am not. I hope that he will take me entirely at face value when I assure him that I am looking for reassurance. I am sure that he can understand that there are areas for concern. I have discussed the matter in detail with the chief executive of the trust, Dr. Patrick Geoghegan, and he gave me his personal assurance that no one should be based at the EMI facility at Rawreth who would pose any threat to children at that primary school. I am grateful for that but I would like to cover the issue with the Minister as well.
I want to ask two questions. First, will the Minister assure me that no one who has any record that might suggest that they could pose a threat to children will be based at the EMI facility at any time? Secondly, will he also assure me that security measures will be in place? There must be physical security—the design of the building, exits, locks and so on—and 24-hour manning and adequate staffing. so that it will not be possible for any patient from that facility to go walkabout unsupervised by staff. I am assured that the people in the facility require 24-hour supervision, and I want the Minister to reassure me that there will be adequate staff and security measures in place to ensure that that remains the case. I would welcome the Minister's reassurance on those two points for reasons that I hope he can understand, and which hon. Members will appreciate are fully appropriate in the circumstances.
The second issue that I want to raise relates to the old Runwell hospital site. A low and medium-secure unit will be built in one corner of the site, and the bulk of the remaining land will be sold for housing redevelopment. The local community has known that that has been in the wind for many years, so it does not come as any surprise to them. An outline planning application was submitted to Chelmsford borough council a while ago, but rather than determining it immediately, the council is negotiating with the applicants about the fine detail of the application. That is being handled for the Secretary of State by an organisation called Inventures that is acting as the Secretary of State's agent in the matter.
An organisation called the Runwell hospital sports and social club is also located on the site, covering some 10 acres. The club arose as a sports facility for the hospital staff, of whom there were many in days gone by, but over the years the club extended its membership to members of the local community. Many people now use that facility for rest and recreation, and a number of sports are available there. To give the Minister a flavour,

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they range from outdoor sports such as football, to archery, bowls and others. A small clubhouse caters for the members.
Understandably, the club is anxious about its future because of the redevelopment, and a delegation from the club led by its chairman, Mr. James Fraser, came to see me at my constituency surgery last autumn to express its concerns and to ask me to take up the matter on its behalf. I subsequently wrote to Inventures and asked whether it could provide any long-term guarantees for the future of the club. I regret that, to date at least, it appears that it is willing to renew the club's lease on a year-by-year basis only.
Mr. Deputy Speaker: Order. I am listening extremely carefully to the hon. Member. Unless I am missing something, he seems to be straying into an area of planning consent that is not the concern of the Minister who will reply to the debate.
Mr. Francois:I take on board your points, Mr. Deputy Speaker. If I am sailing too close to the wind, I shall tack back in, if I may put it like that. I hope that you will understand that this is a matter of genuine concern to my constituents. However, I shall quickly see whether I can get something out of the Minister, bearing in mind what you said; I would not wish to argue with you in any way.
The Minister understands the problem. I wonder whether he or another Minister at the Department of Health would be prepared to accept a delegation so that we can discuss the matter face to face to try to secure for the club a long-term future in which it will not be threatened. That facility should be retained for the benefit of my constituents and other people in the community who find it extremely valuable.
In summary, I would appreciate it if the Minister provided me with some reassurance about the EMI facility at Rawreth, not least because he must realise that, because the primary school is to move, the relocation of the facility may cause concern to parents who are thinking of sending their children to the school. It would therefore be valuable to have ministerial reassurance that all the angles have been covered. I would also be obliged if the Minister consented to receive a delegation so that we can discuss the issue that falls outside this debate and bring it to a satisfactory conclusion.
10.16 am
Dr. Julian Lewis: I join others who have congratulated my hon. Friend the Member for Daventry (Mr. Boswell) on securing the debate. I particularly congratulate him on the measured and compassionate way in which he addressed the subject.
I should state for the record that I am not a medical doctor. Like the hon. Member for Stroud (Mr. Drew), my knowledge of the matter comes entirely from the experiences of friends, relatives and others who are close to me. Because of the prevalence of mental health problems in society, we all have such experiences on which to draw.
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I recall the Friday in December 1997 when I introduced a Mental Health (Amendment) Bill after having been drawn second in the private Member's Bill ballot. It was the usual set-up for business of that sort, with a sprinkling of hon. Members in the Chamber. I believe that, just a week earlier, the Member who had been drawn first in the ballot introduced his Bill to ban hunting with dogs. Hon. Members may remember that, on that occasion, the Chamber was heaving with people who were concerned to express their opinion on what is, of course, a very important issue about which people hold passionate beliefs. However, I felt then and still feel that there is a mismatch between the concern that is shown for desperate people and that shown for hunted foxes.
Even today, for this most important debate, there are only seven hon. Members in the Chamber: four Conservatives, one Liberal Democrat and two from the Labour party, including the Minister. I appreciate that time limitations and the fact that we are not considering legislation have something to do with that. Nevertheless, I believe that it indicates that mental health, despite its importance, is undervalued.
For the Minister's benefit, I wish to flag up early the two main issues about which I spoke way back in December 1997 and about which I shall speak today: the importance of separate therapeutic environments for the treatment of people who suffer very different forms of mental illness, and the importance of abolishing mixed-sex wards in psychiatric units.
As my hon. Friend the Member for Daventry said, traditionally, the problem was swept out of sight and people were sometimes over-zealously confined to institutions. However, we all know that the pendulum has swung in the opposite direction, sometimes too far, and that some people need the support of an institution, or at least the knowledge that an institution is available, for what I believe was called the revolving-door technique. People could be out in society but, if they felt an episode coming on, they could go into an institution for respite or treatment—it used to be said, perhaps flippantly, for an MOT service—to recharge their batteries and become stabilised before venturing out into the world again. One of the effects of the pendulum swinging to such an extent against the institutionalisation of people with mental health problems was that beds were then no longer available for those who needed them in the long term or on a revolving-door basis.
I shall give an example from my constituency, but will not go into constituency matters to anything like the extent that my hon. Friend the Member for Rayleigh (Mr. Francois) did with his customary assiduity. There was a large mental hospital on the Tatchbury Mount site in my constituency before I lived in New Forest, East. It had a very good reputation, but in succeeding years, more and more of the Tatchbury site, which was intended for the therapeutic welfare of people with mental health problems, has been taken over by the administrators of local medical services. I do not draw any conclusions from that about people's state of health, but it has been indicative of a trend and I am glad that a state-of-the-art acute unit is now being built on that site for clients in the New Forest area and beyond who may need an in-patient stay in years to come.

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There are two broad categories of sufferer from mental health problems. There are those whose affliction tends to make them aggressive or psychotic and those whose affliction or illness tends to make them vulnerable and delicate. What concerned me in 1997, when I introduced my Bill, was that in-patient facilities had been so contracted that, if someone fell into either category, there was no guarantee that if they were admitted they would not be cheek by jowl with someone in the other category of vulnerability. To be more specific, someone suffering from a potentially suicidal, depressive condition could have found themselves on the same ward as people suffering from illnesses that made them psychotic and aggressive. I cannot think of anything worse from the therapeutic point of view for someone in a state of extreme suicidal, clinical depression than to be in such an environment. A dilemma would arise for the doctors and families of people in that condition as to whether it was more risky to leave them out in society where they might kill themselves or to put them in an institution or unit where they would be cheek by jowl with people who were unlikely to encourage any form of rapid recovery.
Mr. Drew: Does the hon. Gentleman agree that that dilemma arises not just in hospitals but in prisons where there are the same pressures and people suffering from mental illness are also incarcerated?
Dr. Lewis:: I do indeed. I have not studied the subject, but I strongly suspect that there are people in prison today who would be in mental hospitals, not prison, if there were more facilities for in-patient admission to those hospitals.
As I said at the outset, I am not medically qualified to comment on these things, but I want to make an observation about what is sometimes called depression, as it has increasingly made an impression on me as I have become acquainted with people who have suffered from it. There is a closer relationship between the physical state of the body—the chemical state of the body, in particular—and the state of mind of an individual than is commonly recognised.
It is unfortunate that the word "depression" is used in two entirely different senses. It is used in the purely psychological or subjective sense, when someone says, "I am feeling down","I am feeling upset","I am feeling unhappy","I am feeling extremely unhappy" or, "I am feeling depressed." Hearing that said in isolation always inspires the reaction, "Ah, well, if you look at it this way, cheer up, get your act together or show an effort of will, you can snap out of it." That is one category of depression, and the word "depression" is commonly used in that sense. For that reason, clinical depression is underrated because it shares the same descriptive term.
When people suffer from what I referred to earlier as potentially suicidal clinical depression, it can often have an entirely physical cause. My mind goes back to the histories that I used to read about secret agents in enemy territory who were captured and deprived of sleep night after night in order to break them down. The strongest and most courageous people would inevitably crack if they were deprived of sleep for a sufficient period of time.
Much of what passes for clinical depression today is actually caused by shock or trauma, or something that has upset the chemical balance of someone's
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constitution and destroyed their ability to sleep soundly so that they are in a state of mental decline. All the talking, counselling and cognitive therapy in the world will not do anything to help unless the chemical problem can be addressed. It is unfortunate that these two very different categories of "depression" are lumped together by a common terminology.
Finally, I want to talk about mixed-sex wards. In February 1999, I initiated a debate on this topic, in which I paid tribute to a group of women users led by Cath Collins and based at the Maudsley hospital. Even then, the women were campaigning for new local units that would ensure that people of opposite sexes in a vulnerable mental condition were not put together in wards in circumstances of intimate closeness and sharing facilities.
I recently heard that the women's continuing struggle over a certain unit that concerned them has been successful. That is progress of a sort, but I want the Minister to assure us that there will be no concealment of the figures that show which trusts have succeeded in doing away with mixed-sex wards in psychiatric units, and which trusts persist in trying to keep them going because they believe that it is normal for men and women to mix even in extreme circumstances.
In preparing for the debate, I had a quick look on the internet at newspaper cuttings about sexual assaults, including rapes, that have taken place in mixed-sex wards, and there are too many cuttings, even from the last year or two, for me to run them off my computer database conveniently.
I ask the Minister two questions. First, does he accept in principle that there should be separate therapeutic environments for the treatment of people with very different types of mental illness in in-patient units? Secondly, will he guarantee that, when inquiries are made into which trusts and health authorities have succeeded—and which have not—in abolishing mixed-sex wards in psychiatric units, the data will be forthcoming?
10.30 am
Mr. Paul MarsdenI congratulate the hon. Member for Daventry (Mr. Boswell) on securing the debate. He set out carefully considered arguments, and has made some well thought-out points, which I sincerely hope that the Minister will consider. I also congratulate other hon. Members present, who have also made valid points.
Mental health problems are widespread, and even though things are improving there is still an element of the attitude that prevailed perhaps 20 years ago with cancer. No one wanted to talk about cancer, and if anyone put their hand up and said that they had cancer, a certain stigma attached, because people thought that it might be contagious in some way. Times are changing with regard to mental health, but there is still an element of that attitude now. That is why this debate is so important, and why it is important that the Government address some of the real. problems that are still out there. However, I congratulate them on starting to make real headway in addressing the problems.
MORI, the polling organisation, found that three out of five people reported knowing someone with mental health problems, and one in five reported experiencing

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three or more mental health problems themselves. One in three have reported depression. The charity Rethink undertook a survey last year, and found that a quarter of young adults have reported suffering from stress. It thinks that if there were better public understanding of mental illnesses, it would benefit young people particularly. It found that some 10 per cent. of young people will experience mental health problems.
Although the suicide rate is falling in the general population, it is not falling among young people, and that is of particular concern. The survey also found that young adults had to wait 18 months from the appearance of their first symptoms for a diagnosis of schizophrenia. The YoungMinds organisation highlighted a number of problems. It said:

"There is a major gap between government policy and service delivery."

It highlighted that young people were particularly vulnerable to

"Depression, eating disorders, behavioural problems"

and

"drug and alcohol abuse".
YoungMinds said that that could lead to real problems, including children's being excluded from school and committing offences, and could even lead to homelessness.
As the hon. Member for Stroud (Mr. Drew) highlighted, there are real problems in Britain's prisons. Ministers' parliamentary replies make it clear that, in the past six years, the number of suicides has increased from 41 to 94. Taking into account the increase in prison population, that means that people are 13 times more likely to commit suicide in prison than they are in the wider community. That is clearly related to the fact that on entering custody, 20 per cent. of men and 40 per cent. of women have previously attempted suicide. The social exclusion unit report of July 2002 found that 72 per cent. of men and 70 per cent. of women sentenced to prison suffered from mental health problems. The problems extend to other vulnerable groups such as rough sleepers. It has been found that perhaps half of rough sleepers suffer from mental health problems.
I praise mental health care staff across the country who do a fantastic job day in, day out dealing with some of the most vulnerable people, whether they are in the acute sector or in the community. Clearly, those staff are still under-resourced, which is a problem that goes back several years. The phrase, "a Cinderella service" still stands to a certain extent. It did not help that between 1989 and 1997, one third of NHS beds for people with mental health problems were cut. At that time in 1997, only one in five people diagnosed with schizophrenia had access to a community psychiatric nurse.
In recent times, the King's Fund has found that things are not getting much better. It has highlighted lack of funding and the problem of recruitment and retention of staff. It is worried about the political targets that have been set by Whitehall, and concerned that targets for mental health services, which are arguably less glamorous than other Government targets, lose out. The Government should be congratulated on introducing the national service framework, which was
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a stepping stone, but, as the hon. Member for Daventry said, we need an update. We need to know what progress has been made on that NSF.
The King's Fund also highlighted the need for early intervention to prevent problems from getting worse. It wants a much greater focus on care given by GPs and community health care. The national GP survey of primary care conducted by the Mental After Care Association—MACA—found that one third of GPs want to spend more time with patients but are unable to because of the pressures of work. The reason that GPs give is that 30 per cent. of their patients suffer from mental health problems.
I was concerned to learn that for young people in particular the average wait for their first out-patient appointment to see a psychiatrist is 6.6 weeks. Back in 1997, it was 6.4. Arguably, problems are not going away, but getting worse. In my constituency, covered by Shropshire, the average wait for children is nine weeks for a first out-patient appointment to see a psychiatrist.
The Mental Health Foundation has highlighted that there is a national shortage of consultant psychiatrists. I welcome the extra £140 million that has been outlined for the next three years for child and adolescent mental health services, but where is that money going, and will it deliver what we all want: a comprehensive mental health service?
The draft Mental Health Bill was a complete disaster. It was summarised well by the Mental Health Foundation when it said that it believed the proposed Bill to be

"fundamentally flawed. The proposals in this Bill are misconceived, unworkable, are likely to infringe individuals' human rights and undermine the more positive aspects of current mental health policy."

I hope that the Minister will ask the Minister of State, the hon. Member for Redditch (Jacqui Smith), to go back to the drawing board and return with a new Bill. A Bill is needed because as the Mental Health Foundation said that it was deeply disappointed by such a missed opportunity.
We need expanded capacity with increased funding for mental health services, so that there are more mental health nurses and specialist doctors. We need that new mental health legislation. We must improve the diversity of services, by trying to recruit people from the ethnic minorities who understand the cultural differences that exist in our society. I was told the story of a woman in a mental health hospital who, for reasons of privacy and her Asian background, sat on the toilet in reverse position. The reason for her behaviour was privacy, but mental health care professionals could have easily misinterpreted it as related to the mental health problem that she had. Such problems, possibly leading to misdiagnosis, would not arise if there were more people from different backgrounds with a greater understanding of diversity. We have to give carers more support and we have to ensure that we have joined-up services, including health, education, social services and the voluntary sector, if we are to deliver the services that people need.
With the Government leading the way, I hope that that will help to bring about the change in attitude that, as I said at the start, is so fundamental. That is where such a great difference can be made. Intervention can be

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made early if people feel confident enough to access mental health services and to talk about the problems that they are encountering. I hope that the Government will listen, in particular to those voluntary organisations that were so concerned about the Bill's proposals. I hope that the Minister can address some of my concerns.
10.40 am
Tim Loughton: I add my congratulations to my hon. Friend the Member for Daventry (Mr. Boswell) on bringing this subject to Westminster Hall today. The trouble is that it is an enormous subject and we do it only a little justice this morning. I congratulate the other hon. Members who have brought their own particular expertise, particularly my hon. Friend the Member for New Forest, East (Dr. Lewis), who has a great track record in the field, and the hon. Member for Stroud (Mr. Drew), who raised many points about conditions in prisons and the conditions and environment that affect people with mental health problems. I also congratulate my hon. Friend the Member for Rayleigh (Mr. Francois) on his ingenuity in raising some only slightly related constituency issues. I agree with all the points that hon. Members have made.
Despite many warm words from the Government, mental health is still a much neglected facet of the health service. In my role of shadowing the mental health brief, I see many excellent voluntary projects up and down the country, often run on a shoestring. I have seen many excellent and dedicated professionals in the service operating in increasingly difficult conditions. Too many people, young and old, are still being failed by the system. Mental health trusts are all too often at the back of the funding queue, and all promised growth moneys get swallowed up by debts inherited by newly formed trusts. That is why the Opposition have sought to raise the profile of the whole subject of mental health in Parliament. We organised a series of summits on it at Westminster last year and have used some of our Supply day debates for the subject.
We are now almost a year on from the highly misguided draft Mental Health Bill, which was an exercise more in coercion and law and order than in giving proper medical help and support to people with serious mental health problems. It had the world and his wife arrayed against it and it has not seen the light of day since, but a proper mental health Bill is desperately needed. My first question to the Minister is: when will we at last see the mental health Bill? Will it be the product of, and under the ownership of, the Secretary of State for Health, as it should be, or the Home Secretary, whose fingerprints were all over the first attempt?
The national service framework, as my hon. Friend the Member for Daventry said, set seven national standards for mental health services to drive up quality and reduce variations in services to patients and service users. That should include round-the-clock crisis teams for emergencies, more mental health beds and improved training for general practitioners. Yet in almost every respect, professionals and patients are just not seeing those improvements at the sharp end.
As many hon. Members have mentioned, there is a big problem with staff vacancies. About one consultant in three plans to retire early, according to a study by the Royal College of Psychiatrists. The problem is worst in
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inner London and north-west England. Dr. Andrew McCulloch, the chief executive of the Mental Health Foundation, has said:
"This is a disaster in the making. The Government has no strategy for dealing with this. If we lose all these experienced older staff, it is very difficult to see how we could run a lot of the services."
A draft Department of Health study on work force planning two years ago predicted that by 2005 there would be between 10,000 and 35,000 vacancies among mental health staff. The latest figures from the Royal College of Psychiatrists suggest that there are at least 800 key vacancies at the moment, and that many health trusts are having to use large numbers of agency staff—in some cases, up to 30 per cent. Findings of the Sainsbury Centre for mental health show that there are 25,000 registered mental health nurses—just 4 per cent. of nurses registered in the UK. Half of the UK registered nursing work force is now over 40 years old and only 4.7 per cent. of international nurse recruitment is for mental health.
The Opposition health team has carried out a detailed survey and written to all mental health trusts up and down the country. We shall release the findings of that survey shortly. We asked about staffing levels, numbers of new category primary care mental health workers and numbers of operative assertive outreach teams. Some of the findings were alarming.
On staff vacancies, one trust reported 10 vacancies out of a total of 30 consultant posts, which is a 33 per cent. vacancy rate. Agency staff account for 22 per cent. of all nursing staff in another trust. Nearly every trust surveyed said that it did not currently employ a primary care mental health worker, while a few said that they had plans to appoint some in the coming year.
On assertive outreach teams and 24-hour cover, some trusts have just one team in place while others have five. Only 30 per cent. of the trusts that responded said that they had 24-hour cover with at least one team on call, and only four of the trusts had a full allocation of teams available for 24-hour cover. Some 80 per cent. of trusts said that they had no early intervention teams in their area.
I shall quote some of the comments contained in the responses:

"A high percentage of adolescents are picked up and treated by YOT; however the commissioners are not funding this service after August this year. This will leave a gap in service. We have no specialist Adolescent only services."

Another trust said:
"There is a real danger that the particular needs of older people for access to good quality mental health will drift off the policy/ political agenda."
Those are hard data from people at the sharp end.
We asked another trust how many of the new category primary care mental health workers it employed; the answer was none. We asked how many assertive outreach teams operated in the trust; the answer was none. We asked whether its assertive outreach teams could offer 24-hour cover, seven days a week; the answer was no. We asked how many early intervention teams had been established in its area since July 2000; the answer was none. We asked how many crisis resolution teams worked in its area and whether all those teams offered 24-hour cover; the answer was none.

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We asked whether provision for adolescent mental health was adequate; the answer stated that it was very inadequate. We asked whether the trust knew how many GP practices had proper access to counselling services in their practice areas; the answer was no. We asked about the scope for community involvement on its mental health trust in the future; the answer was none. We asked whether it could offer its female service users a women-only day centre facility; the answer was no.
That survey was not untypical. It deals with one trust, which covers a large part of a county. There is a complete absence of any of the key innovations in mental health services about which the Government tell us so much. The innovations are not working in that trust and that is not untypical. There are many other specific areas of concern that I do not have time to go into.
YoungMinds, the organisation at the forefront of the campaign for better facilities for young people with mental health problems, has conducted a two-year, in-depth study of in-patient units for young people, which is published today. The study reveals a widespread lack of post-discharge provision for young people. Young people leaving in-patient services are not seen as a priority by community-based professionals. Many inpatient units are struggling with recruitment problems and the pressure caused by working with a lack of trained staff. There are many stories of children with severe health problems being treated alongside hardened drug addicts and alcoholics in adult wards.
There were 64,920 occupied bed days for patients under the age of 18 on adult psychiatric wards during 2001–02. That represents 36 per cent. of the total number of hospital occupied-bed days for that age group on both child and adolescent wards and adult wards during that year, which is unacceptable.
What are we doing to prevent mental health problems among our young people? The Department of Health's research among 15 to 21-year-olds reported that 86 per cent. of them knew someone who had experienced mental health problems. More than half of them knew someone who had self-harmed, but 97 per cent. of them knew little about mental health problems.
We have heard about the incidence of suicide and the national suicide prevention strategy, which was published in September. As Richard Brook, the chief executive of the mental health charity Mind, has said:
"The problem with the suicide strategy is while it is good at looking at risk, it's not good at delivering services … There will not be the services for the vulnerable groups, particularly young men".
We have heard about the alarming rise in the suicide rate, particularly among prisoners.
What preventive measures have the Government taken to tackle depression and mental health problems in our schools and the stigma attached to mental health problems? What discussions have the Minister and his colleagues had with organisations such as the Charlie Waller memorial trust, which has done excellent work in combating depression? We must work on prevention at the primary care trust level, with 90 per cent. of depression cases being referred to and treated by GPs. Work is needed to raise awareness of reducing the
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stigma in schools, and we should appoint specialist trainers to work alongside health visitors, teachers and parents, and incorporate mental health and emotional health and well-being teaching in the school framework.
I could go on, and mention the problems of access to drugs for schizophrenia and so on. The subject is very important. The Government must raise the profile of the issue and match their warm words with serious actions and results for people, particularly young people, who desperately need mental health services throughout the country. I ask the Minister urgently to bring back as soon as possible a proper mental health Bill that will attack many of the problems that we still have, and not to let it be hijacked by those who would use a mental health measure as a way of locking people up rather than giving them the proper medical treatment that they need and deserve.
10.50 am
The Parliamentary Under-Secretary of State for Health (Mr. David Lammy): I congratulate the hon. Member for Daventry (Mr. Boswell) on securing this important debate, on his sincerity and on the measured way in which he raised the issue. It has been a good debate. It is fair to say that all hon. Members have discussed the issue in a non-partisan way, and we all welcome that. The issue is one of the most important in all our constituencies.
Given what has just been said by the hon. Member for East Worthing and Shoreham (Tim Loughton), I shall set out the context that we inherited in 1997 because it is fundamentally important. One would struggle to find an area of the national health service that was so undercapacity and subjected to such underinvestment. It did not command the attention of Government, or our communities and population in the way in which it should have done. That is the situation that we inherited. There was underinvestment in our mental health services, a host of damaging inquiries into service facilities, a demoralised and undersupported work force, and community services were in a sorry state.
We made it clear in that context that we faced a challenge, which the Government took very seriously. We said that we were going to prioritise that problem, and we did so. It is significant that, alongside the priority we gave to cancer and coronary heart disease, we made it clear that our mental health services needed investment and reform. The national service framework and many of the other developments that hon. Members have spoken about this morning followed. I want to talk about those, too.
The issue is fundamentally important when one considers that as many as one in six of the population is affected by a mental health problem, and many more families and children are indirectly affected. Hon. Members will know that I stand here as a Minister in the Department of Health and as a Member of Parliament representing one of the poorest constituencies in the country. I cannot do a surgery without seeing the effects of mental ill health. Each year, more than 600,000 people with serious mental health problems receive care from specialists, mental health and social care services.
As has been said, suicide is now the commonest cause of death among young men. Perhaps as many as a quarter of primary care consultations concern someone

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with a mental health problem. That is why the Government are committed to improving mental health services. Our clear and comprehensive programme of reform represents the best opportunity and provides the biggest investment to improve the lives of large and neglected groups of people.
Key to the programme of reform is the mental health national service framework—the first national service framework to be published in the sector. The Government are proud of laying down national standards that everyone who has a mental illness should expect all over the country. The aim of the framework is to deliver modern mental health and social services of a kind that people are entitled to expect in every part of the country. It will help to improve access to effective treatment and care, to reduce unfair variation, to raise standards across the country and to provide quicker and more convenient services for patients.
At the very least, we are talking about a 10-year programme of reform. The NSF sets standards for mental health covering health promotion, primary care, access to services, specialised services for people with severe mental illnesses, support for carers and the action needed to reduce the suicide rate. It provides a national standard base across the country. The hon. Member for New Forest, East (Dr. Lewis) raised some big future stuff. Of course, decisions must be based on the clinical decisions that people make on the ground. However, the hon. Gentleman talked about the separation of types of treatment. That is not the direction of Government policy or where we began our inquiry. The capacity constraints and problems were such that we simply had to lay down minimum standards to begin with.
Dr. Julian Lewis:Does the Minister accept the principle that it is wrong for people with very different types of mental illness to be lumped together on the same wards where they can harm each other's prospects of progress, or, indeed, harm each other?
Mr. Lammy:The hon. Gentleman will know that there is a long tradition of Ministers laying down
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standards and frameworks and taking expert advice. Decisions must be made locally and clinically. He will also know that the Government have done much to ensure that when local situations arise—I do not know his locality—people can raise issues through overview and scrutiny panels. We also have a new inspectorate and patient forums. The Government have put in place a number of mechanisms by which such situations and incidents can be dealt with as they arise—something that was not the case in the past.
There are further national service frameworks on older people—with a dedicated section on mental health—on children and on services for people with long-term conditions, which will build on and complement the work that is already under way.
My hon. Friend the Member for Stroud (Mr. Drew) raised the issue of investment, as did the hon. Member for Daventry. Underpinning the reform of mental health services is more than £300 million in new investment by 2004 to fast-forward the NSF and deliver our NHS plan commitments. The hon. Member for East Worthing and Shoreham cast some doubt on whether that money is reaching the front line. He will know that the first tranche of that money, the 2001–02 tranche, was ring-fenced—it totalled £75 million—ensuring that, from a low capacity base, local areas were able to begin to plan and to get the staff to build up to where we need to be by the end of the NSF.
Mr. Francois:Will the Minister respond briefly to the two constituency points that I put to him?
Mr. Lammy:I am sure that if the hon. Gentleman writes to my hon. Friends in other Departments, they can deal with the latter issue. The first issue is a local one and there are methods by which it can be discussed. I mentioned the overview and scrutiny panel. That should reassure his constituents, as it would in other areas. He should be aware of shifting the balance of power. We must not attempt to run local issues from the Department of Health but instead allow clinicians and local people to make decisions. He will understand that.

River Parrett
11 am
Mr. Ian Liddell-Grainger: I am delighted that I have been able to secure this debate on the Parrett catchment project, although I note that hon. Members are fleeing from the vagaries and excitement of it.
The River Parrett gurgles through the very heart of my constituency. It has a natural tendency, not surprisingly, to overflow. It is not rocket science to understand why. The river snakes through some of the lowest-lying land in England. Everyone knows it, and for centuries everyone has managed to control it—until now.
Today, the people who live and farm anywhere near the Parrett have good reason to be scared. They cannot leave it to the agricultural community to tame the floods, because farmers and drainage boards no longer have the prime responsibility to do that. People dare not rely on district councils, which have tiny budgets and a very much smaller say, and they certainly do not trust Somerset county council, with very good reason—I suspect that the Government do not trust Somerset county council either—all of which leaves the River Parrett laughing. It has become a victim of muddled over-management. The old drainage boards are too local, the district councils have the knowledge but not the cash and the county council has more money but less brain, so the Government have invented a new quango—the Parrett catchment project.
Anyone with a grain of common sense—I know from many debates that the Minister ha.s many—would leave the river to the experts in the Environment Agency. It ends up doing the donkey work such as dredging, fencing, repairing and planning. However, instead of being left to get on with it, the poor old Environment Agency must tolerate the intervention of the wretched new quango.
I brought with me a little catchment project of my own, fresh from the Parrett, in what looks like a specimen bottle. I am offering this bottled sample as a prize to the Minister if he can produce any plausible explanation for the existence of the Parrett catchment project. I am sorry that it is only half full—I assure hon. Members that I have not drunk the rest.
The quango was established in 2000 under the chairmanship of Humphrey Temperley. That name should ring bells—probably alarm bells—in Somerset. Yes, it is the same Humphrey Temperley who ran the county council until the electors decided that they had had more than enough of him. Was that the end of Temperley? Sadly for Somerset, it was not.
I am reminded of a children's skipping rhyme that was very popular in Bridgwater:
"Poor-old-Humphrey-couldn't-get-his-bum-free."
That is the problem. The rhyme may be silly, but it is perfectly true. Just when we thought it had been unseated, the substantial Temperley posterior reappeared in another comfy chair, on the Parrett catchment project. What does the quango do? What is it for? Why do we need it or him?
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I have been trying in vain to discover the role of Humphrey's new baby. It organises an enormous number of forums. It claims to have won a bid for European funding. It makes fact-finding visits to Europe. Actually, Mr. Temperley was last seen finding facts in the Ruhr valley. I do hope he was not wearing lederhosen.
The Parrett catchment project also spends an inordinate amount of money and time talking. It talks to English Nature and the Royal Society for the Protection of Birds, which is fine. Such organisations are vital and are well worth talking to because they can draw on their ideas and experience. However, it is not necessary to create a quango to open obvious lines of communication.
The Parrett catchment project commissions research—quite a lot of it—and generates paperwork. I have heard it said that the project has produced enough paper to build an entire dam for a flood prevention scheme at Bridgwater, and I can believe that from the amount that is sent to my office. It also boasts influence within the Department for Environment, Food and Rural Affairs. When Mr. Temperley is not fact-finding elsewhere, he can often be seen attempting to bend the Minister's ear. if he keeps his nose clean, the Parrett catchment project might one day earn him a knighthood. He could then become Sir Humphrey and say, "Yes, Minister" until the cows come wading home through the floods.
Hon. Members may not know or even want to know that the Parrett catchment project is now a national leader. The River Parrett is the first river in the country to have a catchment flood management plan. It was chosen specifically by DEFRA and will set the trend for flood management throughout the country. Is that relevant to the Parrett catchment project? No, although I have no doubt that Mr. Temperley will submit another mountain of paperwork commending the plan and complicating it simply to justify his existence. He may even include some glossy photographs—he always does—of his fact-finding missions to foreign parts, with or without the lederhosen.
The catchment flood management plan is the work of the Environment Agency—the professionals. The Parrett catchment project did not write the plan and Mr. Temperley's role is that of an irrelevant irritant. He irritates my constituents because he and his organisation are a waste of public money. If anyone from ITV is watching this debate on the monitors, I would like to suggest a new programme starring Humphrey and his useless Parrett catchment project. I have come up with a working title: "He is a nonentity. Get him out of here." Pithy at the moment—perhaps.
The serious downside of the whole saga is that there is now a crisis of public distrust. The Minister knows what I am talking about. He had first-hand experience just a few months ago when he came to the constituency of my hon. Friend the Member for Taunton (Mr. Flook) in Somerset and faced angry protests and banner-waving because folk are no longer able to trust or have faith in the way in which flooding is controlled in both our constituencies.

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The problem is to know who is in charge. We know that the Environment Agency does very good work, so why not leave the matter to the agency?
Mr. Adrian Flook: I am grateful to my hon. Friend for this debate. The Environment Agency's work could be better done if it had slightly more money because lack of funding is, to some extent, holding it back. Will he be pressing the Minister for extra money for the agency, which does such good work from Bridgwater?
Mr. Liddell-GraingerMy hon. Friend has, as usual, hit the nail on the head and I am grateful for all his support during our short time in Parliament. It has been an interesting time because we have had two floods in both our constituencies. The problem is funding. The Environment Agency is professional and needs resources to manage the area that receives water from Exmoor—my hon. Friend and I both live with that—which goes into Dorset and across Somerset through two choke points. One is in my hon. Friend's constituency and one is in mine: the Parrett and the Tone.
My hon. Friend has spent many hours on this matter. He will continue to do so and long may we continue to work together on it. However, why not give the power and the money to the Environment Agency? Why not take flood management seriously by removing the flood of irrelevant paperwork from the catchment project? While the Minister is at it, he might as well look at some of the other stupid inconsistencies. Last Friday, a farmer came to my surgery. He was extremely angry and brought along some top brass from the National Farmers Union to back him up. That farmer's problem is typical of the discriminatory way in which flood management works. If the water becomes too high in the river, the only thing to do is to let it out, but on flat land, such as in Somerset, it cannot be let out willy-nilly, so the same places and the same poor farmers get soaked more or less all the time. However, they do not receive a brass farthing in compensation. The Environment Agency does not have the power or the budget.
The farmer who came to see me is even worse off: his land has been flooded consistently and he has now had word that his integrated administration and control scheme grant is being taken away or substantially cut, because those responsible for it are not prepared to support farming on land that goes under water continuously. It is bad enough for that man to watch his fields disappear; it is bonkers to punish him as though he had flooded them deliberately—he has not. A percentage of his IACS grant has been or will be removed, because his land has been consistently flooded. Just to let the Minister know, that farmer is on the banks of the Stowey, which probably says a lot to both of us.
There have recently been threats by some farmers—although not, I hasten to add, in my constituency or in that of my hon. Friend the Member for Taunton—who are prepared to take the law into their own hands and do some active flood management of their own. At one point, with tempers running as high as the water, there was an active movement to shut the sluice gates on the Stowey, which would have threatened Taunton. It is not acceptable for people to reach that point in this day and
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age—for any of us. Many farmers have had enough. A lot of ordinary people who know the lie of the land are worried. Many sensible Somerset souls want sensible decisions from the Government for change. The Minister experienced that himself on a visit to my hon. Friend's constituency.
On Sunday, it is the annual River Parrett festival. I urge the Minister to give visitors something proper to smile about. I urge him to take the John Cleese role and tackle the Parrett catchment project head-on. Why? This project is deceased; it is no more. If it had not been chaired by Humphrey Temperley, it would be pushing up the daisies. It has gone to meet its maker and join the quango choir invisible. This is an ex-Parrett project, or at least it should be.
11.11 am
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs(Mr. Elliot Morley): I congratulate the hon. Member for Bridgwater (Mr. Liddell-Grainger) on securing the debate. There are clearly important issues relating to the carrot—I mean Parrett—catchment plan. I am getting mixed up between dead carrots and dead parrots.
As the hon. Gentle man stated, I have visited the area many times. In my ministerial capacity, I have talked to local people, local farmers and the Environment Agency in the area. I was pleased to inaugurate the Baltmoor wall opening. That was a considerable investment to protect many homes and important communications and roads in the area. I know the history of the area and that there have been tensions, particularly in the past, between the priorities of, for example, farmers and the desires of conservationists in respect of an internationally import ant area. That is recognised by all concerned.
The Parrett is an important river drainage system and an important part of the community. We recognise the need to integrate the international importance of nature conservation in the area with the equally legitimate flood defence needs of householders, farmers and other landowners. In that sense, it is desirable to bring communities together to try to achieve a common understanding of the different priorities. Incidentally, the Parrett catchment project is not a Government quango, but a local initiative. I support the idea of bringing people together in that way. I have been to some of the project's meetings, listened to presentations and heard some of its ideas, which have a great deal of merit.
We fund the catchment flood management plan for the Parrett. That involves some overlap with the Parrett catchment project, but it is not quite the same, because the catchment flood management plans focus on the most appropriate options in respect of minimising flood risk along the Parrett. That ongoing study also considers coastal issues, such as Steart point, and the various options available to the Environment Agency. In due course, it will consult local people about the preferred option. That will eventually come to the Department for Environment, Food and Rural Affairs, and we shall give it careful consideration in working out how best to use our grants to support various schemes.
I understand that there will always be differences of opinion and emphasis on the approach. It is correct for the hon. Gentleman to say that when I visited Somerset

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and the Baltmoor project, six householders were concerned about that refurbishment and strengthening of the wall. I believe that they were mistaken, and I made it clear that although the money is designed to protect large numbers of people—homes and properties in Taunton are part of the strategy—we do not ignore people because they are in a community of only six homes.
The residents were wrong in thinking that Hay and Curry moors had been declared a reservoir. I think that they were getting mixed up with the fact that the Baltmoor wall comes under the Reservoirs Act 1975. That is simply because it must meet certain standards, as when the moor is full, enormous pressure is put on the wall. It must stand up to that pressure to ensure that the people who live behind it are protected. That is part of the agency's work.
It is also worth pointing out that the Hay and Curry moors have flooded since the 13th century. We went through a long dry period, in the 1980s in particular, and people sometimes forget about the traditional pattern of the moors. That is also the case with some of the farming patterns. I noted that the farmer concerned was an arable farmer. Going back in time, farming would never have been arable in such an area because of the nature of the flooding. Traditional farming patterns are closely connected with summer grazing and winter flooding, and farmers work in harmony with nature.
For different reasons, there was intensification of agriculture, driven by the Agriculture Act 1947 and, in recent years, the common agricultural policy. Those moves were understandable, but we have moved on from using subsidies simply to maximise food production. These days, our support for agriculture is more sophisticated, and we recognise the range of benefits that it can provide not simply in food production, but in habitat and landscape management and as part of water management of the Somerset levels. That is why the Somerset levels is an environmentally sensitive area and why about £3.5 million is paid to farmers every year for water management. That recognises the patterns of the levels and the impact that they have on farming, as well as the benefits that flooding brings for nature conservation and protection.
Mr. Liddell-Grainger: The Minister is absolutely right, but my point is that the land does not flood continuously. The IACS is being stopped over the percentage of land that is now being flooded on a frequent basis, rather than the whole thing. The farmers feel aggrieved that they, rather than anyone else, have to take the water on the edge of the Stowey and that the pressure on them to act responsibly is now causing a cost over which they have no control.
Mr. Morley: I am sure that those issues can be examined in relation to the ESA and our stewardship. We pay an additional £1.2 million in Somerset for stewardship payments, and that is another considerable sum. It is not as if we are not recognising the problems, and I am sure that we will continue to make those payments.
The residents of Hay and Curry moors were also concerned that the improvements to the Baltmoor wall would increase the frequency of flooding. I have written
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to them to point out that those improvements, together with the improvements at Stan moor and Hook bridge, will lead to a reduction in both the frequency and length of flooding on those moors. I hope that that point reassured those residents, whose concerns were misplaced.
I was also interested in the threats by local farmers to close sluices. Like the hon. Gentleman, I do not believe that that is a sensible position to take. I do not believe that that was endorsed by the internal drainage board that they represent and I am sure that it was not backed by the Association of Drainage Authorities, of which I am proud to be vice-chairman. I have a long connection with drainage boards because they are important in my constituency and in north Lincolnshire. The IDBs have come a long way, and do a good job in most circumstances. I recognise that there are good examples of good practice in relation to the IDBs.
With regard to the Parrett catchment, it is important to try to take into account the range of views expressed, and to take an holistic approach to flood management in relation to many other important issues including the agriculture, rural economy, tourism and nature conservation of the area. The Parrett catchment project makes a useful contribution to the resolution of those issues. Along with our catchment flood management plan and the further modelling studies proposed, we believe that it will introduce plans that will be helpful for the area.
There has been a long history of investment in flood defences in the levels and moors, particularly on the River Parrett and its tidal embankments, and that investment continues. DEFRA provided £3 million in grant to the Environment Agency for the strengthening of flood defences on the lower River Tone at Baltmoor wall, as I mentioned, and Stan moor bank; I opened those defences in January 2003.
We also recognise the problems on the Steart peninsula that are being considered by the Environment Agency, and we support its efforts to find a solution that meets local needs and takes account of wider environmental interests, at a realistic cost. I went to the area to examine the proposals and the challenges, and I think that all concerned will benefit from what is proposed. There is much local interest in and support for the proposals.
We recognise that there is a need to increase the programme of flood defence capital works in Somerset, and have taken account of that in our allocations. The allocation to the agency's Somerset levels local flood defence committee for grant-eligible expenditure has increased from £3.5 million in 2001–02 to £5.35 million in 2002–03. Grant eligibility depends on the capital programmes that are put forward in a given year.
We also recognise that there is a great need to work with local people and flood management bodies to seek solutions; I know that the Environment Agency has asked for that involvement and welcomes it. However, the question of how to engage people needs to be addressed.
I listened carefully to what the hon. Gentleman said about the Parrett catchment plan. He made some amusing points. It is not for me to interfere with the Parrett catchment project, because it is not a Government body or a quango but a local initiative.

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However, I strongly support local initiatives. I believe that the best way to make progress on such matters is often to involve local communities, local interest groups and stakeholders in formulating their ideas on the best way forward. Technical and professional advice is also available from the Environment Agency, local authorities and statutory bodies such as English Nature. We also cannot ignore the professionalism of bodies such as the wildlife trusts and the Royal Society for the Protection of Birds, which often employs locally based experts and consultants; we are keen to engage with those experts, and listen carefully to their point of view.
Recently, the general principle of flood defences has changed a great deal. These days, in our approach to flood defence, in line with DEFRA's commitment to sustainability, we look for a sustainable approach to flood defence and water management. That might, on occasions, mean moving from traditional hard engineering to more environmentally friendly approaches and utilising soft defences, such as sand banks, forestry, upper river catchments for waterretention programmes, soil management regimes and working with farmers. There is the potential in our agri-environment budgets to give financial support to such approaches as part of a coherent management plan.
Careful consideration should be given to whether the proposals coming from some of the plans and consultancies are cost-effective and whether downstream benefits would be obtained from their implementation. On protecting Taunton, for example, there is the issue of the flood banks. If a lot of money were spent upstream on water retention, forestry, or water management, which might be justified in reducing the peak of the water going downstream, much money might be saved by not raising the banks. If all the money were spent upstream, however, and all the money were needed to raise the banks downstream, the economic case would be undermined. Those are the kinds of technical issues that we in DEFRA must evaluate and
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they are also the kinds of things to which various groups and organisations on the Somerset levels and in the Parrett catchment are giving careful thought.
One relevant issue is whether or not there should be an engineered sluice on the Parrett: I visited the proposed site again and there may be a case for it. We at DEFRA have a completely open mind about that. A sluice will be an expensive investment, but expense is not in itself a deterrent, as long as it gives long-term benefits. The current evaluation and hydraulic modelling will take into account major investments of that kind. If there is a justification for those, we will consider them in relation to the grant aid that we offer for flood defence schemes. But that must be considered properly against the range of the scheme's potential benefits and costs.
As the hon. Gentleman rightly stated, the water and river management of the Somerset levels also has social, historical and cultural connections. Those are important too. That area is a major tourist attraction; it brings in many people who enjoy it and admire its special nature. During the winter months it attracts many people who go to see the floods and the wildfowl—there is a lot to see. The nature of the area is wonderful when it is flooded in winter and spring. Many farmers have diversified to take advantage of the tourism trade and I am glad to say that there has been support for a range of rural businesses from DEFRA, through rural enterprise schemes, marketing and processing grants. I am pleased to see such innovation in the area, and that people are benefiting.
I understand the hon. Gentleman's concerns. It is important that there be proper involvement, transparency and accountability. Above all, we must engage local communities and local people and try to take into account the whole range of priorities and concerns. The benefits of the Parrett catchment project lie in bringing people together and, despite the hon. Gentleman's comments, there is merit in that structure and we should encourage it.
11.30 am
Sitting suspended until Two o'clock.

Defence Industry (Scotland)
2 pm
Jim Sheridan: I begin by expressing my thanks and appreciation for being selected to introduce such an important debate. This subject is pertinent to the people of Scotland, but it is of equal importance to citizens and military personnel throughout the United Kingdom and in the international arena where we are carrying out our duties with the utmost professionalism. That is best shown by the current situation in Iraq, especially in the city of Basra, where our troops are highly respected for the way in which they are carrying out their duties. The majority of people in Basra recognise that, and we can see on our television screens how much they appreciate the troops and how helpful they have been to them. Those professional troops can carry out their duties in such a way only if they are given professional support and equipment that is manufactured throughout the United Kingdom. The defence industry also provides good-quality and well-paid jobs.
Prior to entering this place, I spent a significant amount of my working life in the defence industry, in shipbuilding and systems manufacturing. Scotland makes a large and important contribution to the United Kingdom defence industry by hosting several important establishments that provide and produce the cutting-edge, high-tech equipment on which our forces depend.
Not including subcontractors, approximately £1.5 million of defence expenditure comes directly to Scotland, and an estimated one in 50 Scots are dependent on the Ministry of Defence for their livelihoods. I firmly believe that that would be put at risk if the unthinkable happened and, as recent election results have confirmed, the unlikely break-up of the United Kingdom by those with a narrow and parochial view of life were to become a reality.
Angus Robertson: I thank the hon. Gentleman for allowing an intervention so early in his speech. Does he believe that employment in Scotland, which is directly dependent on defence equipment expenditure, has increased or decreased since the Labour party has been in power?
Jim Sheridan: Before responding to the hon. Gentleman, I wish to pass on my condolences to the hon. Member for Banff and Buchan (Mr. Salmond), the leader of the Scottish National party parliamentary group, whose mother has unfortunately passed away. My best wishes are with him and his family at this time.
As for whether more jobs have been created since the Labour party came into power, I do not have the statistics to prove it, but it is undoubtedly true that, had Labour not come into power in 1997, we would not have a shipbuilding industry. It would have been demoralised. However, if need be, I shall obtain such statistics for the hon. Gentleman.
Rachel Squire: I thank my hon. Friend for securing this important debate. I apologise to him that, due to Defence Select Committee business, I shall have to leave early. Does he agree that there would have been no future for Rosyth dockyard in my
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constituency or for the Clyde shipyards without the United Kingdom Government and their commitment to the biggest warship-building programme in 30 years, in which Scotland has a major share?
Jim Sheridan:My hon. Friend makes a valid point. Rosyth is a perfect example of Labour in Government. I compliment the management and the trade unions at Rosyth for not depending on MOD work, and instead having a long-term vision and diversifying into the commercial market.
There is no doubt that Scottish workers are involved in producing quality equipment for every sector of our armed forces, directly or indirectly, be it for gunnery sites for land and air forces or for the construction of the warships that patrol and defend our island. I remind those members of the Opposition parties who argued against the decision to build the two aircraft carriers of the disastrous consequences it would have had for the shipbuilding industry if they had been successful. [Interruption.] I have been asked to name them. Lloyd Quinan of the Scottish National party argued that we should not be building both those ships, and said that we should be building only one.
Mr. Ian Davidson: I am particularly grateful that my hon. Friend has given way on the subject of aircraft carriers. Do we have any information on how many aircraft carriers an independent Scotland would require? How many frigates would an independent Scotland require? Would they be built on Clydeside? Can he give me an estimate of the number of jobs he believes would be lost without the Royal Navy orders?
Jim Sheridan: I thank my hon. Friend for that intervention. Unfortunately, I do not have access to the SNP's statistics on how many battleships or aircraft carriers we would need in an independent Scotland, but I hazard a guess that one would be too many for that very reason.
The investment in the aircraft carriers was welcomed by the shipbuilding industry in Scotland, which was on its knees. I recall that the SNP spokesperson from Glasgow, Govan was calling for the Government to intervene to save the yard in Govan while, further down the Clyde, her colleague was arguing that we should have only one aircraft carrier, the consequences of which would have been horrendous for the shipyards.
It is important that the major players in the shipbuilding defence industry are sustained, but we must also remember that some of the smaller, commercial shipyards are equally dependent on those orders—none more so than the Ferguson shipyard of Port Glasgow in my constituency that currently faces extreme difficulties because of a lack of orders. It would welcome further investment or work that would flow from the building of the aircraft carriers. In Port Glasgow, many of the indigenous skills and industries were lost because of the devastating impact of 18 years of Conservative rule.
We must remind ourselves of the many communities throughout Scotland that have some of the oldest regiments in the British Army and are also host to a number of RAF flying stations. Many of those bases are

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used to provide quality training of our armed forces while they are defending our shores—skills that are recognised throughout the world.
Anne Picking: Although my hon. Friend is right to speak about the training of the armed forces, will he place on record the importance of the medical corps and the nursing corps, and the support that we receive from the health service via the military? That must be placed on record.
Jim Sheridan: My hon. Friend makes a valid point. She has a proud record of working in the medical field, and she has corrected us when we have concentrated on the soldiers and the manufacturing of equipment. We tend to forget the valuable asset that we have in the medical corps of the military.
Mr. David Marshall: While my hon. Friend is going through the list of categories of people whose jobs depend on defence, will he add the highly-paid, professional and clerical staff, many of whom are employed at Kentigern house in the centre of Glasgow, on which the city depends greatly for its employment?
Jim Sheridan:: I thank my hon. Friend for that intervention. He is right, because the staff play a crucial role in servicing front-line forces. Without them, those forces would be unable to function as professionally as they do now. Reflecting again on an independent Scotland, I wonder what would happen to those jobs if that disaster occurred. They are equally important to the search-and-rescue teams based at the site, which provide round-the-clock emergency assistance to people not only in the United Kingdom but throughout neighbouring countries. They do that in all weathers and often at risk of their own lives. My argument is that those bases would be jeopardised by the break-up of the United Kingdom.
Scotland is one of the most important recruitment areas for the armed forces, and provides 10 per cent. of their recruits. Currently, 13 per cent. of the British Army is Scottish. Around £600 million was spent with Scottish prime contractors.
Mr. Davidson: Does my hon. Friend agree that it is regrettable that the armed forces are not prepared to produce evidence to show that they are equal opportunity employers? They need to show that people from a constituency such as mine have an equal opportunity to join the officer class, and that there is no monitoring of the areas from which officers and men are drawn. They should provide confidence that the armed forces are not socially selective in their recruitment.
Jim Sheridan: I thank my hon. Friend for his valid intervention. Some people perceive, rightly or wrongly, that the class system still exists in the armed forces. Our armed forces should be transparent and seen to be equal opportunities employers. As parliamentarians, we should ensure that they are.
Mr. Peter Duncan: I hope that the hon. Gentleman will endorse the continuing belief that the British Army and the Scottish
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forces should be selected on grounds of ability. They are the best and should remain so. I accept the point made by the hon. Gentleman about transparency, but nothing should come above obtaining the best people for the best forces that the United Kingdom can command.
Mr. Deputy Speaker: Order. I am listening carefully to the debate. The armed forces are the armed forces, and the defence industry serves the armed forces. The armed forces are not part of the defence industry, so I suggest that we concentrate on the subject of the debate.
Jim Sheridan: Thank you, Mr. Deputy Speaker. I shall continue.
Each year, Scotland accounts for approximately 8 per cent. of the United Kingdom's jobs in defence manufacturing. It is a matter of fact that defence companies have a proud record of investment in quality training for our youngsters who, if they decide to leave, take that training with them into the commercial world. I am a living example of that, although some people may not agree that it is a proud record.
On diversity of skills, there is a crucial role for the Defence Diversification Agency in utilising the skills and technology gained in the defence industry and transferred to commerce and markets. That could and should be exploited if we are to retain this country's leading role in new technology. Tangible evidence of that can be found in the development of the mobile phone, which was designed initially by the military—we know how many jobs that has created throughout Scotland. There are many other examples, including the commercial use of the infrared equipment currently being developed for use in private cars and burglar alarms.
As a former defence worker, I am fully aware of the quality training that our youngsters in Scotland receive. There are many examples of mature individuals developing the skills gained working in the defence industry and carrying them into commercial markets. Many others have used their expertise to develop and grow some of our smaller businesses and create jobs in Scotland outside the defence industry. Not all of them, I must add, are in manufacturing. Some are in the civil and administration sectors, as has been referred to. More than 24,000 members of the MOD and armed forces work at defence sites in Scotland, including more than 15,000 armed forces personnel and 9,000 MOD civil servants. Those are all quality, well-paid jobs that could be put at risk by the destabilisation of the UK.
Angus Robertson: Can the hon. Gentleman say whether there are more or fewer of those jobs since Labour came to power?
Jim Sheridan: Again, I do not have the statistics to answer the hon. Gentleman accurately. I can only reiterate that, if we are dealing in hypotheses, one hypothesis is that the destabilisation of the UK could result in there being no jobs in Scotland at all.
Mr. Bill Tynan: Can my hon. Friend put that into perspective by hazarding a guess about employment levels in Scotland if the Faslane

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operation were closed and Trident removed from the Clyde, as is the current policy of the Scottish National party?
Jim Sheridan: My hon. Friend makes a perfectly valid point. There are debates on nuclear disarmament on both sides of the argument, but there is no doubt that an independent Scotland would jeopardise the jobs at Faslane and Coulport. Although the SNP's policy is to remove that facility, I have never heard it talk of replacing that facility, or engage in serious discussion on defence diversification.
Although the employment created by the defence industry is crucial to the economy of Scotland, we must also use every opportunity and resource to encourage companies currently engaged in the defence market to continue research into and development of commercial opportunities and markets that could be exploited to sustain jobs. We must remind ourselves that the Scottish economy is a sufficient beneficiary of the defence industry. Without this Labour Government's prudent handling of taxpayers' money and their long-term view of the country's defence needs, the resources required to protect and defend our country could not be found.
That is why I firmly believe that this debate is crucial to the defence of our country, to its manufacturing base and for the security of thousands of civil service jobs that could be lost by the unnecessary constitutional upheaval of independence. I ask my hon. Friend the Minister and all like-minded colleagues to use every opportunity to spell out to the UK electorate the dangerous and potentially disastrous consequences of the break-up of the UK. Real threats to world peace and our own security still exist. Those who argue that we should stop investing in the defence of our country and follow the Mel Gibson bow-and-arrow philosophy are, in my view, irresponsible and fundamentally wrong.
Several hon. Members rose—
Mr. Deputy Speaker: Order. I can see that a number of hon. Members present wish to speak. It may be helpful if I indicate that it is desirable that the first of the Front-Bench speakers be called no later than 3 o'clock.
2.19 pm
Angus Robertson: I am grateful to have the opportunity to take part in the debate. I commend the hon. Member for West Renfrewshire (Jim Sheridan) for securing discussion of a vital subject: the defence industry in Scotland. I thank him for his gracious comments about the untimely death of the mother of the parliamentary group leader of the SNP in Westminster. I will pass on his comments.
I take the opportunity to commend people in Scotland, who do much to support the service community. I commend communities such as Lossiemouth in my constituency, which last week reelected an SNP councillor, Joyce Stewart, to represent the ward and RAF Lossiemouth. That commendation applies to communities that support defence and manufacturing industries. Many of those communities have ignored the Tory scare tactics of Labour Ministers
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who have demeaned their office by creating false uncertainty. I single out Rosyth East, which has again returned an SNP councillor.
The defence industry in Scotland does not operate in isolation. It is an integral part of the Scottish economy and it is boosted or buffeted by the Government's macro-economic policy, as well as their determination to support domestic and overseas contracts. There is no dispute between any Members, regardless of our political persuasion, about the skills of workers in Scotland and about the wish of their management to succeed.
We need to understand the underlying realities of manufacturing and industry in Scotland at present to assess properly whether Scotland's potential is being realised. Although the hon. Member for West Renfrewshire has done much to bring the issue to the fore, I was gobsmacked that he was unable to confirm whether more or fewer people have been employed in the industry since the Labour party came to Government. I shall return to that shortly.
Mr. Davidson: I am glad that the hon. Gentleman gave way before he moved too far away from mention of particular parliamentary constituencies. I draw his attention to the Govan constituency, which his party failed to win despite the best efforts of many. That constituency is particularly involved in shipbuilding. Will he clarify how many aircraft carriers an independent Scotland will build? In the run-up to the next general election, how many aircraft carriers will his party commit an independent Scotland to building in that yard in particular?
Angus Robertson: I am grateful to the hon. Gentleman for bringing up the issue of shipbuilding, which is close to his heart and to the heart of other hon. Members who represent shipbuilding constituencies. It is a subject that I shall return to later. I will also deal with whether there are more or fewer shipbuilding jobs in Scotland now than when Labour came to power. I will answer the hon. Gentleman's question.
If the Scottish economy, or the defence industry in Scotland, had been at the centre of Labour's plans, we may have had more to celebrate. Hon. Members should be aware that since 1999 the Scottish economy has grown at only a third of the rate of the UK economy as a whole. In fact, Scotland has the worst growth record of any country in the European Union. Since Jack McConnell came to office, Scotland's economy has shrunk. Sadly, unemployment in Scotland is still the highest among the constituent nations of the UK. It is 20 per cent. higher than the average of small EU countries.
Sadly, without the best opportunities, people are leaving. That is why Scotland's population is shrinking, while the UK's is growing. Scotland's population is projected to decrease by 10 per cent. over the next 40 years, while the UK population is set to increase by 10 per cent. Ministers, and no doubt Government Members, will claim that since 1997 the UK Government's policies have created the most stable macro-economic environment for a generation, which is of direct benefit to the defence industry in Scotland. Sadly. the only stability has been that of stable decline, which has affected the defence industry in Scotland.
John Robertson: I wonder whether the hon. Gentleman could get off the point-

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scoring part of his speech and put things into the perspective of what has been happening in the world. Does he think that the ending of the cold war just might have had something to do with reductions in the defence industry?
Angus Robertson: I am grateful for the hon. Gentleman's intervention and explanation of why there have been fewer jobs in manufacturing in the defence industry in Scotland since the Government came to office. I seem to remember that the Soviet Union collapsed in 1989. The Labour Government came in quite a while afterwards and are the subject of the debate at present. The hon. Gentleman's explanation is not much of an excuse for the economic instability that we have suffered in Scotland. That stable decline needs to be addressed by the Government to help boost all industries and manufacturing, including the defence industry.
Labour Members have been falsely claiming success in securing defence jobs in Scotland since 1997. The reality is that the jobs tally has been in decline. I posed a question to the hon. Member for West Renfrewshire but did not get an answer. The record on job retention and creation consists of a litany of failures. Since Labour came to power in 1997, we have had 250 job losses announced at Faslane; hundreds of job losses at British Aerospace at Prestwick as a result of the end of plane-making; job losses at Yarrow's and Kvaerner on the Clyde; and—this will be of interest to the hon. Member for Glasgow, Anniesland (John Robertson)—a total loss of 2,400 jobs in shipbuilding in Scotland. Of course, thousands of jobs were also lost with the closure of the Royal Ordinance factory at Bishopton, of which I am sure the hon. Member for West Renfrewshire is aware.
During the 1990s, defence equipment employment in Scotland plummeted from 14,000 in 1990–91 to 6,000 in 1999. There are reports that that figure has now dropped to around 5,000. [Interruption.] The Minister poses a question from a sedentary position about what prospects an independent Scotland would have in that regard. I draw her attention to the fact that one company in Sweden—a small, northern European country, which is neutral and not a member of NATO—employs nearly three times as many people as are employed in Scotland in the manufacture of equipment for the armed forces. That completely nails the lie about job insecurity with the normal status of independence. If a country such as Sweden can have a vibrant defence industry, why can we not emulate that record?
Mr. Tynan: The hon. Gentleman has indicated that jobs have been lost since 1997 because of Labour party policies on the defence industry. What level of employment would exist in the defence industry in Scotland if the SNP's current policies were put in place?
Angus Robertson: I am grateful to hon. Gentleman for raising that point. It is important that all hon. Members understand the reality of the situation under the current Government and the options for change. Were Scotland's tax contributions to the Ministry of Defence to be spent in a Scottish military context, the change would be vast. The reality is that there has been a decline in manufacturing and in uniformed and civilian staff in the armed forces.
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On the issues raised by the hon. Member for Glasgow, Pollok (Mr. Davidson), Members have mentioned the recent success of securing aircraft carrier and Type 45 orders for Scottish yards. I am convinced that workers at Scottish yards will produce the world-beating quality for which they are known. That is why they received the orders in the first place. I am certain that no Government Member would suggest that the yards received the orders because of the graciousness of one political party. They received them because the workers at those yards are well known for the quality of their labour and of the work that they produce.
My only regrets about the orders that have come to Scotland were adequately expressed in a Westminster Hall defence debate by the hon. Member for West Renfrewshire. He said that the Government were

"encouraging companies such as BAE Systems and Thales to invest in quality jobs, albeit in the central belt."—[Official Report, Westminster Hall, 1 May 2002; Vol. 384, c. 187WH.]
That is a big problem for the north of Scotland, although in saying that I take nothing away from the workers on the Clyde and elsewhere who are involved in shipbuilding. That major problem could have been dealt with if at least part of the orders had gone to the Nigg fabrication yard.
Mr. Davidson rose—
Jim Sheridan rose—
Angus Robertson: I have already given way.
The yard that once employed 3,000 people is mothballed and skilled workers have to emigrate, or commute vast distances to work in the sector.
Members of the Amicus trade union, some of whom lobbied Members of Parliament this afternoon, have dealt with that problem. I do not know how many Members present in the Chamber had the opportunity to speak with Amicus members about what is happening to BAE Systems. It was impressed on me and other Members that there is a serious prospect of major job losses in Scotland—at Prestwick, where 195 jobs are under threat, further south in Woodford and in Charlton, Wharton and Broughton, which I hope I pronounced correctly.
I have a special interest in the difficulties of the Nimrod programme, for the simple reason that the entire maritime reconnaissance fleet is stationed at RAF Kinloss in my constituency. I therefore wish to ensure that the Nimrod project delivers and that the total number of Nimrods that has been earmarked for construction by BAE Systems is supplied. I have sympathy for the BAE workers who fear that their jobs are threatened. I hope that the Minister will take their concerns on board in her discussions with Amicus.
Sandra Osborne: I also hope to speak about the Nimrod contract. I share many of the hon. Gentleman's concerns. Will he acknowledge that both the Government and BAE Systems are putting substantial funding into that contract to ensure that it gets off the ground?
Angus Robertson: It is interesting that some cost overruns are good and some are bad. I cannot remember

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what the latest tally is for the increasing cost of the Scottish Parliament but the increase in the cost of the Nimrod contract is nearly £300 million. While we should rightly consider any measure that retains jobs, from a taxpayer's perspective, we should ensure that companies carry out contracts efficiently and effectively. I shall discuss that at a meeting with the Ministry of Defence tomorrow afternoon
I appeal in a non-partisan spirit to the Minister to take on board and explore my suggestions, which would benefit the defence industry in Scotland. Fantastic opportunities are offered through offset contracts. Members will be aware that an offset refers to the compensatory trade agreement whereby the purchasing nation requires the exporting company to reduce or to offset the purchase price of a defence product or service. Offset is otherwise known as industrial participation, and according to the Society of British Aerospace Companies Ltd., it is worth more than £4.7 billion. More than £2.5 billion of that is in the form of indirect offset into the UK. Industrial participation is increasingly used by the MOD in evaluating competitive procurement bids, and it seems that the value to the UK of direct offset is likely to increase as companies exploit its potential as a marketing tool. That is also open to companies throughout Scotland and in the rest of the UK
Unfortunately, the Library has been unable to find any substantial information in the public domain that gives an indication of the geographical spread and regional values of individual offset contracts. That contrasts markedly with the situation in the United States. Under section 309 of the Defense Production Act 1950, the US Department of Commerce is obliged to prepare an annual report for Congress on offset in defence trade. Specifically, the report examines the impact of offsets on the US economy and its defence industrial base
Will the Minister tell us the value of offset contracts in Scotland, and what efforts the Scotland Office is making to secure offset contracts? Why has it been possible for the US authorities to be open, transparent and accountable, while in the UK, the Government cannot account for billions of pounds worth of contracts? When will the UK Government publish those key statistics?
Sadly, the standards of defence services in Scotland are also being challenged by the Government's privatisation agenda. In particular. that is felt in Labour plans to privatise the defence fire service. I pay tribute to the Transport and General Workers Union and to the hon. Member for Selby (Mr. Grogan) for their part in the campaign against that ludicrous idea. The privatisation is vigorously opposed by my constituents, especially those who depend on the cover of the DFS at RAF Lossiemouth.
Will the Minister either confirm or deny that the Government are considering decoupling the DFS privatisation from the airfield support services project? The SNP and I would very much welcome that. I hope that that position is supported by the right hon. Member for Edinburgh, East and Musselburgh (Dr. Strang) and the hon. Members for West Renfrewshire, for Glasgow, Anniesland, for Glasgow, Baillieston (Mr. Wray), and
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for Dumfries (Mr. Brown), who signed early-day motion 853 against the privatisation during the previous Session
Anne Picking: To follow up the question asked by my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson), how many frigates would the SNP policy produce?
Angus Robertson: What is important to people working in the manufacturing sector is knowing whether their jobs are secure. What the Government—and Labour Members—have to ask is whether they will honour the legal and binding contracts that have been entered into. All the projects being carried out in Scottish yards are subject to legal and binding contracts. Those jobs are and will be secure. The only thing that would undermine jobs in Scotland is a UK Government, and Labour Ministers and Members, being prepared to countenance breaches in standing, binding contracts
The hon. Lady needs to look to her Front Bench rather than to the official opposition in Scotland if she is concerned about whether people's jobs are at risk. I hope that she gets the opportunity to catch your eye, Mr. Deputy Speaker. Perhaps then she could tell the Chamber whether she is opposed to the privatisation of the defence fire service—an idea so ludicrous that even the leader of the Conservative party at Westminster described it as a privatisation too far—or perhaps the hon. Lady is to the right even of the Conservative party.
Jim Sheridan: The hon. Gentleman rightly paid tribute to the workers in Govan and Glasgow for the quality work that they carry out. If the SNP were to gain power, would it carry out the current orders in both those yards? How would the hon. Gentleman secure those jobs, and how many aircraft carriers and frigates will the SNP build in Scotland?
Angus Robertson: I am not certain whether the hon. Gentleman understands that the companies that are building for those contracts are private companies. It is not for the Government of an independent Scotland to undermine a commercial contract that has been entered into. The only people who are likely to breach a commercial contract are the UK Government, and I think that that is unlikely. Perhaps the hon. Gentleman has less faith in his Front-Bench team.
Mr. Davidson: Will the hon. Gentleman give way?
Angus Robertson: I will not, in fairness to the other hon. Members who want to take part in the debate. Mr. Deputy Speaker has urged hon. Members to give others an opportunity to speak
In conclusion, the reality of Scotland's defence industry is different from the rosy picture painted by the Government. There is tremendous potential for a normal independent country where companies can bid for contracts in a competitive economic environment predicated on growth. There is a sad contrast between that and the reality of the decline in employment under Tory and Labour Governments, as well as the Government's continuing privatisation agenda. Scotland deserves better and our defence industry deserves better. Taking the right decisions in Scotland is the best guarantee of success.
2.40 pm
John RobertsonI shall try to address the matter without engaging in political points scoring against a party that has shown a sad lack of understanding of industry in Scotland. I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing the debate. Once again, he has shown leadership on an issue about which he is knowledgeable
It will not come as a surprise to hon. Members to learn that I intend to speak about shipbuilding and that I will concentrate in the main on the Govan and Scotstoun yards. The Scotstoun yard is in my constituency and I hope that it has enough work to last beyond my retirement, which is something that I doubt that any previous Member for my constituency—its boundaries have changed—could have said.
The shipbuilding industry was decimated by successive Governments in the 1970s and written off for privatisation in the 1980s. It is easy to sell off an industry for money, but it is impossible to invest while money is being given out to shareholders or friends, which is exactly what the Conservative Government did. [Interruption.] The hon. Member for Moray (Angus Robertson) has been chirping away. I say to him that when an industry has been run down and has not been invested in, it takes time to build it up. The fact of the matter is that 3,000 jobs still exist thanks to the Labour Government. He may not want to accept that, but it is a fact.
Mr. Peter Duncan: Am I to understand it that the hon. Gentleman's argument is that an industry must be in the public sector in order to make significant investment? If that is the case, it is an extraordinary argument that belies the evidence of the past two decades. Industries that require investment can generate it in private industry, and have done so successfully in Scotland.
John Robertson: I have great respect for the hon. Gentleman, but he cannot put words in my mouth. I never mentioned that point. I said that his party sold off the shipbuilding industry for money alone and did nothing about investing in what was left because it wanted to make sure that there would not be a shipbuilding industry in this country. There were 200,000 workers in the industry in 1960, but now there are only 30,000 in the whole country. The demise of the shipbuilding industry is sad.
Angus Robertson: The hon. Gentleman's interest in shipbuilding is undisputed, but can I ask him whether there are more or fewer shipbuilding jobs in Scotland since Labour came to office?
John Robertson: I thought that the hon. Gentleman had answered that. There can be no jobs without investment, which is at last coming into shipbuilding. He knows that there are fewer jobs, and I know that. Why are there fewer jobs? It has nothing to do with the Labour Government, which is what he would like to suggest. Thanks to the Labour Government, there are more jobs today than there were a year ago, and there will be more of them in the years to come
Modern apprenticeships—the first for more than 20 years—are currently increasing employment on the Clyde. There were 42 new apprenticeships last year;
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there are 112 this year; and there will be more to come in the following years. I do not take credit for that as a Labour Member; I take credit for helping to support my constituency and my constituents. The company has been pointed in a direction that it had forgotten about.
Jim Sheridan: As a former shipyard worker who was made redundant, I know that the reasons for job losses were the introduction of new technology—shipbuilding industries elsewhere have been decimated by new technology—and, most important, the end to the demarcation of yards. That relates to the point about congratulating the workers of Glasgow and Govan. The job losses were not the result of any lack of investment.
John Robertson: I thank my hon. Friend for that point.
The fact of the matter is that three Type 23 frigates have been sold to the Sultan of Brunei in recent years. One is ready to be delivered, with the other two to follow shortly. There are also six Type 45 destroyers and two ALSLs—alternative landing ships logistics—to be built, and we have more than our fair share of carrier work for the Scotstoun and Govan yards. I hope that the Ferguson yard in the constituency of my hon. Friend the Member for West Renfrewshire picks up its fair share of work. It has 400 workers who need work
My hon. Friend the Member for Greenock and Inverclyde (David Cairns) has also seen shipbuilding decimated in his area. Today, shipbuilding practically does not exist in the lower Clyde. The upper Clyde is thriving, but on reduced amounts of work. The Ferguson yard must be examined too. We need the work that exists, and more of the same. It is up to us on the Clyde to show that we are still a force to be reckoned with.
Mr. Davidson: I suggest that my hon. Friend does not take too much for granted. It is not true to say that the aircraft carrier construction has been firmly committed to the Clyde. It is clear that the initial decision leads in that direction, but a number of break points during the process of ordering and contracting could easily result in manufacturing work being taken to a foreign yard should Scotland become independent. Similarly, the second tranche of frigates has not been firmly committed at this stage, and they could be taken away and given to Vosper if Scotland became independent. Export orders are dependent on a core stream of work from the Royal Navy, and they might also be lost if Scotland became independent. Is my hon. Friend clear about that?
John Robertson: I do not need to re-emphasise my hon. Friend's point, but I commend him for the work that he has done as chair of the all-party group on shipbuilding and ship repair. I have no doubt that the lobbying of Ministers by him and other colleagues helped to secure orders for the Clyde and other areas of the country. They got the rules changed when they managed to secure written confirmation from the Minister with responsibility for defence procurement that all MOD ships would be built in Britain, and that no single part would be built elsewhere, such as in Holland as happened in the case of one ship. My hon. Friend helped to lead ghat effort, and it was a great win for those who have been fighting for so many years.

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Where will we get more ships? My hon. Friend said that we should not stand by and say that the ships we have now will be sufficient for the Navy for evermore. We must look to future sales. Most of the early attacks on Afghanistan and Iraq came from ships: rockets were fired from ships, planes were launched from ships, and troops were initially landed from ships. Britain does not have that kind of naval force at present. I know that that is being considered under the strategic review, which represents a new chapter. I hope that it continues to be a subject of the strategic review as the days and years go by. We cannot stop at this point: there is more to be done
We must consider the types of ships that we have. There are ports throughout the world now that will not admit single-hull ships. We may have to build many double-hull ships. My question to the Minister, which I do not expect her to answer today, is how many of our naval ships are single hull and how many will have to be replaced with double-hull ships? Perhaps I could take credit for stimulating shipbuilding, particularly on the Clyde.
I have spoken for long enough—some would say too long. Scotland has been very important to the defence industry for many years. Even today, with only 5 per cent. of the population, it still supplies 8 per cent. of the troops on the ground. We have carried out most of the shipping of goods in the past, and we have done more than our fair share of swirling the kilts, playing the pipes and leading the fight from the trenches. Scotland has a proud heritage and tradition in the defence industry, and I hope that it will continue
I conclude with a bit of point scoring. Withdrawal from NATO would be an absolute disaster, not just for Scotland but for Britain and the rest of Europe. I shake my head at some of the things that have been said about that. I ask the Minister to support the industry in the future.
2.51 pm
Sandra Osborne: I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing the debate. I very much agree with his assertion that many jobs that have been created and secured in Scotland by the defence industry would disappear like the proverbial snow off a dike if Scotland were ever to become independent
I wish to raise the matter of the Nimrod contract, which is very important to my constituency. In March, an agreement was reached between BAE Systems and the Ministry of Defence to halt the production phase of Nimrod. That resulted in the loss of 1,005 jobs at BAE's five sites throughout the UK. In my constituency, 195 jobs were lost, as the hon. Member for Moray (Angus Robertson) has already said. I am pleased that he is taking such a close interest in my constituency. It is more than the Scottish National party candidate did at the Scottish Parliament election, but it is welcome nevertheless
I met BAE's management and the Minister responsible for defence procurement to discuss the matter. I had been aware for some time that the contract was in serious trouble. The Government have provided
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substantial funding to put the contract back on track, as has BAE Systems. There was a real prospect that the contract would have been terminated if that had not happened. The negotiations were difficult for both sides, and I appreciate that the action that had to be taken was taken. However, as the revised contract stands, all production after the third aircraft will be stopped while the design matures and an assessment is made of the true cost of development. That is likely to create a two-year gap between the design and development phases and the date for restarting production.
John Robertson: What does my hon. Friend think will happen to the skilled labour during those two years? Will it go to other industries and be lost to the defence industry for ever?
Sandra Osborne: That is a good question, and it was asked at the lobby earlier today. When the aircraft carrier contract was announced, BAE Systems and Thales both suggested that there was already a 20 per cent. skills shortage in the area, so it is a major concern
As I said, the company announced redundancies. The job losses will mean that employees who currently work on Nimrod will leave the company, thus adding to the skills shortage to which my hon. Friend referred. That will also have clear implications for the Government, because increased costs will be incurred as new workers on the project will have to go through a learning curve when production is resumed. Where will we get the skilled work force that will be needed once production starts again? As an example of the many lessons that have been learned, the inner wing on the first Nimrod started at a baseline of more than 75,000 hours. By the fourth aircraft, production time had fallen to just over 25,000 hours and was still falling to reach a target of less than 10,000 hours.
I have been aware of the tremendous efforts made by the work force at Prestwick to cut the costs of the project and to recognise the problems. Their efforts, as I have illustrated, had already started to pay dividends before the announcement, but if that skill is lost to aircraft manufacturing, it is likely to be lost for ever. Surely the strategy should be to fill the two-year gap by keeping work going in the meantime. It is recognised that some elements of the strip down and manufacture, which are not subject to design change, could continue in the interim, thereby retaining some of the current work force and enabling a more realistic plan for production to restart. That would also help to reduce redundancies and secure the affected sites for the future
I have a list of stable work that could continue in the meantime, which will not be subject to design change in the future. I hope that the Minister will use her good offices to put forward my suggestion to the ministerial team at the Ministry of Defence. As the hon. Member for Moray said, a successful lobby took place today by Amicus. The fact that it was well attended by Scottish MPs was much appreciated. The trade unions believe that it would be feasible to bring forward such work now. They are not asking for more money from the Ministry of Defence, only that agreed funding is brought forward early
Three important issues are involved, the first of which is mitigating the redundancies. Secondly, capability must be retained and. thirdly. we must avoid substantial

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restart costs. Such issues are serious and the trade unions have put forward practical proposals that merit serious consideration. It is imperative that, whenever the contract recommences, Prestwick and Scotland benefit from such a substantial investment by the taxpayer. From my discussions with the Ministry of Defence and BAE Systems, I am aware that that has not been ruled out. It is especially important at the moment while the aerostructures division of BAE Systems is up for sale. It may be significant that the Nimrod work was not included in that sale. Nevertheless, whatever the outcome, will the Minister make representations on behalf of the Scottish work force to make sure that Prestwick receives its fair share of the contract when it recommences and any other defence contracts in future?
2.57 pm
Mr. John MacDougall: I am aware of your appeal at the beginning of the debate, Mr. Deputy Speaker, so I shall shorten dramatically my contribution. I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing the debate on the important Scottish defence industry. I have close historical connections with the defence sector because of the long battles that took place at Rosyth naval base during the review of the nuclear defence industry. I say from the outset that the Government's performance in the allocation of the aircraft carrier programme was carried out in a competitive and honourable fashion. I cannot say that that was the case throughout the Rosyth escapade, but it is best to lay that particular matter to rest
The importance of a defence industry cannot be understated. Our important discussions highlight that and, while we have experienced some political point scoring, there is a need for honesty about the value of the industry, not only to the defence sector. We must remember that many industries that are not defence related feed into the defence sector. It is important to bear in mind that family businesses and shopkeepers throughout Scotland depend on the defence industry. We are not talking only about defence, but the unequivocal value of the industry. When it is bid for and the money is available, it will guarantee resources in the communities that we represent. We should not lose sight of that
I wish to express particular concern about the uncertainty of the commitment on the aircraft carrier programme. I hope that the Minister will assure us that she will use her best endeavours to keep the programme on schedule. In my constituency and in central Fife, companies such as Raytheon are dependent on the defence sector and the jobs in it. They are only asking for a fair opportunity; they do not want unfair political intervention. They want to ensure a level playing surface for companies, which is the only fair way in which to allocate contracts
My hon. Friend the Member for Dunfermline, West (Rachel Squire), who represents Rosyth, was present earlier and apologised for her departure to consider other defence matters. Rosyth has always had a proud role in the defence sector, so the issue does not affect only the west coast—that has not been presented as an argument today, although the impact on the west coast is serious. There is a Scottish dimension to the programme and Rosyth stood to gain significantly from the work load
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If we do not have the opportunity to retain programmes to which the Ministry of Defence is committed, jobs may be lost in the intervening period. Clearly, it is much more difficult now for companies to retain staff when there is no work for them. if skilled labour is lost, the present successful economy and the employment figures that are lower than they have been for around 30 year; may be affected. People have a better opportunity of moving on and there is a danger of losing skills from the industry. Any internal loss of opportunity may result in the loss of skills and affect a company's competitiveness when making a bid later. That may threaten the work coming into Scotland and that makes a contribution to the Scottish economy
My appeal today is that we should all recognise that, despite any political differences, it is important not to create fear among those employed in the defence sector or indulge in scaremongering. We should tell them loudly and clearly that we care about their future and their valuable skills, that we are doing our best to ensure that they are given a fair opportunity of using those skills on defence work and in the vital industries further down the line that supply the defence industry, so that those people have the best chance to continue to make a contribution
I have been brief in accordance with your wishes, Mr. Deputy Speaker, and am grateful for the opportunity to express my concern about the future of the defence industry in Scotland. I thank my hon. Friend the Member for West Renfrewshire for providing us with the opportunity to debate this important issue today.
3.2 pm
John Thurso: I congratulate the hon. Member for West Renfrewshire (Jim Sheridan) on securing this timely debate. I shall show that it is particularly timely, given a matter that concerns my constituency.
The defence industry is of major importance to Scotland, providing a vital backbone for employment. In particular, the Government's shipbuilding programme provides continuity of work in many traditional industries and allows them to be developed. It is important to build on those employment and enterprise opportunities
Defence-related industries provide that opportunity, but, as anyone who has ever undertaken a sector-wide analysis will know, an opportunity may also be a threat and I want to enter one caveat. Scotland's high dependence on defence and defence-related industries comes with the threat that jobs may be lost in future as they have been in the past. It is vital that the Government, in encouraging and supporting the defence industries, ensure the sustainability of employment so that the situation does not arise, as it has in the past, in which today's jobs become tomorrow's redundancies.
It is vital that the Government plan wisely. To a great extent, that will depend on the development of our foreign policy. Who could have foreseen two years ago what we would be asked to undertake at this time? Clearly, that will be an ongoing debate. The recent chapter of the strategic defence review, produced in July 2002, acknowledges that there is still much debate to be had. The essential caveat that I enter is that, in our planning, we must be careful that jobs are not simply for a short period, but remain sustainable

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The defence industry can broadly be split into two parts. One part relates to defence establishments, the service contracts that go with them and the related civilian employment. The other part is defence procurement. I shall concentrate on that, but briefly mention the other part of the industry. Our establishments provide welcome and valuable economic support, often in areas that do not enjoy heavy industry and jobs. Interestingly, of the 170,000 service personnel deployed throughout the United Kingdom last year, 14,000 or some 8 per cent., were in Scotland. More interesting perhaps is the fact that, of the 73,000 civilians employed, some 8,000 or 11 per cent. were in Scotland
The bases provide a welcome anchor to many local economies. The Vulcan royal naval training test establishment in my constituency is responsible for the land testing of nuclear reactors for use in all our submarines. It recently landed a new 13-year contract, which is a tremendous support for that economy. The establishment employs 280 people, supported by some five naval staff, and is worth more than £10 million directly to the local economy. There are also two establishments in my community that, unusually, have all the inconveniences, such as noise, but none of the economic benefit. These are the bombing range at Tain, where all the aircraft come from a neighbouring constituency, and the live firing range at Durness. I have made this point before, so I shall not labour it, but the relationship between such places and the Ministry of Defence in the 21st century needs to be considered.
Angus Robertson: During the previous Session, the hon. Gentleman signed an early-day motion on the defence fire service. Will he take this opportunity to reaffirm that that represents his position and that of his party, and impress on the Minister that the Government should reverse their agenda of privatisation of the defence fire service?
John Thurso: If I signed an early-day motion, I am sure that it represents my position and that of my party
As has been mentioned, defence is an extremely important industry throughout Scotland. It accounts for one in 50 jobs, but I shall not labour the figures. It is interesting that defence does not figure merely in the traditional industries, but is at the cutting edge of modern technology. Research and development has been mentioned, and a point that I came across in researching this subject is that, in Scotland, 31 per cent. of R and D expenditure has been for defence purposes, compared with 15 per cent. in the UK as a whole.
John Robertson:Does the hon. Gentleman agree that it is a sad fact that R and D in Scotland lags well behind that in the rest of the United Kingdom? Perhaps he could say why he thinks that that is so.
John Thurso: I certainly agree, but as we must keep an eye on the clock, I should like to proceed with my speech.
I want to deal with shipbuilding and Nigg. I welcome the Government's announcement and the statement that was made at the last Scottish Grand Committee. I
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shall not go over that ground again, but the Type 45 destroyers and the 10,000 jobs that will come with the future aircraft carriers are a welcome and necessary boost for Scottish industry. The hon. Member for Moray (Angus Robertson) referred to Nigg. If I may correct him, at its height, there were more than 4,000 jobs, not 3,000, but I am sure that he will join me in congratulating the management on the 200 jobs that they secured in one of the sheds two weeks ago. It is not totally in mothballs. In pushing for some of the work from the future carriers to go to Nigg, I want to make it clear that that would be a relatively small and specialised part of the total expenditure, which the expertise at Nigg is well capable of handling. Placing work there would not be a particular threat to either Rosyth or Clydeside. The key factors are the concept of the dry build, the size of the dry dock, the heavy lifting equipment and the skilled work force
I am delighted to say that I had a constructive meeting with the Secretary of State for Scotland some six or eight weeks ago. The debate is timely because this morning I had a meeting with Lord Bach, who has given me a commitment to make an early visit to Nigg to see precisely what can be done. Immediately after this debate I am going into a meeting with KBR Caledonia, which operates the shipyard. There is a genuine possibility of securing work, and I am grateful to the Government for the support and help that they have given me in pushing the case forward
Given the constraints of time, I shall conclude by saying that the Scottish defence industry is important because it provides opportunities in other areas. We must plan wisely to ensure a commitment on jobs, which must be sustainable. I ask the Government to continue to support the creation of jobs not only in the central belt but throughout the rest of Scotland, and in the highlands in particular.
3.11 pm
Mr. Peter Duncan: In traditional fashion, I, too, join in the cross-party welcome for the success of the hon. Member for West Renfrewshire (Jim Sheridan) in securing the debate, which follows a similar debate last year. For those of us who have not worked in the defence industry and have not worked on Clydeside, it is great to hear contributions from him and the hon. Member for Glasgow, Anniesland (John Robertson), who know the communities and have worked in the industries. I greatly value their contributions. With a few exceptions involving the usual suspects, today's debate has been of a relatively high quality and has involved all parties in Scotland. I welcome its relevance, given the dramatic developments since our debate on 1 May last year
The Scottish defence industry obviously makes a substantial contribution to Scottish armed forces. I understand that the debate is not about Scottish armed forces, but I seek your indulgence, Mr. Deputy Speaker, given their importance to employment in Scotland. Our armed forces form 13 per cent. of the British Army and, as we have found out in the recent past, they have made significant and skilled contributions, particularly in Basra. We are all immensely proud of them
I am also aware that the families of servicemen throughout Scotland have made a huge contribution. Those hon. Members who do not have a defence

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industry locus in their constituencies all have constituents who have made sacrifices, in that they have been worried and concerned over the past few months. Similarly, we all have businesses in our constituencies that have made sacrifices by giving up their reservists. That is an oft-forgotten sacrifice made by industry not only in Scotland but throughout the United Kingdom. Because those businesses are flexible, they tend to be very small, and giving up an employee to go on reserve duty is a significant sacrifice for them. I should like to pay tribute to businesses in Scotland that have made that sacrifice in recent months
The defence industry obviously gives Scotland a significant boost. It is worth £1.6 billion to the Scottish economy and provides 8 per cent. of jobs and investment. We cannot gloss over it in a small annexe to a debate on the Scottish economy, of which it forms a significant part
As the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) said, the Scottish defence industry has a two-pronged risk and reward. As we develop our defence industry to its natural capability, there is the risk that we expose ourselves to over-specialisation. Getting that balance right is a significant challenge for the Scottish economy
I pay tribute, albeit briefly—I only do things to nationalists briefly—to the hon. Member for Moray (Angus Robertson) for his suggestion that one cannot divorce consideration of the defence industry in Scotland from consideration of other industry in Scotland. The two are very much intertwined
I regret to say to the Government that the decline of manufacturing industry in the UK and the specific decline of manufacturing industry in Scotland—part of which is defence—will have a dramatic effect on the ability of Scottish industry to subcontract to defence industries. I recently met a company of subcontractors in the defence industry, and they face exactly the same challenges of budgeting, taxation, red tape and administration as other small businesses in the defence industry the length and breadth of Scotland and the rest of the UK.
Angus Robertson: Does the hon. Gentleman agree that it would be of benefit to everyone with an interest in the defence industry if the Government published statistics showing the value of offset contracts so that we could be fully aware of whether companies in Scotland and elsewhere in the UK are making the most of what those contracts have to offer?
Mr. Duncan: The hon. Gentleman is right about the offset contracts, in as much as we should be maximising the value of the whole defence industry to the Scottish economy. There is no doubt that more transparency on that is the least that should be expected of any Government, and no less of this one
As I mentioned, 13 per cent. of those employed in UK forces are from Scotland. It is a significant employer by any manner of means. I would point out that in the UK there are 6,000 fewer people employed in the armed forces than there were in 1997. That has had an effect in Scotland, and we need to see some concentrated attempt from the Government to redress that balance and address the recruitment and retention crisis that plagues our armed forces
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I said that we have had a mixed debate. The mixed element came from the hon. Member for Moray, who possibly faces the frightening prospect of being defence Minister in an independent Scotland. If that did not frighten anyone else in the House, it certainly frightened me. I find extraordinary the appeal that he made for jobs for the carrier contract to be dispersed around Scotland—particularly to Nigg. His double standards on that matter know no bounds. The simple fact is that his party's policy would leave Scotland under-defended. It would not develop new orders for the products or deliver further work for shipbuilding contracts, never mind the delivery of an industry that is capable of fulfilling the existing ones
To give a further example of SNP doublespeak on the defence industry, in my constituency I recently saw off the SNP MSP. As part of his—unsuccessful I am delighted to say—electoral plank, he criticised the run down of Qinetiq in West Freugh. I heartily agreed with him that that was a dreadful development for my part of the world. However, the simple fact is that Qinetiq is a high-quality, highly specialised, high-technology partner to the UK Government in defence, and there would be no research and development in an independent Scotland defence force—certainly not of the quality of the work done at West Freugh
The carrier orders are the obvious significant developments since we last considered these matters, and I would like to make a few further observations to those that I made in response to the statement given at the last Scottish Grand Committee. We retain considerable reservations about the link with Thales, particularly given the developments of the last two or three months with regard to the French Government. We remain concerned about the way in which such contracts are awarded over decades rather than years, particularly for the maintenance and development of technology over those decades. It is of concern that we are tying ourselves to a foreign Government and a situation in which we have no guarantees for the future
I accept entirely the point made by the hon. Members for Glasgow, Anniesland and for West Renfrewshire about the skills gap. That is surely the highest priority, following on from the announcement about the carrier orders. I accept that it is a particular locus for the Scottish Executive, but in some way we all have to address the skills gap in Scotland. Otherwise, we will not be able to fulfil these orders to the maximum of our abilities. In addressing the future of our shipbuilding industry, I am happy to quote the hon. Member for Glasgow, Anniesland—I hope correctly this time—and say yes, we have an opportunity for the future. However, we must get beyond this crisis-to-crisis stumbling on Clydeside and the other shipbuilding yards throughout Scotland. It is not acceptable simply to delay major decisions until we hit a brick-wall crisis, then rely on another major decision by the MOD suddenly to come to the rescue. We require long-term planning, we must address the skills shortage and, crucially, we must have a level playing field internationally. Concerns remain that the international shipbuilding market is not universally fair to Scotland's defence industry
The defence industry cannot be overlooked when considering a successful Scotland in the future. I commend the Government for the part that they have

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played in ensuring that defence decisions that apply to Clydeside have been taken when necessary. I look for further decisions in the near future, to take the industry forward.
3.20 pm
The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire): Those hon. Members who would recognise it will know that this is not my normal voice. I put that down to a great deal of zealous campaigning last Thursday—with significant success
I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing this important debate. In doing so, he has allowed us to consider an industry that is one of the cornerstones of the Scottish manufacturing base, notwithstanding some of the comments that we have heard this afternoon. I should also like to thank my hon. Friends and other hon. Members who have taken the time to participate. I am delighted to respond to the points raised, although I suspect that I will not be able to respond to very many of them. I shall cover as many as I can
Like most Scottish MPs, I am well aware of the important contribution that Scottish defence industries make to the Scottish economy, and recognise the value of Government spending on defence programmes and the contribution that that makes to the manufacturing sector in Scotland. It is no accident that, during the past 15 years and from two parties in Government, we have had no fewer than three Secretaries of State for Defence from Scottish constituencies. That highlights the importance that defence plays in the whole political dynamic in Scotland
I also recognise that the defence industry, in all its manifestations, from manufacturing through to the provision of home bases for service personnel, underlines the strength of the partnership in the United Kingdom: a view amply reinforced in the results of last week's elections to the Scottish Parliament. If there is one point that I should like to put to the hon. Member for Moray (Angus Robertson)—which picks up on something that my hon. Friend the Member for Central Fife (Mr. MacDougall) said—it is that defence is not just about the deployment of forces or the building of ships; it is about communities. It is about the schools, shops and local community facilities that are sustained by service personnel in—dare I say it—some of our more fragile areas. The hon. Member for Moray and his colleagues should ask the small shopkeepers how much they will lose if the whole defence industry is withdrawn from its positions in Moray. To be perfectly frank, it is not good enough for members of the Scottish Nationalist party who represent constituencies with a strong defence base to say that they support defence, when the party has at its core a policy of pulling Scotland out of NATO, out of the United Nations and into isolation.
Angus Robertson: Will the Minister give way?
Mrs. McGuire: No, the hon. Gentleman has had more than his fair share this afternoon. It is important that he is allowed the opportunity to reflect on some of those arguments, and perhaps consider how he can address them with his constituents
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Almost every part of Scotland is touched by defence, from Caithness to the borders. The list of defence industries across Scotland includes everything from Crew Toll and the Gyle in Edinburgh to Rosyth, Faslane, Govan, Glenrothes, Hillend, Donibristle in Fife and Newbridge in West Lothian—it stretches across the whole of Scotland. [Interruption.] The hon. Member for Moray can chunter all he likes, but I shall not allow him to intervene
I do not want to reiterate some of the points made, but it is worth stressing that approximately £600 million of defence contracts are based in Scotland. As everyone here realises, that is not the full picture. There are all sorts of additional and added-value connections with defence: Scottish companies have subcontracts for defence expenditure not only in Scotland, but in other parts of the United Kingdom. A prime example is the 2001 award of the Bowman contract to CDC UK
Further benefits to Scottish industry included the subcontract work awarded to CDC UK by Alenia Marconi Systems at Hillend in Fife, which secured almost 100 jobs—an important security for the people in that community. AEA Technology in Thurso also provides employment in the constituency of the hon. Member for Caithness. Sutherland and Easter Ross (John Thurso)
Scottish Executive support mechanisms are also in place. They established a new facility in Glengarnock, creating an initial 600 jobs with the opportunity for more.
I said that I would try in a short space of time to answer some of the issues raised. While I am speaking about the hon. Member for Caithness, Sutherland and Easter Ross, I want to congratulate him on the way in which he has pursued the Nigg issue. He told us exactly what he had done. He had been to see my right hon. Friend the Secretary of State, and has had meetings with the various companies involved. That stands in stark contrast with the sniping—dare I use that word?—in a defence industry debate from some hon. Members from the Scottish National party sitting to his immediate left
My hon. Friend the Member for Ayr (Sandra Osborne) raised a concern about the Nimrod contract. I know that there was a lobby today. I am sure that some of the messages from that lobby will be taken to Ministry of Defence Ministers. I also assure her that I will discuss some of the comments that she made today with my colleagues in the MOD
We heard this afternoon about the decline in defence jobs. I want to tell the 1,600 employees at Clydeside, the 2,000 at Rosyth, the 2,000 at BAE Systems in Edinburgh, the 500 at AMS, the 600 at Raytheon in Fife and the 5,000 at Faslane that the claim that the Government are not helping out and supporting our defence industries is palpably untrue.
I do not want the hon. Member for Moray to go away with a complex. I shall give him just one nugget. I heard his comments on the offset contracts, and assure him that I shall raise that issue with my colleagues in the MOD
We have had an opportunity to reflect on the benefits of the defence industry in Scotland, but it is not all take. By being involved in that industry, we also provide a great deal of support, not only in high tech, important though that is, but in everything from warships to

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missile control systems, from uniforms and training to simulation systems. We cannot underestimate the input of Scottish industry: companies such as Thistle Garments in Cumbernauld, which produces waterproof outerwear for service personnel. It was awarded an MOD contract for 28,000 sets of high-tech combat clothing and is expected to create some 50 jobs.
Last week during the Scottish election campaign, I visited a carpet manufacturer in Aberdeen. I would not have expected to find anything to do with defence jobs in a carpet fibre factory in Aberdeen, but members of staff told me that they had a massive contract for guy ropes for tents. The company has picked up such contracts as part of its diversification—apparently, we are all putting down laminate flooring instead of carpets.
I appreciate that the time available to me is short, and I shall soon move to the subject of Ayrshire and Auchancrow, but I must say that the importance of the defence industry in Scotland is not open to question. If I could give just one message to colleagues, it would be that we should not undermine the importance of our defence industry by constantly harping on about what it does not do. We should be positive and concentrate on what it does do. If we need ambassadors for Scotland, we should look no further than the Black Watch, which acted with great dignity in Iraq. It was no doubt sustained in that theatre of war by a great deal of industrial technology, and, dare I say it, some of the more mundane things, such as clothing et cetera.
Mr. Deputy Speaker: Order. We must move on to the next debate.

Scottish Agricultural College
3.30 pm
Mr. George Foulkes: I am particularly grateful to lead this debate in this parallel Chamber. I know that my hon. Friend the Member for Ayr (Sandra Osborne) and the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) would like to say a few words if they are able to catch your eye, Mr. Deputy Speaker. That is certainly okay with me, and I understand that it is okay with the Under-Secretary of State.
One or two eyebrows were raised in one or two quarters, including those of the Under-Secretary of State, about the relevance of the topic to Westminster. I must confess—honest as always—that it is, of course, principally a matter for the Scottish Parliament and the Scottish Executive. However, there are significant British and overseas interests that it is our duty to consider and to protect. Indeed, as the chairman of the Scottish Agricultural college says in the foreword to its 2002 annual report:

"This report details activities which will aid Scottish agriculture, and agriculture in other parts of the UK."
Page 13 of the same report notes that:
"consultancy and training have been carried out in countries as dispersed as New Zealand, Poland, Japan, and the USA."
When I was a Minister at the Department for International Development, I visited the Auchincruive campus to see the excellent and much-needed work that was being done to help the developing world, funded by DFID.
Page 15 of the annual report describes the pressure from the general agreement on tariffs and trade and the World Trade Organisation, for which we have responsibility, to phase out headage payments. On page 30, where the college's research and development funding is broken down, we see that the UK Government contribute more than £2.3 million. Research councils, levy boards and the European Union also make significant contributions. Therefore, this matter is of importance to us. Some, or all, of us are threatened by the plans being considered by the board of the SAC. Owing to funding pressures, the college has, understandably, been looking at ways of saving money. I do not object to that. However, the proposal that it has come up with flies in the face of all logic.
In 1990, the SAC was created by the merger of three agricultural colleges in Scotland—those at Ayr, Aberdeen and Edinburgh. The staff, students and public in Ayrshire and in Dumfries and Galloway contend that there was a clear commitment at that time to maintain and indeed to expand the teaching and research presence at Auchincruive. Any proposal that goes against that is a clear betrayal of trust.
I accept that the SAC board has a duty to ensure that the college does not continue to run at a loss, but I challenge the options that it has been considering and the basis on which they have been arrived at. The Deloitte and Touche report of 20 February 2003 was mischievously described by Dr. Maitland Mackie, whom my hon. Friend the Member for Ayr knows, as the Finnie report, because it was called for by the Minister for Environment and Rural Development.

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That report comes to the wrong conclusion. Its analysis is based on a faulty remit and subjective weightings, with no justification whatsoever.
The remit was drawn up and the options were assessed by the executive management team. That team, under Professor Bill McKelvey's leadership, favours centralisation of the operation in Edinburgh. Therefore, the assumptions that it has made inevitably favour the Edinburgh option. The conclusions fly in the face of logic and of fact. To suggest that it is cheaper to centralise all operations in Edinburgh—where we know that costs are substantially higher, the economy is overheated, transport is congested and housing is scarce and expensive —is manifest nonsense. To attempt to recruit a further 1,100 full-time student equivalents to King's Buildings in Edinburgh, where, at present, only 115 have chosen to study, is pure fantasy. That policy, which would transfer staff from Ayrshire and Aberdeen to Edinburgh, runs contrary to the Scottish Executive's policy of dispersal from Edinburgh to other parts of Scotland. That is quite apart from the nonsense of having an agricultural college in the middle of a city.
Staff and students at Auchincruive are against the plan, as was evident at the meeting that I convened in Ayr at the end of March, which was attended by my hon. Friend the Member for Ayr. At that meeting, MPs and MSPs from all parties, including my MSP, Cathy Jamieson, who is a Minister in the Scottish Executive, expressed strong opposition to the proposal. The National Farmers Union in Ayrshire issued a press release saying that it opposes plans for the closure of the Scottish Agricultural college; all the local NFU leaders are quoted.
I have also had letters, e-mails and phone calls from constituents opposing the plan. Indeed, I have had more communications on the subject than 1 had on the war in Iraq, so strong is the feeling in Ayrshire. A member of staff writes to me:
"The last few years have been very difficult with the mind set of the new management regime pro Edinburgh centralisation and clearly uncaring about operations in the south west of Scotland."
Things have indeed been difficult for staff. I know of staff who have felt pressurised and threatened by the attitude of the management team.
In a memorandum to me, the member of staff points out that over half of the second year HND agriculture students at Auchincruive are from Dumfries and Galloway. I am sure that the hon. Member for Galloway and Upper Nithsdale will have something to say about that. My correspondent also says that it is not uncommon for local Ayrshire students to do the milking and to feed the stock before starting college in the morning. Both those things would be impossible if the college were centralised in Edinburgh. He adds that Edinburgh now has the highest housing costs in Scotland and the Scottish Agricultural college has no hall of residence facilities to offer students.
Mr. David Marshall: As a representative of an urban constituency, I am at a loss to understand some of my right hon. Friend's arguments. However, what I cannot figure out is how students are ever going to get practical experience of milking cows,
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herding sheep, or delivering lambs in a city such as Edinburgh. The best method of learning such things is to do them. How will that be achieved in Edinburgh?
Mr. Foulkes: I was happy to give way to my hon. Friend because it is his birthday today—we all congratulate him on that—and because he has a lot of experience. He may represent an urban constituency but he used to be a shepherd, so he knows what he is talking about. He is absolutely right. Auchincruive has a farm on campus and other farms all around it, so it is easy to get practical experience. King's Buildings. however, is right in the centre of Edinburgh and it would be impossible to get such experience.
I understand that Professor McKelvey has a vision of Auchincruive not as an agricultural college but as a high-level research establishment linked to the university of Edinburgh, and that he is prepared to sacrifice agricultural and horticultural education to that vision. I am not prepared to accept that, and I hope that others feel the same. My correspondent tells me that, at a staff briefing at Auchincruive, the principal said:
"We intend to implement this plan regardless of the Scottish Executive's views."
That coincides with my own perception. I understand that one official from the Scottish Executive Environment and Rural Development Department—I hope that the Minister will look into this—told the principal:
"it doesn't matter what the politicians think—this is going ahead."
That kind of arrogance and lack of sensitivity to local wishes gives Governments a bad name. Unfortunately, it is politicians who get it in the neck in this area, as in other areas.
I want to leave time for other hon. Members to speak, so I will move on to my requests to the Minister. When my hon. Friend the Member for Ayr and I met the chairman and principal of Scottish Agricultural college in Edinburgh last month, they agreed, under sustained pressure from us—we really laid it on the line—that they would consider other options if directed to by Scottish Ministers, so long as the financial consequences were taken account of. The board later confirmed that. Will the Minister, or the Secretary of State, arrange a meeting with colleagues in the Scottish Executive and ask them to review all the options for the Scottish Agricultural college? All the options given in the Deloitte and Touche report should be reviewed. I also respectfully suggest to the Minister that, once the Rural Development Committee of the Scottish Parliament is reconstituted, it might consider conducting an inquiry into the matter and reporting on it to the Parliament.
May I ask that all the points that I have raised, that other hon. Members will raise and that other Ayrshire MPs and MSPs have raised, should be taken into account before a final decision is made? I accept that the decision must ultimately be taken by the Scottish Executive and the Parliament. However, I hope that, when they take that decision, they will remember that it will have an impact throughout the United Kingdom and overseas. It is vital for the people whom I represent—staff, students and the community. I am concerned about those people and that is why I am grateful to have the opportunity of putting their case—forcefully, I hope.
3.40 pm
Mr. Peter Duncan: I am grateful to the right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) for allowing me a couple of minutes to demonstrate the cross-party strength of feeling on the issue, which does not divide us: it unites the south-west of Scotland and particularly Auchincruive. I will leave the advocates from Aberdeen to speak about that area.
Auchincruive is Scottish farming in south-west Scotland. The right hon. Gentleman rightly said that farming in that area is critical to our development. At the point in our regional development when farming is becoming more difficult and more sophisticated, and when the need for training in farming is greater than ever before, we face the prospect of having the greatest vehicle for the delivery of that training taken from us. That is extremely regrettable. The sense that nothing will change, irrespective of how many politicians speak out against the proposal, is also deeply regrettable, and I hope that the Minister can offer some reassurance that that may not be the case.
The proposal runs directly contrary to all the directives on decentralisation, and to all the wise words about getting agricultural and rural-related jobs into rural areas. It is not possible to run a farming-related course in the centre of Edinburgh. A sophisticated research base can be operated in Edinburgh. That is not what Auchincruive was meant to be.
On behalf of my party in south-west Scotland, I am delighted to lend support to the right hon. Member for Carrick, Cumnock and Doon Valley, and hope that the Scottish Executive and the Minister will think again.
3.42 pm
Sandra Osborne (Ayr): I congratulate my right hon. Friend the Member for Carrick, Cumnock and Do on Valley (Mr. Foulkes) on securing the debate. He has been a marvellous supporter of Auchincruive, and never more so than at this crucial moment. He ably underlined the importance of Auchincruive to the UK and internationally, which is why it is important to raise the matter in the House of Commons.
Although Auchincruive is in my right hon. Friend's constituency, many of my constituents work or study there, so I share all his concerns about the issue. I am grateful to him for organising the public meeting and for mobilising support throughout Ayrshire—across the political divide, as he and the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) said—among students and staff, in the local council and in the local community in Ayrshire and Dumfries and Galloway. All unanimously oppose the proposal and will fight to get it reconsidered.
During our visit to Edinburgh to meet the management, I was amazed to see what King's Buildings was like, and that anyone would think of siting an agricultural college in a landlocked city, compared with the site of outstanding natural beauty at Auchincruive. Anyone would regard that as ludicrous but it seems to be a serious proposal. As my right hon. Friend said, to move from a prized educational site such as Auchincruive to a highly pressurised area flies in the face of the Executive's policy of decentralising jobs throughout Scotland. That is one of the most important issues to underline in relation to south-west Scotland.
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At our meeting, it was clear that the management seemed, as my right hon. Friend said, to regard the research element of their business as more important than the agricultural college. No one would deny the difficulties of the farming industry, but it seemed ludicrous that Scotland would not want to support and to develop a thriving educational facility for the farming community. A fundamental reaffirmation is needed by the Scottish Executive and the management that that facility and the funding to support it are absolute requirements for Scotland.
Like my right hon. Friend, I have been extremely impressed by the way in which the staff and students have worked together to rebut in great detail the consultants' report. At our meeting, the management signalled that they would take no irreversible action until there could be further discussion. Although it took some persuading and we put a bit of pressure on them—my right hon. Friend certainly did so in his inimitable fashion—we secured that agreement. That provides us with a window of opportunity. I know that, in Ayrshire, people are getting together to ensure that we use it to the nth degree.
Auchincruive college is important for Ayrshire economically, for tourism, for the rural community and for ensuring that there is a fair spread of Government jobs. I hope that the Minister will take on board my right hon. Friend's comments and do all she can to influence the decision and to retain Auchincruive as a marvellous facility.
3.46 pm
The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire): I congratulate my right hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on securing this important short debate on a matter that is clearly very close to his heart. I did not so much raise my eyebrows as stand back in awe at his undoubted skill in persuading the Speaker's Office to hold this debate in the parallel Chamber. I have known of Auchincruive for many years. When I was young, wide-eyed and innocent—if I ever was, and that saves anyone else from saying that—I was going with a young accountant who used to do the audit of Auchincruive. I ended up marrying him. I do not know whether it was the good Ayrshire air, but something worked.
As my right hon. Friend, my hon. Friend the Member for Ayr (Sandra Osborne) and the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) have acknowledged, the Auchincruive campus delivers a range of services to the local farming community and far beyond. It also has links, mainly on a project-funding basis, with Government Departments other than its core funding and sponsorship by the Scottish Executive. The fact that the agricultural college is currently working with the Department for Environment, Food and Rural Affairs, Bristol university and various other research institutes across the United Kingdom may have encouraged my right hon. Friend to consider that there was a hook for Scotland Office interest and intervention. I will come back to that, as I suspect that that may not be the case.
My right hon. Friend argued that those links raise issues that could be realistically described as coming within the reserved policy interests of the UK

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Parliament. As he and others have identified, primary responsibility for matters related to Auchincruive's current and prospective position lies with the Scottish Executive. However, it may be helpful if I outline the factual position in relation to the matters raised in the debate.
The Scottish Agricultural college was created in 1990 through the merger of three existing agriculture colleges, with campuses at Ayr, Edinburgh and Aberdeen. It provides services to land-based communities and businesses of three main types: advisory and consultancy, research and development and education and training. As of December last year the SAC had just over 900 staff, comprising 166 at Aberdeen, 225 at Auchincruive, 328 at Edinburgh and 208 at area offices. Analysed by function, those figures break down at just over 200 staff in research and development, more than 100 in education and more than 400 in advisory consultancy. There are about 160 staff in general administrative duties.
The college has a turnover of around £45 million per year, including approximately £18 million in sponsorship from the Scottish Executive. I understand that, in recent years, the SAC's student numbers have decreased and the college has been making a loss. As a result, the SAC is seeking to rationalise its estate so that it can reduce costs and operate more effectively and efficiently.
I turn now to the specific issue of the debate. In September 2001, the SAC announced plans to withdraw from its Auchincruive campus and to consider a partnership with the university of Paisley in Ayr. For those colleagues who do not understand the geography, there are all sorts of connections in Scotland. It wished to build links between its Aberdeen campus and the university of Aberdeen. The plans attracted considerable opposition, which prompted a debate in the Scottish Parliament in March last year.
Scottish Ministers concluded at that time that the SAC's proposals were not grounded in a clear strategy; nor had the SAC produced a detailed analysis to support its conclusions. They asked the SAC to conduct a full review in consultation with stakeholders of what services it should be aiming to provide, and then to conduct an appraisal of the options for delivering those services.
The SAC engaged the services of external consultants, and Deloitte and Touche produced the first of two reports in October last year. It identified the SAC's strengths as being in veterinary and advisory services and in certain parts of the research programme. The report also noted that the SAC had lost ground in its education function and needed to review objectives in that area.
The SAC accepted the recommendations in the first report in most respects. However, Scottish Ministers could not confirm their agreement of the position until the SAC had completed its analysis of its education markets and could provide a clear education strategy on the basis of that analysis. Scottish Ministers agreed, however, that the SAC should proceed with appraising the options for the physical infrastructure required for delivering its educational and research services.
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The second Deloitte and Touche report was published in February this year. It identified that the SAC's combined estate is five times greater than its requirements and that significant cost savings and economies of scale and staff utilisation could be achieved through rationalisation. Of the 10 options assessed in the report, the recommended option for both financial and non-financial reasons was that the SAC should consolidate its estate at the Edinburgh and Bush campus. That recommendation has attracted significant criticism and comment in this debate.
I understand that services would continue to be provided across Scotland, with the advisory and consultancy and veterinary services—which are currently delivered from area offices and veterinary centres—remaining unaffected by the proposals. Furthermore, education outreach centres would continue and be developed on or near the existing campuses at Auchincruive in Ayrshire and Craibstone in Aberdeen.
The Deloitte and Touche recommendation to consolidate campus-based education and research facilities in the Edinburgh area is the SAC's preferred option. In order to implement this option, the SAC would require Scottish Ministers' approval for the reinvestment of the proceeds of the sale of the surplus assets at Craibstone and Auchincruive. Moreover, it would require continued funding by the Executive for its core functions of educational research and advisory services.
There is a recognition that the SAC cannot compete because of the mismatch between the level of business that it now has and the facilities that it has inherited from the three former agricultural colleges. Nonetheless, I gather that Scottish Ministers continue to have a number of concerns about the college's position.
Mr. Foulkes: As my hon. Friend says, Scottish Ministers have several concerns. She seemed to indicate earlier that she did not believe that it was appropriate for the Scotland Office to intervene. My understanding is that she and the Secretary of State have regular meetings with Scottish Executive Ministers. I know that some officials might say that they have to gang warily and tread carefully not to upset them, but I remind her of a mutual friend of ours who said that
"we're at our best when at our boldest."
Will she or the Secretary of State consider putting that on the agenda with Ross Finnie or his successor to ensure that the points that my hon. Friends and I have made today are properly considered?
Mrs. McGuire: I was coming to my response to my right hon. Friend's individual questions, and I will cover that point in a minute.
As I was saying, Scottish Ministers have expressed some concerns. The college has been made aware of those concerns and has been tasked with undertaking additional work on its strategy for education services, the impact on projected student numbers and the financial viability and affordability of the options in the second Deloitte and Touche report.
It is also worth mentioning that the SAC's preferred option runs counter to the spirit of the Scottish Executive's relocation policy, a point that was noted by

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my hon. Friend the Member for Ayr. The SAC has been asked to re-examine the extent to which it proposes to relocate services from the west and north-east of Scotland. In addition, it has to consider where some of these services could continue to be provided in Aberdeen and Ayrshire, either by the SAC alone or in partnership with other organisations.
I can confirm to my right hon. Friend that the SAC has been encouraged to take the concerns fully on board and come back to the Scottish Executive with revised proposals. I gather that the process is likely to take several months and, as a result, no decision has been taken on the final outcome of the option appraisal work. I have noted carefully the various points made by my right hon. Friend and other hon. Members that sought assurances about the UK Government's interest in the topic. I assure my right hon. Friend that I will follow through on that as necessary with colleagues in the Department for International Development and the Department for Environment, Food and Rural Affairs.
As a former insider in the Scotland Office, my right hon. Friend will be aware that we have regular meetings with colleagues from the Scottish Executive. I must say that there is a difference between being bold and crossing the devolution settlement, of which he is a great supporter and was a great advocate. I am sure that our colleagues in the Scottish Executive who are charged with determining Auchincruive's future will take a keen interest in this debate.
Mr. Peter Duncanrose—
Mrs. McGuire: If the hon. Gentleman is quick, I will give way.
Mr. Duncan: I thought that the Minister might have a minute. Does she accept that this Parliament has a remit for employment and that there are significant employment issues? Jobs are once again at risk of being moved from rural to central Scotland and she has the opportunity to do something about it.
Mrs. McGuire: I have never been offered so many temptations in half an hour to cross a constitutional line The hon. Gentleman will understand that the issue comes under the devolved settlement for the Scottish Parliament and Executive. However, given that hon. Members are already working in partnership with their Scottish Parliament colleagues, I will undertake to ensure that the proceedings of this debate are raised with Scottish Executive colleagues when Ministers are in place. I am sure that hon. Members who have participated today will do whatever they can and need to ensure that the Auchincruive issue is kept alive during the continued consultation on its future.

Maternity Services (Ashford and St. Peter's Hospitals)
4 pm
Mr. David Wilshire: May I ask you, Mr. Deputy Speaker, to convey to Mr. Speaker my thanks for this opportunity to raise a very serious quality of care issue affecting my constituency and that of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond)?
I have two preliminary points. First, I do not view this opportunity as a party political occasion. That is the last thing with which I wish to get involved. Secondly, although there may be criticisms of individual people, the overwhelming majority of the trust's staff work their socks off under very difficult circumstances and I mean no criticism of them in any shape or form.
I shall start by setting the scene for this brief debate. The Ashford and St. Peter's Hospitals NHS Trust was set up in 1998 from a merger of two separate hospital trusts. One was the Ashford hospital trust, which is in my constituency and serves my constituents and those of the hon. Member for Feltham and Heston (Alan Keen), and the other was St. Peter's hospital trust in Chertsey, which is in the constituency of my hon. Friend the Member for Runnymede and Weybridge. Therefore, we have a joint interest in the matter.
The merger was, to put it gently, controversial and problematic. From its first moment, the trust has lurched from one financial crisis to another. As a result, in 2000–01 it was awarded no stars at all and the upshot was that it was selected for franchising of its top management. That was a controversial experiment. All that I will say about it, because it is not immediately relevant to the debate, is that luckily the franchise plan seems to have disappeared without trace. I urge the Minister not to look for it because he will realise if he rediscovers it that to implement it he would have to find much more money than would be needed to deal with the financial issues that I am about to raise. In fact, it would be useful if he tore up the plan because it mainly contains attempts to make yet more cuts at Ashford hospital, and he will have a battle on his hands if he tries to do that.
Ashford's maternity unit was closed the year before the merger. It goes without saying that that was fiercely opposed as well. Essentially, there were two justifications for the closure of what was then the maternity unit in my constituency: first, that it was unsafe and secondly, that if it continued as it was, the royal colleges would withdraw their recognition of it for training purposes. Given such arguments, I suppose that one had to listen carefully to them.
The objections to the closure were that St. Peter's simply would not be able to cope with the extra work, however hard-working and dedicated the staff, and that it would lead to poorer services and, in the most extreme case, to personal tragedy. That is exactly what has happened.
Among its many recommendations, the report of the Commission for Health Improvement on maternity services at Ashford and St. Peter's hospitals suggests doing more maternity work at Ashford hospital. I agree, but we should go further and reopen the maternity unit

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at Ashford. That decision would have the support of the trust. There are many examples in this country of midwife-led delivery units and such a unit would go a long way to solving the problems. I urge the Minister to back that idea.
Mr. Philip Hammond: My hon. Friend may be aware that I have received a written answer from one of the Minister's colleagues that indicates that although there will not be any additional money for the implementation of the recommendations of the report there will be a Government response. Will he ask the Minister whether that response will cover not only the wider issues that the report raises but those that it raises that relate to Ashford and St. Peter's?
Mr. Wilshire: I do not think that I need to ask the Minister, as my hon. Friend has done exactly that and I am sure that we shall receive an answer in due course.
As I read the report, two themes underlie what has gone wrong. The first is inadequate funding; the second is insufficient staff. I do not want to put the matter too indelicately, but the trust is bankrupt. It is trading illegally and ran out of cash to pay its bills last Christmas, as did other hospitals. Despite the fact that it is making cuts, the trust has been kept afloat only by annual bail-outs. It has a brought-forward debt of more than £7 million. Last year's debt was £11 million and the trust is predicting the same or worse this year. The trust faces a stark choice: continue to trade illegally or cut even more services. Unless the Government end the underfunding of that trust, there is no way that the 40 recommendations will ever be implemented.
The other underlying theme is staffing. Recruitment and retention at the trust are huge problems and the facts speak for themselves. The midwife vacancy rate is 28 per cent. and the maternity registrar vacancy rate is 40 per cent. That is the extent of the staffing problem. However hard the people in post work, it is no surprise that that situation causes service quality problems or that it leads to the use of locums and agencies, which adds to the financial crisis.
The primary cause of that inability to recruit and retain is the local cost of living. There are some simple facts in the report. The average cost of a house nationally is £145,000, whereas the average cost in Ashford is £195,000 and in Chertsey, in my hon. Friend's constituency, it is £231,000. Those prices must be considered in the context of national pay scales. The situation has been made worse since the closure of the maternity unit at Ashford because all the staff on the Ashford site get the outer London weighting, which is £2,522 a year, but none of them do at St. Peter's. When the Ashford unit was closed, people did not go to St. Peter's—surprise, surprise—but went into London. The consequence was catastrophic. The Minister must deal with the pay pressures of south-east England and the pay differentials across the two sites.
I shall now deal with the details of the report, although there are far too many to talk about in such a short debate, so I have had to select what I consider to be the two biggest problems: the staffing problem and a consultant problem.
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The staffing problem involves not only vacancies but funding, which is also wrong. One example of many says it all: established posts for midwives. Although the Minister will put me right if I am wrong, as I understand the matter, the Government and the national health service use Birthrate Plus to say what the standards should be. If the trust operated up to the Birthrate Plus standards, it would have 152 whole-time equivalent midwives. However, the Government funds the trust for only 99 midwives, not 152. That is bad enough, but the reality is that the trust only has the equivalent of 70 whole-time midwives. Given that fact, it is no surprise that page 35 of the report says:
"The trust's funded establishment of midwives is one third less than the establishment recommended by Birthrate Plus. The trust's current permanent midwifery staffing levels are less than half the Birthrate Plus recommendation."
The midwives that we have work as hard as they possibly can and are skilled and dedicated, but they do not stand a chance while those circumstances continue. Not only must the underfunding of the trust end, but the proper funding of establishments must become a priority.
I shall now discuss the consultant problems. I am talking only about two of the trust's eight consultants. I would not want anyone to think that my criticism is levelled at all of them. The report's key conclusion on the subject is nothing short of damning. At the bottom of page viii in the executive summary, it says:
"The consultant obstetricians and gynaecologists do not function as a team. There are poor working relationships and very challenging human resource issues within the consultant group. These difficult circumstances have diverted management time and have been a barrier to more effective team working within the service. The situation is unacceptable, poses a risk to the quality of patient care and requires urgent resolution."
That is blunt and damning and requires action.
Part 8 of the report spells out the issues a little more clearly:
"CHI found substantial evidence of problems that impact upon the ability of consultant obstetricians and gynaecologists to work as a cohesive team. Other bodies are currently involved in some of the associated issues. The General Medical Council has made a judgement about the professional conduct and fitness to practise of one of the clinicians working in the maternity unit. The National Clinical Assessment Authority has been contacted for advice. The Centre for Effective Disputes Resolution…is working with the trust to provide a mediation service. It is not appropriate for CHI to investigate or comment on individual clinicians".
Why ever not?
I spoke to the chairman about the issue and on 1 May he wrote as follows:
"You are aware that Kevin Gangar had a case concerning his conduct considered by the GMC in February 2002. He was reprimanded but returned to work in the Trust in March 2002 with the recommendation that he should only work under specified supervision. Under these circumstances the Trust were deterred from 'stronger action".
I think that the time for stronger action has come. I have a simple question for the Minister: will he back the dismissal of Dr. Gangar? I hope that he will.

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Another issue arises from the subject of consultants, but it is almost totally ignored by the report. There is just a brief mention of it in the introduction. That, really, is the reason why the report came about in the first place. It says:
"This followed the death of a baby in the trust's maternity unit. At the time of writing, the death of this baby is still the subject of a police investigation."
That is all there is on the subject in the report. What actually happened was that the trust properly and swiftly reported the death to the coroner, and I applaud them for it. The coroner, having considered the circumstances, called in Surrey police, who investigated what they described as a potentially serious offence.
The clinician concerned was a locum employed by BUPA. He was suspended by the trust. He then left the trust and went back to BUPA. BUPA was formally informed of what had happened, and—amazingly—did not do much except place its locum in Chichester, where he remained carrying out his work until he left the United Kingdom. That cannot be right and my question to the Minister is, will he investigate? What, if anything, was the health service in Chichester told about what had happened? I have not investigated, as it is not in my constituency, but I have had a discussion with my hon. Friend the Member for Chichester (Mr. Tyrie).
There is a further aspect to this deeply disturbing issue. For reasons that will become clear, I shall approach this aspect with care. The police investigation resulted in a decision to charge someone. What happened during that investigation and what has happened since a decision was taken, is worthy of further inquiry, consideration and debate. Earlier this week, I received from Surrey police the following statement, which is headed "Dr. Vladan Visnjevac":
"Proceedings against a man have been commenced by obtaining a warrant for his arrest. This warrant has been obtained because he is no longer within the jurisdiction. These proceedings are now active for the purposes of the Contempt of Court Act".
I respect that statement, as I respect the rules of this House, and I am aware that I am protected by parliamentary privilege so the last thing that I want to do is prejudice justice or a fair trial. There will come a time, however, when the Minister will need to investigate that issue.
The picture that emerges from the report is that my local maternity unit has serious problems. My constituents are receiving an inferior service. The report confirms that the investigation was justified and I applaud the trust for requesting it.
I shall end with a few questions for the Minister. Will he end existing underfunding? If he does not, things will get worse, not better. Will he increase the number of funded midwives? If he does not, the problems will continue. Will he arrange for St. Peter's staff to receive the same outer London weighting as the Ashford staff? If he does not, staff vacancies will continue. Will he back the dismissal of Dr. Gangar? If he does not, consultant troubles will continue. Will he investigate BUPA? If he does not, more tragedies might happen. Will he scrap the trust franchise plan? If he does not, he will have to find even more money. Most of all, will he support the reopening of a maternity unit at Ashford? If he does not, the unacceptable pressures and troubles at St. Peter's will continue. If he does, however, he will deserve and receive the thanks of us all.
4.18pm
The Parliamentary Under-Secretary of State for Health (Mr. David Lammy): I congratulate the hon. Member for Spelthorne (Mr. Wilshire) on securing this debate on the future of maternity services at Ashford and St. Peter's trust.
As the hon. Gentleman knows, we are committed to modernising all maternity units throughout the country, to increasing the number of midwives and providing women with greater choice in childbirth, and to ensuring that women receive the highest quality of maternity care. Those aims are key to the direction in which we are travelling and to much that the Government are doing in this area.
Maternity services are a core function of the NHS. About 560,000 deliveries took place in England in 2000–01. We are committed to ensuring that the care provided in maternity units throughout the country, including St. Peter's hospital, is of the highest quality.
I acknowledge the concerns that the hon. Gentleman raised and I am aware that the maternity service has experienced well documented problems. I reassure him that the Department, the strategic health authority and the trust take such issues seriously. Unfortunately, he will know that even in the best units there are, occasionally, tragic events. The families involved in such tragedies have my heartfelt sympathies. The NHS and the Department strive to eliminate all causes of such events and to learn from them to continue to improve service safety and quality.
For that reason, in May 2002, the Department and the trust asked the Commission for Health Improvement, an independent body, to undertake an investigation into the management, provision and quality of maternity services provided by St. Peter's hospital, so that women, their partners and the wider public could be reassured about its services. The report published in March this year identified various areas for improvement, including problems with staffing, concerns about patient information and involvement and the need for improved team working. However, overall the unit was found to be safe and improving, despite many of the challenges.
The CHI also identified some examples of good practice, including the one-to-one parent education support for teenage mothers, work with mothers expecting multiple births and the births reflection service. It is correct that when we discuss matters of this kind we put them in context and pay tribute, saying where things have gone well and where they have not gone as well.
The report was published only a month ago, but the trust has already taken positive action to address the concerns highlighted by the CHI. The trust has implemented various modifications, as follows: a new managerial structure, implemented in February 2003, to provide clearer lines of communication; the appointment of a consultant midwife, who will lead and further develop the provision of "home-from-home" delivery of care led by midwifery; and improvements in clinical governance arrangements, which have been led by the appointment of a new consultant in charge and a new directorate committee.
One of the CHI's main concerns for health improvement relates to staffing problems and I am pleased to report that the trust is actively working to

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recruit additional midwives. The trust has a strengthened team of support staff, including 16 midwifery care assistants, who provide support to women before and after they have their babies. Midwifery care assistants free the midwives so that they may concentrate on using their own skills to best effect. In addition, there are 40 hours of consultant cover on the ward, out-of-hours ward rounds and on-call arrangements.
In February this year the clinical negligence scheme for trusts gave St. Peter's a positive review of its risk management process; its maternity care scored 100 per cent. against the pass mark of 75 per cent. for level 2.
Mr. Hammond: The Minister talks about improvements the trust is making, but my hon. Friend the Member for Spelthorne (Mr. Wilshire) made it clear that it is under severe financial pressure; it is supposed to clear its accumulated deficit within the next two financial years. Can the Minister make it clear, for the record, that he will support the trust if it decides to invest in services to correct the appalling deficits in the maternity unit, rather than to clear the accumulated deficit, as his Government require it to?
Mr. Lammy: I wanted to put on record the improvements in the trust and the work that it is doing following the CHI report to make sure that the real challenges that it faces—which the hon. Member for Spelthorne has set out—are being addressed. That is the right context in which to have this debate. In opening the debate, the hon. Gentleman was keen to ensure that it was not partisan, as am I.
I will speak about the finances, but I want to make it clear for the record that we have given the primary care trust a record allocation this year, and, as the hon. Member for Runnymede and Weybridge (Mr. Hammond) will know, the deficit problems in the area go back a decade or so. In a sense, when he lays much of the blame for the matter at the Government's door, that is not entirely the picture. I hope to move on to that.
Mr. Wilshire: I accept that the Minister has given the PCT a record amount, but what will he do about the PCT pointing out that it is £20 million short on its budget and if it does not receive £20 million, it will have to cut £20 million pounds worth of services this year?
Mr. Lammy: Those are issues that I want to move on to, but I know that the hon. Gentleman wants me to deal with them now. I cannot deal with them other than in a political way. In another Chamber in this House, a debate is taking place about foundation hospitals. It centres on the Government's thrust to localise services. The hon. Gentleman will know that there are members of his party who believe that that is the right direction in which to be going.
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We have said that we cannot run every hospital, every primary care trust or every GP practice from Whitehall. The hon. Gentleman asked what the Government will do. The Government's job is to set out the standards and to ensure that increases in funding and investment are made at local community level. There was an increase of 9.29 per cent. in cash terms for the strategic health authority that is responsible for the hon. Gentleman's local trust. Once that decision is made, it is for the trust, working with the hospitals, to take it forward. It cannot be right that we should micro-manage, from the centre, what is going on in an individual trust. We cannot do that, and we should not do that. How have we made the position easier? We have given that allocation over three years—the hon. Gentleman's local trust will be experiencing that—so that the plans can be put in place and individual trusts can work closely with the strategic health authority to make the position better.
Mr. Wilshire: Not only is the PCT underfunded, but the trust itself has made it clear that, notwithstanding the extra money that it is given, it will have to cut services if that is all the money that it is to receive. To say how much it is given is irrelevant; it is how much it costs to provide the service that matters, and that is what the Government must address.
Mr. Lammy: The debate is unfortunately descending into politics, which is the business of the House of Commons, so let us get on with it. As a Conservative Member of Parliament, the hon. Gentleman cannot, on the one hand, vote in the Lobby against the 1 per cent. increase that we want to give the NHS through the national insurance budget, and, on the other hand, have an Adjournment debate and ask the Government to give even more money to an individual trust. That does not stand up ideologically, intellectually or politically.
I say to the people of Ashford and St. Peter's that, as a Government, we are doing our part. We have increased the funding by 9.29 per cent., and by 2005–06, the rise will be 29.97 per cent. There are massive increases, and it is for the NHS locally to decide how that money is spent. Ideologically, the hon. Gentleman must decide whether or not he supports a nanny state, but it must be for his local managers to decide how that money is spent and, at the same time, to recognise that the maternity unit is undergoing £1.4 million of modernisation and refurbishment. That has created not just a new antenatal department, but new rooms for consultants and consultations, a new parent education unit, and more.
The list goes on. Despite the challenges that exist, we invest in the NHS, and people living in the hon. Gentleman's constituency will benefit from that, as will people throughout the country.
It being half past Four o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.

TREASURY

  Employment
  Mr. Frank Field
  To ask the Chancellor of the Exchequer which five regions had(a) the lowest and (b) the highest employment rates in each year since 1997; and what their respective rates were. [110683]

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

  Letter from C. Mowl to Mr. Frank Field, dated 7 May 2003:

  The National Statistician has been asked to reply to your Parliamentary Question about employment rates. I am replying his absence. (110683)

  The attached table gives the information requested for the twelve month periods ending December of each year from 1997 to 2002. These estimates are from the Labour Force Survey (LFS).

  Working age1 employment rates2 by region and country in the UK—Average for January to December each year

  Employment rate (Percentage)

  Five Government Office Regions with highest employment rates

  1997

  South East

  78.4

  South West

  77.1

  East

  76.6

  East Midlands

  75.6

  West Midlands

  73.2

  1998

  South East

  79.4

  South West

  77.8

  East

  77.7

  East Midlands

  76.1

  West Midlands

  74.2

  1999

  South East

  79.8

  South West

  78.4

  East

  78.1

  East Midlands

  76.4

  West Midlands

  73.7

  2000

  South East

  80.3

  South West

  78.9

  East

  78.8

  East Midlands

  76.3

  Yorkshire and Humberside

  73.7

  2001

  South East

  80.1

  East

  79.3

  South West

  78.9

  East Midlands

  75.8

  West Midlands

  73.9

  2002

  South East

  79.7

  South West

  79.0

  East

  79.0

  East Midlands

  76.4

  West Midlands

  74.2

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  Working age1 employment rates2 by region and country in the UK—Average for January to December each year

  Employment rate (Percentage)

  Five Government Office Regions with lowest employment rates

  1997

  Northern Ireland

  67.1

  North East

  67.3

  Wales

  68.2

  London

  69.9

  North West

  70.2

  1998

  North East

  66.6

  Northern Ireland

  67.0

  Wales

  68.0

  North West

  70.2

  London

  70.5

  1999

  North East

  66.6

  Northern Ireland

  67.0

  Wales

  68.8

  North West

  71.4

  Scotland

  71.6

  2000

  Northern Ireland

  66.4

  North East

  68.1

  Wales

  69.3

  London

  70.8

  North West

  72.3

  2001

  Northern Ireland

  67.3

  North East

  68.4

  Wales

  68.5

  London

  71.0

  North West

  72.2

  2002

  Northern Ireland

  67.7

  North East

  68.4

  Wales

  69.8

  London

  70.5

  North West

  72.3

  1 Men aged 16–64 and women 16–59.

  2 Working age people in employment as a percentage of the Working age population.

  Source:

  ONS Labour Force Survey

  Mr. Frank Field
  To ask the Chancellor of the Exchequer which 100 local authority words have(a) the lowest and (b) the highest employment rates; and what the rates are in each case. [110684]

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

  Letter from Len Cook to Mr. Frank Field, dated 7 May 2003

  As National Statistician, I have been asked to reply to your recent question about employment rates in local authority wards. (110684)

  I regret to inform you that the data you requested are not available form the Labour Force Survey. However, Census data on employment will be available at ward level on 30 June.

  Child Tax Credit
  Mr. Brady
  To ask the Chancellor of the Exchequer what change has taken place in the number of(a) physical and (b) verbal assaults on Inland Revenue staff the introduction of child tax credit. [111834]
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  Dawn Primarolo
  The child tax credit was introduced on 6 April 2003 alongside working tax credit. Physical and verbal assaults on Inland Revenue staff have always been uncommon and remain so.

  Civil Service (People with Disabilities)
  Mr. Bercow
  To ask the Chancellor of the Exchequer what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in the Department. [110520]

  Ruth Kelly
  The proportion of people with disabilities in senior posts in the Treasury is 1.1 per cent. against the corporate Senior Civil Service (SCS) target on disabled staff of 3 per cent. by 2005.

  We are taking steps to increase the recruitment of people with disabilities across the whole of the department, including staff in senior posts. Particular actions include:
  advertising all senior posts and highlighting that we are an equal opportunities employer;
  guaranteeing an interview to people with disabilities who meet the minimum requirement for our recruitment programmes;
  participating in the Cabinet Office scheme for people with disabilities, offering two placements this summer; and
  continuing to support the department's active Disability Advisory Group, sponsored by the Permanent Secretary, to ensure the interests of people with disabilities are taken on board when developing management and personnel policies.

  We are planning to conduct a full disability survey later this year to ensure our records of disabled staff are accurate and up to date.

  Customs and Excise
  Simon Hughes
  To ask the Chancellor of the Exchequer how many Customs and Excise staff have been deported under immigration law in the last two years. [111722]

  John Healey
  Customs and Excise have no record of any staff leaving the service in the last two years by reason of "deportation".

  Debt Relief
  Mr. Pike
  To ask the Chancellor of the Exchequer if he will support efforts to find solutions to the collapse in coffee prices at the forthcoming G8 summit; and if he will make a statement. [111569]

  John Healey
  Coffee growers have been hit by low prices and deteriorating quality, the result of global over-supply and structural imbalances in the industry. The Government will support efforts to find solutions at the G8 summit and in follow-up work after the summit, notably for poor countries in Africa.

  There are a number of possibilities. The UK is already contributing to a sustainable coffee market by helping growers to diversify through its development programme; trying to expand the trade opportunities of commodity-dependent countries, cut tariffs and reduce the negative impact of the CAP. We are promoting foreign investment and good regulatory frameworks, increasing the aid budget to 0.40 per cent. of national income by 2005–06 and advocating more debt relief to
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  highly indebted poor countries. A government-industry working group is currently looking at what more can be done to improve the livelihoods of poorer commodity producers in developing countries. The summit will consider what more can be done.

  Football Clubs (Administration)
  Andy Burnham
  To ask the Chancellor of the Exchequer what agreement on unpaid tax the Inland Revenue has reached with each professional football club in administration in the last two years. [111572]

  John Healey
  When any business seeks protection from its creditors by appointing an administrator, the Inland Revenue is bound by insolvency law just like any other creditors. Due to taxpayer confidentiality, information about dealings with individual professional football clubs cannot be provided: Exemption 15 of the Code of Practice on Access to Government Information applies.

  Income Drawdown
  Mr. Gardiner
  To ask the Chancellor of the Exchequer how many complaints concerning income drawdown have been lodged in each year since 1996. [111445]

  Ruth Kelly
  The information requested is not held centrally and could be provided only at disproportionate cost.

  Iraq
  Mr. Gardiner
  To ask the Chancellor of the Exchequer (1) what work has been undertaken(a) to assess the basic economic indicators in Iraq and (b) to overcome the failure by the Iraqi regime to supply figures to international economic institutions; [111453]

  (2) whether the IMF has issued interim reports on the work of its Iraq task force; [111454]

  (3) whether his Department is working with the World bank to provide it with primary economic information on Iraq. [111452]

  John Healey
  Iraq's isolation from the international community, combined with the impact of two wars and 12 years of sanctions, means that reliable data on the Iraqi economy are extremely scarce. The World bank has not maintained active operations in Iraq (the last loan approved was in 1973) and regular reports by the international financial institutions on the economy, such as IMF Annual Article IV reports, have not been compiled for some years.

  In accordance with its guidelines for working with countries in conflict, the World Bank closely monitors developments in Iraq and maintains contacts with the United Nations and international donors to exchange information and build a knowledge base on the evolving socio-economic and humanitarian conditions on the ground.

  The UK Government are working with their international partners to ensure the effective engagement of the International Financial Institutions in the rehabilitation of post-conflict Iraq. The collection of accurate data and the preparation of a comprehensive

  683W
  needs assessment are key steps in that process. The UK Government are in regular contact with the World Bank and International Monetary Fund on these matters.

  In a communiqué issued following their spring meetings, both the International Monetary and Finance Committee of the IMF, chaired by the Chancellor of the Exchequer, and the Development Committee of the World bank have noted that 'the IMF and World Bank stand ready to play their normal role in Iraq's re-development at the appropriate time'. Staff in both institutions have begun initial preparations for these tasks. Beyond information available on their websites, neither the World Bank nor the IMF has so far published any recent reports on Iraq.

  Mr. Gardiner
  To ask the Chancellor of the Exchequer what tariffs exist on the importing of Iraqi goods to(a) the EU and (b) the UK. [111553]

  John Healey
  All imports from Iraq remain prohibited without an import licence while United Nations sanctions remain in force. Prior to sanctions being imposed in 1990, imports from Iraq were eligible for reduced rates of customs duty under the Generalised System of Preferences.

  Customs duty rates of the EU and UK are one and the same. The HM Customs and Excise Tariff lists both full and preferential rates of duty and includes information on the Generalised System of Preferences. A copy is available in the Library of the House.

  Landfill Tax
  Mr. Prisk
  To ask the Chancellor of the Exchequer how much revenue was raised by the landfill tax in the UK in(a) 2001–02 and (b) 2002–03; and how much revenue he estimates will be raised in 2003–04. [111836]

  John Healey
  Landfill tax receipts figures for the financial years 2001–02 to 2003–04 were published in the April 2003 Financial Statement and Budget Report (FSBR). The 2001–02 figure is an outturn figure, while that for 2002–03 is an estimate and that for 2003–04 is a forecast. The published rounded figures are:

  £ billion

  2001–02

  0.5

  2002–03

  0.5

  2003–04

  0.7

  National Insurance
  Mr. Bercow
  To ask the Chancellor of the Exchequer what plans he has to review the national insurance lower earnings limit. [111751]

  Dawn Primarolo
  None. The lower earnings limit is currently £77 per week and it is linked to the weekly rate of the basic state pension.

  Road Fuel Gases
  Mrs. Helen Clark
  To ask the Chancellor of the Exchequer what representations he has received regarding his decision to consult stakeholders before announcing decisions on fuel duty rates on road fuel gases. [112093]
  684W
  John Healey
  Treasury Ministers have received no representations on this decision to consult.

  Stakeholder Pensions
  Mr. Gardiner
  To ask the Chancellor of the Exchequer how many complaints concerning the sale of stakeholder pensions have been received in each year since their introduction; and what broad categories these complaints fell into. [111440]

  Ruth Kelly
  If the Treasury receives complaints about the sale of stakeholder pensions, it refers complainants to the firm concerned. Where it is evident that the complainant has already complained to the firm concerned, and is dissatisfied with the handling of his complaint, the complainant is generally referred to the Financial Ombudsman Service.

  The Financial Ombudsman Service tells me that, between 1 April 2002 and 31 March 2003, they received 115 complaints about stakeholder pensions.

  These complaints principally concerned administrative difficulties at the time of the initial purchase, in collecting premiums, in promptly transferring money into plans, and in providing information at the point of sale.

  Tax Credits
  Mr. Boswell
  To ask the Chancellor of the Exchequer how many persons previously on disabled persons tax credit are awaiting transfer to regular working tax credit payments. [111669]

  Dawn Primarolo
  Claim forms for working and child tax credits were sent to all individuals and couples who were receiving disabled person's tax credit. Awards are already being paid to all those who made their claims by 31 January 2003, except in a very few cases where further information is needed to make a decision on the claim. In these cases, the Inland Revenue should already have been in touch with claimants to ask for further information.

  Mr. Gardiner
  To ask the Chancellor of the Exchequer (1) if he will post information on the Inland Revenue microsite for tax credits and on any reprints of tax credit application forms, stating that children may also be eligible for free school meals as a result of the credit; [111448]

  (2) if he will ensure that more prominence is given in leaflets sent out with child tax credit awards to making parents aware of the free school meals entitlement for children. [111450]

  Dawn Primarolo
  There are a number of 'passported benefits' that may attach to the new tax credits, and the tax credits award notice and accompanying notes alert people to the fact they may qualify as a result of their award. In addition, a new Inland Revenue leaflet providing information and giving contact points for details on some of the more common benefits was published on the Inland Revenue website on 2 May 2003. It will soon also be available in paper format.

  Taxation
  Mr. Bercow
  To ask the Chancellor of the Exchequer how many people resident in Buckinghamshire pay income tax at the top rate of 40 per cent. [111726]

  Dawn Primarolo
  Around 10,000 Buckinghamshire residents paid income tax at the 40 per cent. rate in the 2000–01 tax year. This estimate is based on the Survey of Personal Incomes. This is the latest year for which estimates are available.

EDUCATION AND SKILLS

  Education (Wandsworth)
  Mr. Cox
  To ask the Secretary of State for Education and Skills how much he has given to the London borough of Wandsworth for education services in the borough in the last three years. [112051]

  Mr. Miliband
  The following table shows the Department's total Education Standard Spending Assessment, recurrent and capital grant allocated to Wandsworth local education authority for the financial years 2000–01 to 2002–03. Complete figures for 2003–04 are not yet available.

  £ million

  2000–01

  2001–02

  2002–03

  SSA

  101.9

  105.2

  102.9

  Recurrent grant

  8.8

  14.2

  22.2

  Capital grant

  7.4

  7.0

  12.3

  Total

  118.1

  126.4

  137.4

  Education Benefits
  Mr. Wray
  To ask the Secretary of State for Education and Skills what plans he has to promote the benefits of(a) adult, (b) further and (c) higher education to school leavers, adults and those not in full-time employment; and if he will make a statement. [111148]

  Mr. Ivan Lewis
  The Learning and Skills Council has specific legal responsibility for widening participation in learning across post-16 education and training in England. This Department supports the agenda to promote the benefits of learning across all sectors of education. This includes the "Aim Higher" campaign which promotes the benefits of higher education.

  Examination Results
  Mr. Damian Green
  To ask the Secretary of State for Education and Skills what percentage of pupils in England achieving A-levels in(a) mathematics and (b) English achieved grade A in (i) the best performing local education authority and (ii) the worst performing local education authority in the last year for which figures are available. [110191]

  Mr. Miliband
  The information requested is given in the following table.686W

  Percentage of A level passes that were grade A in 2002

  LEA

  Percentage

  Maths

  Highest

  Reading

  58.5

  Lowest

  Lambeth

  5.6

  English

  Highest

  Reading

  30.2

  Lowest

  Hackney

  0.8

  Mr. Rosindell
  To ask the Secretary of State for Education and Skills what proportion of GCSE students in the London Borough of Havering achieved five or more C grades, or higher, last year; and what the proportion was in other London boroughs. [110581]

  Mr. Miliband
  The percentage of 15-year-olds achieving five or more GCSE grades C and above or the GNVQ equivalent in the London Borough of Havering in 2001/02 was 57.3. The figures for the other London boroughs are as follows.

  London Borough

  Percentage of 15 year olds with 5 A*-C or better

  Barking and Dagenham

  42.3

  Barnet

  59.1

  Bexley

  52.6

  Brent

  49.6

  Bromley

  59.9

  Camden

  48.4

  Croydon

  48.9

  Ealing

  49.8

  Enfield

  46.2

  Greenwich

  33.3

  Hackney

  31.1

  Hammersmith and Fulham

  50.3

  Haringey

  35.4

  Harrow

  59.1

  Hillingdon

  46.0

  Hounslow

  49.5

  Islington

  32.9

  Kensington and Chelsea

  55.7

  Kingston upon Thames

  60.0

  Lambeth

  40.1

  Lewisham

  38.7

  Merton

  40.9

  Newham

  42.4

  Redbridge

  63.7

  Richmond upon Thames

  51.4

  Southwark

  35.7

  Sutton

  64.8

  Tower Hamlets

  43.6

  Waltham Forest

  44.3

  Wandsworth

  48.6

  Westminster, city of

  41.5

  Individual Learning Accounts
  Mr. Boswell
  To ask the Secretary of State for Education and Skills what plans he has to include small-scale learning providers within the ambit of a revised Individual Learning Account scheme. [111283]

  Mr. Ivan Lewis
  For all its failings, ILA was successful in getting non-traditional learners back into learning, and that success was based in part on the role played by the best providers, many of them small scale, who were able to encourage learners to take the first step. This influence will be as important in the successor scheme as it was in the original programme. The scheme will promote high quality relevant learning, whether from
  687W
  small or large scale providers. Details of the scheme will be announced next month as part of the Skills Strategy.

  Oxford and Cambridge (Admissions)
  Mr. Chaytor
  To ask the Secretary of State for Education and Skills how many, and what percentage, of(a) applicants and (b) successful applicants there were to (i) Oxford and (ii) Cambridge University from (A) fee paying schools, (B) local authority 11–18 comprehensive schools, (C) sixth form colleges, (D)

  Percentage of applications from maintained sector Year of entry

  Percentage of acceptances from maintained sector Year of entry

  Cambridge University

  2000

  2001

  2002

  2000

  2001

  2002

  Christ's

  55

  58

  61

  37

  51

  54

  Churchill

  75

  68

  70

  68

  58

  66

  Clare

  56

  65

  66

  55

  59

  60

  Corpus Christi

  49

  56

  57

  39

  53

  52

  Downing

  51

  47

  54

  41

  46

  50

  Emmanuel

  61

  59

  57

  54

  53

  54

  Fitzwilliam

  71

  68

  72

  66

  60

  69

  Girton

  61

  62

  64

  61

  58

  51

  Gonville and Caius

  48

  46

  52

  48

  36

  46

  Homerton1

  —

  —

  76

  —

  —

  72

  Hughes Hall2

  —

  —

  60

  —

  —

  100

  Jesus

  57

  53

  53

  54

  56

  56

  King's

  84

  85

  80

  77

  78

  69

  Lucy Cavendish2

  —

  —

  89

  —

  —

  100

  Magdalene

  42

  42

  48

  36

  44

  55

  New Hall

  59

  58

  65

  58

  55

  54

  Newnham

  58

  64

  62

  49

  59

  61

  Pembroke

  55

  57

  59

  50

  50

  51

  Peterhouse

  52

  45

  53

  43

  43

  53

  Queen's

  60

  60

  57

  55

  53

  47

  Robinson

  65

  64

  69

  56

  64

  62

  Selwyn

  58

  54

  61

  49

  48

  58

  Sidney Sussex

  55

  58

  58

  45

  52

  58

  St. Catherine's

  58

  52

  59

  52

  51

  57

  St. Edmund's2

  —

  —

  100

  —

  —

  —

  St. John's

  52

  55

  50

  45

  49

  45

  Trinity

  56

  52

  54

  48

  45

  44

  Trinity Hall

  55

  53

  52

  47

  50

  43

  Wolfson2

  —

  —

  83

  —

  —

  83

  All standard colleges

  59

  58

  60

  52

  53

  55

  Mature student colleges (Hugh Hall, Lucy Cavendish, St. Edmunds and Wilfson)

  86

  86

  —

  87

  87

  —

  1 Homerton College amalgamated with Cambridge on 1 April 2001

  2 Prior to 2002, figures for these colleges were amalgamated.

  Percentage of applications from maintained sector Year of entry

  Percentage of offers to maintained sector Year of entry

  Oxford University

  2001

  2001

  2002

  2000

  2001

  2002

  Balliol

  —

  50

  61

  56

  53

  51

  Brasenose

  —

  40

  40

  44

  44

  49

  Christ Church

  —

  43

  49

  47

  39

  47

  Corpus Christi

  —

  57

  60

  56

  52

  58

  Exeter

  —

  51

  52

  60

  56

  48

  Harris Manchester

  —

  100

  100

  100

  86

  92

  Hertford

  —

  69

  76

  61

  67

  71

  Jesus

  —

  67

  68

  57

  58

  61

  Keble

  —

  58

  63

  65

  60

  59

  Lady Margaret Hall

  —

  46

  51

  47

  41

  52

  Lincoln

  —

  52

  63

  46

  57

  64

  Magdalene

  —

  56

  57

  46

  52

  52

  Mansfield

  —

  71

  81

  75

  67

  75

  Merton

  —

  61

  59

  61

  54

  53

  New

  —

  54

  53

  48

  49

  55

  688W
  state grammar schools and (E) further education colleges, in each of the last three years, broken down by constituent college. [101040]

  Margaret Hodge
  [holding answer 10 March 2003]The available information for the constituent colleges of Oxford and Cambridge is shown in the following tables. These figures are compiled by the institutions themselves, who are responsible for its accuracy. The tables cover all applicants, irrespective of their qualifications, and therefore take no account of any differential levels of A-level attainment between students from the maintained and independent school sectors.
  689W

  Percentage of applications from maintained sector Year of entry

  Percentage of offers to maintained sector Year of entry

  Oxford University

  2001

  2001

  2002

  2000

  2001

  2002

  Oriel

  —

  46

  54

  40

  45

  49

  Pembroke

  —

  45

  46

  45

  55

  51

  Queen's

  —

  50

  49

  53

  57

  46

  Somerville

  —

  55

  55

  60

  61

  64

  St. Anne's

  —

  53

  61

  61

  57

  55

  St. Catherine's

  —

  59

  58

  56

  49

  44

  St. Edmund Hall

  —

  40

  46

  42

  60

  55

  St. Hilda's

  —

  62

  61

  53

  64

  63

  St. Hugh's

  —

  63

  62

  50

  66

  74

  St. John's

  —

  67

  80

  70

  53

  51

  St. Peter's

  —

  50

  49

  51

  61

  64

  Trinity

  —

  47

  49

  44

  54

  51

  University

  —

  46

  46

  48

  43

  49

  Wadham

  —

  71

  75

  66

  68

  73

  Worcester

  —

  41

  49

  47

  48

  48

  Total

  —

  55

  59

  54

  55

  57

  1 Figures not available for applications in 2000.

  School Buildings
  Mr. Damian Green
  To ask the Secretary of State for Education and Skills what recent representations he has had with regard to the imposition of VAT on new school buildings used partly by the general public; and if he will make a statement. [111369]

  Mr. Miliband
  My Department has received no representations recently with regard to the imposition of VAT on new school buildings used partly by the general public. Any specific correspondence on this issue would normally have been forwarded to Customs and Excise for their response, as they have policy responsibility for VAT.

  School Inspections
  Mr. Gibb
  To ask the Secretary of State for Education and Skills (1) what proportion of lessons inspected by Ofsted use pupil setting for(a) year 10 and (b) year 11; [111673]

  (2) how many independent schools were inspected by Ofsted in 2002; [111674]

  (3) what percentage of secondary state school lessons inspected by Ofsted in 2001–02 were judged satisfactory or better; and what percentage were judged poor; [111675]

  (4) what percentage of state secondary schools inspected by Ofsted in 2001–02 have an obligatory school uniform policy; and what percentage have a school prefect system. [111676]

  Mr. Miliband
  These are matters for Ofsted and I have asked HM Chief Inspector, David Bell, to write to the hon. member and to place a copy of his letter in the Library.

  Skills Shortages
  Mr. Bercow
  To ask the Secretary of State for Education and Skills if he will make a statement on skills shortages in the Oxfordshire, Milton Keynes and Buckinghamshire Local Learning and Skills area. [108486]

  Margaret Hodge
  Revised figures from the Employers Skill Survey 2001, funded by the Department, showed that 6 per cent. of employers reported skill shortage vacancies in the Oxfordshire, Milton Keynes and
  690W
  Buckinghamshire Local Learning and Skills area. This compared with an average of 4 per cent. and a high of 12 per cent. for England., There were eight skill shortage vacancies per thousand employees in this area, which was the average for England.

  Teachernet Website
  Mr. Brady
  To ask the Secretary of State for Education and Skills (1) what has been the cost of developing the new Teachernet emergency planning website; [109416]

  (2) when his Department will set a date for the launch of the Teachernet emergency planning website; [109417]

  (3) how many (a) teachers and (b) local education authorities have been consulted regarding the content of the Teachernet emergency planning website. [109418]

  Mr. Ivan Lewis
  Development of the Teachenet emergency planning website has cost approximately £60,000. My Department invited all local education authorities (LEAs) in England to identify staff and teachers who would like to test the site. 17 LEAs responded that they would like to take part. We have not yet received responses from all of them so we do not yet know how many individuals have been involved.

  I will set a date for launch of the website when I am satisfied that all responses have been received and properly considered, and consequent improvements to the site have been made.

CABINET OFFICE

  Civil Service (People with Disabilities)
  Mr. Bercow
  To ask the Minister for the Cabinet Office what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in the Department. [110524]

  Mr. Alexander
  As at 29 April 2003 0.5 per cent. of staff at senior civil service level in the Cabinet Office are disabled. The Cabinet Office has a target to increase this proportion to 3 per cent. by 2005 and has put in place a number of initiatives to help achieve this. The Department is a member of the cross-departmental
  691W
  Disability Working Group, which is currently working to identify best practice in surveying staff on disability—a re-survey of Cabinet Office staff is planned once this work is complete.

  The Cabinet Office also supports its own departmental network for disabled staff (DISCO) and will be working with them to support a number of events throughout the coming year to promote the European Year of Disabled People. This includes hosting information meetings on various disabilities such as diabetes, epilepsy and ME.

  Contingency Planning
  Simon Hughes
  To ask the Minister for the Cabinet Office what preparations he has made for the distribution of information to the general public in the event of a civil emergency. [111122]

  Mr. Alexander
  Long-standing protocols exist for distributing information to the public in the event of a civil emergency. These arrangements are maintained by the Government Information and Communication Service within the Cabinet Office.

  The Emergency Services warn and advise those in the immediate vicinity of an incident, working closely with other bodies as appropriate.

  Away from the emergency the public will be advised, as appropriate, in line with the Government's 'Go In Stay In Tune In' doctrine. We have made arrangements

  Jan

  Feb

  Mar

  Apr

  May

  Jun

  Jul

  Aug

  Sept

  Oct

  Nov

  Dec

  1999

  36

  39

  48

  50

  2000

  51

  51

  53

  54

  56

  56

  54

  52

  56

  57

  60

  60

  2001

  62

  71

  92

  111

  123

  125

  129

  128

  138

  146

  147

  145

  2002

  148

  145

  143

  142

  138

  141

  140

  134

  139

  140

  144

  145

  2003

  141

  141

  138

  Entertainment
  Mr. Gray
  To ask the Minister for the Cabinet Office when he has entertained Labour honourable Members at public expense in the last 12 months; and at what cost. [106257]

  Mr. Alexander
  No such events have taken place.

  Property Portfolio
  Mr. Bercow
  To ask the Minister for the Cabinet Office what the estimated value is of the property portfolio held by the Cabinet Office. [108367]

  Mr. Alexander
  The estimated value of the total property portfolio held by the Cabinet Office on 31 March 2002 was £157.1 million.

  The above figure includes Downing Street and buildings that are owned by the Cabinet Office but are jointly occupied with other departments.

  Sickness Absence
  Mr. Bercow
  To ask the Minister for the Cabinet Office how many staff in the Office were on long term sick leave in each of the last five years. [109255]
  692W
  with the media for them to transmit detailed warning advice and guidance to the public by TV, Radio, Teletext, Ceefax and through websites as appropriate.

  These arrangements are appropriate to existing and anticipated threat levels.

  Document Classification
  Harry Cohen
  To ask the Minister for the Cabinet Office how many documents are held by his Office that are subject to security classification, broken down by category of classification. [107354]

  Mr. Alexander
  The information could be provided only at disproportionate cost. My Department follows the Cabinet Office guidance on document marking and control.

  E-Envoy
  Mr. Yeo
  To ask the Minister for the Cabinet Office (1) if he will make a statement on the Government's plans to change(a) the level of staffing and (b) the role of the Office of the e-Envoy; [105629]

  (2) how many staff have worked in the Office of the e-Envoy in each month since its establishment; [105628]

  (3) if he will make a statement on the work of the Office of the e-Envoy since its establishment. [105630]

  Mr. Alexander
  The following table should have been used, pursuant to his answer of 3 April 2003,Official Report, columns 799W–80W:

  Mr. Alexander
  There is no central definition of long term absence. Cabinet Office uses absence of at least 20 calendar days as a general guide. Numbers of staff with recorded absence above this level have been as follows:

  Year

  Numbers of staff with more than 20 calendar days absence

  Number of staff in post

  1999

  73

  1,560

  2000

  80

  1,750

  2001

  126

  1,840

  2002

  139

  1,950

  Records are not available for 1998.

  The Cabinet Office is committed to managing attendance effectively. We already have in place procedures recommended by the 1998 report "Working Well Together—Managing Attendance in the Public Sector"; and new procedures for proactive monitoring of attendance, where absence levels reach 10 calendar days in 12 months, will be introduced by the summer.

  Our target for overall levels of absence is no more than 6.1 days per staff year by the end of 2003.
  693W
  Records of absence published in the latest annual report "Analysis of Sickness Absence in the Civil Service" show that for the Cabinet Office in 2001:
  the average absence per staff member was 5.7 days
  54.3 per cent. of staff had no recorded absence

WORK AND PENSIONS

  Age Discrimination
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions what steps his Department is taking to address the issue of age discrimination. [109441]

  Malcolm Wicks
  We have already implemented recommendations from the Performance and Innovation Unit Report, "Winning The Generation Game". The Department has already implemented policies to allow staff to stay on up to age 65, and we have delivered the Green Paper on Pensions. The Department has also taken steps to promote the provisions of the Government's Code of Practice on Age Diversity in Employment.

  We are currently developing our policy on age alongside new legislation from the EC Article 13 Employment and Race Directives. The legislation to outlaw unfair discrimination at work on the grounds of age is required to be in place by December 2006.

  The Department has taken age into consideration in its development and equality proofing of all human resource policies and processes and is committed to tackling any negative attitudes towards older staff. We are currently working with the Employers Forum on Age to progress age diversity policies by using their policy review toolkit 'One Step Ahead'. The toolkit sets out the framework to enable employers to undertake a comprehensive age equality review and to deliver age "neutrality" across the business. The toolkit will shortly be issued across the DWP HR community.

  The Department plays an active role in promoting age diversity to the wider employment market through the Age Positive Campaign. The campaign material can be

  Research involving opinion polls

  Title

  Purpose

  Cost

  Welfare Reforms Omnibus Survey

  Monitoring attitudes towards various aspects of the work areas covered by the Department.

  £9,600

  Disability and Carers Benefits Directorate (DCBD) Customer Satisfaction Survey 2001–02

  The postal survey conducted in February 2001, provided Disability and Carers Service (DCS), which replaced the DCBD in April 2002, with valuable customer feedback and a baseline from which the DCS can measure future improvements in service delivery. The questionnaire asked customers to comment on their experiences when dealing with the DCBD by telephone, written correspondence or when visiting the offices and, additionally, when claiming one of the benefits DCBD administer.

  £5,015 (postal charges only as survey was conducted in-house).

  Jobcentre Plus Customer Satisfaction Survey

  A large scale client survey undertaken to determine satisfaction with the level of service received from Jobcentre Plus. The survey involved 3,100 telephone interviews with a range of benefit recipients accessing a variety of Jobcentre Plus services.

  £88,600

  Appeals Service Customer Survey

  To assess performance against Service First Standards which cannot be measured internally and to obtain information direct from customers about the service they have received. The survey also informs the work being undertaken by the Modernising Appeals Programme on the shape of future service including opening hours and tribunal session times.

  £46,455

  Attitudes and Awareness Survey

  To obtain information on the level of awareness of the Disability Discrimination Act and the Disability Rights Commission.

  £20,000

  Young Disabled People Survey

  To obtain information on the opinion and attitudes of young disabled people.

  £94,000

  Attitudes to Electronic Service Delivery

  To explore public attitudes to providing DWP services on-line, and examine how to maximise take-up. This research included 20 mini focus groups, as part of a wider project.

  £41,347

  694W
  accessed via the website and includes the Government's current code of practice "Age Diversity in Employment" which is also available in the Library. It has examples of good practice and ministerial support.

  There are well-advanced plans to establish an Age Champion and a network of staff groups across my Department's businesses to focus on age issues. A Diversity Awareness Programme is being rolled out across my Department and this includes important messages about behaviour and negative attitudes towards age.

  Departmental Expenditure
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions what expenditure has been incurred by his(a) Department, (b) agencies and (c) non-departmental bodies in 2002 on (i) opinion polling, (ii) focus groups and (iii) other forms of market research; and if he will list the surveys commissioned and the purpose of each. [106274]

  Malcolm Wicks
  Details of expenditure incurred by this Department, its agencies and non-departmental public bodies, in 2002 in respect on opinion polls, focus groups and other forms of market research of opinion polls, are given in the following table.

  The cost information provided in the table is, in the main, that incurred in the financial year 2002–03. Financial information provided for the 2002–03 financial year is provisional and subject to final audit.

  Some of the projects listed may have been undertaken by a mixture of methodologies, for example, in-depth interviews and surveys, in addition to focus groups and opinion polls. In such instances, it has not always been possible to disaggregate costs for the individual elements.

  While this Department is keen to hear what people have to say about proposed new policies and ideas, we are committed to obtaining best value for money. Public opinion research, including focus groups and polling, is subject to the usual strict rules that spending must represent good value for the taxpayer and must not be used for party political purposes.
  695W

  Research involving opinion polls

  Title

  Purpose

  Cost

  Easing the Transition to Work

  Focus Groups with (former) Benefit Agency, Employment Service and Local Authority staff in London and South Wales to explore their experiences and views of promoting and administering various work incentives measures. This was one element of a wider research project.

  £15,970

  Developing Services for Pensioners

  Giving customers the opportunity to express their views on service development for The Pension Service.

  £34,400

  Evaluation of Action Teams for Jobs

  Evaluation of Action Teams for Jobs during its first year of operation.

  £2,950

  Evaluation of the Remote Jobpoints

  This comprised a small scale quantitative survey of users and non users of remote

  £62,345

  Experiment in Port Talbot and Luton—surveys results from Stage 1 and Stage 2

  jobseeking services in two Tesco supermarkets—market research, fed into the development of a larger project termed flexible service delivery.

  New Deal 50 Plus Regional Marketing Evaluation

  Purpose of the survey was to evaluate the regional marketing programme for ND50 +. The research provides an overview of how the marketing campaigns have worked and feedback to inform the development of future marketing activity.

  £10,580

  Diversity in Disability

  To provide a greater understanding of the life experiences of disabled men and women from different minority ethnic groups.

  £57,429

  Evaluation of Community Sentences Withdrawal of Benefits

  To establish staff views of the implementation of the policy in pilot areas. Group discussions were held with staff from the Benefits Agency, Employment Service and
  Probation Service. This was in addition to 31 interviews with staff and 55 interviews with offenders.

  £81,395

  Evaluation of the Permitted Work Rules for Incapacity Benefit Claimants

  To obtain information on the use of the new arrangements by staff who apply them or refer to them in their work.

  £85,500

  Awareness of SENDA

  To obtain information on the level of awareness among educationalists, disabled young people and their parents.

  £19,000

  Publication Focus Group

  Consultation of DRC publications.

  £509

  Jobseeker Direct Customer Satisfaction Survey

  Small scale national quantitative survey of users of Jobseeker Directive, looking at the views of the service and how it could be improved.

  £30,350

  Jobseeker Traffic Survey

  Large national survey of jobseekers views of Jobcentre Plus services.

  £67,000

  Awareness Day Research

  Pre and post research to evaluate the effectiveness of the awareness raising campaign.

  £11,000

  Part-time Workers
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions what assessment he has made of the impact of the Part-time Workers Directive on staff in his Department. [109264]

  Maria Eagle
  The Part-time Workers Directive has not had a significant impact on staff in DWP. Existing policies already provided a range of working patterns for all our staff, both male and female. Full-time staff can work in non-traditional ways (e.g. compressed hours, informal home-working), and part-time staff can work part year, for example during school terms but not during school holidays.

  We also recognise that some part-time staff do not have children; they have simply made other life choices. Staff may take the opportunity to match their working arrangements with their personal lives and responsibilities as carers, to study, undertake voluntary work, or pursue other interests. More than 25 per cent. (see Table A) of DWP staff work part-time (source: DWP baseline map for year ending 30 September 2002) against a little over 15 per cent. in the Civil Service as a whole (Civil Service statistics October 2002).

  A recent survey of DWP staff indicated that 67 per cent. (see Table B) of staff were in agreement that "the organisation allowed people to adopt a work pattern to accommodate a work life balance" 22 per cent. did not have an opinion either way and only 11 per cent. felt that their work pattern conflicted with their home life (source: staff survey 2002).

  DWP ensures that part-time staff are not treated less favourably in their contractual terms and conditions than comparable full time staff; the 'pro rata principle' applies wherever appropriate.
  696W

  Table A: Staff in post by work pattern and gender (DWP HR baseline map 30 September 2002)

  Full time

  Part-time

  Male

  39,460

  2,080

  Female

  62,424

  33,020

  Total

  101,884

  35,100

  Percentage

  Male

  38.7

  5.9

  Female

  61.3

  94.1

  Table B: The percentage of staff in DWP who feel that: "The organisation allows me to adopt a working pattern which helps me balance my work and home life" (Staff survey result 2002)

  Percentage

  Strongly agree

  14

  Agree

  53

  Neither agree nor disagree

  22

  Disagree

  9

  Strongly disagree

  2

  Pensions
  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions what assessment he has made of the effect on incentives to contribute to private pension schemes of the fact that student maintenance loans are paid from gross income. [111068]

  Maria Eagle
  The Government recognise the value of saving for retirement in providing people with security, comfort in retirement and long-term independence and security. To address the problems that may have discouraged people of all ages from saving in the past the Government are implementing a strategy designed to create the right environment for saving; provide incentives to save through favourable tax treatment;
  697W
  and ensure everyone has access to the financial information they need to make informed savings decisions.

  It also recognised that there will be times in many people's lives when they cannot afford both to contribute to a pension and meet their current needs, but it is important that people save when they can afford to do so. Student loans are repaid on an income contingent basis, which means that the amount repaid is affordable and does not prevent graduates from making other investments such as contributions to a pension scheme.

  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions if his Department will add projected life expectancy to the information available on government pension statements. [110406]

  Malcolm Wicks
  The pension forecast statements issued by the Department for Work and Pensions are to provide individuals with the information on state pensions to help them plan their incomes in retirement. The statements are personal to the individual and do not contain information on life expectancy of either the individual, or the general population.

  Customer research conducted on the information contained in these statements has not highlighted the need to provide such information and there are currently no plans to do so.

  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions whether the promotional material for the pensions credit will make clear that products such as equity release affect any tax credits available. [111067]

  Maria Eagle
  A Guide to Pension Credit will be published in September. This publication will provide detailed information about the way income and capital is treated in the calculation and will make it clear that money raised from a loan on property or through equity release counts as capital.

  Mr. Willetts
  To ask the Secretary of State for Work and Pensions how many responses he has received to the Green Paper on Pensions; and if he will place copies of the responses in the Library. [110904]

  Maria Eagle
  There have been over 800 responses to the consultation on the Green Paper, Simplicity, Security and Choice: Working and saving for retirement (Cm 5677).

  We are analysing responses and will respond to the consultation in due course. Copies of the responses will then be placed in the Library.

  Vera Baird
  To ask the Secretary of State for Work and Pensions whether he plans to increase the payment due under the caring allowance entitlement of the State Second Pension. [110858]

  Maria Eagle
  There are no plans to increase the level of State Second Pension for those who qualify through caring responsibilities.

  Pensioner Benefits
  Dr. Kumar
  To ask the Secretary of State for Work and Pensions how many pensioners in Middlesbrough,698W
  South and East Cleveland will benefit from (a) the increased state pension and (b) the additional winter fuel payments for over-80s. [111250]

  Maria Eagle
  We increased the basic state pension by above inflation in April 2003. Everyone who is entitled to a basic state pension will benefit from the increase.

  Information relating to the additional payments to the over-80s is not available in the format requested. However. there are around 3,600 people in Middlesbrough, South and East Cleveland constituency who are aged 80 or over. If they are entitled to a winter fuel payment, they will also be entitled to an additional payment.

TRADE AND INDUSTRY

  Advertising Regulations
  Mr. Wray
  To ask the Secretary of State for Trade and Industry what measures are in place restricting companies from marketing products to children under 16 years of age; and if she will make a statement on the regulations in place for responsible advertising. [111149]

  Miss Melanie Johnson
  Non-broadcast advertising in the UK is controlled primarily by self-regulation under which the Advertising Standards Authority is responsible for ensuring compliance with the British Code of Advertising, Sales Promotion and Direct Marketing. The Code contains specific rules on advertising to children.

  For advertisements appearing on the television, the Independent Television Commission oversees compliance with its own Code of Advertising Standards and Practice. With regard to advertisements on the radio, the Radio Authority licences and regulates the independent radio industry, including radio advertising, in accordance with the statutory requirements of the Broadcasting Act 1990 and the Broadcasting Act 1996.

  Arbre
  Mr. Grogan
  To ask the Secretary of State for Trade and Industry what representations she has received from the new owners of Arbre; and if she will make a statement on the sale of Arbre. [111194]

  Mr. Wilson
  My officials have had discussions with the company interested in purchasing Arbre. There are a number of issues to be resolved before any announcement can be made. I hope that this matter can be brought to a satisfactory conclusion very soon.

  Broadband
  Mr. Paterson
  To ask the Secretary of State for Trade and Industry how many homes and businesses in Shropshire have a broadband connection. [111661]

  Mr. Timms
  These data are not available.

  Carbon Sequestrian Leadership Forum
  Mr. Colman
  To ask the Secretary of State for Trade and Industry if she will make a statement on the representation of the Government at the meetings of the
  699W
  Carbon Sequestration Leadership Forum being held on (a) 14 and 15 May in San Francisco and (b) 23 to 25 June in Washington DC. [110456]

  Mr. Wilson
  The Government are considering their level of representation at these international meetings.

  Employers' Liability Insurance
  Mr. Drew
  To ask the Secretary of State for Trade and Industry what representations have been made to her Department by organisations in the voluntary sector which have had problems in obtaining employer liability insurance. [111109]

  Nigel Griffiths
  The DTI have not had representations from the voluntary sector because formal representations on this issue have been directed to the Home Office which is responsible for the voluntary sector, and to the Department for Work and Pensions (DWP), which is leading a Government review of the employers' liability insurance system.

  The DWP-led review of the employers' liability insurance system aims to assess the case for reform and, if such a case is demonstrated, to identify the objectives and options for such reform. It is due to report in Spring 2003. Further details of the review are available at http:/www.dwp.gov.uk/publications/dwp/2002/health-safety/eli-review/index.htm

  The Active Community Unit in the Home Office has set up the Insurance Cover Working Group (ICWG) to look into insurance difficulties for the voluntary sector and advise on practical solutions. The ICWG has engaged consultants, Alison Millward Associates, to undertake a study into the current position regarding the provision of insurance for the voluntary and community sector, including employers' liability insurance, and to make practical recommendations that will bring relief to the problems. The report is to be delivered to the ICWG on 16 June.

  Once the recommendations of these reports have been considered, decisions will be taken to implement agreed practical solutions in partnership with the voluntary and community sector, the insurance industry, local authorities and Government Departments.

  Energy Meetings
  Mr. Colman
  To ask the Secretary of State for Trade and Industry what meetings have taken place between the Minister of State for Energy and(a) the World Coal Institute and (b) the IEA Clean Coal Technology Centre in 2001, 2002 and so far in 2003; and what meetings are planned for the rest of 2003. [110457]

  Mr. Wilson
  No meetings have taken place between the Minister and the World Coal Institute and the IEA Clean Coal Technology Centre in this period, and none are planned for the rest of 2003. However, close contact is maintained between the Department of Trade and Industry and these organisations. DTI Officials attend the twice-yearly Executive Committee meetings of the IEA Clean Coal Technology Centre, the most recent of which was on the 24–25 April, and both the IEA Clean Coal Technology Centre and the World Coal Institute actively participate in the DTI's cleaner coal technology programme.

  Fallen Stock Regulations
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry what additional resources will be required by trading standards departments in Buckinghamshire in respect of new fallen stock regulations. [110333]

  Mr. Morley
  I have been asked to reply.

  Allocation of resources for enforcement of the new rules on disposal of fallen stock is a matter for local authorities.

  Financial Assistance for Industry (Representation)
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry what representations she has received about the Financial Assistance for Industry (Increase of Limit) Order. [111729]

  Alan Johnson
  No representations have been received.

  Higgs Report
  Mr. Norman
  To ask the Secretary of State for Trade and Industry how many letters and submissions have been received by the DTI on the Higgs Report; and how many of these were in favour of its conclusions. [110398]

  Miss Melanie Johnson
  The Higgs review made a number of recommendations relating to the role effectiveness of non-executive directors, many of which are to be taken forward to advance best practice through amendments to the combined code. The FRC is responsible for changes to the code and therefore for consulting on the amendments proposed in the Higgs review. Responses were sought by the FRC by 14 April. It is for the FRC to report on the responses to that consultation, and on amendments to the combined code resulting from the review and consultation.

  The Department has received a number of letters on the recommendations in the report, many of which enclosed copies of responses to the FRC. It has also received letters in relation to the work of the group, which is being led by Professor Laura Tyson, Dean of the London Business school, which was set up as envisaged in the report to bring to greater prominence candidates from the non-commercial sector.

  Industrial Injuries
  Mr. Cummings
  To ask the Secretary of State for Trade and Industry what the value was of damages paid to sufferers of chronic bronchitis and emphysema and vibration white finger who live in the Easington constituency in(a) 2000, (b) 2001, and (c) 2002. [111203]

  Mr. Wilson
  The figures are as follows:

  £

  Year

  COPD

  VWF

  2000

  1,575,226

  9,801,475

  2001

  3,300,724

  10,594,815

  2002

  7,020,245

  7,723,689

  Pharmacies
  Mr. Cummings
  To ask the Secretary of State for Trade and Industry what representations she has
  701W
  received concerning the OFT report on Pharmacies from community based pharmacies; and if she will make a statement. [111205]

  Miss Melanie Johnson
  We have received numerous representations from community pharmacies and other stakeholders regarding the OFT report on the control of entry regulations and retail pharmacy services in the UK.

  In relation to England, the government has said that we favour change to open up the market and improve quality and access without diminishing the crucial role that pharmacies play, especially in poorer and rural areas. The Government intends to come forward with a balanced package of proposals for consultation before the summer recess.

  The regulations on pharmacy entry controls are devolved in Scotland, Wales and Northern Ireland and the devolved administrations announced their responses to the OFT's recommendations on 26 March.

  National Minimum Wage
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry how many people are in receipt of the national minimum wage, broken down by(a) region, (b) county, (c) gender, (d) age group and (e) ethnic origin. [110313]

  Alan Johnson
  In Spring 2002 there were around 760,000 jobs in the UK that paid at or just above the level of the National Minimum Wage.

  The table provides a break down of this figure by region.

  Number of jobs paying at or just above the NMW rate1 in Spring 2002; United Kingdom

  North East

  60,000

  North West

  120,000

  Yorkshire and Humberside

  90,000

  East Midlands

  70,000

  West Midlands

  80,000

  Eastern

  50,000

  London

  30,000

  South East

  60,000

  South West

  60,000

  Wales

  40,000

  Scotland

  70,000

  Northern Ireland

  2—

  UK

  760,000

  1 Defined as paid at £4.10–£4.19 for 22 + and £3.50–3.59 for 18–21 year olds.

  2 Sample size too small for reliable estimate.

  Source:

  ONS central estimates of Low Pay, Labour Force Survey & New Earnings Survey.

  In Spring 2002, around 560,000 women were in jobs that paid at or just above the level of the NMW compared to around 200,000 men.

  Around 50,000 18–21 year olds were in jobs that paid at or just above the NMW compared to around 710,000 adults aged 22 and over.

  Estimates by country, and ethnicity are not available due to sample sizes being too small to provide reliable estimates.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Illegal Meat Imports
  Mr. Lidington
  To a ask the Secretary of State for Environment, Food and Rural Affairs how many prosecutions concerning the illegal import of meat have been initiated as a result of the detector dogs experiment at Heathrow. [109853]

  Margaret Beckett
  [holding answer 28 April 2003]. No prosecutions have been undertaken as a result of seizures made by the detector dogs.

  A decision to bring a prosecution before the courts would take into account a number of factors, including the weight of evidence to prove intent to break the laws in question and the ability to bring the offender before the British courts. These criteria may not be easy to satisfy in the case of air passengers bringing in meat illegally, especially where small quantities are seized.

  The six-month detector dog pilot resulted in just under 10 tonnes of illegal products of animal origin being seized.

  Responsibility for the detector dogs was fully transferred to HM Customs and Excise on 1 May, as part of a wider transfer of anti-smuggling controls for products of animal origin.

  Agricultural Incinerators
  Mr. Peter Duncan
  To ask the Secretary of State for Environment, Food and Rural Affairs what her assessment is of the number of incinerators using(a) over and (b) under 50 kg/fuel per hour available to the UK farming industry. [108962]

  Mr. Morley
  Prior to the introduction of the EU Animal By-Products Regulation on 1 May 2003, the Department was not responsible for the approval of animal carcase incinerator, with the exception of incinerators which dispose of Specified Risk Material. A central register of operators currently approved to operate SRM incinerators indicates that as at 29 April 2003 there were 306 approved incinerators in Great Britain.

  However, we believe the number of low capacity animal carcase incinerator—those operating at less than 50kg/hour—to be around 2,500. 20 high-capacity incinerators are currently contracted to the Over-30-Months and Fallen Stock Survey schemes. No assessment has been made of the number of other high-capacity animal carcase incinerators in the country.

  Agricultural Market Price Support
  Mr. Gibb
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the impact of agricultural market price support on UK income distribution. [108816]

  Mr. Morley
  Agricultural market support measures under the CAP are estimated to have increased the cost of food for a notional family of four by about £5 to £6 per week. As food represents a higher proportion of the total expenditure for low income households, the impact will be more severe for these households. There are no estimates of the impact of market price support
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  on the income distribution of UK farmers. However, the OECD's provisional estimates for 2001 show that market price support in the EU accounted for nearly 60 per cent. of total support to agriculture and represented 24 per cent. of the value of production at the farm gate. OECD estimates for individual commodities show that market price support represented 3 per cent. of the value of production of cereals, 37 per cent. for milk, 44 per cent. for sugar and 84 per cent. for beef and veal.

  Animal Carcases
  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) how she recommends horse owners who have opted under the horse passport scheme not to put their horse into the human food chain should dispose of their carcasses; [107916]

  (2) whether it is her policy that the Animal By-Products Regulations will result in a ban on the burial of horses on private land. [107914]

  Mr. Morley
  Current legislation permits a number of disposal routes for fallen stock, including horses. These include rendering, incineration, sending the carcases to a knacker or hunt kennel, or, in restricted circumstances only, burial or on-farm burning.

  The new EU Animal By-Products Regulation will be directly applicable in the UK and will ban the routine burial or open burning of animal carcases when it applies in member states from 1 May 2003. The other disposal routes can still be used.

  Mr. Hendry
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) how long it will take to assess the responses from farmers on her Department's proposed scheme for the removal of carcases from farms after 1 May 2003;[111278]

  (2) when she expects her proposed scheme to remove animal carcases from farms to be operational; and how farmers should deal with carcases until the scheme is operational. [111276]

  Mr. Morley
  [holding answer 6 May 2003]The closing date for responses is 6 May 2003. The time taken to then assess the viability of the scheme will be dependent on the number of responses and the type/size of holdings which have expressed an interest in the scheme. However, we would expect to have completed such an assessment by the end of May 2003.

  Assuming that the scheme is viable we anticipate that it will take a minimum of three months from the date when the decision is taken on whether to proceed to get the scheme operational.

  An infrastructure of approved knacker yards, hunt kennels, rendering plants and incinerators already exists to allow farmers to comply with the new rules. However, if farmers do not know who provides these services locally they can ring a help line on 0845 8507070 which has been set up to provide advice on collection and disposal facilities.

  Bovine TB
  Mr. Luff
  To ask the Secretary of State for Environment, Food and Rural Affairs how many herds under movement restrictions to control the spread of bovine tuberculosis have been subject to such controls for(a) more than two years, (b) between one and two years, (c) between six months and one year and (d) less than six months. [110755]

  Mr. Morley
  Information on the number of herds under movement restrictions in categories(a) to (b) is not available. However, preliminary information, in the form of herds in each category as a percentage of unconfirmed and confirmed incidents resolved in Great Britain in 2002, is given in the following table.

  Duration of TB movement restrictions as a percentage of all unconfirmed/confirmed TB incidents in GB ending in 2002

  Duration of movement restrictions

  1As percentage of all unconfirmed TB incidents

  1As percentage of all confirmed TB incidents

  (a) more than two years

  Data not available

  Data not available

  (b) between one and two years

  11

  48

  (c) between six months and one year

  8

  20

  (d) less than six months

  81

  32

  1 Preliminary figures produced by the Veterinary Laboratories Agency from the Vetnet database

  Mr. Luff
  To ask the Secretary of State for Environment, Food and Rural Affairs in how many of those herds suffering a breakdown following testing for bovine tuberculosis were(a) lesions found at the post mortem of any animal from the herd and (b) tissue samples taken which proved positive for Mycobacterium bovis in each of the last five years. [110756]

  Mr. Morley
  The number of confirmed new TB breakdowns is given in the following table.

  A confirmed TB incident is one in which (i) visible lesions are found in at least one of the slaughtered animals at postmortem examination, and/or (ii) Mycobacterium bovis is cultured from the tissue samples of at least one reactor animal. Separate data on the two categories can be provided only at disproportionate cost.

  TB incidents in Great Britain 1998–2002—herds

  Year

  Number of confirmed new herd incidents

  1997

  503

  1998

  720

  1999

  875

  2000

  1,044

  2001

  511

  2002

  11,837–1,962

  1 Provisional figures.

  Note:

  Data will remain provisional until all culture results are available and data validation has been carried out.

  Source:

  Vetnet

  Sir Michael Spicer
  To ask the Secretary of State for Environment, Food and Rural Affairs when she expects to publish the results of the present research into the impact of TB in badgers on cattle. [111016]

  Mr. Morley
  Defra has a wide-ranging bovine TB research programme, comprised of many individual research projects. Once individual projects are complete
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  final reports are published on the Defra website. Some of the projects currently underway are not scheduled to end until 2006.

  The Independent Scientific Group on Cattle TB is reviewing the effect of the Foot and Mouth disease outbreak on the badger culling trial and is expected to provide advice to Ministers on the likely completion date shortly. In addition, an independent audit panel has just been set up to look at the progress of the trial and the likely timescale to which it will produce results.

  Bovine Viral Diarrhoea
  Mr. Peter Luff
  To ask the Secretary of State for Environment, Food and Rural Affairs of those herds with a breakdown confirmed by a positive laboratory test for Mycrobacterium bovis, how many are vaccinated against bovine viral diarrhoea. [1107541]

  Mr. Morley
  These data are not available.

  Cement Kilns
  Sue Doughty
  To ask the Secretary of State for Environment, Food and Rural Affairs what the total annual dioxin emissions produced by cement kilns were in each year for 1997 to 2002. [110222]

  Alun Michael
  The estimated total annual emissions of dioxins produced by cement kilns were as follows: 1997, 2.829 grams; 1998, 2.883 grams; 1999, 8.511 grams; 2000, 4.715 grams; and 2001, 5.684 grams. Data are not yet available for 2002.

  Civil Service (People with Disabilities)
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in her Department. [110517]

  Alun Michael
  In common with other Government Departments, Defra has a target for increasing the number of disabled civil servants to 3 per cent. by 2005. Currently, 1 per cent. of Defra's Senior Civil Servants have declared a disability. At grades below SCS the figure is 6 per cent.

  Defra is taking steps to address the low number of disabled Senior Civil Servants. In addition to running the 'Two Ticks' guaranteed interview scheme for disabled applicants, the Department participates in central schemes targeted at disabled staff including the civil service bursary scheme and fast stream summer placements for disabled graduates.

  We encourage members of staff to declare their disability but this is voluntary and there may be a degree of under-reporting. The Department is considering what we can do to improve the response rate. We are also represented on the Cabinet Office's Disability Working Group which is looking at this issue for Government Department's in general.

  Dolphins
  Mr. Woodward
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) if she will publish the critical findings of the use of dolphin friendly fishing gear; [108190]
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  (2) if she will publish the results of her Department's surveys on board UK pair trawlers to establish how many dolphins were killed per 100 net hauls; and if she will make a statement. [108170]

  Mr. Morley
  Research by the Sea Mammal Research Unit (SMRU) carried out in 2002 on behalf of the Department into the use of exclusion devices to reduce the by-catch of cetaceans in the offshore bass fishery has been published on my Department's website at: www://defraweb/science/project_data/Document Library/MF0733 A report on further research carried out during the 2003 spring bass fishery will be published later this year and I will ensure the hon. Member receives a copy.

  Since 2000, SMRU, under contract to Defra, has carried out a number of surveys to estimate the level of by-catch in UK pelagic fisheries. Surveys of the bass fishery in 2001 and 2002 recorded 62 common dolphins caught in 182 hauls observed. This information has been published in the UK by-catch response strategy, a copy of which has been placed in the Library of the House.

  Mr. George Osborne
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps the Government are taking to prevent the death of dolphins caused by bass fishing in the English Channel. [111212]

  Mr. Morley
  Action to address the issue of dolphin and porpoise by-catch needs to be taken internationally, as fishing vessels from many countries are involved. We have been pressing for such action within the EU and have commissioned a programme of research and development to reinforce our arguments. Urgent action is needed in the pair trawl fishery for bass off south west England, which involves a substantial number of vessels from other member states. Our research programme identified a by-catch problem in this fishery and is now trialling a possible gear solution. This looks promising, and I am determined to achieve a solution by this or other means. The second urgent need is to deploy EU observers to identify and assess other problem fisheries. I have followed up action in the Council of Agriculture and Fisheries Ministers, by writing to Commissioner Fischler and the French Fisheries Minister in support of effective measures. In addition, with the devolved administrations, I have issued a consultation document outlining a UK by-catch response strategy, copies of which have been placed in the Library of the House.

  Mr. Woodward
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what progress is being made by the Secretary of State in discussion with European Commissioners to introduce an EU-wide observer programme to broaden information on by-catch of dolphins in EU fisheries; [108199]

  (2) what progress the Government have made in their discussions with the French Government to carry observers on French trawlers to ascertain the numbers of dolphins being caught in French nets; [108191]

  (3) what proposals she has to ask the European Commission for a seasonal closure of fisheries to protect dolphins; [108189]

  (4) what estimates her Department has made of the numbers of French trawlers involved in pair-trawling for sea bass in the English Channel; and if she will make a statement; [108200]
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  (5) what the Government's policy is on the banning of pair-trawling to protect dolphins in the English Channel; [108192]

  (6) what plans the Government have to introduce legislation on dolphin-friendly fishing nets in time for the 2003–04 winter bass migration. [108194]

  Mr. Morley
  We highlighted the need for urgent action on the issue of cetacean by-catch at the January meeting of the Council of Agriculture and Fisheries Ministers. I have also pursued this issue with Commissioner Fischler on a number of occasions, both in writing and in personal contacts.

  I have recently written to the Commission to press for urgent action to widen observer coverage off the south-west coast where a number of other member states' vessels fish. I was pleased that the Commission included a commitment to take action in this area in papers produced as part of the recent reform of the Common Fisheries Policy. Commissioner Fischler has sent an encouraging reply sharing the UK's concern and agreeing a need to act at Community level, but I will follow up our recent approaches and continue to press for concrete proposals for positive action.

  I have also recently written to Hervé Gaymard, the French Fisheries Minister, stressing the need for effective action, and requesting his support for measures to widen observer coverage with a view to the reduction of cetacean by-catch. Action by France is particularly important as French pair trawlers play a substantial part in the offshore bass fishery; estimates are that some 30 to 40 French pairs are involved in this fishery.

  Defra has committed some £140,000 for trialling the use of exclusion devices developed by the Sea Mammal Research Unit (SMRU) to reduce the by-catch of cetaceans in the offshore bass fishery. If SMRU's trials do not identify the use of the separator grids as a viable solution, we will look at other measures. I do not rule out any approach at this stage including arguing for restrictions on fishing, the gear that can be used or seasonal closures.

  In the meantime, I, along with the Devolved Administrations, have issued a consultation document outlining a UK by-catch response strategy. This sets out the extent of our knowledge of by-catch in UK waters and makes proposals for action to address the by-catch problem. The document has been placed in the Library of the House.

  Fallen Wildlife
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment her Department has made of the bio-security risk of fallen wildlife in the countryside. [108800]

  Mr. Morley
  No formal assessment has been made of the bio-security risks of fallen wild animals in the countryside. The carcases, or parts of carcases, of wild animals will be exempt from the scope of the Animal By-Products Regulation unless they are thought to be diseased or are used to produce game trophies. Although the Regulation places them under no legal obligation,708W
  owners of property on which there are dead wild animals are advised to contact their local authority for advice on appropriate disposal methods.

  In some parts of the country, (Cornwall, Devon, Dorset, Gloucestershire, Herefordshire, Worcestershire and Shropshire), badgers may be infected with TB. In these areas, those who find dead badgers are advised to contact their local Animal Health Office who may wish to test the carcase for TB.

  Farm Subsidies
  Mr. Gibb
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her answer of 14 April 2003,Official Report, columns 479–80W, on farm subsidies, what proportion of production-linked subsidy payments have been redirected into rural development measures since 2001. [110876]

  Mr. Morley
  The Common Agricultural Policy Horizontal Regulation (Reg.1259/99) enables member states to redirect up to 20 per cent. of CAP direct subsidy payments for the purpose of co-financing new expenditure on the so-called 'accompanying measures'—essentially, in England, the agri-environment schemes and farm woodlands.

  The Government's policy of modulating production-based subsidy payments into rural development was first introduced in the UK in 2001 at a relatively low, flat rate of 2.5 per cent. following full consultation. The rate, which under existing legislation will rise progressively to 4.5 per cent. by 2005, rose to 3 per cent. in 2002 and again in 2003 to the current rate of 3.5 per cent.

  Fast Food Outlets
  Dr. Stoate
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make it compulsory for fast food outlets and commercial kitchens to install(a) fat traps and (b) grease interceptors in their waste water discharge systems. [110678]

  Mr. Morley
  Sewerage undertakers have powers to control and reduce discharges of fat and oil into sewers. If they consider the discharge constitutes trade effluent, their consent is required in accordance with the provisions of the Water Industry Act 1991. The consent may set conditions and require the elimination or diminution of any specified constituent of the trade effluent before it enters the sewer. Such a discharge without the undertaker's agreement is a criminal offence.

  If the sewerage undertaker does not classify the discharge as trade effluent, it is still an offence under section 111 of the 1991 Act, for a person to empty into a public sewer, or any drain or sewer connecting with a public sewer, any matter which is likely to injure the sewer or drain, to interfere with the free flow of its contents or to affect prejudicially the treatment and disposal of its contents. Any person who is found guilty of an offence is liable to a fine or imprisonment. I consider these statutory controls to be sufficient. We would expect sewerage undertakers to take action where a problem arose and to encourage appropriate preventative measures to stop problems arising from fat and oil entering the sewers.

  Fisheries
  Mrs. Iris Robinson
  To ask the Secretary of State for Environment, Food and Rural Affairs how many Scottish based trawlers targeting whitefish using trawls with a minimum mesh size of 100mm have been recorded as fishing in the statistical rectangle 39E4 in the past three months. [109692]

  Mr. Morley
  Five Scottish based fishing vessels were recorded as targeting whitefish using trawls with a minimum mesh size of 100mm in rectangle 39E4 between 1 December 2002 and 28 February 2003.

  Flood Defence
  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to increase funding to the Environment Agency for flood defence. [111658]

  Mr. Morley
  The outcome of last year's spending review for Government funding of all flood and coastal defence operating authorities (Environment Agency, Local Authorities and Internal Drainage Boards) was:

  £ million

  Year

  Defra

  ODPM

  2003–04

  1114

  295

  2004–05

  129

  332

  2005–06

  154

  382

  1 Since increased to £136 million from within Defra's overall provision

  Defra's allocation to the Environment Agency in 2003–04 for capital grants and contributions to national initiatives is £69 million. Based on all authorities' current forecasts, indicative allocations to the Agency in 2004–05 and 2005–06 are £80 million and £110 million respectively. However these indicative allocations will be subject to review in the light of updated forecasts from authorities. The ODPM funding is distributed to local authorities under the local government finance settlement and is used by them inter alia to fund the levies they pay to the Environment Agency. The levies paid to English Regions of the Agency total over £263 million in 2003–04.

  The Government have announced their intention to convert these levies into a Defra block grant, though the timing for this has yet to be finalised.

  Mr. Gardiner
  To ask the Secretary of State for Environment, Food and Rural Affairs whether her Department compiles records of flood reduction projects that have received the backing of(a) local authorities and (b) private companies, but have not proceeded because they fail the Environment Agency's cost benefit analysis. [111058]

  Mr. Morley
  All flood and coastal defence operating authorities (the Environment Agency, local authorities and Internal Drainage Boards) have a responsibility to ensure that value for money is obtained when investing taxpayers' funding. The rules which govern public sector investment are laid down by HM Treasury, but Defra has published guidance on how these can be met 710W
  for flood and coastal defences. Data are not maintained on proposed flood alleviation projects which are not economically worthwhile.

  Mr. Gardiner
  To ask the Secretary of State for Environment, Food and Rural Affairs what representations the Environment Agency has received from groups representing local government seeking a change to the system of cost benefit analysis used in flood reduction work. [111071]

  Mr. Morley
  Such representations would be directed to Defra, rather than the Environment Agency, as it is this Department which provides guidance on the economic appraisal of flood and coastal defence schemes. A number of representations were received during the consultation on the Flood and Coastal Defence Funding Review and these will be considered for the next review of our guidance. Any proposed changes would be subject to consultation with the industry at large, and with HM Treasury as appropriate.

  Mr. Gardiner
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her answer of 2 April 2003,Official Report, column 764W, on flood reduction, whether the Environment Agency changes the cost benefit analysis used in assessing flood reduction works when local authorities and private companies have also agreed to provide funding for the project. [111072]

  Mr. Morley
  As explained in my previous answer, (2 April 2003,Official Report, column 764W), it is often incorrect to deduct contributions from the cost of a flood defence project in assessing its economic viability. However, the issue needs to be considered on a case by case basis. Relevant guidance on the treatment of contributions is contained in Defra's publication, "Flood and Coastal. Project Appraisal Guidance—Economic Appraisal (FCDPAG3)".

  Fly-tipping
  Mr. Sheerman
  To ask the Secretary of State for Environment, Food and Rural Affairs what(a) the average level of fine imposed on those found guilty of fly-tipping and (b) the maximum fine imposable on those found guilty of fly-tipping are; and how many people were found guilty of fly-tipping in each of the last five years. [111040]

  Mr. Meacher
  Information is not available in the format requested as data on fly tipping prosecutions are not currently collected centrally. However, the Anti-Social Behaviour Bill currently before Parliament includes a provision which, if successful, will mean that these type of data will be recorded in the future.

  We do have some information from the Environment Agency on the cases with which it has dealt. The average level of fine imposed for waste handling offences which it has prosecuted has increased from £1,132 in 1996–97 to £3,004 in 2001–02.

  The maximum fine for those found guilty of fly tipping can be up to £20,000 and two years imprisonment for incidents involving non-hazardous waste and unlimited fines and five years imprisonment for incidents involving hazardous waste.
  711W
  The Environment Agency has data for the 1999, 2000, and 2001 calendar years, but these relate to the number of offenders prosecuted for the offence of unlawfully depositing waste as described by section 33(1) (a) of the Environmental Protection Act 1990. Similarly, prosecution data for the 1998–99 financial year are available, but relate only to section 33 offences generally.

  Data are provided on this basis.

  Offences for breach of all of section 33 of the Environmental Protection Act 1990

  1998–99–367

  All offences under s33(1)(a) of the Environmental Protection Act 1990

  1999–141 (117 individuals; 24 businesses)

  2000–206 (170 individuals; 36 businesses)

  2001–225 (187 individuals; 38 businesses)

  Offences under s33(1)(a)—fly tipping only

  2002—70 (59 individuals; 11 businesses)

  2003 to date—7 (4 individuals; 3 businesses)

  Mr. Nigel Evans
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent estimate she has made of the extent of fly-tipping; and if she will make a statement. [111160]

  Mr. Meacher
  There are currently no national data available on the extent of fly-tipping, as statistics on fly tipped waste are not collected centrally. We are hoping to remedy this situation by means of a clause that has been included in the Anti-Social Behaviour Bill currently before Parliament. If successful, the provision will require the Environment Agency and local authorities to submit annual data returns to the Secretary of State on the categories and quantities of fly tipped waste with which they deal.

  The Environment Agency has been operating a national incident recording system for the last two years. On the basis of its knowledge, it has estimated that there are approximately 50,000 fly-tipping incidents each year costing approximately £100 million.

  Food Safety
  Mr. Todd
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her answer of 18 March 2003,Official Report, column 644W, on food safety, whether the test techniques referred to will be the most accurate available for detecting salmonella in foodstuffs. [109372]

  Mr. Morley
  The test techniques referred to in the answer given on 18 March 2003,Official Report, column 644W, on food safety, do not relate to the detection of salmonella in foodstuffs. They relate to the detection of meat and bone meal and other mammalian protein in fishmeal intended for the feeding of farmed animals.

  In relation to testing for detecting salmonella in foodstuffs, the choice of technique will be dependent on many factors, with accuracy, robustness, simplicity, cost and other issues all needing to be taken into account. No one technique will be suitable for all foodstuffs, and it is incumbent on those undertaking the testing to make sure that the method they use is fit for purpose.

  GM Crops
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs what research her Department has conducted on using transparent polythene coverings to prevent the spread of pollen from GM crop trials; and if she will make a statement. [95902]

  Mr. Meacher
  [holding answer 6 February 2003]The Department has not conducted research on the use of transparent polythene coverings to prevent the spread of pollen from GM crop trials.

  We are not averse to polythene covering being used in GM crop trials, but if control of pollen were required, the applicant would have to demonstrate that the use of such sheeting for this purpose was effective.

  Laying Hens
  Mr. Laxton
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans her Department has to stop the use of enriched cages to house laying hens; and on what basis this decision was made. [110917]

  Mr. Morley
  The Government plan to review the future of enriched cages on an EU basis, when the Agriculture Council next considers the welfare of laying hens directive in 2005. By then it is hoped we will be in a stronger position to address some of the questions on the welfare concerns of enriched cages, as research programmes are completed and for any changes to apply to all EU producers, not just those in the UK, thus avoiding the associated risk of simply displacing production.

  This decision was taken after a thorough consideration of the responses to a three-month public consultation, and the available economic, scientific and veterinary evidence.

  Nuclear Waste
  Mr. Watson
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what savings will be made to the Government by the announcement that the Radioactive Waste Management Advisory Committee is to be abolished; and what the reasons are for its abolition; [110454]

  (2) how the watchdog functions in relation to the management of nuclear waste will be maintained following the abolition of the Radioactive Waste Management Advisory Committee; [110372]

  (3) what safeguards she is putting in place to ensure that the scrutiny undertaken by the Radioactive Waste Management Advisory Committee is not compromised by its abolition. [110373]

  Mr. Meacher
  Sponsoring Ministers are currently considering the future of the Radioactive Waste Management Advisory Committee (RWMAC) in light of the establishment of the new Committee on Radioactive Waste Management (CoRWM), that is being set up to carry forward the Managing Radioactive Waste Safely programme, and will announce their decision in due course. RWMAC is currently served by a secretariat of 3.5 staff and has an annual budget of the order £160,000.

  Ospar Meeting
  Llew Smith
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on matters discussed at the OSPAR officials meeting held in April; and if she will place in the Library copies of papers submitted to the meeting that refer to United Kingdom policy. [111245]

  Mr. Meacher
  During April there were three OSPAR meetings: the Hazardous Substances Committee, the Assessment and Monitoring Committee, and an ad hoc meeting on radioactive substances. These meetings considered a wide range of issues, and in particular undertook preparatory work for the annual meeting of the OSPAR Commission, which this year will be at Ministerial level, to be held in Germany in June.

  The Commission will be reviewing progress, updating the Strategies which were adopted at the last ministerial meeting in Sintra in 1998, adopting a number of specific recommendations, and adopting a declaration which will guide future work. The Commission will also meet jointly with members of the Helsinki Commission for the Baltic Sea.

  The papers considered at the April meetings—about 170 in all—were working documents, and do not yet represent the position of the Commission. When the progress reports, revised strategies, and other documents have been finalised and approved by the Commission I will arrange for copies to be placed in the Library of the House. I will also provide a statement about the outcome of the June ministerial meeting.

  Part-time Workers
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the impact of the Part-time Workers Directive on staff in her Department. [109280]

  Alun Michael
  Defra is committed to creating an environment which enables all members of staff to achieve a better work life balance. Part-time working is one of several ways in which the Department offers its staff flexibility in their working patterns. Figures for staff in post in the core Department1 show that 11 per cent. of staff have adopted a part-time working pattern. Defra agencies and non-departmental public bodies are encouraged to take a similar approach.

  In 2002, the Department conducted a staff survey, one element of which was to compare the views of part-time workers with those of full-time staff on various aspects of working for Defra. The results of the survey will be discussed with the part-time staff network with a view to taking action where necessary. There will be follow up activity to enable us to monitor progress and identify any new issues.

  Defra has produced a race equality scheme under the requirements of the Race Relations (Amendment) Act 2000. As part of this scheme we will monitor the impact on staff in a number of key employment areas. In addition to ethnicity data, the monitoring plan will allow us to assess the impact of our employment policies and procedures on other groups, such as part-time staff.
  714W
  The Department will also conduct an Equality Audit, which will examine pay on the basis of contractual hours. This will enable an assessment of pay equality between full and part-time staff.

  1 Includes staff in the Pesticides Safety Directorate, Veterinary Laboratories and Veterinary Medicines Directorate as at 1 October 2002.

  Pesticides Regulations
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what representations she has received about the Pesticides (Maximum Residue Levels in Crops, Food and Feeding Stuffs) (Amendment) Regulations. [110507]

  Mr. Morley
  We have received no representations about the Regulations which came into force on 31 March 2003.

  Pillar 2
  Dr. Murrison
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has further to redirect Pillar 2, CAP funding to the Rural Development Regulation; and if she will make a statement. [111269]

  Mr. Morley
  Government has redirected, and match funded, a proportion of production linked subsidy payments into rural development measures since 2001. In the current negotiations on CAP reform we are pressing for both a shift in support from production-linked subsidies to environmental and rural development measures and a significant increase in the UK's share of current EU funding for rural development programmes. We are committed to increasing expenditure on the England Rural Development Programme. The detailed arrangements for delivering this commitment will depend on the outcome of the ongoing negotiations on the reform of the CAP.

  Prions (Diagnostic Tests)
  Dr. Gibson
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to assess the new diagnostic test for prions. [109652]

  Mr. Morley
  Five rapid tests for the post-mortem detection of BSE have been evaluated by the EU Commission and are considered appropriate for use as screening tests for cattle. The most recent of these, one from Switzerland and one from the USA, were published by the Commission at the end of 2002. Defra is aware of these assessments and will be guided by them in BSE control programmes. I presume that the question refers to one of these methods.

  Scientists at the Veterinary Laboratories Agency are also engaged in trials of modifications of these and other methods to assess their potential to differentiate between BSE and scrapie. This is being done in collaboration with European and American scientists. In addition, the development of a BSE test for use in live animals is a longstanding Defra priority. Scientific staff monitor both national and global developments and are involved in the collaborative evaluation of a range of

  715W
  tests at different stages of development. Thorough evaluation of performance is required before tests can be used for statutory purposes.

  Renewable Energy Crops
  Mr. Hendry
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has for allowing renewable energy crops to be grown on set-aside land; and if she will make a statement. [111277]

  Mr. Meacher
  [holding answer 6 May 2003]The original CAP reform proposals introduced the concept of a decoupled single income payment, designed to bring markets into better balance and take away incentives for over-production. Energy crops would be eligible for a 'carbon credit' aid of £45 per hectare, capped at 1.5 million hectares across the EU. Compulsory set-aside would have been retained, but the existing derogation to allow non-food, including energy crops, to be grown on it would be removed. We consider that the combination of decoupling together with a further cereals price cut removes the need for land to be taken out of production and placed in set-aside.

  The European Commission have indicated that they may be prepared to make some changes to their original proposal on set-aside, including allowing continued access for non-food crops. Our view is that if set-aside is to continue, it must be applied in a flexible way which maximises its potential benefits.

  Sustainable Development
  Llew Smith
  To ask the Secretary of State for Environment, Food and Rural Affairs what proposals are being put by the United Kingdom to the 11th session of the United Nations Commission on sustainable development in New York; what ministerial level meetings are being held; and if she will place in the Library documents submitted to the 11th session of UNCSD relevant to United Kingdom policy. [111233]

  Mr. Meacher
  My right hon. Friend, the Secretary of State attended the High Level Ministerial Segment of the eleventh session of the United Nations Commission on Sustainable Development (CSD11) in New York on 28–30 April 2003.

  She stressed in particular the importance of the Doha Development Round and the contribution that agricultural subsidy reform can make to Sustainable development, and highlighted the UK proposal for an International Finance Facility (IFF) which would double aid to the poorest countries to $100billion a year up to 2015.

  The UK helped prepare a number of EU statements and papers: copies will be placed in the Library.

  My right hon. Friend, the Secretary of State also held bilaterals in the margins with Mohammed Valli Moosa (Chair of CSD and South African Minister for Environmental Affairs and Tourism), Louise Frechette (UN Deputy Secretary General), Mark Malloch Brown (UNDP), Paula Dobriansky (US Under Secretary of State for Global Affairs), Ronnie Kasrils (South African Minister of Water Affairs and Forestry), David Kemp (Australian Minister for the Environment), Shri T R Baalu (Indian Minister of the Environment and
  716W
  Forests), Marina Silva (Brazilian Minister of the Environment), Pieter Val Geel (Dutch Minister of Housing, Spatial Policy and Environment and Housing), David Anderson (Canadian Minister of the Environment) and Mohamed El Yazghi (Moroccan Minister of Country Planning, Water Resources and Environment).

  Llew Smith
  To ask the Secretary of State for Environment, Food and Rural Affairs whom she plans to appoint to chair the Trade Union Advisory Committee on Sustainable Development. [111367]

  Mr. Meacher
  The Trade Union Advisory Committee on Sustainable Development is currently chaired jointly by myself and John Edmonds, General Secretary of the GMB Union. Mr. Edmonds will be stepping down as co-chair at the next meeting of TUSDAC on 2 July. It is our intention that action to appoint a new co-chair should be completed in time for that meeting.

  TB (Badgers)
  Sir Michael Spicer
  To ask the Secretary of State for Environment, Food and Rural Affairs what the incidence of TB in badgers was in(a) England and Wales and (b) the counties of Herefordshire and Worcestershire in each of the last five years. [111019]

  Mr. Morley
  Since 1998, collection of data about the incidence of TB in badgers has been collected only from the randomised badger culling trial (the "Krebs" trial) and from the road traffic accident survey taking place in seven counties (Cornwall, Devon, Gloucestershire, Herefordshire, Worcestershire, Shropshire and Dorset). Data from both will be analysed by the Independent Scientific Group on Cattle TB (ISG).

  It is a fundamental principle of scientific trials that data must not be released prematurely since that could compromise the subsequent integrity of the trials. The ISG expressed concern in its second report that no data should be released from the field trial and related research which could discourage farmers' willingness to participate in the trial, or encourage either illegal killing of badgers or interference with trial operations. For this reason, they recommended that a narrow band of data (including the prevalence of TB in badgers caught in the trial) should not be disclosed. The ISG has asserted and reinforced the need for total confidentiality of these data until such time as they can be safely released with a considered analysis.

  Telephone Helplines
  Mr. Lazarowicz
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her answer of 24 February 2003,Official Report, column 97W, on telephone helplines, how many calls were made to each helpline charged at national rate in the last year for which records are available; and what the average duration was of these calls. [105878]

  Alun Michael
  Detailed information of this kind is only available for some of the telephone helplines covered by my previous answer.
  717W
  For three of the national rate helplines operated by the Rural Payments Agency, during the year April 2002 to March 2003 some 54,000 calls were received with the majority of calls having durations of between 1 and 2.25 minutes.

  The Pets helpline (also charged at national rate) averages some 6,700 national rate calls per month with typical duration estimated as 10–15 minutes.

  Corresponding information could be obtained for the other helplines covered in my previous answer only at a disproportionate cost.

  Varroa Mites
  Ms Atherton
  To ask the Secretary of State for Environment, Food and Rural Affairs how many cases of varroa mites her Department has identified, broken down by county. [110866]

  Mr. Morley
  Since the establishment of Defra in June 2001, there have been a total of 94 new varroa infested apiaries reported to the Central Science Laboratory's National Bee Unit. The data are broken down by county in the table.

  New apiaries found infested with varroa since June 2001

  County

  2001

  2002

  2003

  Avon

  1

  Bedfordshire

  1

  1

  Berkshire

  1

  1

  Buckinghamshire

  2

  2

  Cheshire

  1

  1

  Cornwall

  1

  Cumbria

  2

  4

  1

  Derbyshire

  Devon

  1

  2

  2

  Durham

  1

  1

  East Sussex

  1

  1

  Gloucestershire

  1

  Greater London

  2

  3

  Hampshire

  1

  Hereford and Worcs

  6

  1

  Hertfordshire

  1

  Lancashire

  2

  Lincolnshire

  1

  Norfolk

  2

  1

  North Yorkshire

  1

  3

  3

  Northumberland

  1

  18

  Nottinghamshire

  1

  Shropshire

  1

  Somerset

  2

  South Yorkshire

  1

  Staffordshire

  1

  Suffolk

  1

  1

  Tyne & Wear

  1

  West Sussex

  2

  1

  Wiltshire

  1

  1

  Wales

  1

  1

  Gwynedd

  2

  Total

  6

  61

  27

  Ms Atherton
  To ask the Secretary of State for Environment, Food and Rural Affairs what research her Department has undertaken to combat varroa mites. [110867]

  Mr. Morley
  The Government have funded a number of research projects to combat the varroa mite since it was first discovered in the UK. Currently, Defra 718W
  is funding a 3-year project that extends an earlier MAFF-funded investigation by Horticulture Research International (HRI) on the use of entomopathogenic fungi as a biological control of varroa. HRI is undertaking this project in collaboration with IACR Rothamsted. It is due to terminate in 2005 and is expected to cost some £323,000.

  Ms Atherton
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what action she has taken to deal with the threat from varroa mites; and if she will make a statement; [110868]

  (2) what action she and her European Union counterparts have taken to deal with varroa mites. [111004]

  Mr. Morley
  Varroa has been the most significant threat to UK beekeeping since it was first detected in Devon in 1992. Defra funds a programme of bee health measures to assist the beekeeping sector, the cost of which was around £1.3 million in 2002–03. Under these measures, the National Bee Unit (NBU), part of the Central Science Laboratory, provides a free diagnostic and inspection service to beekeepers in England as well as training and technical advice to help them become more self-reliant through improved bee husbandry. In addition, the NBU has been carrying out routine screening throughout England and Wales for varroa mites that are resistant to authorised treatments, having first detected them in August 2001. To date, resistance remains isolated to certain areas of Devon and Cornwall. However, the NBU's advice to beekeepers is to remain alert to the threat of further spread and to report any suspected cases to them.

  At EU level, Council Regulation (EC) No. 1221–97 provides for member states to assist the beekeeping sector to improve the production and marketing of honey by alleviating the burden placed on it by varroa. The EU reimburses up to 50 per cent. of Member States' expenditure on certain beekeeping measures. In the past year, the UK has received £324,000 under these measures for approved actions taken to combat varroa. The main thrust of most member states' programmes is, like the UK, to support the control of varroa through technical advice, the provision of diagnostic services and R&D.

  Woodpigeons
  Mr. Ben Chapman
  To ask the Secretary of State for Environment, Food and Rural Affairs what facilities are available for controlling woodpigeons. [111085]

  Mr. Morley
  The control of certain birds, including woodpigeons, is permitted under a series of general licences issued by my Department. This system, first introduced in 1992. offers a practical and easily understood method of control of certain bird species and ensures that birds are killed or taken by certain methods only, with the minimum of distress to the birds.

  Control of birds under the general licences has generally worked well, however a recent High Court judgment has illustrated that there may be areas where review of the general licences would be useful. Officials will consult stakeholders shortly and revise the licences where changes are considered necessary.
  719W
  Copies of the general licences can be found on the Defra website.

DEFENCE

  Civil Service (People with Disabilities)
  Mr. Bercow
  To ask the Secretary of State for Defence what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in the Department. [110533]

  Dr. Moonie
  Currently, approximately 1 per cent. of the senior civil service in the Ministry of Defence have declared themselves disabled. Statistics on disability are collected through voluntary self-declaration.

  As part of our wider personnel strategy, our personnel policies and practices are equality proofed to ensure that there are no barriers for disabled staff who aspire to the senior civil service, and we would encourage them to apply. In addition, the Ministry of Defence provides funding to enable disabled staff who have the potential to reach the senior civil service to participate in the civil service disability bursary scheme. Funding provides for two years of high quality management training together with mentoring opportunities.

  A number of senior posts are filled through open competition as fixed term appointments. Advertisements for these vacancies would normally carry the caption: "The Ministry of Defence is an equal opportunities employer" and stress the point that applications from people with disabilities are particularly welcome. The advertisements also carry the two-ticks "positive about disability" symbol and the Department is committed to offering all candidates who declare a disability a guaranteed interview where they meet the minimum qualifying criteria. We are currently trialling the use of specialist recruitment consultants to help to publicise open competitions to disabled potential applicants.

  Cluster Bombs
  Adam Price
  To ask the Secretary of State for Defence what his latest estimate is of the number of (a) RBL 755 cluster bombs dropped on targets within Iraq and (b) L20 cluster shells fired by UK forces around Basra. [110806]

  Mr. Hoon
  The figures requested have not changed since the responses I gave to the hon. Member on 14 April 2003,Official Report, column 566W.

  Mr. Paul Marsden
  To ask the Secretary of State for Defence how many cluster munitions have been used in the war on Iraq. [109681]

  Mr. Hoon
  As at 29 April 2003, British forces have used in the region of 66 air delivered cluster bombs and in the region of 2,000 extended range bomblet shells in Iraq.

  Colin Davenport
  Mr. McNamara
  To ask the Secretary of State for Defence what the terms are of the retirement of Mr. Colin Davenport. [111639]
  720W
  Dr. Moonie
  Mr Davenport retired under the usual terms that apply to the Senior Civil Service, having reached the normal retirement age of 60.

  Homecoming Parades
  Mr. Rosindell
  To ask the Secretary of State for Defence what criteria he uses to decide whether to arrange for official homecoming and victory parades following conflicts involving UK troops. [110547]

  Dr. Moonie
  There are no set criteria for deciding when a homecoming or victory parade is appropriate. By the nature of the operations which they are designed to commemorate the opportunities are few and far between and each case is therefore considered carefully in the light of the prevailing circumstances.

  Hospital Units
  Mr. Jenkin
  To ask the Secretary of State for Defence what the(a) military establishment and (b) strength is of each Ministry of Defence Hospital Unit. [103977]

  Dr. Moonie
  The military establishment and strength of each Ministry of Defence Hospital Unit as at 10 April 2003 was as follows:

  Unit

  Establishment

  Strength

  Derriford

  190

  151

  Frimley Park

  278

  185

  Northallerton

  167

  146

  Peterborough

  197

  162

  Portsmouth1

  797

  599

  1 Royal Hospital Haslar and Queen Alexandra Hospital combined.

  Iraq
  Dr. Tonge
  To ask the Secretary of State for Defence what percentage of aid to Iraq he estimates will arrive via Umm Qasr in April. [108055]

  Mr. Ingram
  Umm Qasr is one of several routes by which aid has entered and will continue to enter Iraq (including by land from Jordan and Kuwait). We do not record the amount of aid entering Iraq by non-United Kingdom Government Agencies so we cannot calculate the respective shares of the total. Once Umm Qasr is open to shipping we expect the proportion of aid entering Iraq by sea to rise significantly, since the rail links from the port to the rest of the country make it a particularly efficient way of handling bulk supplies of aid.

  Dr. Tonge
  To ask the Secretary of State for Defence what discussions he has had with the Government of Niger concerning the alleged sale of 500 pounds of uranium to Iraq; and if he will make a statement. [110416]

  Mr. Hoon
  None.

  Mr. Gardiner
  To ask the Secretary of State for Defence why British hospital ships were(a) withdrawn from the Gulf area and (b) not made available for injured Iraqi civilians. [111060]

  Dr. Moonie
  The vast majority of injured Iraqi civilians have been treated at Iraqi hospitals and, in the United Kingdom's area of operations, we have made
  721W
  every effort to restore power, water and medical supplies to those facilities. Where necessary, Iraqis have been treated at UK medical facilities. Where appropriate medical facilities were not available in theatre, Iraqi civilians have been airlifted to UK hospitals for treatment.

  RFA Argus, with a 100-bed capacity, made an important contribution to the campaign. However, the ship and her crew have completed their task and are thus returning from theatre. The following UK medical assets remain in theatre:
  1 Close Support Medical Regiment—(1 (UK) Armoured Division)
  5 General Support Medical Regiment—(1 (UK) Armoured Division)
  16 Close Support Medical Regiment—(16 Air Assault Brigade)
  4 General Support Medical Regiment—(102 Logistics Brigade)
  34 Field Hospital—(102 Logistics Brigade)
  202 (Volunteer) Field Hospital—(Reserves)

  Mr Liddell-Grainger
  To ask the Secretary of State for Defence how many territorial army troops were sent to the Gulf during the last four months. [111251]

  Dr. Moonie
  As at 30 April, 3,434 members of the Territorial Army have deployed to the Gulf during the last four months.

  Mr. Jenkin
  To ask the Secretary of State for Defence what field hospitals remain in the Gulf region. [112022]

  Dr. Moonie
  The United Kingdom currently has two field hospitals in the Gulf region. These are 34 Field Hospital, based at Shaibah in southern Iraq, and 202 Field Hospital (V) in northern Kuwait.

  Royal Irish Regiment
  Lady Hermon
  To ask the Secretary of State for Defence if he will make a statement on the future role of the Royal Irish Regiment. [110906]

  Mr. Ingram
  The Royal Irish Regiment comprises three Home Service Battalions, the General Service Battalion which has been serving in Iraq, and a TA Battalion.

  Until there is agreement on security normalisation in Northern Ireland, it would be premature to come to any conclusions on the final composition of the Northern Ireland garrison. Current planning is only addressing the implications of security normalisation for the Home Service battalions. The role of the Home Service element is Military Aid to the Civil Power; as the security environment improves we expect the need for this role will decline.

  Secondments
  Dr. Cable
  To ask the Secretary of State for Defence how many individuals have been seconded to his Department from(a) the private sector, (b) NGOs and (c) other, in each case listing (i) from which organisation and (ii) dates of secondments, in each year since 1997–98. [108077]

  Dr. Moonie
  Information available on personnel seconded to my Department is as follows.722W

  Parent company or organisation

  Start date

  End date

  Inward secondments financial year 1997–98

  Vickers

  April 1997

  April 1998

  Vosper Thorneycroft

  April 1997

  April 1998

  Rolls Royce

  December 1997

  December 1999

  POSG Support Services

  January 1998

  January 1999

  British Aerospace

  March 1998

  April 2001

  Kent Probation Service

  March 1998

  March 2003

  Inward secondments financial year 1998–99

  British Aerospace

  May 1998

  December 1999

  Devonport Management Ltd.

  August 1998

  August 2000

  Simmons & Simmons

  September 1998

  August 1999

  Wragg & Co.

  September 1998

  March 2000

  PA Consulting Group

  September 1998

  August 1999

  City & Hackney Community Service NHS Trust

  October 1998

  October 1999

  Gardiner & Theobalds

  December 1998

  December 1999

  TI Group

  December 1998

  November 2001

  AWE plc

  December 1998

  March 2002

  British Aerospace

  January 1999

  January 2001

  UK Smart Procurement

  February 1999

  February 2000

  BNFL

  March 1999

  March 2000

  West Yorks Probation Service

  January 1999

  January 2004

  Inward secondments financial year 1999–2000

  Defence Acquisition Group

  April 1999

  August 1999

  Dibb, Lupton Alsop

  April 1999

  April 2000

  British Aerospace

  August 1999

  July 2001

  Price Waterhouse Coopers

  October 1999

  October 2000

  Marconi Electonic Systems (Avionics Group)

  November 1999

  November 2001

  British Aerospace

  November 1999

  October 2001

  GEC Marconi

  January 2000

  March 2001

  GKN Westlands

  February 2000

  February 2003

  Thomson Marconi Sonar Ltd,

  March 2000

  September 2000

  BMT Defence Services

  March 2000

  September 2000

  NNC

  March 2000

  September 2000

  MayDay NHS Trust

  December 1999

  June 2003

  Inward secondments financial year 2000–01

  BAE Systems

  April 2000

  October 2000

  Addleshaw Booth & Co.

  May 2000

  April 2001

  UK Smart Procurement

  June 2000

  June 2002

  BAE Systems

  June 2000

  June 2001

  AXA Corporate Solutions

  August 2000

  January 2001

  BAE Systems

  August 2000

  March 2001

  AXA plc

  August 2000

  March 2001

  BAE Systems

  September 2000

  March 2001

  BAE Systems

  September 2000

  September 2002

  BAE

  September 2000

  March 2001

  Babtie Group

  October 2000

  June 2001

  Price Waterhouse

  October 2000

  October 2001

  BAE Systems

  November 2000

  November 2003

  URS Ltd.

  November 2000

  April 2001

  BAE

  December 2000

  December 2003

  BAE Systems

  February 2001

  September 2003

  Ernst & Young

  February 2001

  February 2002

  Rolls-Royce

  March 2001

  March 2003

  Portsmouth Hospitals NHS Trust

  May 2000

  May 2001

  Inward secondments financial year 2001–02

  QinetiQ

  June 2001

  July 2003

  QinetiQ

  July 2001

  March 2003

  QinetiQ

  July 2001

  July 2003

  Burges Salmon

  September 2001

  April 2002

  BAE

  October 2001

  October 2003

  Ernst & Young

  October 2001

  August 2002

  Mass Consultants

  February 2002

  February 2006

  Mass Consultants Ltd.

  March 2002

  March 2006

  AMS UK

  March 2002

  March 2004

  Hagglunds Vehicle AB, Sweden

  March 2002

  January 2004

  Hertfordshire Probation Service

  June 2001

  January 2002

  Suffolk Probation Service

  June 2001

  November 2001

  Manchester Probation Service

  June 2001

  December 2001

  Inward secondments financial year 2002–03

  Wragg & Co.

  June 2002

  March 2003

  BAE

  June 2002

  June 2004

  Rolls-Royce

  July 2002

  July 2005

  Price Waterhouse

  August 2002

  August 2003

  British Nuclear Fuels Ltd.

  September 2002

  September 2005

  BAES

  September 2002

  September 2005

  BAE Systems

  October 2002

  October 2004

  723W

  Parent company or organisation

  Start date

  End date

  BAES

  November 2002

  February 2004

  BAE Systems

  November 2002

  May 2003

  BAE Systems

  November 2002

  November 2003

  BAE Systems

  January 2003

  December 2004

  Peterborough Hospitals NHS Trust

  May 2002

  May 2004

  Service Children's Education

  August 2002

  July 2003

  Service Children's Education

  August 2002

  July 2003

  Admiralty Pilotage & Harbour Service

  October 2002

  October 2004

  West Midlands Health Authority

  November 2002

  March 2003

  Servicemen's Insurance
  Dr. Kumar
  To ask the Secretary of State for Defence what steps he is taking to ensure that the procurement process for the replacement schemes for PAX and RPAX do not penalise regulars and reservists deployed within the 30 day 'exclusion period' applied by many insurers at times of conflict. [111651]

  Dr. Moonie
  Exclusion periods enable underwriters to protect themselves from excessive risks by closing schemes to new applicants. Most insurance contracts contain arrangements for exclusion periods, which may often be applied retrospectively by up to 30 days, as is the case with the current PAX and RPAX policies.

  These arrangements protect the scheme against those seeking short-term cover at the last minute and helps keep premiums affordable for prudent long-term members. Consequently it is planned that the replacement PAX and RPAX contract, which will come into effect on 1 July 2003, will continue to contain such arrangements.

  We encourage service personnel to recognise the long-term nature of life insurance throughout their service and not just at times of more active duty—when they may seek cover too late, just as schemes are withdrawn.

WALES

  Commemorative Plaques
  Sir Brian Mawhinney
  To ask the Secretary of State for Wales what the average cost was of erecting a blue commemorative plaque in the last 12 months. [111620]

  Peter Hain
  My Department does not erect blue plaques.

  Sir Brian Mawhinney
  To ask the Secretary of State for Wales (1) how many blue commemorative plaques were erected in each of the last five years; and, for each year, what the cost was to public funds; and (2) what the policy criteria are for the erection of blue plaques to commemorate distinguished citizens in their native localities. [111623]

  Peter Hain
  My Department has no responsibility for the blue plaque scheme.

  Sir Brian Mawhinney
  To ask the Secretary of State for Wales who(a) sets the criteria of selection and (b) is responsible for the erection of blue commemorative plaques. [111626]
  724W
  Peter Hain
  There is no central blue plaque scheme in Wales. However CADW Welsh Historic Monuments operate the Civic Initiatives—Heritage Grant Scheme under which voluntary organisations could apply for support in erecting plaques.

  EU Directives
  Mr. Bercow
  To ask the Secretary of State for Wales, if he will list the EU Directives or Regulations which have been implemented by his Department since 17 April 2002. [106832]

  Peter Hain
  My Department has not implemented any EU Directives or Regulations since 17 April 2002.

  Honours
  Mr. Pope
  To ask the Secretary of State for Wales how many officials in his Department have received honours; and how many honours are held by his officials, broken down by category of honour. [111482]

  Peter Hain
  None.

  Rail Services
  Dr. Andrew Murrison
  To ask the Secretary of State for Wales pursuant to his answer of 2 April,Official Report, column 733W, on rail services, if he will make a statement on the (a) scope and (b) outcome of his recent meeting with the Strategic Rail Authority and Wales and Borders Railways. [109407]

  Peter Hain
  The meeting formed part of an ongoing dialogue with the Strategic Rail Authority and with train operating companies about rail services in Wales and plans for the future.

CULTURE, MEDIA AND SPORT

  Adventure Playgrounds
  Mr. Luff
  To ask the Secretary of State for Culture, Media and Sport what assessment she has made of the role of adventure playgrounds in reducing anti-social behaviour; and if she will make a statement. [109098]

  Mr. Caborn
  Good quality play opportunities can have a significant impact on children and young people, their families and the wider community. The wider benefits of effective play provision can include a reduction in crime—it can ensure children and young people are enjoying themselves and are therefore engaged in activities which do not lead them to antisocial behaviour.

  No formal assessment of the role of adventure playgrounds has been carried out by my Department, but we in partnership with DfES are conducting a review of Children's Play which will report in the summer. This will identify how funding for children's play can be spent most effectively.

  Archaeology
  Chris Grayling
  To ask the Secretary of State for Culture, Media and Sport what discussions she has had with English Heritage on(a) the arrangements for

  725W
  tendering archaeological work to accompany a major development and (b) the quality and expertise of the teams carrying out such work. [111695]

  Dr. Howells
  The Department has not held discussions with English Heritage on arrangements for tendering or the expertise of people and organisations carrying out such work. Planning permission for major development works is granted by the relevant local authority. It is for local authority archaeological officers to approve plans to carry out archaeological work associated with major developments to the appropriate standards, including approval of a specification which would include the competence and experience of those undertaking the work

  Buckmore Park Scout Centre
  Jonathan Shaw
  To ask the Secretary of State for Culture, Media and Sport what discussions she has had with Sport England regarding the closure of Buckmore Park scout centre; and if she will make a statement. [111086]

  Mr. Caborn
  I understand that Sport England has been involved in discussions with all the interested parties in an attempt to ensure that the centre continues in operation. An action plan was agreed by all the parties which set out a series of steps to be completed. Once these have been done, Sport England believes that it will be possible to progress new arrangements for the management of the centre.

  Cultural Activities
  Mr. Jim Cunningham
  To ask the Secretary of State for Culture, Media and Sport what steps are being taken to evaluate strategies for promoting participation in art and cultural activities in schools and communities. [111134]

  Mr. Caborn
  The Government have already exceeded their target of establishing 12 creative partnerships between schools and creative organisations, by 2004. The National Foundation for Education Research (NFER) is conducting a major evaluation of the creative partnerships programme and will publish its findings in spring 2005. The Government's target to increase the number of people in communities experiencing the arts will be evaluated through Arts Council attendance surveys, due to be completed by March 2004. Findings from these surveys will be compared with baseline data from a pilot survey, carried out in 2001.

  Film Tax Relief
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport if she will list(a) the films which have been certified by her Department since 1997 as a qualifying film for film tax relief, (b) the film production companies which have received film tax relief since 1997 and (c) how much film tax relief has been granted in each year since 1997. [111155]

  Dr. Howells
  DCMS certifies qualifying films as British under the terms of the Films Act 1985. Those certificates may be used in support of a claim for tax relief on the films to which they relate. Claims for 726W
  tax relief are made to the Inland Revenue and I am unable to provide details for reasons of taxpayer confidentiality.

  I am arranging for the list of qualifying films for the period from 1997 to be placed in the Libraries of both Houses.

  Film production benefits from a number of tax reliefs that accelerate the deduction of expenditure on British qualifying films. The estimated tax cost of relief provided under Section 48 of the Finance (No.2) Act 1997 is £440 million for the period 1997–98 to 2001–02. The tax cost of the other reliefs is estimated to be an additional £70 million a year.

  Great British Kitchen
  Mr. Kidney
  To ask the Secretary of State for Culture, Media and Sport what financial support has been requested from her Department for the establishment of a national visitor attraction within the proposed Great British Kitchen development at Stafford. [111184]

  Dr. Howells
  The Department is not aware of any direct requests for financial assistance to support the Great British Kitchen development. However, I am aware that there have been a number of meetings between officials at the Department for the Environment, Food and Rural Affairs and the British Food Trust to discuss this project.

  Iraq (Cultural Heritage)
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport what measures she is taking to ensure the identification and return of antiquities and cultural artefacts looted from Iraq. [110606]

  Tessa Jowell
  The current UN sanction requires State Parties to the UN to impose import controls on objects from Iraq, including antiquities. We welcome UNESCO's announcement that they will be proposing to the UN a continuing selective embargo on the movement of Iraqi cultural property so that there should be no diminution of control over the import of Iraqi cultural property. This is clearly an option, and we are very supportive of this aim.

  Last year the UK acceded to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. Irrespective of whether UN sanctions are lifted, since these objects have been stolen from Iraqi museums, the UK now has an obligation to prevent their import and assist the legitimate authorities in Iraq to secure their return.

  I have written to the British Art Market Federation and to the Antiquities Dealers Association to ask for their assistance in locating and identifying looted material should it surface on the legitimate market in the UK (despite the existence of a ban on the import of such material).

  The legitimate art market will be helped by the announcement on 29 April that UNESCO intend to establish a database of items believed to have been stolen. We will work closely with UNESCO to ensure that this database is as comprehensive as possible. We also welcome and support the swift response of the UK

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  and international heritage sector to circulate the identity of antiquities looted from Iraqi museums, including the posting on its website by the Art Newspaper of details of more than 300 of the most prominent objects from the collection of the Baghdad Museum, and the plans announced on 29 April by the International Council of Museums (ICOM) to issue on the world wide web a fully illustrated Red List of the hundred most important antiquities looted from the Baghdad Museum.

  I have also written to my hon. Friend the Member for Wentworth (John Healey), Economic Secretary to the Treasury, to ask him to alert Customs officers at all ports of entry in locating and identifying any Iraqi antiquities, with a view to prosecuting those who attempt to breach the import controls.

  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport how many illegally obtained objects of Iraqi cultural heritage, broken down by type, have been found entering the United Kingdom since 9 April. [110845]

  John Healey
  I have been asked to reply.

  From 9 April 2003 to date Customs have not detected any illegally obtained objects of Iraqi cultural heritage entering the UK.

  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport (1) what steps she has taken to secure a ban in the international trade in objects of Iraqi cultural heritage; [110847]

  (2) what measures are in place to deal with the illicit trade of objects of Iraqi cultural heritage; [110848]

  (3) what steps she is taking to encourage the return of cultural objects stolen or illicitly exported from Iraq. [110846]

  Tessa Jowell
  The current UN sanction requires state parties to the UN to impose import controls on objects from Iraq, including antiquities. The current ban on the import of antiquities from Iraq means that such antiquities can be seized if there is an attempt to import them illegally. However, there is a concern that when UN sanctions are lifted there should be no diminution of control over the import of Iraqi cultural property. UNESCO have announced that they will be proposing to the UN a continuing selective embargo on the movement of Iraqi cultural property. This is clearly an option, and we are very supportive of this aim.

  Last year the UK acceded to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. Irrespective of whether UN
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  sanctions are lifted, since these objects have been stolen from Iraqi museums, the UK now has an obligation to prevent their import and assist the legitimate authorities in Iraq to secure their return.

  We fully support the Private Member's Bill, which will make it illegal in this country to trade dishonestly in cultural objects unlawfully removed from another country. The Dealing in Cultural Objects (Offences) Bill has both cross-party and cross-sectoral support among the UK art trade and heritage community. The Bill is due to go into Committee on 14 May and we shall be discussing with parliamentary business managers how best to progress the Bill through its remaining stages as fast as possible.

  I have written to my hon. Friend the Member for Wentworth (John Healey), Economic Secretary to the Treasury, to ask him to alert customs officers at all ports of entry in locating and identifying any Iraqi antiquities, with a view to prosecuting those who attempt to breach the import controls.

  I have also written to the British Art Market Federation and to the Antiquities Dealers Association to ask for their assistance in locating and identifying looted material should it surface on the legitimate market in the UK (despite the existence of a ban on the import of such material).

  The legitimate art market will be helped by the announcement on 29 April that UNESCO intend to establish a database of items believed to have been stolen. We will work closely with UNESCO to ensure that this database is as comprehensive as possible.

  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport what representations she received, from whom and when, between 1 January and 20 April, regarding the threat of looting of antiquities in Iraq; what her response was; and if she will make a statement. [110614]

  Tessa Jowell
  [holding answer 1 May 2003]I have received and responded to letters from the United Kingdom Institute for Conservation of Historic and Artistic Works on 8 April and the Society of Antiquaries of London on 13 April concerning the protection of Iraq's cultural heritage. I have also received copies of letters from ICOMOS sent on 13 March addressed to my right hon. Friend the Prime Minister and Ministers in the Foreign and Commonwealth Office.

  The Coalition consulted widely before the commencement of the military campaign on the risks to ancient historical and archaeological sites. We have stressed our commitment to protecting such sites. We want to protect resources for all Iraqis and will take what measures are necessary to do this.

PRIME MINISTER

  Asylum Seekers
  Mr. Shepherd
  To ask the Prime Minister pursuant to his oral answer of 29 January 2003,Official Report, column 875, on reducing the number of asylum applications, whether the Government have decided fundamentally to look at the UK's obligations under the European Convention on Human Rights. [111423]

  The Prime Minister
  As I said in the House on 29 January 2003, if measures that we have introduced do not dramatically reduce the number of asylum applications, we are prepared to go further, including fundamentally looking at our obligations under the European convention on human rights. I remain confident that current measures will halve the intake by September 2003.

  We also continue to work with the UNHCR and others to make the Refugee Convention operate more effectively. The Home Secretary presented the United Kingdom's ideas for new international approaches to asylum processing and refugee protection to his EU counterparts on 28 March 2003. This international work is complemented by domestic measures which provide protection to those who need it but deal robustly with abusive claims.

  Russian Federation
  Llew Smith
  To ask the Prime Minister if, during his meeting with President Putin of Russia on 29 April 2003, he raised the issue of the assistance the United Kingdom is providing to the Russian Federation to manage its surplus military plutonium stockpile. [111705]

  The Prime Minister
  My talks with President Putin focused on Iraq, the importance of rebuilding the international consensus and working together with Russia and others to deal with the humanitarian and reconstruction issues as well as the need to transfer authority to the Iraqi people as quickly as possible. The issue was not raised.

  Security
  Harry Cohen
  To ask the Prime Minister how many documents are held by his office that are subject to security classification, broken down by category of classification. [107346]

  The Prime Minister
  I refer the hon. Member to the answer my hon. Friend the Minister for the Cabinet Office gave him today.

  Telephone Tapping
  Andrew Mackinlay
  To ask the Prime Minister whether the Wilson doctrine applying to tapping the telephones of hon. Members includes Members who have not taken the Oath. [112055]

  The Prime Minister
  The position is as I informed the House on 19 December 2001,Official Report, column 367W, and confirmed last Wednesday, 30 April 2003 in an oral reply. The then Parliamentary Under-Secretary of State for the Home Office, Lord Bassam, confirmed on 27 September 2000, Official Report,
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  column 137W, that this policy extended to Members of the House of Lords. It applies to all Members of Parliament.

  With this long-standing exception in relation to Members of Parliament, it remains the normal policy of the Government neither to confirm nor deny allegations in respect of interception matters.

PRIVY COUNCIL

  Civil Service (People with Disabilities)
  Mr. Bercow
  To ask the President of the Council what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in the Department. [110515]

  Dr. John Reid
  The Privy Council Office is fully committed to working towards increasing the numbers of staff with disabilities in all levels, including senior management, although as a small department these posts are limited.

  The Department's recruitment of senior posts ensures that Civil Service rules were followed and that the appointments were made on the basis of fair and open competition.

  Future vacancies at this level will be advertised using current best practice to attract staff with disabilities and others from under represented groups.

INTERNATIONAL DEVELOPMENT

  Iraq
  Dr. Cable
  To ask the Secretary of State for International Development if she will make a statement on debt relief for Iraq. [111521]

  Clare Short
  Iraq has a serious debt problem as well as considerable compensation claims. We support the IMF's efforts to assess Iraq's economic needs. We also welcome the recent announcement by the Paris Club that they stand ready to engage. As a first step, Paris Club creditors, including the UK, have agreed to carry out a comprehensive assessment of Iraq's debts. They will review debt sustainability further in the coming months.

  Miss McIntosh
  To ask the Secretary of State for International Development what recent discussions she has had with her EU counterparts on delivering humanitarian aid to Iraq. [111523]

  Ms Keeble
  My Department has had regular discussions with EU colleagues at official and ministerial level to talk about humanitarian aid to Iraq. The EU is providing 100 million euros of emergency aid.

  Tom Brake
  To ask the Secretary of State for International Development if she will make a statement on reconstruction in Iraq. [111528]

  Clare Short
  The Geneva Convention and the Hague Regulations impose obligations on occupying powers to provide for humanitarian needs, keep order and to keep the civil administration operating. The Office for
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  Reconstruction and Humanitarian Assistance (ORHA) has a leading responsibility for the fulfilment of these requirements.

  Once there is a UN mandate for reconstruction the UK, the international community and in particular the international financial institutions will be able to engage in reconstruction needs in Iraq. World bank and International Monetary Fund economic and social needs assessments will begin in the coming weeks. Our engagement will reflect the needs highlighted in these assessments.

  Ann Winterton
  To ask the Secretary of State for International Development if she will make a statement on the humanitarian relief programme in Iraq. [111529]

  Clare Short
  I refer the hon. Member to the answer I gave to my hon. Friend the Member for Central Fife (Mr. MacDougall) earlier today (PQ 111519).

  Nick Harvey
  To ask the Secretary of State for International Development pursuant to her answers of 27 March 2003,Official Report, columns 353–54W, on broadcasting and cultural services, what measures she is taking to reconstruct (a) broadcasting and (b) cultural services in Iraq. [110835]

  Clare Short
  As I said on 27 March 2003, a UN mandate for reconstruction is a legal requirement for UK involvement in significant reform of Iraqi institutions. Iraq's reconstruction needs will be substantial and it is too soon to determine specific allocations.

  In the interim, we are supporting the BBC's World Service Trust which broadcasts an Arabic language programme, entitled 'Calling Iraq', from Cyprus. The programme focuses on humanitarian issues such as food, health, water and education.

  Mr. Gardiner
  To ask the Secretary of State for International Development (1) what assessment her Department has carried out of whether schemes similar to UNTAC's Operation Paymaster could be implemented in an interim Administration in Iraq; [111059]

  (2) whether the Government (a) are partly to and (b) have been involved in negotiations to ensure that the wages of civil servants are guaranteed in an interim Administration established in Iraq. [111061]

  Clare Short
  DFID has made no assessment of whether a scheme similar to UNTAC's Operation Paymaster could be implemented in an interim Iraqi Administration.

  The Office for Reconstruction and Humanitarian Assistance (ORHA) is currently paying some Iraqi public sector workers to keep the civil Administration running. ORHA and others are currently reviewing the most appropriate manner in which to pay public sector workers and hope to implement a sustainable and equitable system nationwide as soon as possible.

  Mr. Gardiner
  To ask the Secretary of State for International Development what assessment her Department has made of the needs of Iraq's civil servants in order to establish a working civil service in the country. [111062]
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  Clare Short
  The Office for Reconstruction and Humanitarian Assistance (ORHA) and the military, are currently assessing the needs of Iraq's civil servants and how best to get Iraq's Administration back up and running.

  Ms Atherton
  To ask the Secretary of State for International Development what plans she has to ensure the involvement of women and women's groups in the reconstruction of Iraq. [111165]

  Clare Short
  DFID will strive to ensure women are included in all phases and levels of reconstruction in Iraq. We must help Iraqi women to secure the gains they have achieved and ensure that women's rights are a central part of Iraq's post-war agenda. We are discussing these issues with our partners, including the UN.

  Llew Smith
  To ask the Secretary of State for International Development what estimate she has made on the incidences of(a) cholera and (b) other diseases related to polluted water sources in Iraqi cities following the invasions of Iraq. [111236]

  Clare Short
  On 27 April 2003, the UN Office of the Humanitarian Co-ordinator for Iraq (UNOHCI) reported that the health situation in Iraq in general was stable. The number of diarrhoea cases was within normally expected limits.

  On 6 May 2003, the World Health Organisation reported seven cases of cholera in Basra and is monitoring the situation.

  Most agency assessments are available from the UN Office for the Coordination of Humanitarian Affairs (OCHA) website at: www.agoodplacetostart.org

  Llew Smith
  To ask the Secretary of State for International Development what assessment she has made of how long existing food stocks will last without replenishment in(a) northern, (b) central and (c) southern Iraq. [111699]

  Clare Short
  World Food Programme (WFP) reports indicate that the amount of food distributed by the Oil for Food Programme (OFF) prior to the start of the conflict varies by region. WFP is currently in discussion with Iraq's Ministry of Trade and OFF Public Distribution System officials to ascertain the levels of food pre-positioned at local level.

  WFP estimates that existing family food stocks could begin running out soon. The WFP has pipeline stocks for May and June 2003, although there are shortages of some commodities. On 24 April 2003, the UN Security Council unanimously agreed to extend provisions of resolution 1472 from 12 May until 3 June 2003. This enables the UN to process those existing orders under the Oil for Food (OFF) programme which can be dispatched to Iraq by 3 June 2003. Outside of OFF, WFP are also procuring some foodstuffs from the region. They are aiming to build up supplies similar to those previously supplied by the Oil for Food Programme (480,000 tonnes of food per month) as soon as possible. Meanwhile, food continues to be distributed through the OFF Public Distribution System wherever possible.
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  Llew Smith
  To ask the Secretary of State for International Development whether it is her policy that Iraqi money held in United Nations Accounts should be used to help cover the operational costs and administrative expenses of the new food distribution programme in Iraq; and whether she plans to cap these costs. [111700]

  Clare Short
  It will be important to get food distribution re-established as soon as possible. 16 million Iraqis depended on the Oil for Food Programme before the conflict. We are working with the UN's Office of the Iraq Programme (OIP) and the World Food Programme (WFP) to achieve this.

  On 24 April 2003, the UN Security Council unanimously agreed to extend provisions of resolution 1472 from 12 May until 3 June 2003. This enables the UN to process those existing orders under the Oil for Food (OFF) programme, which can be dispatched to Iraq by 3 June 2003. UNSCR 1472 permits use of UN escrow account funds for some operational aspects of OFF.

  Early indications suggest that the distribution network has, in those provinces that have been assessed, survived the conflict. It has been reported that many food agents want to resume work and have been reporting to distribution centres. The WFP and OIP, in conjunction with the Iraqi Ministry of Trade, are investigating how best to reactivate the OFF public distribution system.

  Coffee Farmers
  Dr. Naysmith
  To ask the Secretary of State for International Development what support her Department is giving to coffee farmers who face poverty as a result of the collapse of coffee prices. [111522]

  Clare Short
  We have development programmes in several coffee producing countries. These include Ethiopia, Rwanda, Nicaragua, Uganda and Guatemala. The problem for coffee growers is oversupply of coffee which has lead to a large fall in prices. Poor countries and people who are dependent on coffee production need short-term support and also longer-term support for economic diversification which would be helped by improved trade access for processed goods.

  Sudan
  Rev. Martin Smyth
  To ask the Secretary of State for International Development what role her Department is playing in the de-mining operations in Sudan. [111524]

  Clare Short
  DFID has provided £1.4 million for mine action in Sudan over the last year. This support was given through the UN Mine Action Service for mine clearance in the Nuba Mountains region, where there is a ceasefire, and to prepare for further mine action throughout Sudan.

  Environmental Impacts
  Norman Baker
  To ask the Secretary of State for International Development what steps she takes to ensure that aid monies allocated have a positive or neutral environmental consequence. [111525]
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  Clare Short
  All DFID programmes promote sustainable development through poverty reduction. We have mandatory procedures to ensure that environmental opportunities and risks are taken account of—and these have recently been strengthened by new guidance for DFID staff to emphasise environmental opportunities.

  We have a growing team of environment staff who work with our country partners to integrate environmental issues into Poverty Reduction Strategies, which form the basis for DFID support in low-income countries.

  Afghanistan
  Andrew George
  To ask the Secretary of State for International Development what recent assessment she has made of the humanitarian situation in Afghanistan. [111526]

  Clare Short
  The humanitarian situation in Afghanistan has improved compared to the situation last year, and is no longer an emergency. This is due both to an increased crop yield (up 80 per cent. on the previous year) and to much better snow and rainfall over the winter in both the north and south of the country. which has eased the effects of the persistent drought. Refugees are continuing to return to the country, aided by UNHCR and the Ministry for Refugees and Repatriation, although at a slower rate than last year. Vulnerable households, such as women-headed households, internally displaced persons (IDPs) and disabled people continue to require assistance.

  Insecurity in the provinces outside Kabul continues to be a concern, and is hampering the operations of NGOs and UN agencies in the southern and eastern provinces. As part of a co-ordinated response with the Afghan Transitional Administration and other international partners the UK Government are considering the deployment of a Provincial Reconstruction Team to one of the provinces outside Kabul. The Ministry of Defence will make a full parliamentary statement on any deployment in due course.

  Tony Cunningham
  To ask the Secretary of State for International Development how much of the money for the reconstruction of Afghanistan, promised at the Tokyo conference, has found its way to Afghanistan. [111781]

  Clare Short
  US$4.5 billion was pledged by donors at the Tokyo conference in January 2002 over a period of between one and five years, depending on the donor. US$1.8 billion was disbursed last year to Afghanistan. A similar amount has been pledged for the current financial year.

  Donors such as the US, who had only made one year pledges at the Tokyo conference, used the Afghan Development Forum held in March 2003 to make new pledges. The total pledged now stands at US$5.2 billion.

  Tanzania
  Mr. Foulkes
  To ask the Secretary of State for International Development when she next expects to visit Tanzania to discuss international aid. [111527]
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  Clare Short
  Following my meetings with President Mkapa last July and subsequent progress, I have no current plans to visit Tanzania over the next few months. Our officials maintain close dialogue on a wide range of development issues underpinning our bilateral relationship.

  Zimbabwe
  Mr. Jim Cunningham
  To ask the Secretary of State for International Development if she will make a statement on the activities of her Department relating to Zimbabwe. [111530]

  Clare Short
  My Department has provided over £51 million in humanitarian assistance since the crisis began in September 2001. We are helping the World Food Programme, which is currently feeding 4.5 million people, and our NGO programmes provide supplementary food to 1.5 million more—largely children. DFID has also built technical capacity in local NGOs and the UN agencies, and funded vulnerability assessments. We have also distributed seed and fertilizers to 188,000 households in communal areas, affecting the food prospects of one million people in 2003.

  We have helped prevent avoidable deaths and disease through essential drug supply and therapeutic feeding inputs through the WHO and UNICEF. We are also tackling HIV/AIDS through a £26 million programme of prevention and mitigation activities over five years to 2005.

  Document Classification
  Harry Cohen
  To ask the Secretary of State for International Development how many documents are held by her Department that are subject to security classification, broken down by category of classification. [107349]

  Clare Short
  DFID holds many thousands of classified documents, and we do not hold figures broken down by category of classification. The information could be provided only at disproportionate cost. My Department follows the Cabinet Office guidance on document marking and control.

  Information Technology
  Mr. Flight
  To ask the Secretary of State for International Development what her Department's(a) total managed expenditure, (b) total spending on Information Technology and (c) spending on Information Technology as a proportion of its total managed expenditure was in each financial year since 1997–98. [107184]

  Clare Short
  The contribution by DFID to total managed expenditure can be measured by the total spending under resource and capital budgets, less non cash items in AME (Annually Managed Expenditure). Data for 1998–99 to 2001–02 were published in our Departmental Reports. New estimates will be published in the same table in the 2003 Departmental Report in May 2003.

  The approximate figures are detailed in the following table.
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  Financial year

  Managed expenditure (£)

  IT spend (£)

  IT percentage of total

  1997–98

  2,529.815

  5,020

  0.198

  1998–99

  2,657.741

  5,303

  0.199

  1999–2000

  2,985,577

  6,622

  0.22

  2000–01

  3,226,336

  10,925

  0.338

  2001–02

  3,441,569

  15,473

  0.449

  2002–03

  3,454,000

  15,000

  0.427

  Note:

  Figures should be multiplied by thousand.

  National Minimum Wage
  Mr. Bercow
  To ask the Secretary of State for International Development what the estimated cost is in 2003–04 to her Department, agencies and the non-departmental public bodies for which she is responsible of the increase in the national minimum wage from £4.20 per hour to £4.50 per hour. [110434]

  Clare Short
  I estimate that there will be no financial impact. The Department's minimum wage under our current pay agreement is £5.25 per hour based on a 37-hour week. We have no reason to believe that DFID's contractor costs will rise due to the increase in the minimum wage.

  Palestine
  Dr. Tonge
  To ask the Secretary of State for International Development what aid her Department has pledged for immediate relief in the Occupied Territories and for the rebuilding of destroyed infrastructure, originally funded by the Department and the European Union. [111322]

  Clare Short
  Last year, out of a total bilateral expenditure of £15 million, about £8 million was used for relief related activity. In addition we contributed £7 million to UNRWA's emergency appeal for 2002. We expect to spend a similar amount this year.

  Infrastructure damage to DFID funded projects has been limited. Where this has occurred we have discussed with our project partners the necessary steps, including additional funding, to ensure projects still meet their objectives. We understand that the European Commission and other member states have taken similar action. The European Union reserves the right to seek compensation from the Israeli authorities.

  Sri Lanka
  Mr. Gardiner
  To ask the Secretary of State for International Development what role humanitarian mine action will play in supporting the peace process in Sri Lanka; and if she will make a statement. [111069]

  Clare Short
  Humanitarian Mine Action is critical for the Sri Lankan peace process. The civil war has displaced nearly one million people in the North and East of the Island. Helping these people and their families return to their former homes, and restart their livelihoods, will build confidence in the peace process and will help foster an environment in which peace can be sustained. However, many of these families are
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  unable to benefit from the peace process. They are living in camps, prevented from returning home because of mines.

  DFID is a major supporter of mine action in Sri Lanka. We have provided over £1 million through the United Nations for demining and public awareness. Further support will be provided within a £6 million contribution recently approved to support UNICEF's Children Affected By Armed Conflict programme. In addition Britain also contributes to the support for mine action which the European Union finances through international and local NGOs in Sri Lanka.

FOREIGN AND COMMONWEALTH AFFAIRS

  Burma
  Mr. Leigh
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the Royal Thai Government to request that(a) Thailand will officially host talks between the Burmese military and the ethnic nationalities, (b) the Thai mediation between the SPDC and the ethnic groups is open and transparent, (c) the future of Burma's national reconciliation will be at the heart of the mediation process and (d) ethnic leaders are allowed to meet officially on Thai soil to discuss their future. [110607]

  Mr. Mike O'Brien
  We are in regular contact with the Thai Government concerning the full range of Burma related issues. However we have not made any formal request to the Thai authorities concerning possible Thai mediation on questions concerning Burmese ethnic minority groups and the military regime. Unfortunately, there is no evidence to suggest that the Burmese military regime is yet prepared to enter into substantive discussions/negotiations with Burmese political parties. The primary channel for encouraging national reconciliation in Burma is the United Nations Secretary General's Special Envoy to Burma, Tan Sri Razali Ismail. We continue to give Tan Sri Razali Ismail our full support and co-operation.

  Mr. Leigh
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps the Government(a) have taken and (b) will take to (i) facilitate the New Panglong Initiatives undertaken by representatives of the eight Burma States, (ii) encourage ethnic representations in the national reconciliation process and (iii) engage with and meet ethnic representatives officially. [110608]

  Mr. Mike O'Brien
  Active participation and agreement by Burma's ethnic minority groups will be an essential ingredient in any successful process of national reconciliation in Burma. We welcome and encourage initiatives that help prepare the ethnic minority groups for constructive and successful participation in substantive dialogue on these issues. The UK, EU partners and others are pressing for substantive political dialogue to begin in Burma.

  We maintain regular contact with representatives of Burmese ethnic minority groups through our Embassy in Rangoon. FCO officials in London held a meeting on
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  24 April with a delegation of religious leaders from Burma, including representatives from ethnic minority groups.

  Focus Programme
  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether there will be a review within the Foreign and Commonwealth Office to learn the lessons of overspend on the Focus programme. [111214]

  Mr. Straw
  An initial review is already underway to learn the lessons from this programme. We are also looking more widely at lessons learned from other programmes, with a view to drawing these together into a paper which will provide guidance to those managing future programmes. I would be happy to send the right hon. Member a copy of this once it is complete. The final paper will also be published on our unclassified intranet.

  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs why it was judged that the Focus programme was not best placed to provide best value for money or provision of services needed after 11 September 2001. [111226]

  Mr. Straw
  The right hon. Gentlemen misunderstands the point made in my ministerial statement of 28 April 2003,Official Report, column 2WS. The events of 11 September 2001 raised the importance of back up and disaster recovery in programmes such as Focus. It was one of the factors leading to increased costs.

  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken to ensure that the cost of the replacement for the Focus programme will fall within his Department's financial budgets. [111227]

  Mr. Straw
  We are unable to afford a programme which would meet the original goals of the Focus programme. However, the FCO has prioritised its ICT budgets for this financial year to ensure we have the money required to deliver a new FCO intranet.

  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs what estimate has been made of the cost of providing a replacement for the Focus programme. [111228]

  Mr. Straw
  We can not afford to fill the gap left by the cancellation of the Focus programme in the current spending round. We will instead squeeze further efficiencies out of existing systems, and introduce a new intranet. The exact cost of the new intranet will depend on the outcome of a scoping exercise which is currently underway. It will certainly be below £1 million.

  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the cost was of the cancellation of the contract with Fujitsu for the provision of the Focus programme. [111229]

  Mr. Straw
  The net cost of cancelling the contract with Fujitsu was £7 million. This takes into account the amount paid to Fujitsu, internal FCO costs, and the value of assets obtained.
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  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs how much money allocated to the Focus programme was irretrievable; whether penalties were imposed by Fujitsu as a result of the cancellation of the contract; and why it took as long as it did to cancel the programme once it became clear that it was no longer required. [111230]

  Mr. Straw
  At the point of cancellation the FCO had spent £9.5 million on the Focus programme, including internal costs, supplier costs, hardware and software. Of this we will retain assets of £2.5 million.

  We were able to reach a mutually acceptable settlement with Fujitsu.

  The issue was not that the programme was no longer required but rather that it was no longer affordable. Once the decision to cancel had been taken, we moved quickly to negotiate an agreement with Fujitsu to close the programme.

  Iraq
  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will place in the Library a copy of the statement the United Kingdom Ambassador to the United Nations made to the Security Council when UNSC Resolution 1441 was debated on 8 November 2002; and if he will summarise Ambassador Greenstock's comments on the non-automaticity of the resolution. [108056]

  Mr. Rammell
  A copy of Ambassador Greenstock's statement on the adoption of Security Council Resolution 1441 has been placed in the Library of the House. He said on that occasion,"There is no 'automaticity' in this resolution. If there is a further Iraqi breach of its disarmament obligations, the matter will return to the Council for discussion as required in paragraph 12 [of Resolution 1441]. We would expect the Security Council then to meet its responsibilities."

  Dr. Cable
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to the answer of 24 February 2003,Official Report, column 251W, on Iraq, whether there are claims by UK shareholders still outstanding in respect of the 1974 nationalisation of the Iraqi oil industry. [110919]

  Mr. Mike O'Brien
  We have not been able to trace any approach by UK shareholders regarding claims in respect of the 1974 nationalisation of the Iraqi oil industry.

  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether steps have been taken in Iraq to recruit specialists in the 740W
  international justice sector; and what plans have been made for transitional justice processes. [110978]

  Mr. Mike O'Brien
  Our main priority at present is to secure stability in Iraq and to ensure that humanitarian needs are met. Reconstructing the judiciary and helping rebuild the criminal justice system will play an important role in achieving our goal of creating a secure and stable Iraq.

  Lynne Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether there have been delays in issuing licences to humanitarian agencies in Iraq. [110980]

  Nigel Griffiths
  I have been asked to reply.

  The Government assess all export licence applications as quickly as possible. In most cases applications for Iraq have to be referred to the United Nations for consideration.

  The Government are urgently considering additional measures to facilitate the export of humanitarian goods to Iraq.

  Israel
  Mr. Jim Cunningham
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations his Department has made to the Israeli government concerning respect for international law. [111133]

  Mr. Mike O'Brien
  We have reminded the Israeli Government on many occasions of their obligation to respect international law, in particular in their administration of the Occupied Territories. Where we consider the Government of Israel has breached specific provisions, we make our concerns clear. In the last two months we have lobbied on the need to comply with the provisions of the Fourth Geneva Convention in relation to:continued settlement activity;
  excessive use of force by the Israel Defence Forces and civilian casualties;
  unjustified closures which damage the humanitarian situation;
  Palestinians in administrative detention;
  destruction of Palestinian land and property;
  the impact of the "security" fence.

  Ministerial Meetings
  Mr. Rosindell
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last spoke to the(a) German and (b) French Foreign Ministers. [110587]

  Mr. MacShane
  My right hon. Friend the Foreign Secretary met both Joschka Fischer and Dominique de Villepin in Berlin on 24 April and has since spoken to Monsieur Villepin by telephone on 28 April. The Foreign Secretary met both again at the EU Foreign Ministers informal meeting in Greece on 2–3 May.

HOME DEPARTMENT

  Corporate Manslaughter
  Dr. Starkey
  To ask the Secretary of State for the Home Department what plans the Government have to publish draft legislation on corporate manslaughter. [111012]

  Hilary Benn
  We are committed to reforming the law to increase corporate liability for manslaughter and will do so when parliamentary time allows. The results of the regulatory impact assessment are currently being studied and will influence any draft legislation.

  Asylum Seekers
  Margaret Moran
  To ask the Secretary of State for the Home Department (1) what action he intends to take in respect of solicitors and agents who fail properly to advise clients in respect of asylum cases; [110673]

  (2) what action he (a) has taken and (b) intends to take in respect of solicitors and agents who charge asylum seekers for writing letters to hon. Members. [110674]

  Beverley Hughes
  Anyone in the United Kingdom dissatisfied with the advice or services provided by their immigration adviser may complain to the Office of the Immigration Services Commissioner (OISC), which was established under Part V of the Immigration and Asylum Act 1999. Unnecessary letters to hon. Members and overcharging for writing them can be the basis of a complaint to the OISC.

  If the adviser is regulated by the Commissioner and the complaint is upheld, the Commissioner may take disciplinary action. If the adviser is a solicitor the Commissioner will refer the complaint to the relevant designated professional body (DPB); any subsequent disciplinary action is a matter for that body.

  Complaints may also be submitted direct to a solicitor's professional body or, for publicly funded cases in England and Wales, direct to the Legal Services Commission (LSC). The LSC can withdraw funding from solicitors who do not meet their required standards and refuse to pay for the writing of unnecessary letters.

  The Commissioner reports annually to the Secretary of State as to the effectiveness of each DPB in regulating its members regarding the provision of immigration advice or immigration services. The Commissioner's first such report was incorporated in his Annual Report for 2001–2002 which the Secretary of State presented to Parliament on 23 July 2002.

  Mr. Paice
  To ask the Secretary of State for the Home Department when the number of asylum seekers last averaged 4,500 per month over a 12-month period; and what the total annual cost to the Exchequer was of the asylum system in that year. [110792]

  Beverley Hughes
  [holding answer 1 May 2003]The most recent 12-month period when applications for asylum averaged 4,500 per month was between May 1998 and April 1999, when the total number was 53,020, an average of 4,420 per month.
  742W
  For the financial year 1998–99 (April 1998 to March 1999), asylum seeker support payments made by the then Department of Social Security and Department of Health totalled £475 million.

  Child Protection
  Mr. Wray
  To ask the Secretary of State for the Home Department what discussions he has had with EU colleagues regarding the inclusion of specific children's rights in EU policy. [110778]

  Hilary Benn
  The Children and Young People's Unit has lead responsibility for monitoring the UK's implementation of the UN Convention on the Rights of the Child. Ministers for Children from EU Member States meet yearly for the EU Permanent Intergovernmental Group "Europe de L'Enfance" and the last meeting took place on the 11 October 2002. These meetings include discussions on the UN Convention on the Rights of the Child as well as other child rights issues, including progress made on combating the commercial sexual exploitation of children, the EU Social Inclusion Action Plans, and the progress made towards setting up an EU child research observatory.

  Mr. Wray
  To ask the Secretary of State for the Home Department how many sex offenders have been banned from travelling abroad to locations where they may abuse children; and if he will make a statement. [110779]

  Hilary Benn
  Under current legislation the courts do not have the power to stop a sex offender subject to the notification requirements of the Sex Offenders Act 1997 from travelling abroad, although those sex offenders who have been released from custody on licence are subject to standard conditions that they must not leave the country without the permission of the supervising officer and this is only granted in exceptional compassionate circumstances.

  In a ministerial statement of 5 March I announced that we would be introducing a new foreign travel order that will enable courts to prohibit those convicted of a sexual offence against a child from travelling to specified countries in certain circumstances. The foreign travel orders are being introduced as a Government Amendment to the Sexual Offences Bill currently before Parliament.

  The new order will be a civil preventative order made following an application from a chief officer of police. It would apply to those convicted of a sexual offence against a child under 16 either in the United Kingdom or abroad. The order would be available where the court was satisfied that it was necessary to protect children overseas from serious sexual harm by the offender. The orders would last for up to six months renewable on further application from the police. A failure to comply with the order would be a criminal offence punishable by up to five years imprisonment.

  Information relating to Scotland is a matter for Ministers in the Scottish Parliament. Information relating to Northern Ireland is a matter for my right hon. Friend the Secretary of State for Northern Ireland.

  Mr. Wray
  To ask the Secretary of State for the Home Department what measures are in place to ensure that child sex offenders from abroad are prevented from entering the UK; and if he will make a statement. [110780]
  743W
  Hilary Benn
  Provisions exist within the immigration rules to refuse admission to, among others, those who have been convicted of a serious criminal offence or those whose presence in the United Kingdom would not be considered conducive to the public good. We would, where appropriate, use these provisions to deny entry to the United Kingdom to those individuals identified as having been convicted of, or having been involved in, committing serious sexual offences.

  Anyone identified as being of interest to the Immigration Service for such reasons will have their details circulated to all ports and offices likely to encounter them, including visa offices abroad. A person whose conduct or convictions merit it can therefore either be refused a visa or entry clearance by an entry clearance officer abroad or refused leave to enter by an immigration officer on arrival in the United Kingdom.

  We are proposing, as part of the Sexual Offences Bill, a new notification order that would enable the courts to make those who have been convicted of sex offences abroad subject to the sex offenders register if they come to the United Kingdom. The order would make the offender subject to the same notification requirements as an offender convicted of an equivalent offence in the United Kingdom, and failure to comply with the order would be a criminal offence punishable by up to five years imprisonment. The order would apply to UK citizens and foreign nationals.

  Mr. Wray
  To ask the Secretary of State for the Home Department how many child protection officers are stationed at UK ports and airports; what plans he has to increase these numbers; and what plans he has to create a permanent child protection unit. [110782]

  Hilary Benn
  Joint work is underway between agencies at principal entry points to identify children at risk. A Child Protection Pilot Project was launched on 10 March 2003 at Heathrow. This is a joint operation between the Metropolitan police and the immigration service involving one child protection officer working closely with immigration officers. The pilot will be rolled out nationally if it proves successful.

  In addition to this, intake teams have been piloted at Dover as joint initiatives between immigration service and social services. These will be extended to other United Kingdom ports, and Croydon and Solihull Asylum Screening Units.

  Kent Police have also seconded one child protection trained officer (female) to the Joint IS/Police Debriefing Team based in Dover. It is hoped that this will shortly be increased to two permanent officers.

  Mr. Wray
  To ask the Secretary of State for the Home Department what training is available for immigration and police officers in identifying a trafficked child; and what powers can be used to protect trafficked children discovered at ports and airports. [110783]

  Beverley Hughes
  Training provided to police and immigration officers is through the practical sharing of skills and experience across agencies.

  There is, for example, work underway involving key agencies at principal entry points to identify children at risk, including pilot projects involving the immigration service, police and social services at Heathrow and Dover.
  744W
  Furthermore the Home Office has recently published the 'trafficking toolkit' providing guidance for immigration and police officers on how to recognise a victim of trafficking and what to do if such a victim is encountered. In addition all United Kingdom immigration officers at ports of entry have been issued with a profile of potential child trafficking victims. In the event of specific intelligence coming to light about the potential arrival of trafficked children all UK immigration service offices are quickly notified.

  Two immigration officers on attachment to the National Crime Squad Immigration Crime Team (ICT) have attended a week-long multi-agency course on trafficking held by the Child and Women Abuse Studies Unit of the London Metropolitan University. They have cascaded the training to ICT colleagues.

  A vice team consisting of specifically selected immigration officers has also been established in London. The team is fully aware of the procedures with regard to the identification of trafficked children.

  It is an offence under Section 25 of the Immigration Act 1971, as amended by Section 143 of the Nationality, Immigration and Asylum Act 2002 to assist in unlawful immigration to the United Kingdom, and Section 145 of the Nationality, Immigration and Asylum (NIA) Act 2002 has also made it an offence to traffic in prostitution. Anyone convicted of either offence is liable to imprisonment for up to 14 years.

  There is however no current evidence to indicate that trafficking in children is a large-scale problem in the United Kingdom.

  Mr. James Wray
  To ask the Secretary of State for the Home Department what proposals he has to ensure child victims of trafficking are protected from and do not return to or are not kidnapped by their trafficker or abuser; what specialist safe accommodation and supervision is available in such circumstances; and if he will make a statement. [110785]

  Beverley Hughes
  Child victims of trafficking are referred to social services to receive assistance and support based on their particular needs. They may arrive in this country as unaccompanied minors seeking asylum, or accompanied by an adult. In the latter case, if anyone who comes into contact with the child is concerned that the child is the victim of abuse or neglect, they should refer the child to the relevant local authority's social services department. Unaccompanied minors seeking asylum will also be referred to social services. Social services have a duty under the Children Act 1989 to safeguard and promote the welfare of children who are in need by providing a range and level of services appropriate to those children's needs or, where appropriate, by arranging for the provision of services from other agencies. This care will be determined by a needs assessment according to the Framework for the Assessment of Children in Need and their Families. Child victims of trafficking are likely to be in need of welfare services and—in many cases—protection under the Children Act 1989.

  Where there is a risk to the life of a child or a likelihood of serious harm, an agency with statutory child protection powers, for example the police or councils with social services responsibilities, should act quickly to secure the immediate initial safety of the child. In some cases, it may

  745W
  be necessary to ensure that the child remains in, or is removed to, a safe place. Under s.20 of the Children Act 1989, a local authority may provide accommodation for any child within their area if they consider that to do so would safeguard or promote the child's welfare. This may involve placing the child in a foster placement or it may place the child in a children's home.

  There are only very limited circumstances in which it is an option to hold a young person in secure accommodation. The Children Act 1989 permits that children may only be held in secure conditions if they satisfy certain specific grounds such as a likelihood of absconding together with a likelihood that injury would be caused to the young person themselves or others. This requires the approval of the courts.

  Mr. Wray
  To ask the Secretary of State for the Home Department what counselling services are available to child victims of trafficking; and what special immigration arrangements can be made if the child is not from the UK. [110786]

  Beverley Hughes
  The immigration arrangements for child victims of trafficking will depend on the individual circumstances of the case. Unaccompanied asylum seeking children who apply for asylum are referred to the Refugee Council's Panel of Advisers, a non-statutory body which acts as adviser to the child in his or her dealings with the Home Office and other agencies for the duration of the asylum claim. No unaccompanied child will be removed from the United Kingdom unless we are satisfied that adequate reception and care arrangements are in place in the country to which he or she is to be removed.

  We expect that the provision of assistance and support to child victims of trafficking will be secured by local statutory services in response to identified needs. Child victims of trafficking are likely to be in need of welfare services and-in many cases—protection under the Children Act 1989. Social Services have a duty to safeguard and promote the welfare of these children following an assessment of their circumstances.

  Community Support Officers
  Vera Baird
  To ask the Secretary of State for the Home Department what training in self-defence is given to police community support officers. [110859]

  Mr. Bob Ainsworth
  The training given to community support officers (CSO) is a decision for their chief officers and will depend on the role they are to perform and the powers that they are designated to exercise. The three principal training models currently in use contain elements on self-defence. The emphasis of this training is on the verbal resolution of conflict situations. CSOs are advised to call for police assistance if in any doubt about their own safety or the safety of the public.

  Crime Statistics (Buckingham)
  Mr. Bercow
  To ask the Secretary of State for the Home Department how many incidents of(a) violent crime, (b) burglary and (c) vandalism in the Buckingham constituency were reported to the police in 2001–02; and how many investigations resulted in a conviction. [108511]
  746W
  Mr. Bob Ainsworth
  The requested details are not collected centrally.

  Details of some offences recorded by the police have been collected by police Basic Command Unit (BCU) since 1 April 1999. The table gives details of numbers of offences and detections for the Aylesbury Vale BCU. Details of criminal damage offences are not available at BCU level.

  Aylesbury Vale BCU

  2001–02

  Violent crime1

  Offences

  1,174

  Offences detected

  754

  Burglary in a dwelling

  Offences

  779

  Offences detected

  127

  1 Violent crime is comprised of the violence against the person, sexual offences and robbery offence groups.

  Details of convictions specifically relating to offences in the Aylesbury Vale BCU are not available.

  CS Gas Sprays
  Vera Baird
  To ask the Secretary of State for the Home Department if he will authorise community support officers to carry CS gas sprays for use in emergencies. [110853]

  Mr. Bob Ainsworth
  [holding answer 1 May 2003]The role of community support officers (CSO) is to provide uniformed highly visible patrols in communities, to support police officers, and to tackle low level disorder and anti-social behaviour. None of the 27 forces who have currently deployed CSOs have issued them with handcuffs, batons or incapacitant sprays.

  Death Certification
  Mr. Paul Burstow
  To ask the Secretary of State for the Home Department when the review of death certification is likely to be concluded; and if he will make a statement. [110825]

  Hilary Benn
  The Independent Fundamental Review of Death Certification and Coroner Services in England, Wales and Northern Ireland reported to the Home Secretary at the end of April. The Home Secretary has not, therefore, had the opportunity yet to decide what form the Government's response will take.

  Mr. Burstow
  To ask the Secretary of State for the Home Department whether the review of death certification will recommend giving MRSA a code so that it can be listed as a cause of death on death certificates; and if he will make a statement. [110826]

  Hilary Benn
  The Independent Fundamental Review of Death Certification and Coroner Services in England, Wales and Northern Ireland reported to the Home Secretary at the end of April. Ministers are currently considering its recommendations. Currently MRSA (methicillin-resistant Staphylococcus aureus) can and does appear on death certificates.

  Drugs
  Simon Hughes
  To ask the Secretary of State for the Home Department what proportion of the additional funding announced for tackling drug misuse on 21 January will be spent on drug treatment; and if he will make a statement. [109585]

  Mr. Bob Ainsworth
  My right hon. Friend the Home Secretary announced on 21 January a package of measures to fight crime and drug abuse, backed by £190 million of new investment. This included £12.6 million in new resources in 2003–04, a 28 per cent. increase over 2002–03, to support the development of drug treatment services in the 30 areas with the highest levels of drug related crime, as part of the £236 million national pooled treatment budget.

  Mr. Cummings
  To ask the Secretary of State for the Home Department how many successful prosecutions there were for the dealing of drugs in the Easington area in(a) 2000, (b) 2001 and (c) 2002. [111202]

  Mr. Bob Ainsworth
  The information requested is not available at constituency level. However, data from the Home Office Court Appearances Database show that the number of persons in the Durham police force area who were successfully prosecuted for offences involving 'dealing' in illegal drugs in 2000 was 147. These are the latest figures available at the present time.

  Dysfunctional Families
  Mr. Burstow
  To ask the Secretary of State for the Home Department pursuant to his Answer of 9 April 2003,Official Report, column 281W, on Command Paper 5778, (1) what definition his Department has provided to local authorities in order to allow for common data collection; and what plans he has to collect this data; [109533]

  (2) what plans his Department has to collect figures on dysfunctional families. [110153]

  Hilary Benn
  Dysfunctional families can be identified through the existence of multiple risk factors and/or through the number of contacts that a family has with local agencies. In the coming months we will be publishing a Crime Reduction Toolkit on dysfunctional families to support Crime and Disorder Reduction Partnerships (CDRP's) in the identification and development of ways of intervening with dysfunctional families at a local level.

  There are currently no plans to collect data locally or centrally on dysfunctional families in the Home Office.

  EU Committees
  Mr. Bercow
  To ask the Secretary of State for the Home Department if he will list(a) the names, titles and grades of the officials who sit on the EU committee for the implementation of the incentive, exchange, training and co-operation programme for the prevention of crime, (b) the number of times, and the dates, on which it has met since January 2002, (c) the agenda items it has considered since January 2002, (d) the decisions it has made since January 2002 and (e) the means used to communicate the decisions to the House. [110276]
  748W
  Mr. Bob Ainsworth
  The EU Committee for the implementation of the incentive, exchange, training and co-operation programme for the prevention of crime (Hippokrates) does not have a fixed membership, but consists of delegates drawn from each of the 15 European Union member states. The UK representatives in 2002 were: Mr. Paul Ekblom (Grade 7), Research Development and Statistics, Mr. Darren Grubb (Executive Officer), Policing Organised Crime Unit and Miss Sue Garrod (Executive Officer), European and International Unit. The Committee met once in 2002, on 23 July, to discuss the bids which had been received and to agree the allocation of funds to successful projects. The Committee will not meet in future as the Hippokrates funding programme, along with four other Justice and Home Affairs funding programmes (Grotius II, Stop II, Oisin and Falcone), has been superseded by the framework programme on police and judicial co-operation in criminal matters (AGIS). The decisions made by the Committee were not communicated directly to the House as information about the Hippokrates programme is already publicly available.

  Mr. Bercow
  To ask the Secretary of State for the Home Department if he will list(a) the names, titles and grades of the officials who sit on the EU Committee for the implementation of the Community action programme on preventative measures to fight violence against children, young persons and women, (b) the number of times, and the dates, on which it has met since January 2002, (c) the agenda items it has considered since January 2002, (d) the decisions it has made since January 2002 and (e) the means used to communicate the decisions to the House. [110277]

  Mr. Bob Ainsworth
  The EU Committee for the implementation of the Community action programme on preventative measures to fight violence against children, young persons and women (Daphne) does not have a fixed membership, but consists of delegates drawn from each of the 15 European Union member states. The UK representatives in 2002 were: Miss Jenny Gray (Grade 7), Social Services Inspector, Department of Health and Mrs Louise Day (HEO), Public Order and Crime Issues Unit, Home Office. The Committee met three times in 2002: on 30 January to agree the annual work programme and criteria for evaluating and selecting bids for funding; on 11 September to discuss the bids which had been received and to agree the allocation of funds to successful projects; and on 6 November to agree the annual work programme and criteria for evaluating and selecting bids for 2003. The decisions made by the Committee were not communicated directly to the House as information about the Daphne programme is already publicly available.

  Firearms
  Mr. Swire
  To ask the Secretary of State for the Home Department (1) how many crimes involving firearms were committed in each of the last five years in(a) the East Devon constituency, (b) Devon and (c) Cornwall; [109613]

  (2) how many deaths involving firearms there were in the last five years in (a) the East Devon constituency, (b) Devon and (c) Cornwall. [109612]
  749W
  Mr. Bob Ainsworth
  Details of firearm offences have not been collected by parliamentary constituency, and Devon and Cornwall comprise a single police force area. Available published data for the Devon and Cornwall police force on the number of recorded homicide offences and recorded crimes in which firearms (including air weapons) were reported to have been used are given in the table.

  Number of firearm crimes in Devon and Cornwall

  Homicides

  Total offences involving firearms

  1997

  0

  94

  1998–99

  1

  144

  1999–2000

  1

  140

  2000–01

  1

  111

  Numbers of firearms offences were published on a calendar year basis up to 1997, and on a financial year basis thereafter. There was a change of counting rules for recorded crime on 1 April 1998 which had the effect of increasing the number of crimes counted. Numbers of recorded crimes before and after this date are therefore not directly comparable.

  Mr. Rosindell
  To ask the Secretary of State for the Home Department how many firearms have been surrendered to the police as part of the Trident gun amnesty campaign. [110591]

  Mr. Bob Ainsworth
  As at 23 April, 1,485 guns, 34,677 rounds of ammunition and 522 other weapons had been handed in to the Metropolitan Police as part of the national firearms amnesty. The amnesty finished on 30 April and final figures are now being collected.

  Mr. Andrew Rosindell
  To ask the Secretary of State for the Home Department how many crimes involving a firearm were committed in the UK in(a) 1979, (b) 1983, (c) 1987, (d) 1992, (e) 1997, (f) 2001 and (g) 2002. [110592]

  Mr. Bob Ainsworth
  The numbers of recorded offences involving firearms in England and Wales for the years in question are given in the table.

  Number of firearm offences (including air weapons)

  Year

  Number of offences

  1979

  6,547

  1983

  7,961

  1987

  9,002

  1992

  13,341

  1997

  12,410

  2000–01

  17,697

  2001–02

  22,314

  Numbers of firearms offences were published on a calendar year basis up to 1997, and on a financial year basis thereafter.

  There was a change of counting rules for recorded crime on 1 April 1998, which will have the effect of increasing the number of crimes counted. Numbers of recorded crimes before and after this date are therefore not directly comparable. As a result of some police forces adopting the principles of the National Crime Recording Standard (NCRS) in advance of its official introduction across England and Wales on 1 April 2002, numbers of offences recorded in 2000–01 and 2001–02 may also have been inflated.
  750W
  Information relating to Scotland and Northern Ireland are matters for my right hon. Friend the Secretary of State for Scotland (Helen Liddell) and my right hon. Friend the Secretary of State for Northern Ireland (Paul Murphy).

  Graffiti Magazines
  Dr. Stoate
  To ask the Secretary of State for the Home Department if he will take steps to prevent the sale from licensed retail premises of graffiti magazines containing pictures of illegal graffiti. [110679]

  Mr. Bob Ainsworth
  The Home Office has no plans to do so.

  Hemsworth Crime
  Jon Trickett
  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 the Hemsworth constituency since the commencement of the scheme. [109902]

  Mr. Bob Ainsworth
  Anti-Social Behaviour Orders (ASBOs) were introduced from 1 April 1999. Information held centrally up to 31 May 2000 is for the number of ASBOs issued within England and Wales by police force area only.

  From 1 June 2000 official statistics on the number of ASBOs issued within England and Wales 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. The number of notifications received by the Home Office of ASBOs issued in the West Yorkshire MCC, from 1 April 1999 to 30 November 2002 (latest available) is 25. From 1 June 2000 to 30 November 2002 no notifications have been received of ASBOs issued within the Wakefield metropolitan district council area (in which the Hemsworth constituency is situated).

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

  The table shows the number of Curfew Orders with electronic monitoring made in the Hemsworth constituency from 1999 up to March 2003.

  No applications have yet been received to establish a local child curfew scheme under section 14 of the Crime and Disorder Act 1998. Some local authorities and police forces have considered the possibility but concluded that other measures should be taken to tackle relevant local problems.

  Number of curfew orders imposed in the Hemsworth constituency 1999–20031

  Adult

  Juvenile

  Total

  1999

  111

  0

  111

  2000

  133

  0

  133

  2001

  136

  14

  150

  2002

  180

  11

  191

  20031

  49

  8

  57

  Total

  609

  33

  642

  1Up to March 2003

  751W
  Jon Trickett
  To ask the Secretary of State for the Home Department how many police officers additional to the complement on 1st May 1997 were appointed to the Hemsworth constabulary in each year since 1997. [109905]

  Mr. Bob Ainsworth
  Hemsworth is part of the Wakefield Division of West Yorkshire Police force. Deployment of resources between divisions and other units of West Yorkshire Police is an operational matter for the Chief Constable (Mr. Colin Cramphorn).

  Information has not been collected centrally on a regular basis about the number of officers deployed to particular Divisions or to areas within those divisions. However, I refer my hon. Friend to the reply of 2 December 2002 by my right hon. Friend, the Member for Southampton Itchen (John Denham) to the hon. Member for North Southwark and Bermondsey (Mr. Simon Hughes), Official Report, column 589W, setting out police strength for each Basic Command Unit for each force in England and Wales as at 31 March 2002.

  In total West Yorkshire Police had 5,209 police officers and 2,234 civilian support staff on 31 March 1997. The number of police officers fell to 4,815 at 31 March 2001, since then it has been rising, reaching 4,999 at 30 September 2002. At 31 March 1997 West Yorkshire Police had 2,234 civilian support staff. By 31 March 2002, the latest available figures, this had risen to 2,364.

  Police officer strength nationally fell after March 1997, before rising to the record number of 131,548 at 30 September 2002. The fall in West Yorkshire was much more marked than that which occurred nationally, despite the force having done a little better than the national average in terms of resources. This will have been a reflection of local decisions by West Yorkshire's chief officers and its police authority about the mix between precept increases, balances of officer and civilian numbers and other expenditure.

  Jon Trickett
  To ask the Secretary of State for the Home Department (1) what assessment his Department has made of the number of illegal firearms in circulation in the Hemsworth constituency; and if he will make a statement; [109907]

  (2) how many deaths by firearms have occurred in each of the last five years in (a) the Hemsworth constituency and (b) England; [109909]

  (3) how many firearms have been handed in to police over the past five years in (a) the Hemsworth constituency and (b) England; [109920]

  (4) how many crimes involving firearms have occurred in each of the last five years in (a) the Hemsworth constituency and (b) England. [109908]

  Mr. Bob Ainsworth
  Details of the number of illegal firearms in circulation are not collected centrally.

  Details of firearms offences are not collected by parliamentary constituency. Available published data on the total number of recorded crimes in which firearms (including air weapons) were reported to have been used in West Yorkshire and England are given in the table.
  752W

  Number of recorded crimes involving firearms

  West Yorkshire

  England

  1997

  974

  11,816

  1998–99

  1,041

  13,283

  1999–2000

  1,235

  16,234

  2000–01

  1,544

  17,083

  Numbers of firearms offences were published on a calendar year basis up to 1997, and on a financial year basis thereafter.

  There was a change of counting rules for recorded crime on 1 April 1998, which will have the effect of increasing the number of crimes counted. Numbers of recorded crimes before and after this date are therefore not directly comparable. As a result of some police forces' adopting the principles of the National Crime Recording Standard (NCRS) in advance of its official introduction across England and Wales on 1 April 2002, numbers of offences recorded in 1999–2000 and 2000–01 for England may have been inflated. West Yorkshire adopted the Standard on 1 April 2002, therefore their figures will not have been affected.

  Information on the number of firearms that have been handed in to police are not routinely collected centrally.

  Available published data on the number of recorded homicide offences in which firearms were reported to have been used are given in the table.

  Number of homicide offences involving firearms

  West Yorkshire

  England

  1997

  1

  57

  1998–99

  4

  49

  1999–2000

  1

  62

  2000–01

  3

  72

  Jon Trickett
  To ask the Secretary of State for the Home Department how many juveniles were arrested for(a) robbery and (b) other offences defined as street crime in (a) England, (b) London and (c) the Hemsworth constituency, in each of the last five years. [109979]

  Mr. Bob Ainsworth
  Statistics are collected on arrests for notifiable offences, by offence group and police force area (pfa), and are published on a financial year basis. The table shows data for the notifiable offence group of robbery, for the years 1999–2000 to 2001–02. Information for earlier years is not available on a consistent basis.

  Data for 2002–03 will be published in the autumn.

  Street crime is generally referred to as the offences of robbery and snatch theft. Snatch thefts are not separately identifiable from other offences covered under the theft and handling stolen goods offence group.

  753W

  The number of persons aged 10–17 arrested for robbery, by police force area (pfa) and for England, 1999–2000 to 2001–02

  Area

  1999–2000

  2000–01

  2001–02

  England (estimated)

  12,700

  14,300

  15,700

  Pfa

  Metropolitan Police

  14,700

  15,684

  25,956

  West Yorkshire3

  244

  566

  776

  1Excludes City of London as arrests data not available.

  2 Includes City of London

  3 Pfa in which the constituency of Hemsworth is located.

  Intoxicating Substances
  Mr. Love
  To ask the Secretary of State for the Home Department what action the Government propose to take following the recommendations of the Advisory Council on the Misuse of Drugs in 1995 that cigarette lighter refills be limited in size to about 25ml; and if he will make a statement. [111187]

  Mr. Bob Ainsworth
  The Department of Trade and Industry pursued the Advisory Council's recommendation with the industry. Some manufacturers voluntarily introduced a 25ml gas lighter refill, but progress towards an industry-wide agreement to reduce the refills to a maximum size of 25ml was hampered by anti-competitive considerations and practical difficulties.

  In view of the difficulties encountered in trying to implement the recommendation, the Government decided to tackle the problem by an alternative means. It accordingly introduced the Cigarette Lighter Refill (Safety) Regulations 1999, which prohibits the sale or supply of lighter refills containing butane gas to anyone under 18 years.

  Initial decisions on applications received for asylum in the United Kingdom1, 1991–2002, nationals of Iraq—number of principal applicants

  Cases considered under normal procedures2

  Backlog clearance exercise3

  Initial decisions4

  Granted asylum

  Granted ELR

  Refused

  Granted asylum

  Refused under backlog criteria5

  Exceptional leave granted when applicant had not applied for asylum6

  1991

  175

  45

  115

  15

  —

  —

  250

  1992

  1,440

  190

  1,210

  40

  —

  —

  185

  1993

  515

  185

  300

  30

  —

  —

  990

  1994

  645

  380

  220

  45

  —

  —

  620

  1995

  795

  570

  175

  50

  —

  —

  205

  1996

  665

  470

  135

  60

  —

  —

  380

  1997

  665

  255

  295

  110

  —

  —

  205

  1998

  1,100

  510

  500

  90

  —

  —

  110

  1999

  745

  315

  320

  100

  5

  *

  75

  2000

  5,530

  845

  2,455

  2,220

  10

  *

  40

  20017

  8,880

  815

  1,855

  6,210

  —

  —

  20

  20027

  11,785

  700

  8,130

  2,955

  —

  —

  n/a

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

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

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

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

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

  6 Exceptional leave granted in view of internal situation in Iraq when applicant had not applied for asylum, excluding dependants

  7 Provisional data.

  Information on initial decisions on asylum applications is published quarterly. The next publication will cover the period up to March 2003.
  754W
  Mr. Love
  To ask the Secretary of State for the Home Department how many convictions there have been under the Intoxicating Substance (Supply) Act 1985 in each year since 1992. [111188]

  Hilary Benn
  The information requested is given in the table for the period 1992 to 2000. These are the latest figures available at the present time. The data are from the Home Office Court Appearances Database.

  Number of convictions under the Intoxicating Substances (Supply) Act 1985, England and Wales, 1992–2000

  Number

  1992

  4

  1993

  4

  1994

  6

  1995

  0

  1996

  3

  1997

  6

  1998

  6

  1999

  5

  2000

  0

  Iraqi Nationals
  Simon Hughes
  To ask the Secretary of State for the Home Department how many Iraqi nationals have been granted exceptional leave to remain in the UK since 1991. [109601]

  Beverley Hughes
  The table shows the number of Iraqi asylum applicants, excluding dependants, granted exceptional leave to remain in the UK between January 1991 and December 2002. These statistics relate to initial decisions only and exclude the outcome of appeals or other subsequent decisions.

  Juvenile Crime
  Simon Hughes
  To ask the Secretary of State for the Home Department how many juveniles were arrested
  755W
  for (a) robbery and (b) other offences defined as street crime in (i) London, (ii) Manchester and (iii) Leeds in each month in 2002. [109606]

  Mr. Bob Ainsworth
  Statistics are collected on arrests for notifiable offences quarterly, by offence group and police force area (pfa), and are published on a financial year basis. The table shows data for the notifiable offence group of robbery, for the period 2001–02 by

  Number of persons aged 10–17 arrested for robbery, by police force area, England and Wales 2001–02

  Police force area (pfa)

  April to June 2001

  July to September 2001

  October to December 2001

  January to March 2002

  Total

  Greater Manchester

  296

  275

  271

  252

  1,094

  Metropolitan police1

  1,796

  1,174

  1,497

  1,489

  5,956

  West Yorkshire

  198

  177

  192

  209

  776

  1Includes City of London

  Mersey Tunnels Police
  Mr. Ben Chapman
  To ask the Secretary of State for the Home Department what discussions he has had about an agreement between the Police Complaints Authority and the Mersey Tunnels Police. [110560]

  Mr. Bob Ainsworth
  There have been no such discussions.

  Plastic Bottles
  Mr. Pike
  To ask the Secretary of State for the Home Department (1) what representations he has received in favour of increasing the use of plastic bottles in bars and clubs from(a) the police, (b) environmental agencies and (c) other interested parties; and if he will make a statement; [108059]

  (2) what recent discussions he has held with representatives of (a) the British Beer and Pub Association and (b) other organisations to promote the use of plastic bottles; and if he will make a statement; [108058]

  (3) what discussions (a) he has had and (b) his officials have had with other Departments on promoting the use of plastic bottles in bars and clubs; and if he will make a statement. [108060]

  Mr. Bob Ainsworth
  I have not held any recent discussions with representatives of the British Beer and Pub Association or other organisations on what can be done to promote the use of plastic bottles. Nor have I received any representations in favour of increasing the use of plastic bottles in bars and clubs from the police, environmental agencies or other interested parties. But representations have been received from one individual, advocating a switch from glass to plastic bottles in the United Kingdom licensed trade to minimise the risk of glass-related injuries taking place.

  I refer my hon. Friend to the reply I gave my hon. Friend for Harrow West, (Mr. Thomas) on 28 March 2003, Official Report, column 451W. We remain concerned about the high level of injuries that occur when glasses and bottles are used as weapons in drink-related situations in and outside licensed premises and other drinking establishments, and we intend to see that this problem is effectively tackled. The Licensing Bill Guidance that has been published in draft by the
  756W
  quarter, for the pfas Metropolitan police, Greater Manchester and West Yorkshire. Data for 2002–03 will be published in the autumn.

  Street crime is generally referred to as the offences of robbery and snatch theft. Snatch thefts are not separately identifiable from other offences covered under the theft and handling stolen goods offence group.

  Department for Culture, Media and Sport will include a range of conditions that a licensing authority could impose on a premises to address violence of this form.

  My officials are working closely with the Prime Minister's Strategy Unit on their study to produce a national strategy for reducing the harm associated with alcohol misuse. The study, which was announced on 19 July 2002, is paying particular attention to the issue of alcohol-related violence, and views have been sought and obtained from a wide variety of organisations and individuals.

  Police
  Simon Hughes
  To ask the Secretary of State for the Home Department what performance data is gathered by the Police Standards Unit from local police forces. [109515]

  Mr. Bob Ainsworth
  The Police Standards Unit itself does not gather performance data from local police forces directly. The Unit does assemble and make use of performance information, for instance on crime rates, detection rates and resource usage, which is collected from forces by other parts of the Home Office. The Unit also makes use of some data collected by the Association of Chief Police Officers (for instance on forensics performance).

  Simon Hughes
  To ask the Secretary of State for the Home Department if he will make a statement on the progress achieved in developing the Police Performance Assessment Framework. [109600]

  Mr. Bob Ainsworth
  As stated in the National Policing Plan 2002–06, the Home Office, in partnership with the Association of Chief Police Officers (ACPO), Association of Police Authorities (APA) and the other key stakeholders, is developing a balanced performance assessment framework for policing—the "Policing Performance Assessment Framework" (PPAF). When completed, this will facilitate the monitoring of policing performance across six performance areas (domains): citizen focus; reducing crime; investigating crime; promoting public safety; providing assistance and resource usage.

  Before the full PPAF is introduced, an interim assessment framework is being used to compare policing performance. The National Policing Plan 2002–06 details 13 interim performance indicators against which

  757W
  performance is being assessed. The report "Police Performance Monitoring 2001/02" published in February 2002 contains further information.

  Mr. Paul Marsden
  To ask the Secretary of State for the Home Department how many(a) police officers and (b) civilian police staff based in Shrewsbury Police Station were subjected to (i) verbal and (ii) physical attacks in the last year. [109661]

  Mr. Bob Ainsworth
  The requested details are not collected centrally. Available information is as follows:

  West Mercia Constabulary—2001–02

  Police officers

  Civilian police staff

  Fatal assaults

  0

  0

  Serious assaults

  18

  1

  Less serious assaults

  234

  19

  Total

  252

  20

  Mr. Rosindell
  To ask the Secretary of State for the Home Department (1) what discussions he has had with(a) the Metropolitan Police and (b) senior police officers in Hackney and Havering regarding the loss of eight police officers from the London Borough of Havering to the London Borough of Hackney; [110715]

  (2) if he will make a statement on the loss of eight police officers from the London Borough of Havering to the London Borough of Hackney; [110716]

  (3) when he next intends to review police numbers in the London Boroughs of (a) Havering and (b) Hackney. [110714]

  Mr. Bob Ainsworth
  Decisions about the allocation of resources, including police officers, to the London Boroughs are matters for the Commissioner and the Metropolitan Police Authority (MPA).

  My right hon. Friend the Home Secretary has regular meetings with the Commissioner (Sir John Stevens QPM) at which a range of policing issues are discussed, including police numbers. I understand from the Commissioner that he and the MPA are committed to achieving borough workforce targets in all boroughs as soon as practicable.

  Prison Service
  Andy Burnham
  To ask the Secretary of State for the Home Department how many Prison Service officers in the North West are acting as principal officers; and how long each has served in that temporary post. [111571]

  Hilary Benn
  The number of Prison Service senior officers in the North West acting as principal officers is 27.

  Number

  Up to 1 year

  14

  Between 1 and 2 years

  8

  Over 2 years

  5

  Detail of how long each has served in that temporary post is provided in the table.
  758W

  Senior officer

  Period

  1

  3 days

  2

  11 days

  3

  1 month

  4

  1 month

  5

  2 months

  6

  3 months

  7

  3 months

  8

  6 months

  9

  7 months

  10

  7 months

  11

  8 months

  12

  9 months

  13

  10 months

  14

  10 months

  15

  13 months

  16

  15 months

  17

  18 months

  18

  18 months

  19

  19 months

  20

  21 months

  21

  21 months

  22

  22 months

  23

  25 months

  24

  26 months

  25

  28 months

  26

  32 months

  27

  40 months

  Pub-watch Scheme
  Mr. Cummings
  To ask the Secretary of State for the Home Department what support his Department has offered to promote the Pub-watch scheme. [111204]

  Mr. Bob Ainsworth
  The Government welcome the contribution that Pub-watch schemes can make in helping to tackle alcohol-related violence and disorder. The importance of that contribution was reflected in the Home Office action plan, "Tackling Alcohol Related Crime, Disorder and Nuisance", published in August 2000. The plan highlights how such schemes, by disseminating information about known individuals or groups of people, can help to keep troublemakers from pubs and clubs, as well as provide early warning to bar staff, door staff and the police of instances of possible disorder.

  The Home Office does not provide direct financial support to Pub-watch schemes.

  Road Accident Victims
  Simon Hughes
  To ask the Secretary of State for the Home Department what funding is available within his Department for helping the victims of serious road accidents; and if he will make a statement. [109577]

  Mr. Bob Ainsworth
  The Home Office is providing funding for victims of serious road incidents in a number of ways.

  The police are able to use their general grant settlement to deploy family liaison officers for serious road incidents. The resource made available is a local operational matter. However, since this April, family liaison officers are routinely deployed at fatal incidents or those which seem likely to result in a fatality. In carrying out their duties, family liaison officers issue a copy of the Brake guide "Advice for bereaved families

  759W
  and friends following a death on the road". In 2003–04, the Home Office is providing Brake with a grant of £46,752 to ensure its production and distribution

  The core funding provided to Victim Support allows them to provide a Witness Service in all Crown and magistrates courts. If a road traffic incident involves a court case, the victim or their family can access this support.

  The White Paper, "Justice for All" included a proposal to extend specialist support for road traffic victims. Pilot projects are currently being set up to test the most effective ways of providing support.

  Secondments
  Dr. Cable
  To ask the Secretary of State for the Home Department how many individuals have been seconded to his Department from the private sector, in each case listing(a) from which organisation and (b) dates of secondments in (i) 2001–02 and (ii) 2002–03. [108099]

  Hilary Benn
  Secondments are part of the Interchange initiative, which promotes the exchange of people and good practice between the Civil Service and other organisations. All sectors of the economy are involved: Voluntary, Education, Health, Public and Private. Interchange provides opportunities for civil servants to learn new skills, widen their experience and develop ideas. It also brings in skills and experiences from other sectors

  Details of staff seconded from the private sector to the Home Department are listed in the table. Data for 2002–03 is provisional. Final figures will be available later in the year.

  Name of organisation

  Number of staff

  Duration

  Apri12001 to March 2002

  Not listed

  1

  Not listed

  BT

  1

  15 March 2002

  to 4 March 2003

  April 2002 to March 2003

  BT

  1

  15 March 2002 to present

  Bates Wells & Braithwaite Solicitors

  1

  27 January 2003 to present

  Dr. Cable
  To ask the Secretary of State for the Home Department how many individuals have been seconded to his Department from NGOs in each case listing(a) from which organisation and (b) dates of secondments in each year since 1997–98.[108100]

  Hilary Benn
  Secondments are part of the Interchange initiative, which promotes the exchange of people and good practice between the Civil Service and other organisations. All sectors of the economy are involved. Voluntary, Education, Health, Public and Private. Interchange provides opportunities for civil servants to learn new skills, widen their experience and develop ideas. It also brings in skills and experiences from other sectors.

  Full details of organisations and dates are not held centrally. Available data on inward secondments is listed in the table. Data for 2002–03 is not yet available.
  760W

  Total number of staff on inward secondment to the Home Office

  1997–98

  20

  1998–99

  25

  1999–2000

  30

  2000–01

  21

  2001–02

  44

  Sexual Assault (Support Services)
  Vera Baird
  To ask the Secretary of State for the Home Department what the Home Office budget for rape counselling and support services was in financial year 2002–03. [110719]

  Hilary Benn
  At present the Home Office does not directly fund rape counselling services. During the financial year 2002–03, the Department paid a grant of £302,000 to the Rape Crisis Federation (RCF), an umbrella body for a network of some 40 local rape crisis centres in England and Wales. This grant enabled the Federation to provide a range of support services to its member groups, but was not intended to provide direct services to rape victims.

  The Department's main programme for providing support services to victims of crime, including victims of rape and sexual assault, is through its grant in aid to the organisation Victim Support. Total Home Office funding to Victim Support during 2002–03 was £29.3 million. It is not possible to put a precise figure on how much of this funding was spent on services to victims of rape and sexual assault.

  Vera Baird
  To ask the Secretary of State for the Home Department when the Home Office will publish the comparative study of sexual assault referral centres carried out by London Metropolitan University. [110721]

  Hilary Benn
  As part of the work conducted under the Crime Reduction Programme Violence against Women Initiative, the Home Office commissioned Professor Liz Kelly from London Metropolitan University to evaluate the contribution of three established Sexual Assault Referral Centres towards supporting victims of rape and sexual assault and reducing attrition in the criminal justice system. An overview of the research is due to be published in the autumn of 2003.

  Vera Baird
  To ask the Secretary of State for the Home Department what the Home Office's preferred model is for rape counselling and support services.
  [110726]

  Hilary Benn
  The Home Office does not currently have a 'preferred model' for the provision of rape counselling and support services.

  This objective may be achieved through the use of Sexual Assault Referral Centres (SARCs); rape crisis and other counselling and support services; national or local telephone helplines; or some combination of these.

  Travellers
  Mr. Soames
  To ask the Secretary of State for the Home Department if he will make a statement on the timescale for introducing the proposals to provide
  761W
  the police with increased powers to move on unauthorised traveller encampments which were announced on 5 July 2002. [110657]

  Mr. Bob Ainsworth
  [holding answer 1 May 2003]:We will bring forward legislation when parliamentary time allows.

HEALTH

  Breast Cancer
  Mr. Colman
  To ask the Secretary of State for Health what the Government is doing to ensure that women with breast cancer are not waiting longer than the four weeks between being told that they need radiotherapy and starting their treatment. [110744]

  Ms Blears
  A waiting time target of a maximum one month from diagnosis to first treatment was introduced for all cases of breast cancer in 2001. In the last quarter—October to December 2002—96.5 per cent. of women received their first treatment within a month of diagnosis with breast cancer. Separate data on waiting times for radiotherapy are not collected centrally. In order to tackle radiotherapy waiting times, we are making unprecedented investment in new radiotherapy facilities, streamlining care processes through the cancer services collaborative and working to best utilise the current workforce and to increase the number of staff in post and in training

  Drug Misuse and Dependence
  Mr. Paul Marsden
  To ask the Secretary of State for Health pursuant to his Answer of 1 April 2003,Official Report, column 691W, if he will place a copy of Drug Misuse and Dependence-Guidelines of Clinical Management (1999); in the Library.
  [1100361]

  Ms Blears
  Copies of 'Drug Misuse and Dependence—Guidelines on Clinical Management' are available in the Library. The document is also available on the Department's website at http://www.doh.qov.uk/drugdep.htm.

  Epilepsy
  Mr. Paterson
  To ask the Secretary of State for Health how many sudden unexpected deaths from epilepsy there were in(a) Shropshire, (b) the West Midlands,(c) England and (d) the UK in each of the last five years for which figures are available. [111667]

  Ruth Kelly
  I have been asked to reply.

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

  Letter from Len Cook to Owen Paterson, dated 7 May 2003:

  As National Statistician, I have been asked to reply to your recent question concerning how many sudden unexpected deaths from epilepsy there were in (a) Shropshire, (b) the West Midlands, (c) England and (d) the UK in each of the last five years for which figures are available (111667).
  762W
  The figures requested are given in the following table. The total number of deaths with an underlying cause of epilepsy are also provided as context for the number that are "sudden unexpected deaths"

  Number of deaths with an underlying cause of epilepsy1 and among those, those where "sudden unexpected death in epilepsy"2 was mentioned on the death certificate, England, West Midlands Government Office Region and Shropshire,3 1997 to 20014

  Number of deaths

  England

  West Midlands

  Shropshire

  Year

  All

  Sudden unexpected

  All

  Sudden unexpected

  All

  Sudden unexpected

  1997

  769

  54

  77

  *

  *

  —

  1998

  789

  55

  76

  *

  7

  —

  1999

  819

  87

  97

  5

  8

  —

  2000

  804

  97

  90

  *

  11

  —

  2001

  984

  149

  118

  25

  9

  *

  —Zero deaths

  *Fewer than five deaths

  1Cause of death selected using the International Classification of Diseases, Ninth Revision (ICD-9) code 345 for the years 1997 to 2000, and, for the year 2001, the International Classification of Diseases, Tenth Revision (ICD-10) codes G40 and G41.

  2Deaths where "sudden unexpected death in epilepsy" or similar wording (e.g. "sudden unexplained death in epilepsy") was written on the death certificate.

  3Figures relate deaths of usual residents of these areas. Figures for Shropshire are for the former county as they include deaths in Telford and Wrekin which became a unitary authority in 1998. Figures for the United Kingdom are not available.

  4Figures are for deaths which occurred in these years.

  EU Cancer Plan
  Mr. Bercow
  To ask the Secretary of State for Health if he will list(a) the names, titles and grades of the officials who sit on the EU committee for the implementation of the Community action plan to combat cancer, (b) the number of times, and the dates, on which it has met since January 2002, (c) the agenda items it has considered since January 2002, (d) the decisions it has made since January 2002 and (e) the means used to communicate the decisions to the House. [110280]

  Ms Blears
  No officials now sit on this committee which existed for the purpose of the Europe Against Cancer programme. The Europe Against Cancer programme was completed in December 2002.

  Fertility Treatment
  Mr. Dhanda
  To ask the Secretary of State for Health (1) what action he is taking to ensure that infertility treatment and assisted conception techniques are available on the NHS throughout England and Wales; [110829]

  (2) if he will make a statement on the National Institute for Clinical Excellence's review of infertility services; [110833]

  (3) what representations he has received from West Gloucestershire primary care trust regarding provision of infertility services. [110832]

  Ms Blears
  [holding answer 1 May 2003]The West Gloucestershire primary care trust (PCT) has made no representations to my right hon. Friend the Secretary of State for Health about the provision of infertility
  763W
  services. Along with other PCTs, it is awaiting the outcome of the review of infertility services by the National Institute for Clinical Excellence (NICE).

  In NICE we have a means of bringing order to what has, until now, often been an unfair way for patients to access treatment and care. NICE guidelines will provide recommendations for good practice based on the best available evidence of clinical and cost effectiveness. The guidelines emerging from NICE will reflect the three stages of infertility services, which are primary care, where couples first contact their general practitioner, secondary care for more advanced exploration and treatments, and tertiary centres that provide the high tech treatments such as in-vitro fertilisation.

  Overall, however, we are seeking to achieve integrated guidance so that when couples have to be referred on to a further stage in the investigation and treatment of their infertility they can be offered a seamless service.

  We expect the guidance produced by NICE to be implemented consistently across the national health service and the uptake of this guidance will be monitored locally and by the Commission for Healthcare Audit and Inspection. Clinicians have to make an independent clinical judgement taking due account of NICE's advice and the strength of evidence which lies behind it.

  NICE is expected to deliver the guidelines in November 2003.

  Methadone Overdose Deaths
  Ms Atherton
  To ask the Secretary of State for Health what research his Department has(a) commissioned into the number of methadone overdose deaths in the UK in the last 12 months for which figures are available and (b) evaluated on the role of methadone supervision in reducing overdose deaths. [110598]

  Ms Blears
  The Office for National Statistics maintains a database that contains information on deaths from drug-related poisonings for each year since 1993.

  In 2001, the last year for which figures are available, there were 207 deaths where methadone was mentioned on the death certificate. It should be noted that where more than one drug is mentioned on the death certificate, it is not always possible to tell which of them was primarily responsible for the death.

  Comprehensive reviews of the effectiveness of methadone have been provided by several authors (Hall et al., 1998, Farrell et al., 1994, Bertschy 1995, Marsch, 1998). Most of those studies demonstrating the effectiveness of methadone are of on-going maintenance treatment but the evidence generally becomes weaker as the duration of treatment shortens, with little systematic evidence to support short-term detoxification. Specific studies include Fontain & Ansseau, 1995, Glass, 1993 and Gossop, M. et al., 2001. High quality medical and psychosocial services, a clear orientation towards social rehabilitation, treatment longevity and slow detoxification of well-stabilised patients have all been identified as giving the best outcomes, including reducing overdose deaths.

  Prostate Cancer
  Jon Trickett
  To ask the Secretary of State for Health what plans he has to encourage applications for research funding for projects relating to prostate cancer. [109919]

  Ms Blears
  The Department, jointly with other members of the National Cancer Research Institute (NCRI), has established the NCRI prostate cancer collaboratives, and is funding half of the total cost of £7.4 million over five years. The collaboratives regularly issue calls for proposals for pilot projects to support innovative research ideas.

  The Department is currently directly funding a large-scale randomised controlled trial (called ProtecT) evaluating the effectiveness of treatments for clinically localised prostate cancer. The trial, at a total cost of about £14 million, is being undertaken in nine centres. It will involve over 100,000 men between the ages of 50 and 69 years, and will compare three treatments: active monitoring; radical prostactectomy, and radical radiotherapy. The Department is also funding several other important projects into other aspects of prostate cancer that have been identified as priorities, and by 2003–04 will be directly funding £4.2 million of research a year into prostate cancer, subject to quality proposals being received.

  Jon Trickett
  To ask the Secretary of State for Health what plans he has to extend the model of the Prostate Cancer Advisory Group to other disease groups. [109912]

  Ms Blears
  The Department will continue to encourage, build on and improve partnership working between the National Health Service, the voluntary sector and professional organisations. The prostate cancer advisory group is one model that can be considered as this work develops.

  Scans (Waiting Times)
  Mr. Norman
  To ask the Secretary of State for Health (1) what assessment he has made of current waiting times for(a) CT scans, (b) MRI scans, (c) ultrasound scans and (d) X-ray tests; [109655].

  (2) what guidance he has issued on the maximum length of time a patient should wait for (a) a CT scan, (b) an MRI scan, (c) an ultrasound scan, (d) X-ray tests and (e) audiology tests; [109659]

  (3) what assessment he has made of the effectiveness of data collection concerning waiting times for (a) CT scans, (b) MRI scans, (c) ultrasound scans and (d) X-ray tests. [109654]

  Ms Blears
  Data are not collected centrally on waiting times for diagnostic scans nor has any central guidance been issued. The length of time that a patient may have to wait for any scan is dependent on their clinical condition. Emergency cases need to be seen immediately. Other cases will be carried out as quickly as possible, dependent on the clinical priority of all patients waiting to be scanned.

  Where a scan forms part of the diagnostic process for a patient urgently referred with suspected cancer, this will be covered by the target of a maximum two months wait from urgent referral to first treatment, which will be in place for all cancers by the end of 2005.
  765W
  To increase the capacity of diagnostic services, funding has been made available for the provision of new and replacement scanners. The New Opportunities Fund has provided funding for 57 magnetic resonance imaging (MRI) scanners and the NHS Cancer Plan has provided funding for a further 50 MRI and 50 computed tomography scanners through central purchasing programmes by 2004

  Severe Acute Respiratory Syndrome
  Bob Spink
  To ask the Secretary of State for Health what advice has been given to medical professionals on the(a) diagnosis and (b) treatment of severe acute respiratory syndrome. [108471]

  Ms Blears
  The Department issued information and advice on the diagnosis and treatment of severe acute respiratory syndrome (SARS) to all general practitioners, trusts and public health professionals on Friday 14 March and Monday 7 April via the Chief Medical Officer's public health link system.

DEPUTY PRIME MINISTER

  Housing Development
  Lynne Jones
  To ask the Deputy Prime Minister pursuant to his answer of 11 April,Official Report, column 429W, if he will place in the Library a copy of the summary of the responses to the consultation document, The Way Forward for Housing Capital Finance, on which he relied in reaching the decisions reflected in Sustainable Communities: Building for the Future and the Local Government Bill. [110476]

  Mr. McNulty
  A copy of the summary of responses to the consultation document 'The Way Forward for Housing Capital Finance' has been placed in the library of the House.

  The consultation paper included proposals on the abolition of the Local Authority Housing Grant (LASHG), capital receipts pooling and reform of the housing capital finance regime.

  Views were evenly balanced on the proposal to pool capital receipts. There was greater concern about the proposal to abolish LASHG, but many of those responding were under the impression that the resources currently used for LASHG would no longer be available. That was not the intention, and the Office of the Deputy Prime Minister therefore determined to abolish LASHG from 1 April this year so as to be able to target the resources more effectively. The resources have been taken fully into account in the Communities Plan, with transitional arrangements to ensure that the most advanced LASHG schemes in the pipeline can continue.

  Mrs. Calton
  To ask the Deputy Prime Minister how the £230 million transitional fund for housing was calculated; what assessment he has made of whether it will cover outstanding projects; and whether it is ringfenced. [110357]

  Mr. McNulty
  The transitional funding figure was an estimate made on the basis of information provided by the Housing Corporation as to normal levels of commitments by authorities at yearend. The 766W
  transitional arrangements have since been extended to support investment in housing of up to £550 million in 2003–04, which is higher than in any previous year. The money will be ring-fenced to schemes that could have gone ahead in 2003–04 if LASHG had continued. Details are set out in the statement given on 5 March 2003, Official Report, column. 82WS.

  Exhibition
  Mr. Yeo
  To ask the Deputy Prime Minister if he will list events at which his Department and each agency and non-departmental public bodies for which his Department is responsible have exhibited in each of the past three years, stating for each(a) the purpose of exhibiting, (b) the cost of exhibiting and (c) the number of staff attending for the exhibition. [107612]

  Mr. Leslie
  The Office of the Deputy Prime Minister was established on 29 May 2002.

  The information requested has been placed in the Library.

  Firefighters' Dispute
  Mr. Rosindell
  To ask the Deputy Prime Minister how many man-hours have been lost in the Fire Service in the London Borough of Havering as a result of strike action in the past 12 months. [110586]

  Mr. Raynsford
  Information on the exact number of man-hours lost in Havering due to the strikes in the Fire Service is not held centrally, and could be provided only at disproportionate cost.

  However, there are two shifts in a 24-hour period. Twenty shifts were severely affected by strike action by members of the Fire Brigades Union in November 2002, six in January 2003 and four in February 2003.

  Gifts
  Mr. Pickles
  To ask the Deputy Prime Minister if he will list gifts made by his Department to(a) governments and officials of overseas countries, (b) foreign companies and (c) other persons, in each year since 1997. [103226]

  Mr. Leslie
  The Office of the Deputy Prime Minister was established on 29 May 2002. Since then, gifts purchased by the Office for presentation to governments and officials of overseas countries comprise two alarm clocks, six ornamental candles, two ornamental boxes, two trays and one photo frame. There are no gifts recorded as being given to foreign companies or other persons.

  Local Plan (Tewksbury)
  Mr. Laurence Robertson
  To ask the Deputy Prime Minister if he will instruct his inspectors to speed up the dispatch of their Report on Tewkesbury Borough Council's Local Plan; and if he will make a statement. [111643]

  Mr. McNulty
  The Inspector's report on objections to the Tewkesbury Local Plan is expected to be issued to Tewkesbury Borough Council during December 2003, as requested by the Council. I have asked the Chief Executive of the Planning Inspectorate, to write to the hon. Member.

  Ministerial Costs
  Mr. Pickles
  To ask the Deputy Prime Minister what the costs have been in(a) salary, (b) administrative support and (c) travel of the (i) Deputy Prime Minister, (ii) Minister of State for Housing, (iii) Minister of State for Local Government, (iv) Minister of State for Social Exclusion, (v) Parliamentary Under-Secretary of State for Housing and Planning and (vi) Parliamentary Under-Secretary of State for Local Government, since May 2002. [91622]

  Mr. Leslie
  Since 1 June 2002 to 31 March 2003 the total costs to public funds in(a) salary, (b) administrative support and (c) travel of the Ministers specified were as follows:

  (a) £191,790

  (b) £638,309

  (c) £27,357.61

  National Insurance
  Mr. Bercow
  To ask the Deputy Prime Minister what the cost will be to public funds in 2003–04 of the rise in national insurance contributions on the salary bill of his Department. [107901]

  Mr. Leslie
  It is estimated the changes to employers' National Insurance contributions will increase pay costs on average by 0.7 per cent. next year.

  National Minimum Wage
  Mr. John Bercow
  To ask the Deputy Prime Minister what the estimated cost is in 2003–04 to his Department, agencies and the non-departmental public bodies for which he is responsible of the increase in the national minimum wage from £4.20 per hour to £4.50 per hour. [110436]

  Mr. Leslie
  No additional costs for staff will be incurred by the Office of the Deputy Prime Minister, it's agencies and the non-departmental public bodies as a result of the increase in the national minimum wage.

  Nominated Insurance
  Mr. Crausby
  To ask the Deputy Prime Minister if he will make a statement on nominated insurance relating to leaseholders. [111195]

  Mr. McNulty
  Section 164 of the Commonhold and Leasehold Reform Act 2002 will allow leaseholders of houses who are subject to a nominated insurer clause to be able to insure the property with the insurer of their choice provided that certain conditions are met.

  National BVPIs and ACPIs 2000–011

  National BVPIs 2001–02

  National BVPIs 2002–03

  National BVPIs 2003–04

  Percentage decrease from 2000–01 to 2003–04

  Unitaries/metropolitan boroughs

  189

  123

  97

  98

  48%

  London boroughs

  189

  121

  94

  95

  50%

  County councils (including Fire)

  134

  105

  86

  85

  37%

  District councils

  91

  65

  51

  53

  42%

  Fire authorities

  18

  18

  19

  19

  n/a

  1 Includes Audit Commission performance indicators which were replaced entirely in 2001–02 by best value performance indicators.

  768W
  In order to implement this provision, the form of the notice of cover must be prescribed by regulation. The Office of the Deputy Prime Minister published a consultation paper on 6 May that seeks views on draft regulations that prescribe the form of the notice of cover and also seeks views on additional information to be included in the notice.

  Park Homes
  Margaret Moran
  To ask the Deputy Prime Minister what measures he intends to take to increase protection of park home owners against site owners. [110667]

  Mr. McNulty
  The Office of the Deputy Prime Minister is currently considering how best to take forward the agenda for reform following the undertakings given by the Government in its response to the Park Homes Working Party report.

  Margaret Moran
  To ask the Deputy Prime Minister how many park home site owners have been prosecuted for overcharging park home owners for utility services in the last 12 months. [110668]

  Mr. McNulty
  This information is not held centrally and could only be provided at disproportionate cost.

  Part-time Workers
  Mr. Bercow
  To ask the Deputy Prime Minister what assessment he has made of the impact of the Part-time Workers Directive on staff in his Department. [109275]

  Mr. Leslie
  Part-time working is one of several ways in which the Office of the Deputy Minister offers staff flexibility in their working patterns. The percentage of staff within the Office of the Deputy Prime Minister who work part time is 9 per cent. For the Executive Agencies of the Office of the Deputy Prime Minister the percentage of staff who work part-time is as follows: the Rent Service 8 per cent., PINS 15 per cent., Fire Service College 10 per cent. and the Queen Elizabeth II Conference Centre 4 per cent..

  Performance Indicators
  Mr. Pickles
  To ask the Deputy Prime Minister how many(a) best value performance indicators and (b) Social Service Inspectorate performance indicators there are for which local authorities must provide information to central Government. [111079]

  Mr. Leslie
  The Government require local authorities to provide information on a range of best value performance indicators. Details of the number which, were set from 2000–01 to 2003–04 are set out in the table, together with the overall change in the number of Audit Commission and best value performance indicators since 2000–01
  769W
  My right hon. Friend the member for Darlington (Mr. Milburn) asked the 150 local authorities with responsibility for social services to provide information on 50 high-level social services performance assessment framework indicators in 2002–03 and will do so for 50 indicators in 2003–04. A total of 13 of the social services performance assessment framework indicators are also included in the best value set for 2003–04.

  The Social Services Inspectorate does not set performance indicators but instead uses them along with other information to inform assessments of local authorities' performance on delivering social services.

  Planning Guidance
  Mr. Swayne
  To ask the Deputy Prime Minister what plans he has to revise PPG21; and if he will make a statement. [111653]

  Mr. McNulty
  The Office of the Deputy Prime Minister published a consultation paper on 26 February which proposed the cancellation of PPG21 (Tourism) and its replacement with good practice guidance. The consultation period closes on 23 May. After that date all responses received will be fully considered before any decision is taken on the future of PPG21.

  Public Land (Re-use)
  Llew Smith
  To ask the Deputy Prime Minister pursuant to paragraph 3.126 of Budget 2003, HC500, by what means the Government will consider how surplus central and local government landholdings can contribute to the delivery of corporate government objectives on recycling public owned land for productive re-use. [110112]

  Mr. McNulty
  English Partnerships is currently developing a register of surplus public sector land in England, and hopes to complete an initial version of the register by the end of May. The information in the register will help us explore how surplus central government sites can best be used to contribute to the delivery of corporate Government objectives. The Office of the Deputy Prime Minister will also clarify the scope for encouraging local authorities to take account of these wider policy objectives in their land disposals.

  Regional Government
  Mr. Evans
  To ask the Deputy Prime Minister how many responses were received from the North West of England on the consultation on regional government; and how many(a) were in favour of regional government, (b) were opposed to regional government and (c) expressed mixed views. [111159]

  Mr. Raynsford
  By 1 May 2003, the Office of the Deputy Prime Minister received 2086 replies from individuals and organisations in the North West to the Soundings Exercise on the level of interest in a referendum on establishing an elected regional assembly. In the light of changes to the Regional Assemblies (Preparations) Bill, we have asked for any 770W
  further responses by 16 May. We asked for views about the level of interest in holding a referendum, not about interest in regional government itself, and most respondents confined their responses to the former.

  Sickness Absence
  Mr. Pickles
  To ask the Deputy Prime Minister if he will list for(a) his Department, (b) agencies and (c) non-departmental public bodies in each year since 1997 the daily average number of staff absent on sick leave, and what the numbers represent as a percentage of the relevant total work force. [106816]

  Mr. Leslie
  I refer the hon. Member to the answer given to the hon. Member for St. Ives (Andrew George) on 27 February 2003,Official Report, column 726W.

  Executive non-departmental public bodies are not staffed by civil servants. Sickness absence rates for these staff are not held centrally, and could be provided only at disproportionate costs.

  Tourism
  Mr. Swayne
  To ask the Deputy Prime Minister what representations regarding his proposals to revise PPG21 he has received from the tourist industry. [111652]

  Mr. McNulty
  To date the Office of the Deputy Prime Minister has received 44 responses of which 20 are from the tourism industry. The consultation period closes on 23 May 2003. After that date all responses received will be fully considered before any decision is taken on the proposals put forward in the consultation paper. Responses will also be made publicly available at the close of the consultation exercise.

  Welfare Services
  Mr. Bercow
  To ask the Deputy Prime Minister what representations he has received about the Local Authorities (Charges for Specified Welfare Services) (England) Regulations. [111749]

  Mr. McNulty
  To the best of my knowledge the office of the Deputy Prime Minister has not received any representations in relation to these regulations.

  Wind Turbines
  Mr. Lidington
  To ask the Deputy Prime Minister what his policy is on the liability of onshore wind turbines for non-domestic rates. [109828]

  Mr. Leslie
  The policy of the Office of the Deputy Prime Minister is that the turbines should be liable for rates in the same way as the generality of non-domestic property.

  The rateable values of the turbines are currently calculated by rules prescribed by the Secretary of State in the Electricity Supply Industry (Rateable Values) (England) Order 2000. The Office of the Deputy Prime Minister aims to end in 2005 the prescribed rating of turbines. Rateable values would then be set in the same way as they are currently set for most properties, that is by valuation officers not by my right hon. Friend the Deputy Prime Minister.

LORD CHANCELLOR'S DEPARTMENT

  Civil Service (People with Disabilities)
  Mr. Bercow
  To ask the Parliamentary Secretary, Lord Chancellor's Department what progress has been made in meeting targets for the proportion of people with disabilities in senior posts in the Department. [110526]

  Ms Rosie Winterton
  In May 2000 my Department set targets to increase the number of staff with disabilities in the Senior Civil Service (SCS) to 3 per cent. by 1 April 2002; and to 4.5 per cent. by 1 April 2005. As at 31 March 2003 3.6 per cent. of the SCS had declared a disability taking us beyond the target for the date.

  My Department uses open competition in selection which provides a wide pool of diverse applicants, and advertisements are placed in the disability media. A comprehensive outreach pack giving practical guidance on widening our appeal as an employer is currently being finalised. An annual report incorporating employment statistics by disability is produced and published to all staff. A mandatory Diversity Awareness Training course for all staff and a staff-run Disability Network assists in creating an environment in which individuals with a disability are encouraged to declare their disability. A team of Disabled Persons' Liaison Officers works with the Disability Service Teams at Job
  772W
  Centre Plus to provide advice and assistance. My Department promotes actively the Bursary Scheme for civil servants with a disability and provides mentors from the SCS to support the Scheme. The Department nominates a group of delegates annually to attend the Civil Service College "Personal Development for Disabled People" course. To promote the European Year of Disabled People, a series of articles is being published on particular disabilities in our internal departmental journal and comprehensive guidance is being prepared for individuals with disabilities and their managers on how to obtain reasonable adjustments, in the field of employment.

  National Minimum Wage
  Mr. Bercow
  To ask the Parliamentary Secretary, Lord Chancellor's Department what the estimated cost is in 2003–04 to her Department, agencies and the non-departmental public bodies for which she is responsible of the increase in the national minimum wage from £4.20 per hour to £4.50 per hour. [110441]

  Ms Rosie Winterton
  Staff in my Department and its agencies and non-departmental public bodies are already on salary levels above £4.50 per hour. Some additional costs to the Department may arise if external contractors providing services such as cleaning and catering are affected by the increase in the national minimum wage, but at this stage it is not possible to assess what these costs might be.

TRANSPORT

  Driving Licences
  The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson)
  Legislation that was laid before Parliament by the previous administration on 11 November 1996 and came into effect in January 1997 unintentionally exempted certain drivers from paying a fee for certain short term medical driving licences (that is licences which are restricted on account of the holder's medical condition). However the Driver and Vehicle Licensing Agency (DVLA) continued to charge such a fee. Corrective action is now being taken by the DVLA.

  Until the age of 70 medical licence holders receive free renewals of their short period licences. This ensures that they are not at a financial disadvantage to those whose licences are not required to be renewed until they reach the age of 70. However, at 70 and every three years thereafter, non-medical licence holders must pay a renewal fee. The policy has always been that, in the interests of equity, medical licence holders should also be subject to this fee except that in cases where licences are granted for periods of less than three years they should not have to pay fees at intervals shorter than three years.

  Between 1991 (when the over 70 renewal fee was introduced) and 1997, this is what the legislation was understood to have required and this is what happened. Regrettably the Regulations which were laid before Parliament on 11 November 1996 and came into force on 1 January 1997 changed the drafting of the relevant provision to the effect that medical licence holders were exempt from paying the three-yearly renewal charge at and after 70. This was not the intention. Although the policy was to charge these applicants a fee, and the DVLA operating instructions continued to reflect this, the legislation no longer provided for it. Unfortunately, it was not picked up at the time and consequently medical licence holders continued to be charged.

  This was compounded in 1998 when the legislation was amended in respect of drivers of buses and lorries holding short period medical licences to bring it into line with the changes which took effect in 1997.

  Consequently the DVLA will be refunding fees as appropriate, with interest. The fees to be refunded vary according to the number of licences renewed during the period and the value of payments made. Licences were generally for a three-year period but some shorter term ones were issued. It is possible that some drivers paid a renewal fee up to three times during the period. The cost of car licences varied between £6 and £8.50 and lorry and bus licences between £26 and £32.50 during the period.
  32WS
  DVLA deeply regrets this matter and Ministers have insisted that measures are taken to refund those involved and to minimise the risk of this problem happening again. Now that the Agency has identified the problem it is taking action to identify all those drivers affected and will refund the payments made. Drivers affected need not take any action as payable orders will be automatically issued to them by the end of June.

  There will inevitably be some drivers affected who have moved and not notified the DVLA of their change of address and some drivers who are now deceased. To handle these cases, DVLA has put in place a free helpline which such drivers or their next of kin can contact for advice on what they need to do to obtain payment. The helpline number is 0800 5877 664.

NORTHERN IRELAND

  Education and Library Boards
  The Secretary of State for Northern Ireland (Mr. Paul Murphy)
  I have today, laid before Parliament the certified Statement of Accounts of the five Education and Library Boards for the period 1 April 1999 to 31 March 2000. Copies have been placed in the Libraries of both Houses.

TREASURY

  Census (England and Wales)
  The Financial Secretary to the Treasury (Ruth Kelly)
  The National Report on the 2001 Census for England and Wales is being laid before Parliament today. Copies are available in the Vote Office and the report is also accessible on the National Statistics website.

  The report provides detailed statistics covering the wide range of topics included in the 2001 Census, and fills out the picture given by the key statistics report released on 13 February 2003 and the first results published on 30 September 2002. In particular it shows many relationships between census topics, for example the links between age, social group and health.

  The printed report comprises a set of 145 tables presenting statistics at the national level, and an accompanying CD contains the corresponding figures for England and Wales separately, English regions, and local authorities in England and Wales, along with software to view, manipulate and download the data. The CD contains the equivalent to the entire set of 1991 Census County Reports, which were published in two printed volumes for each of the 55 counties in England and Wales over a 14-month period. The CD also contains an electronic version of the key statistics report released on 13 February.

  A further set of tables covering migration and workplace statistics will be published in a supplementary report later in the summer.

INTERNATIONAL DEVELOPMENT

  Intellectual Property Rights
  The Secretary of State for International Development (Clare Short)
  Last September, the Government welcomed the report of the Commission on Intellectual Property Rights"Integrating Intellectual Property Rights and Development Policy" as a valuable contribution to the debate on the complex issues surrounding the interaction of intellectual property rights (IPRs) and development policy. I am now able to announce the publication of the Government's response. This is available in the Library of the House and on the websites of the Commission, the Patent Office and the Department for International Development.

  The Government believe that IPRs can play a vital role in the course of the development process for developing countries today, just as they did, and continue to do, in the UK, other developed countries and the most successful developing economies. The Commission's report emphasises that a prerequisite for sustainable development in any country is the development of an indigenous scientific and technological capacity. As the Commission recognises, an IPR system is capable of being an important element in developing that capacity, notably in those countries which have already developed a scientific and technological infrastructure. But, as the Commission's report makes clear, an intellectual property system cannot of itself ensure a country attains its developmental goals. The degree to which this occurs depends on many different factors, particularly the economic, social and environmental policies it chooses to pursue, for example, openness to trade and effective governance.

  We agree with the Commission that IPR regimes can and should be tailored to take into account individual country's circumstances within the framework of international agreements such as the Agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS). The Commission also raises the important issue of how technical assistance from developed countries and international organisations such as the World Intellectual Property Organisation (WIPO) can be provided so as to ensure that developing countries fully understand how to create an effective intellectual property system appropriate to their needs. The Government are committed to this goal, both in its own technical assistance programmes and in influencing those of international organisations.

  In setting up the Commission, the Government's intention was to explore how IPRs could work better for developing countries within the overall framework of development policy. The Commission has found that intellectual property does indeed have a role to play in promoting development but it has made a number of detailed recommendations designed to improve the way these rules are developed and applied, both nationally and internationally.

  The Government remain firmly committed to the effective protection of IPRs in order to stimulate continued innovation and creativity. This commitment is consistent with the use of various flexibilities in the
  34WS
  TRIPS agreement by developing countries as the Ministerial Agreement on the WTO Doha Declaration on TRIPS and Public Health in November 2001 demonstrated in one important area for developing countries.

  I would like to thank the Commissioners for a comprehensive and well-written report. While there are those who disagree strongly with aspects of the report, just as others are in wholehearted agreement, nobody should ignore the importance of the issues it raises and the quality of its analysis. We hope it will continue to serve as a stimulus to ongoing debate on these important issues.

FOREIGN AND COMMONWEALTH AFFAIRS

  Iraq and Israel/Palestine Statement (28 April 2003)
  The Secretary of State for Foreign and Commonwealth Affairs (Mr Straw)
  During my oral statement on Iraq and Israel/Palestine, I said that the "United Nations Office of the Humanitarian Co-ordinator has said that it is about to declare the area to the south of Baghdad `permissive'"—Official Report, 28 April 2003, column 21. It was in fact the Coalition's Humanitarian Operations Centre who made this statement. The UN have since declared the Basra Governorate to be at "Phase IV". This allows for the return of some international staff on a permanent basis. UN humanitarian agencies arrived in Baghdad on 2 May to establish a permanent presence.

DEFENCE

  Post-Gulf Conflict Health Measures
  The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie)
  Building on the extensive measures put in place to protect the health of our personnel deployed to the Gulf, the Ministry of Defence has decided to conduct research into the physical and psychological health of those who have been involved in the conflict. It is too soon to know whether health concerns will emerge., but we are of course conscious of the range of physical and psychological health concerns reported by veterans of the 1990–91 Gulf conflict. If health concerns arise out of the current operations, we will want to identify and investigate them as soon as possible.

  We therefore propose to put in place the following measures once the units currently deployed have returned from theatre, as I promised in my answer to the Member for North Cornwall (Mr Tyler) of 14 April 2003 (Official Report, column 570W).
  As soon as possible after personnel have returned from post-operational leave, researchers will hold face-to-face interviews with up to 50 individuals. This will produce qualitative data on any emerging concerns. This work will be carried out by King's College London.
  Once personnel have returned to duty and resumed their normal lives, researchers will issue questionnaires to a large representative cohort of those who were deployed seeking data on health status and exposures. As well as regular and reservist Service personnel and MOD civilians, other groups who deployed with them such as representatives of voluntary aid societies, contractors' personnel and embedded journalists will be invited to form part of the

  35WS
  cohort. The same questionnaire will be distributed to a cohort of those who did not deploy, to provide a comparison, or control, group. This, work will also be carried out by King's. We propose to set up an oversight board to monitor the work chaired by an independent scientist with members drawn from MOD and outside bodies. The research will be published in the peer reviewed scientific literature.
  This will be a longitudinal study. Having identified the members of the cohorts we will aim to keep in touch with them wherever possible, so as to be able to carry out further surveys in future and monitor any changes.
  Depending on the outcome of this work, clinical investigations within the cohorts will be carried out as necessary to provide objective assessments of self-reported ill health. This work too will be carried out by King's.
  All regular and reservist Service personnel and MOD civilians who deployed and have concerns about their health, will be able to attend a Medical Assessment Programme (MAP) run by MOD at St Thomas's Hospital, on referral by their doctor. The MAP will not provide treatment; it will assess patients and recommend treatment
  36WS
  as appropriate. This facility will be made available to attached voluntary aid society personnel, contractors and embedded journalists on a repayment basis.
  All regular and reservist Service personnel and MOD civilians who deployed are already entitled to receive a urine test for uranium if they are concerned. Those who have received high exposures are positively encouraged to do so and in addition to have an isotope test for depleted uranium. Voluntary aid society and contractors' personnel and embedded journalists will be able to receive the test on a repayment basis. To provide a baseline for comparison, we will be asking the Institute of Occupational Medicine in Edinburgh to carry out a study to establish normative values in a military population who did not deploy. (This exercise is separate from the test currently being devised for veterans of the 1990–91 Gulf conflict, where any concentrations will be much lower 12 years on and very much harder to detect).
  We currently monitor the mortality of veterans of the 1990–91 Gulf conflict compared with a control group and publish figures every six months. The same will be carried out for those who have taken part in the current operation.

  Detailed arrangements are now being made and will be announced when they are available.

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

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before business begins, I take the opportunity to inform the House that I will be undertaking a ministerial speaking engagement in Stratford-upon-Avon on Friday, 9th May, when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

Hyde Park: "Star Trek" Exhibition
Lord Berkeley Lord Berkeley asked Her Majesty's Government:
2.36 p.m.
How long the "Star Trek" tented complex will remain in Hyde Park; whether it was granted planning permission; and, if so, by which body.
The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): My Lords, the "Star Trek" exhibition closed to the public on Sunday, 27th April. The site is being dismantled and will be completely cleared by the end of May, if not before. It received planning permission on 17th October 2002 from Westminster City Council.
Lord Berkeley: My Lords, I am grateful to my noble friend for that Answer. As she gave me a Written Answer in March on the same subject, she will be aware that this large tented complex has been on the grass near Marble Arch since the beginning of December. Does she not agree that having so many large tented structures in Hyde Park for so much of the year—this is only one of about six—detracts from the beauty of one of the few remaining open spaces in London? What action will she take to ensure that this does not happen again in the future?
Baroness Blackstone: My Lords, I do not entirely agree with what my noble friend is implying. This was very much a one-off exhibition. I took the decision to support what the Royal Parks wanted to do in allowing the "Star Trek" exhibition, partly because it was to be held in the winter months, when the park is less used than in the summer months, and partly because it would earn the Royal Parks a certain amount of money. Indeed, it has led to more than £250,000 becoming available to the Royal Parks, which will be put to very good use. It will be used to support improvements in Regent's Park, where all the playing fields are being improved and where there is to
1086
be a new pavilion. I hope that your Lordships will agree that exhibitions of this kind, which can bring in extra funding for the Royal Parks, should be allowed to take place from time to time. There will not be another exhibition of this kind in Hyde Park for at least three years.
Viscount Falkland: My Lords, together with many people who enjoy the incomparable space, I am a regular user of Hyde Park and Kensington Gardens, where I ride my bicycle. I congratulate those who present to us a place of peace and quiet, but surely some standards of aesthetics must be maintained. The exhibition was a piece of corporate vandalism, a visual excrescence, which caused enormous distress to those of us who visited the park regularly each week and are now avoiding it. What kind of decisions will be made by Westminster Council in the future? That is what bothers us and, I imagine, bothers the noble Lord who asked the Question. If we can have that monstrosity there, what is coming next?
Baroness Blackstone: My Lords, I cannot answer for Westminster City Council. The noble Viscount will have to put his question about its planning decisions to its leader. The noble Lord is exaggerating in suggesting that this tented exhibition was a dire threat to the aesthetics of the park. It was located in one corner of the park on a patch of ground that is in very poor condition. Incidentally, in addition to the £250,000 I mentioned, an extra £110,000 or so will be spent by those who put the exhibition together on improving the ground on which it was held. So another benefit is that that area of the park will be greatly improved.
Lord Strabolgi: My Lords, I declare an interest as a member of the local residents association. Is my noble friend aware that, in addition to the tented complex, music concerts also cause considerable disturbance to people living around the park? The music is so loud that it can be heard from Marble Arch to Battersea. Will the Government reconsider the use of the park for these kinds of activities?
Baroness Blackstone: My Lords, the answer to that question is no. The Royal Parks are for the people of London. We try to ensure that they are used by the maximum number of people. We should try to attract as many people as possible, including young people, to use the parks and to benefit from what they have on offer. There are seven concerts a year. I regret that they are sometimes rather noisy—I have sympathy with my noble friend in that regard—but we shall certainly not tell the Royal Parks not to hold these concerts.
Lord Inglewood: My Lords, does the noble Baroness agree that many of the strictures that have been levelled against the "Star Trek" tented complex could equally have been made about the Crystal Palace?
Baroness Blackstone: My Lords, I am not responsible for the Crystal Palace. I do not even know what the problem is at the Crystal Palace, so I am afraid I cannot answer the noble Lord's question.
Lord Elton: My Lords, further to the point raised by the noble Lord, Lord Strabolgi, does the Minister not

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have some locus from which she can use her influence or authority to limit the decibels pumped out by the concerts when they take place? This would not reduce their enjoyment to the young people, but it might reduce the harm that it does to their ears, and it would certainly improve the environment for those who live near.
Baroness Blackstone: My Lords, I am certainly very happy to take up that suggestion. I will try to find out exactly what we know about the decibel level that such concerts produce and see whether there is anything we could do to encourage the organisers to make them a little less noisy.
Lord Brougham and Vaux: My Lords, will the Minister tell the House how much money the Royal Parks earn from these sort of events? It is valuable to them, as I believe it is about their only source of income.
Baroness Blackstone: My Lords, I cannot give the precise amount of money that the Royal Parks earn from these events, but I know that it accounts for something like 25 per cent of their funding from non-government sources. They also earn quite a lot of money from the parks being used for film productions, catering and similar facilities. I will write to the noble Lord and give him what figures we have on the precise amount.

Hospital Catering
2.44 p.m.
Earl Ferrers Earl Ferrers asked Her Majesty's Government:
Why the food for the new Norfolk and Norwich University Hospital is cooked in Colchester and sent to Norwich by road.
Baroness Andrews: My Lords, as with all hospitals, decisions on the systems to be used to provide catering services at the Norfolk and Norwich University Hospital are for the individual trust to make.
Earl Ferrers: My Lords, I do not think the noble Baroness can get away with it quite as easily as that. The Government take great pride in what happens in the hospital system and she must be concerned, I would have thought, to realise that £230 million is spent on building a new hospital which apparently does not have any kitchens. Or does it have kitchens which are not used? Presumably all the dishes that come up from Colchester, full of food, including porridge—because even porridge has to be cooked in Colchester—have to go back to Colchester again to be washed up and refilled. Can the noble Baroness say how many road movements, as the Civil Service would say, there are between Colchester and Norwich in bringing the food?
Baroness Andrews: My Lords, the noble Earl is quite right: I am concerned and I certainly do not intend to give him a flippant answer. To answer the last part of his Question first, I understand that every day the food is delivered from Colchester—that is one journey a day. The hospital is brand new, as he knows, built to a PFI contract, and it has opted for the cook-chill method of delivered food. It does not sound very appetising but it is. It means that the food is prepared outside but it is fresh food created to the highest possible quality standards. Because it is delivered in that way, we have a guarantee about that. It offers more choice for patients. The noble Earl is quite right that we are very concerned to increase quality and choice to patients. Hospital food has not been good; we want to make it better. That is why we have introduced the better food programme in hospitals.
Lord Renton: My Lords, can the noble Baroness say how many hours elapse between the cooking of the food at Colchester and its consumption in a hospital at Norwich? How much does it cost to transport that food from the one place to the other?
Baroness Andrews: My Lords, the food is cooked and chilled, so what is crucial is that when it reaches the hospital and is reheated in the kitchen, it arrives on the ward hot and appetising, something to which the patients can look forward. I cannot tell the noble Lord about the transport costs, but if I can find a figure I certainly will let him know.
Baroness Pitkeathley: My Lords, does my noble friend agree that the most important thing from the patients' point of view is not where the meal is prepared or even how it is prepared but its taste and the variety that is available to them? Could she therefore expand a little on her answer about the better hospital food programme, particularly in relation to the choice available to patients?
Baroness Andrews: My Lords, the whole purpose of the better hospital food programme which was introduced in the NHS Plan in 2000 was to put taste, quality and flavour back into hospital food. Among the initiatives that have been introduced over the past couple of years are snack boxes so that people who miss meals when they go to surgery have a nice meal when they return. What we are really proud of—I have here a visual aid—are the menus in which three dishes a day on offer in every hospital are designed by leading chefs. For example, Loyd Grossman is leading our panel implementing the programme. Some of the dishes are absolutely delicious, such as cauliflower cheese with extra cheesy sauce or sticky toffee pudding.
A Noble Lord: More!
Baroness Andrews: That is just the sort of thing, my Lords, that we see and enjoy in our own Dining Room.
Baroness Noakes: My Lords, in the NHS Plan there was a commitment to introduce 24-hour catering by

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December 2001, including the snack boxes to which the Minister referred. Can she explain why only 60 per cent of hospitals have introduced snack boxes and why not all hospitals have yet introduced 24-hour catering?
Baroness Andrews: My Lords, we set ambitious targets because we knew that patients really appreciate good food in hospitals. It proved difficult to meet those targets, but I am delighted to say that we are making progress all the time with 24-hour catering, ward kitchens and snack boxes. Two additional snacks a day are available on the wards for patients and a really nice hot meal in the evening. So we are making very good progress.
Lord Walpole: My Lords, where does this leave the Answer given last week to the noble Baroness, Lady Miller of Chilthorne Domer, by the Minister of Agriculture about the use of local food produced within 30 miles of where it is consumed?
Baroness Andrews: My Lords, the NHS Purchasing and Supply Agency is anxious to involve as many local suppliers as possible. They are supporting that in different ways; for example, the PASA speaks of supplier events. It produces booklets and information and supports the DTI, regional development agencies and small business services. We are very anxious to play a part in sustainable development in that way.
Lord Addington: My Lords, I declare an interest as a local boy. Hearing that food must be transported across the eastern counties to our newer hospitals, I wonder whether the Government are aware that we have "beautifully tender turkeys"—I believe that was the expression—in Norfolk. We also have an excellent catering department in Norwich City College. Are those assets not being under-utilised in this process?
Baroness Andrews: My Lords, I would very much like to see those local assets being used as part of the cook-chill experience. It would be excellent if we could get the local college involved. Because we are looking for innovation and choice, we are prepared to consider several different ways in which best to do things.
Baroness Sharples: My Lords, the noble Baroness said that there was no kitchen at the hospital. I assume that they must use a large number of microwaves.
Baroness Andrews: My Lords, I did not say that there was no kitchen. It is a particular type of kitchen that can cater for reheating large quantities of meals. Each ward has a little kitchen where snacks can be prepared.
Lord Tanlaw: My Lords, is there not a simple solution to this problem, offered yesterday at Question Time? We could serve more corned beef.

Contraception: Morning-after Pill
2.51 p.m.
Baroness Seccombe Baroness Seccombe asked Her Majesty's Government:
What action they intend to take in response to the concern of some nurses that the morning-after pill is being dispensed to women without proper health checks.
Baroness Andrews: My Lords, the Committee on Safety of Medicines and the Medicines Commission fully considered all the safety and medical issues when pharmacy supply of this medicine was being considered during 2000. They advised that emergency contraception could be safely supplied by pharmacists. The Royal College of Nursing has not provided us with any evidence that emergency contraception is being supplied without proper health checks. However, officials from my department would be happy to meet with the RCN to hear its specific concerns.
Baroness Seccombe: My Lords, I thank the noble Baroness for that reply. Two years ago the Royal College of Nursing was in favour of the pill being dispensed over the counter, but now it is calling for tighter controls. Does the Minister share my concern that there appears to be a lack of advice, information and health checks before the pill is prescribed or sold over the counter? The assurances that were given to this House when the relevant Bill was going through the House seem to have been disregarded. I admit that the Minister suggested that she was willing to listen, but what will the Government do to ensure that those assurances are upheld?
Baroness Andrews: My Lords, we are very anxious that the system should work well. The pharmacists themselves are committed to offering an excellent advice service. We have had no evidence, information or feedback that that is not working well. Health checks are made when pharmacists assess patients for their appropriateness to receive emergency contraception, as they are for any other medicine sold by pharmacists.
The noble Baroness may have seen the press notice issued yesterday by the Royal Pharmaceutical Society, which reiterated its commitment. It referred to the very detailed professional guidance that underpins the sale of hormonal contraception. We are content that the system is safe and working well, but we are happy to meet the RCN if it is concerned.
Lord Clement-Jones: My Lords, is the Minister aware that the RCN Congress made absolutely no change to its policies, which were to support—and are still to support—the dispensing of emergency contraception by pharmacists? Is it not the case that no hard evidence was produced in that debate? It was all anecdotal. Would the Minister agree that the benefits

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of emergency contraception in terms of unwanted pregnancies vastly outweigh the issues that have arisen?
Baroness Andrews: My Lords, the noble Lord is right in every respect.
Lord Hylton: My Lords, do the Government agree that the recent introduction of the morning-after pill into schools at a time of rising teenage pregnancies shows the ineffectiveness of much conventional sex education? Will the Government therefore study the success of abstinence education in the United States and discuss it with education authorities here?
Baroness Andrews: My Lords, most contraceptive advice for young people is offered by general practitioners and family planning services. If a school's governing body decides to provide a school-based health service, it can offer contraceptive advice as part of a holistic service. That might happen through extended school services that involve a health service on site, so that we do not have the situation of school nurses prescribing contraceptives.
As regards the evidence from the United States, my information is that no abstinence-only programmes have shown strong evidence that they either delay sex or reduce teenage pregnancies. We are very concerned about teenage pregnancy; our own teenage pregnancy strategy, into which we put £47 million, seeks to inform, advise and support young people as well as possible so that they make the right choices.
Baroness Gardner of Parkes: My Lords, will the Minister say what the proper health checks are to which she referred? What are the contra-indications and how would ordinary people be aware of them, or would only pharmacists and doctors have such information?
Baroness Andrews: My Lords, with reference to the correspondence from the Royal Pharmaceutical Society, the society has issued mandatory standards. Practice guidance is being prepared and based on advice. The standard provisions are used: women are asked whether they have taken the medicine before, and whether there have been contra-indications, especially with regard to liver problems. That is the standard practice advice.
I cannot remember the second part of the question asked by the noble Baroness.
Baroness Gardner of Parkes: My Lords, I asked how the public would be aware of those contra-indications.
Baroness Andrews: My Lords, the only contraindication of which we are aware is that offered by the WHO, and it is simply pregnancy. It is a very safe medicine that has been passed by the Committee on Safety of Medicines. We have absolute confidence that there is no problem with it. Pharmacists are in a good position to give sound advice because they are part of
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the community and people are confident in dealing with them. Again, I can reiterate that we are happy with the situation.
Baroness Whitaker: My Lords, can my noble friend confirm that the rate of teenage pregnancy is actually coming down a little now?
Baroness Andrews: My Lords, yes, I can confirm that. As a result of the teenage pregnancy initiative it has dropped by 10 per cent. That figure is for over-16s and under-16s. It is still too high, but we are seeing improvement.
Baroness Noakes: My Lords, can the Minister confirm that the rate of use of emergency contraception fell slightly in 2001, after the morning-after pill was made available from pharmacists, thus undermining one of the initial rationales? Does she join me in being concerned that the proportion of women obtaining the morning-after pill from their doctor has plummeted from 59 per cent to 43 per cent, thus increasing the likelihood that sexually transmitted infections will go undetected?
Baroness Andrews: My Lords, I do not have the figures that the noble Baroness quoted. I would be most interested in seeing them, if there has been a drop in prescribing. However, we should bear in mind that the morning-after pill, prescribed in this way, was not intended to deal with teenage pregnancy. It was intended to be provided for older women, in fact, and the average age for prescribing is 28. That figure comes from Schering's own research. We are looking at a particular part of the population.
The increase in sexually transmitted diseases has many causes, and I do not see any parallel.

Iraq: Arms Inspections
2.58 p.m.
Lord Judd Lord Judd asked Her Majesty's Government:
Whether, since the Secretary of State for Defence has confirmed that they accept the principle of "independent" verification of arms inspectors in Iraq, they will now advocate the return of the United Nations inspectors led by Dr Blix.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, the Government appreciate the need for credible, independent validation of any discoveries made by coalition forces. We have been actively engaged in discussion with all interested parties in order to take this forward. UNMOVIC and the IAEA would be an option to provide such a validation. Dr Blix himself, however, has said that the circumstances are not right for the return of UN inspectors at present. The task of any inspectors in current circumstances would be monitoring verification, not one of detection.
Lord Judd: My Lords, while thanking my noble friend for that reply and agreeing that it will be

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necessary for matters to move forward and, arguably, for new United Nations authorisation to be introduced for the return of Dr Blix and his inspectors, I wonder whether she will confirm that—given that the Government were at pains to argue that the legitimacy for war was the series of United Nations resolutions over the years recently preceding it calling on the Saddam regime to disarm, and that the Government and their allies went to war because the demands were not met and the conditions for proper inspection were not present—the logical step now is for the UN to continue its work as soon as it is possible to do so? Does she not also agree—I think that she does, but will she confirm—that the international community will welcome the credibility of the UN rather than handpicked inspectors from outside the coalition?
Baroness Symons of Vernham Dean: Yes, my Lords. I hope that I made that absolutely clear in my Answer by saying that we appreciate the need for credible and—I stress the word—independent validation of any discoveries. Of course it is important to find the evidence of the weapons of mass destruction. That is why coalition forces are now actively pursuing sites, looking at documentation and interviewing individuals who have been connected with Iraq's weapons of mass destruction programme. Both the United Kingdom and the United States have deployed specialist personnel and both countries are due to send more specialist personnel into Iraq. However, I entirely agree with my noble friend. It is important that there is independent verification of anything that is found.
Lord Hannay of Chiswick: My Lords, does the Minister agree that the difficulty that the coalition is having in locating these weapons and these programmes casts a rather new light on the carping criticism that was made of UNMOVIC in the period before hostilities broke out by many circles in the United States? Does she not also agree that there is a trade-off between the credibility to which she and others of us would, I am sure, attach primordial importance and the length of time that it takes to get UN inspectors back into Iraq working alongside the coalition?
Baroness Symons of Vernham Dean: Yes, my Lords, I can agree with that. I am glad that the noble Lord, Lord Hannay, was very clear in saying that what he described as "carping criticism" had come from the United States. I do not believe that any of that criticism came from the United Kingdom. I also remind the noble Lord that we are dealing with a country the size of France where we believe that these weapons have been very carefully hidden. As he will know—indeed, the point has been made in another place by my right honourable friend the Prime Minister—in Northern Ireland it has taken a very long time to be able to discover weapons which have been very carefully hidden.
Even now, scientists are coming forward or being found by the coalition forces who we believe were part of the programme of weapons of mass destruction. We
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hope very much that they will be able to contribute to our sum of knowledge about the whereabouts of those weapons.
Lord Howell of Guildford: My Lords, does the Minister agree that smallish containers of germs, poisons and nerve agents are extremely easy to hide in a very large country and probably remain beyond the capacity of any visiting inspectors to uncover? Further to the remarks of the noble Lord, Lord Judd, does she therefore not also agree that it might have been a little more prudent from the start not only to have talked about weapons of mass destruction but also to have emphasised the fact that Saddam was quite simply a brutal tyrant, an aider and abettor of terror of all kinds and a huge threat to Middle East stability, and that it was and remains the duty of all responsible states to get rid of him and restore Iraq to the democracy which it knew before 1968?
Baroness Symons of Vernham Dean: My Lords, I very much agree with the point about these being small containers and substances that are very easy to hide. Indeed, I believe that I made those points very strongly from these Benches in the discussion that we had in your Lordships' House prior to the military conflict. I agree with the noble Lord that it is important not to forget the type of regime with which we are dealing. However, I stress to him, as I think I did before the military conflict began, that, however brutal that regime, the legal basis on which we took up the military conflict was the United Nations Security Council resolutions which stressed the importance of the weapons of mass destruction. That was the legal base. However, I agree wholeheartedly with the noble Lord. It would be a great mistake to forget what a terrible regime that was. In remembering that, we should also remember the brutality facing those who might have wanted to come forward and tell us about the weapons of mass destruction and the fear that they would have had.
Lord Redesdale: My Lords, this morning there was an article in the Guardian saying that some of the Iraqi scientists who worked on these programmes are fearful of coming forward and working with the Americans because any statement they might make that they did not work on weapons of mass destruction will meet with joy from the Americans. They fear that they could end up being arrested. Is there not a case for giving an amnesty to those scientists if they are prepared to work with the Americans in locating materials produced under those programmes?
Baroness Symons of Vernham Dean: My Lords, I have not read the article in the Guardian and I do not know its origins or the validity of the points that it makes. However, the point of substance in the question from the noble Lord, Lord Redesdale, is whether there will be an amnesty for scientists. I believe that the full circumstances in which people were forced to work on those terrible weapons programmes—it is quite possible that some individuals were forced to work on them—should be

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taken into account. However, amnesty for the prime movers—for those who perhaps exerted the force majeure on other scientists—would be entirely inappropriate.
Lord Clinton-Davis: My Lords, what if anything has Dr Blix done which deserves his treatment as a pariah?
Baroness Symons of Vernham Dean: My Lords, I am afraid that I do not accept the premise of my noble friend's question that Dr Blix is being treated as a pariah. I am sure that there are those who have said disobliging things about Dr Blix—indeed, I have heard disobliging things said about Dr Blix—but they have not been said by any representative of the United Kingdom Government.
Lord Rea: My Lords, since Hans Blix and UNMOVIC withdrew voluntarily from Iraq at the start of hostilities, why can they not return as soon as they feel that the security situation is safe enough, without having a further UN resolution?
Baroness Symons of Vernham Dean: My Lords, the best way that I can answer my noble friend Lord Rea is to quote from what Dr Blix said at the Security Council on 22nd April. He said:
"It is evident that in a situation that is still insecure and where military considerations and measures dominate, civilian international inspection can hardly operate".
He went on to say:
"It is also evident that some of the premises upon which the Council established UNMOVIC and gave it far-reaching powers vis-à-vis Iraq have changed".

Nottingham City Council Bill [H.L.]
3.8 p.m.
Read a third time.
Clause 5 [Information to be kept by registered dealers in second-hand goods]:
The Chairman of Committees (Lord Brabazon of Tara)The Chairman of Committees (Lord Brabazon of Tara) moved Amendments Nos. 1 and 2:
Page 5, line 25, leave out "this section" and insert "the relevant paragraph"
Page 5, line 43, after "may" insert "by resolution"
The noble Lord said: My Lords, both the amendments have been proposed by the promoters and are minor drafting amendments. They are available in the Printed Paper Office in the usual way for Private Bills. I hope, therefore, that it will be for the convenience of the House if I ask leave to move the two amendments en bloc. I beg to move.
On Question, amendments agreed to.
On Question, Bill passed, and sent to the Commons.

Business of the House: Debates this Day
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Baroness Hogg and the Lord Hanningfield set down for today shall each be limited to two and a half hours.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.

Burdens on Business
3.9 p.m.
Baroness Hogg Baroness Hogg rose to call attention to the fiscal and regulatory burden on businesses; and to move for Papers.
The noble Baroness said: My Lords, I am honoured to have been invited to move this Motion. I should like to thank the House for this opportunity and the Minister for what I know will be a thoughtful and considered response. I believe that this debate is extremely timely because it comes at a point of great vulnerability in the business cycle.
I must start by declaring my interests, which I hope will also serve as my credentials to speak on this subject. I am currently chairman of two companies. One is large-3i, Britain's leading venture capital company, started nearly 60 years ago and today invested in more than 2,000 businesses across Europe—and one is rather smaller: Frontier Economics, started less than four years ago, which has a turnover of about six and a half million pounds. I am on the board of Carnival, the dual listed company that—uniquely—is in both the FTSE 100 and the S&P 500. I am also on the board of one of Britain's most respected engineering companies, GKN.
In all these contexts I see enterprise as being about capturing the value associated with business opportunity. First, for people to do this successfully there clearly needs to be opportunity. Secondly, people have to see and want to take that opportunity. Thirdly, to enable and encourage them to do so, there needs to be the right economic, fiscal and regulatory climate, which is where government, which can destroy enterprise but never create it, come into the picture.
When talking of the economic climate I always remind myself that God created economists only in order to make weather forecasters look good. But I think that any fair-minded person would acknowledge that this Government started, in 1997, with the economic climate set fair. Their predecessor had provided British business with important advantages in terms of the fiscal and regulatory regime, the incentives provided by five years of continuous economic growth, widely spread across the economy, strong investment and low inflation.
I readily acknowledge that this Government have helped to embed macro-economic stability by their approach to monetary policy. I also should like to pay

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tribute to the Chancellor's commitment to competition policy which—again unlike some of his colleagues—he clearly understands to be essential to efficiency and growth. On the fiscal side, I welcome the reduction in capital gains tax to 10 per cent and the development of the Enterprise Management Initiative.
But I know that the Minister is too sensible, and too honest, to pretend that everything is sunny today. Perhaps the most serious evidence of trouble has been the collapse in business investment, which helped to precipitate the economic slowdown and the sharp downturn in business confidence. We must hope that the Chancellor is right to forecast in his Budget that the economy will pick up in the second half of this year. But I note that even he is not forecasting much of a recovery in business investment.
I think that we have all learnt by now that there is an inverse correlation between the weight of the Budget book and the weight of its contents, so it was with something of a relief that I found that this latest one hits the kitchen scales at close to a kilo. There is this year less micro-engineering in the Budget and some evidence that the Chancellor has recognised the cost of complexity in some of his earlier ideas. Since the hefty increases in national insurance had been announced previously (and the Chancellor did not exactly dwell on them in his Budget speech), all the Budget does is to take roughly the sum of money of which taxpayers have been deprived by a refusal to index their income tax allowances and spread that around elsewhere.
Even so, there are interesting tax proposals in the Budget that need clarifying. We have yet to see how the changes to VAT will work out in practice, though I recognise good intentions. On stamp duty the picture is more confused and the Government are in danger of creating damaging uncertainty here. However, as a member of the Select Committee which is having its first shot at reviewing elements of the Finance Bill, I hope that we can mobilise expert opinion on these issues to good effect. I believe that via this important innovation your Lordships' House will be able to expose some of the weaknesses in tax legislation in Britain—the paucity of consultation, the uncertainty created by a lack of preparation or poor drafting, the erratic approach to implementation dates—without in any way infringing the constitutional rights of another place.
The key conditions for creating a good fiscal climate are that tax should be fair, that it should not be overcomplicated to administer—either for business or for the public sector—and that it should not be at levels that will drive business away from Britain. The same criteria apply to the regulatory regime.
There is something of a paradox involved in making international comparisons. As a member of the European Union we badly need other members to stop dragging their feet on economic reform. Reluctance to proceed with the Lisbon agenda is undoubtedly acting as a drag on growth in our most important market. I commend the Prime Minister's intentions in pursuing this, although I would rather be commending his
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success in achieving it. At the same time we need to maintain the edge in terms of light regulation and low business taxation established in the late 1980s and early 1990s in order to attract investment and encourage growth in Britain.
Last year the European Venture Capital Association published a benchmarking study of the tax and legal environments in member countries. The fact that Britain was still in the lead is both good news and bad. With Germany in the bottom three, it shows how much needs to be done to give the European economy the stimulus to growth provided by a healthy venture capital market. At the same time it reminds us that the UK has relied on a leading edge which can easily be blunted. The latest international survey of corporate tax rates shows that edge is suffering from some erosion. These warning signs should discourage Ministers from imposing yet more distracting regulation, from conceding regulatory agreements in Brussels that might damage British business, and from counting on business to be the financial source of the Government's spending plans.
There are warnings enough even in the Budget arithmetic. This shows how the Chancellor's revenues have been dented by the weakness of the economy, and most notably by the weakness of the corporate sector. Yet he is expecting the overall tax burden to rise rapidly, to over 40 per cent of GDP by 2006. I have to warn noble Lords that the Minister is likely to give them a rather lower percentage because the Government have developed a rather cute way of netting off the total of the tax burden those bits of the social security system that are being combined with the tax system. The proper national accounts measures, free of this distortion, are, however, safely in the Budget Red Book, provided you get as far as page 260. They will show you that the Government plan to have increased the burden of taxation from last year to the end of this Parliament by £150 billion.
I say "even in the Budget" because most respected outside commentators believe that the Chancellor is overestimating the revenue that is likely to be generated by the existing tax regime. The important point to note is that this is true even of those—most notably the highly respected National Institute—who go along with the Chancellor's forecasts for economic growth. That is to say, they believe that even if the economy grows at over 2 per cent this year—a number of people have challenged that figure—and accelerates next year, tax revenue will still fall well short of the levels in the Budget Red Book. That means, of course, that tax rates would need to be raised substantially to deliver the tax revenues the Chancellor forecasts.
As a member of the President's Council of the CBI, I know how great industry's concerns are that the current levels of regulation and taxation should not be further increased, and about measures in the pipeline from Brussels and Whitehall that may add to the burden. We appreciate the steps that the Chancellor took in his latest Budget to lift a few straws out of the sack, but I fear that his colleagues are still puffing behind him with further loads for the camel's back. Perhaps it is foolish of me to hope that timely warnings

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can be helpful, but I shall let hope triumph over experience today and look forward with the greatest confidence to the Minister's response. My Lords, I beg to move for Papers.
3.18 p.m.
Lord Haskel: My Lords, I am most grateful to the noble Baroness for moving this Motion. I was very interested to hear her review of the economy but I should like to take this opportunity to lay some of the myths and misapprehensions about the effect of regulation and taxes on business.
If you listen to the rhetoric, you get the impression that if business were free of regulation and taxes, the economy would flourish and the world would be a better place. Yes, there are some countries where there is very low taxation, little regulation and the minimal state. There are the oil rich countries of Nigeria and Angola. Haiti has very little regulation and virtually no taxes. But these are not places where people want to live. People want to live in the G8 countries, which are the most highly taxed and have the most highly regulated economies. People want to live in those countries because they are the most economically successful.
The explanation of this apparent paradox is simple. Business does not exist in isolation, it exists within society. Markets are as much a social phenomenon as an economic one. If business is to operate successfully within a society it has to accept the values of that society and the norms of its communities. Ignoring that has led to the disappearance of many, many businesses.
It is regulation and taxation which balances the needs, rights and responsibilities of society and business and enables them both to thrive. The balance is achieved by long-standing public regulatory institutions, and the economic success of the rich states depends crucially on the quality of institutions such as the Financial Services Authority, the Food Standards Agency, Ofcom and all the others that we have.
Yet if we listen to organisations such as the CBI or the IoD, we get the impression that they want business to be relieved of the burden of regulation, so that they can be free—free to pollute the atmosphere, to sprawl over our countryside, to exploit staff and customers, and to undertake risky and hazardous activities without any responsibility for negligence or mismanagement. I think that most members of those organisations simply would not want to live in a country with that kind of society. However, we are constantly fed misleading information about how excessive the burdens are. Let me give an example.
At the British Chamber of Commerce conference on 31st March, we were told that 3,849 regulatory instruments were passed last year and that the huge burden on business was becoming unbearable. Nothing like that number of statutory instruments come before your Lordships, so I am grateful to Polly Toynbee, who found out a little more about them. It seems that nearly half were to do with local traffic
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restrictions in order to allow road works and other activities to take place. Others dealt with stopping arms being exported to terrorists or to countries such as Zimbabwe. Many dealt with regulating bus services. There was a regulation abolishing VAT on lifeboats.
Are those really an unbearable burden on business? Yes, there was a regulation about fitting seatbelts to fork-lift trucks because there had been a number of serious accidents, including fatalities, caused by forklift trucks tipping over. Surely that is something that most reasonable businesses would do anyway, yet it is listed as a burden on business.
Another regulation on the list of burdens was to do with maternity arrangements. Do we really want to label women having children as a burden on business? Surely the end result will be that business will lose 50 per cent of the nation's skills and alienate 50 per cent of the nation's brain power. Is that what business wants to do? I do not think so. Family-friendly working has been shown to bring benefits.
The truth of the matter is that our regulatory institutions—they are proportionate and minimalist—work better than most. That was confirmed in a recent OECD report, which said,
"entrepreneurs face a better business and regulatory environment in the UK than in most OECD countries".
The same applies to the so-called burden of taxation. The noble Baroness, Lady Hogg, pointed out that our burden was less than in most OECD countries. They are catching up. When the average level of corporation tax in the world's 30 richest countries was 37.5 per cent, ours was 30 per cent. They have had to cut their rates to bring the average down to 31 per cent, so ours is being cut yet again, particularly for small businesses. Another example is social insurance, which makes up 21 per cent of employment costs in America, but the average in Europe is 24 per cent. In the UK, it is 13 per cent.
One reason why I think that our institutions work well here is that we have a counter-regulation culture in place, and have had for many years under both Tory and Labour governments. Regulations are looked at to see if they are a barrier to innovation and progress, and we are getting better at it. As David Arculus confirmed recently, we have got much better at consulting on regulation.
In spite of our relatively low fiscal burden and the warm words of the OECD, all is not well with British business. In spite of the low burdens on business, productivity here is lower than in most OECD countries. Could it be that, although we have fewer regulations, the standards are too low? Was the noble Lord, Lord Heseltine, right when he said that a great deal of German productivity gains came because Germany's government imposed even higher standards on manufacturing which could be paid for only by improved productivity? When the EU decided that fridges had to be disposed of without releasing ozone-depleting chemicals into the atmosphere, we had to buy German technology to achieve the required standard.

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How do we explain higher productivity in France despite its inflexible and over-regulated employment laws? I am not suggesting that it is because we have too little regulation. I am suggesting that perhaps the market is less effective and slower at driving up standards than regulation—and rising standards is what we all want. The indiscriminate and exaggerated condemnation of regulatory and fiscal burdens does not do business any good in the eyes of the public, who are after all our customers. The recent scandals about pay and dishonesty only add to the mistrust of business by the public.
It is the mentality behind the corporate scandals—that senior executives can use their powerful positions for their personal gain rather than accepting the duty, care and responsibility for the livelihoods of their employees, customers and others who depend on the company—that is worrying. Sadly, the same mentality exists here in Britain and in the US. The opportunities are fewer here than in the United States thanks to our regulatory institutions.
I end where I started. British business should be thankful that we have institutions which regulate effectively and proportionately, and tax relatively lightly. The continued carping and exaggeration by business organisations do us all a disservice, because they seem to be calling for the minimalist state, a place where none of us would want to live. Indeed, it is that exaggerated complaining about regulation which is making business less trusted, and that lack of trust will inevitably lead to calls for yet more regulation.
3.27 p.m.
Lord Freeman: My Lords, noble Lords will wish to congratulate my noble friend Lady Hogg on a most excellent speech. It was succinct, clear and comprehensive, and I am sure that at least we on these Benches will very much agree with it. If she will permit me, I do not intend to try to emulate her contribution, but rather to pick up a number of points made by the noble Lord, Lord Haskel. I very often follow him in debate, and each time I find myself in total disagreement, not only with the general tone, but with a lot of the particulars. He is a good debater, but I am sure that noble Lords will appreciate the chance to have some of his assertions properly debated.
I declare an interest as a chairman of an electrical engineering company and a consultant to PricewaterhouseCoopers, which has to grapple with the flow of tax legislation to which my noble friend referred, and on which I want to touch. I do not intend to quote examples or even to get into an argument with the noble Lord about the number of regulations introduced and their sub-categorisation. That is a blind alley that will not be constructive to the debate. However, I want to follow him in looking at the process whereby governments create regulation and parliaments fail to check it.
I have only 20 years' experience in Parliament, which is a mere fraction of the service of many in this Chamber. However, to be frank, we are losing the battle. The noble Lord says that we live in a counter-regulation culture. We do not. I refer to both
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government and to Parliament, which, sadly, fails to check the executive. We all live in a culture of regulation in this country. I believe that we are losing the battle. More regulations affecting business are issued each year than can be dealt with under the excellent initiative referred to by the noble Lord, Lord Haskel, introduced by the noble Lord, Lord Heseltine—improved, it must be said, by the present Government in 2001—to introduce deregulation measures. Despite those welcome initiatives there is a continued net increase in regulations which adversely affect business.
The Finance Bill gets longer each year—a point referred to by the noble Baroness, Lady Hogg—and is now becoming almost unwieldy. New initiatives from the Department of Trade and Industry in particular, and state aids, which are offered by a number of departments, although each is individually welcomed by different lobby groups, now amount to a blizzard of initiatives which are extremely complicated to understand and which in many cases are counterproductive.
The problem is that Ministers and civil servants can always justify each new regulation on its merits. But if you look at one regulation incrementally added to the totality of regulation affecting business, there are always arguments for and against. Ministers are always eloquent in arguing that social justice, pressures from Europe, the need for the improvement of the interests of one section of our economy or society over the rest will justify the introduction of a regulation. The problem is that there is no one looking at the totality—not only of those regulations introduced during the course of the year but cumulatively. There is no one making a judgment as to whether, overall, they are in the best interests of our economy. I believe that the burden on business is now intolerable.
Lord King of Bridgwater: My Lords, will my noble friend allow me to intervene? Will he, with his great experience, address the point which I do not believe is sufficiently reflected in either the Government's or Parliament's consideration; namely, the ability of the system to administer and deliver what Parliament has enacted? He and I have lived through a period in which all-party support led to the introduction of the Child Support Agency—which proved practically impossible to administer. The problems faced recently by MAFF and then DEFRA were almost beyond the capacity of that ministry to administer and cope. I believe that we now have problems with the tax credit scheme, in regard to which there is a similar qualification. Does my noble friend think that sufficient consideration is given, in terms of worthy measures that might be implemented, as to whether people really consider that the system and the organisation can actually manage to administer what Parliament has enacted?
Lord Freeman: My Lords, I am grateful to my noble friend. The short answer is "No". One of the reasons is the lack of practical experience on the part of those

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in our great departments—both Ministers and civil servants—but, secondly, the great rush that there always seems to be to introduce a Bill without thinking of the consequences down the line.
I shall conclude my remarks in a few moments by commenting on new proposals coming from the Procedure Committee of another place and from the Procedure Committee in this House which will go some way towards dealing with the problem referred to by my noble friend Lord King; namely, legislating in haste and repenting at leisure.
However, I do not want to leave the comments of the noble Lord, Lord Haskel, about living in a counter-regulation culture and the idea that everything in the garden is rosy. Perhaps I may briefly quote two leaders of industry, to whose comments I believe your Lordships should pay attention. The first is Mr Chris Humphries, a former director-general of the British Chambers of Commerce, whose comments appeared in a press release dated 20th January 2001:
"Despite all the rhetoric, the reality is that government has dramatically increased the regulatory burdens that threaten small business competitiveness. Excessive red tape is stifling the very enterprises the Government is seeking to promote".
Those are considered words from someone who is much respected in industry.
Mr Digby Jones, the director-general of the CBI, was quoted in the Daily Mail on 11th August 2000 as saying:
"They [businesses] would say that regulation is the most dominating feature of running business. It is no longer creating wealth it is having to deal with regulations".
The attitude that I am afraid both national and local government have to introducing not only primary but secondary legislation is that no risk should be taken in making detailed regulations or orders that any eventuality could arise that would embarrass either the Government or the Minister. There are no prizes for taking a balanced judgment about making sure that there is a light touch—that you are looking at the outcomes and not at the specific requirements or processes. In fact, civil servants and Ministers get the blame when things go wrong. So we are not a risk-taking culture.
I quote the chairman of the Audit Commission, writing in The Times on Tuesday, 6th May:
"Extremely bright and committed people are shackled by a system that in no way balances the negligible rewards for success against the daunting penalties for failure".
So all the pressures are to gold-plate regulations, to make sure that the regulations are comprehensive and that every eventuality is considered.
What are the solutions? Briefly, let me look at government. Both administrations have tried a number of initiatives over the past 20 years, and particularly over the past 10 years. We had the regulation task forces, led by Frances Maude under the previous administration and by the noble Lord, Lord Haskins, in this Administration. They produced regulatory impact assessments. But all their work was advisory. At the end of the day, if the Minister and the Government did not agree, their advice was ignored.
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I pay tribute to both the previous administration and the present one for introducing the deregulation procedure. There is an example on the Order Paper today of an excellent piece of regulatory reform concerning sugar beet research and education. It removes one piece of legislation. But, frankly, that is a very small contribution to dealing with our overall problems. We are not dealing properly with the new flow of legislation.
I believe that within government we need a Minister of Cabinet rank responsible for vetting all primary and secondary legislation, with the support of advisers, and to be of equal rank with the departmental Minister—so that if it can be shown, not only by outside lobby groups but by internal advice, that there is an incremental burden on business, that Cabinet Minister would have the right and the power to argue with his colleagues that the Bill should not proceed.
Secondly, the Chancellor of the Exchequer must grip the problem of tax simplification. My noble and learned friend Lord Howe is chairman of the excellent Tax Law Review Committee. But that committee is examining the clarification of our tax law, not its simplification. The Chancellor should take the initiative and possibly rely on a Select Committee of both Houses of Parliament or on a group of advisers, or both, in simplifying year by year great chunks of our tax law and writing them into the Finance Bill.
I turn finally to Parliament itself. I believe that there is a good deal of work that should be commended. I pay tribute to the various committees of this House and another place which look at whether regulations are intra vires. But the Delegated Powers and Regulatory Reform Committee in this House and the Scrutiny Committee in another place are not dealing with the merits of regulation. I am very pleased that the Procedure Committee in this House has proposed and I understand that we are to have a new procedure in this place in the new Session of Parliament looking at the merits of delegated legislation. That is much to be welcomed.
I regret to inform your Lordships that a similar proposal in another place has been blocked by the Government—at least, that is how it appears. The proposal was to have a Joint Committee of Members of another place and of this House examining the flow of legislation and making a judgment—it must be said that this is a judgment about politics—as to whether the regulations are necessary. I ask the Minister whether it is true that the Government are blocking the creation of a Joint Committee to examine delegated legislation and, if so, whether the Government will think again.
3.40 p.m.
Lord Brooke of Sutton Mandeville: My Lords. I join my noble friend Lord Freeman in congratulating my noble friend Lady Hogg not only on having initiated this debate, and providing us with the opportunity of participating in it, but on the quality of the speech that she delivered. My late noble kinsman succeeded her late noble kinsman as Financial Secretary to the

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Treasury, and her late noble kinsman succeeded my late noble kinsman seven years later as Chief Secretary to the Treasury. It is therefore a privilege to follow her lead in this debate. This is approximately the anniversary of the last debate which was initiated from these Benches on this subject, which is at least an index that the problem has not gone away during the course of the ensuing year. I hope that I shall avoid duplicating anything that I said a year ago. I shall therefore follow my colleagues in erring on the side of brevity. I hope that I shall not repeat myself.
I acknowledge the proposals in the Budget for the alleviation, at least in some degree, of the problems thrown up by regulations and tax. I like to feel in a modest way that the fact that noble Lords on these Benches have continued to come back to these issues has drawn to the attention of the Government the fact that they needed to improve their record. That is our effect operating in slower time. I compare that with the real time proposals several years ago on corporate structures and international tax arrangements, where I heard, on the morrow of the Budget at one of those breakfasts put on by accounting firms, a tax partner at PricewaterhouseCoopers revealing his concerns about the arrangements which the Budget contained in that regard. Those of us who heard him in that audience were not surprised that the Treasury sought later that day to rubbish him. Indeed, I can recall it happening on the Floor of the House of Commons. Likewise, we were not surprised by the significant number of government amendments to the Finance Bill later in the summer in order to respond to the thrust of those earlier criticisms that he made.
My noble friend Lady Hogg alluded to the welcome reduction in micro-engineering in the Budget, and the Minister will know from the exchanges that he and I have had what pleasure that gives me. The fact that there has been so disappointing a take-up of tax credits is itself an index of how the complexity of schemes that the Chancellor introduces, particularly when they have to be understood by people who are not familiar with these issues, can be a deterrent to the take-up occurring on the scale that the Chancellor would wish. Before the present Government took office in 1997, I served on the Finance Bill with members of the present Government who were then in the Shadow Treasury team. I can remember the future Chancellor of the Exchequer's genuine commitment to increasing productivity and his enthusiasm for training and education. I admired them both.
Five-and-a-half years on from 1997, compared with the five-and-a-half years that went before, one can compare decently and fairly the productivity record in the nation as a whole between the economy under the then Government and the economy under this one. Some might say that five-and-a-half years is not a long enough time scale, but the present Government have been keen to demonstrate to us that boom and bust is now a thing of the past. In that regard the five-and-a-half years that they have been in office seem to me to be a fair comparison. I say in sorrow rather than in anger that it is a genuine disappointment that the growth rate in manufacturing and service industries
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has been less than a half of that which it was in the five-and-a-half years before the Conservative Party left office.
One can ask oneself why that might be? An obvious candidate is the reduction in manufacturing investment that has been occurring under the present administration. My noble friend Lady Hogg referred to that. That is an irony after the raid on pension funds that occurred in the first Finance Bill after 1997, when the Government's logic or rationale was that they wished to reduce the amount of dividends paid by corporations, so that that money would go into long term investment. I remember taking part in the Second Reading of the Finance Bill in 1997, and alluding to that aspect of the Government's policy as a mild example of chaos theory. The Chancellor was throwing quite a large boulder into the placid pool of pensions policy. Meanwhile, as happens under chaos theory, in due course little old ladies in sub-post offices up and down the country would be paying extra for their stamps because the Post Office pension fund was in difficulties. It gives me no pleasure at all to find that that is now what is happening—as I understand it the stamps go up in price tomorrow.
There are commentators who take the view that manufacturing investment is now at its lowest point since 1984. The Chancellor's forecasts of the level of manufacturing investment have dropped very sharply from the forecasts that he made in the Budget last year for the current year, compared with the one that he has made in this year's Budget. It is no surprise that in the list of six proposals that the CBI makes for ways in which manufacturing investment can he restored, the second is a reduction in regulatory obstacles. Inevitably figures will be exchanged in debates of this kind, and there is no way in which we will all end up with the same figures on the hymn sheet. However, there is reasonable agreement that the fiscal cost to business of the Government's policies since 1997 has been of the order of £47 billion, if it is carried through to 2005 under existing plans.
That is not quite as much as the largest warrant that I signed as a Lord Commissioner of the Treasury. Such a warrant has to be signed by two members of the Board of the Treasury. In the 1983 general election the only two members of the board who were in London were my noble and learned friend Lord Howe of Aberavon and myself. I joined him in signing a warrant for £49 billion. A million here and a million there soon adds up to serious money and £47 billion is a pretty inexorable burden for business to carry by comparison with what it was carrying before the present Government came into office.
Lord Haskel: My Lords, I thank the noble Lord for giving way. Can he say how the £47 billion is made up? For instance, does that include the extra money paid out under the minimum wage?
Lord Brooke of Sutton Mandeville: My Lords, the calculation, as the noble Lord knows well, was presented by the CBI. If the matter of detail is of acute importance to him, I will take a leaf out of the

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Minister's book and write to him after the debate. I recognise that when the Government came to office in 1997 they had around their necks the commitment that they had made about not increasing personal taxes. By last year they were reduced to a stealth tax through NICs that were introduced last year and executed this year, falling both on individuals and employers. That £47 billion has inexorably had its effect on business, and has led to the fiscal burden to which this Motion refers.
As to regulations, there seems to be broad agreement from a number of different sources. I take the Chamber of Commerce figure of £20 billion which has cumulatively occurred between 1997 and this year. That figure is not markedly different from that quoted by other commentators. If current rates of growth are maintained from year to year, that figure is likely to expand to between £25 billion and £30 billion by 2005, and thus make it comparable to the fiscal figure. My remarks about the £47 billion fiscal burden likewise apply in this regard.
I have sympathy with the Government with regard to regulations. I recognise that we can be defeated in Europe and find ourselves having to administer schemes and directives from Brussels. I take as a particular example—simply because I have reasonably close working knowledge of it—the agency workers directive. I pay tribute to Alan Johnson, who was the Parliamentary Secretary at the DTI in the previous Parliament and who was responsible for handling that. He published a series of drafts about what the directive would say. In the nature of things, agency workers were highly prevalent in my constituency, where the best part of 1 million people came to work. I took the trouble to write to every employer in that field in my constituency not once but twice as the various drafts emerged. We had round-table conversations about the drafts and what their implications would be and, on behalf of the employers, I wrote to Mr Johnson or the relevant official at the DTI to explain what the consequences would be. I pay tribute to Mr Johnson for the manner in which he absorbed those remarks. The process was fairly prolonged, which itself was a commendation of the Government's attitude.
I said that I have sympathy with the Government. The Government were not happy or enthusiastic about or particularly supportive of the directive but Labour Members of the European Parliament had no hesitation in voting for it when it went through Strasbourg, thus inevitably giving the sense that the right hand did not know what the left hand was doing. The CBI's calculation is that the directive will cost 160,000 people their jobs.
I turn to the effect on individual businessmen, who must deal with regulations as well as taxation. I cast my mind back to when I was running a small business in the mid-1960s. The then Chancellor was encouraged to introduce legislation into that government's policy by two Hungarians. I have absolutely no problem with Hungarians; any nation that can generate as English a motion picture as "The Scarlet Pimpernel" with Sir Alexander Korda as a Hungarian impresario,
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Baroness Orczy as the Hungarian author and Leslie Howard, who was born in Hungary, as the principal actor, has much going for it. Those two Hungarians encouraged the then Chancellor to introduce legislation requiring a foreign company—the company in which I was working was foreign—automatically to pay its profit in dividends at the end of the year to the parent company unless it could prove that it needed the money to keep in the United Kingdom. In investment terms, that was the exact opposite of the philosophy that governed the Government's policy towards investment when they came to office in 1997. But time passes; 30 years have gone by.
I do not know why the Government took that view. It would appear to have placed downward pressure on sterling. It was presumably done in order to raise cash and hope that the money could come back in thereafter. The Inland Revenue required extremely detailed accounts about why one needed not to pay a dividend and to keep the money in this country. I remember spending weekend after weekend preparing schedules, which my wife somewhat resented, explaining why we needed to keep the money here. One's frustration was increased by not knowing why the Government thought that it was useful to employ businessmen's time in that way. In the fullness of time, the Inland Revenue agreed to every proposal that I put to it.
Of course I appreciate all of the arguments about businessmen's other problems, some of which the Minister may adduce. The YouGov poll, which was reported in the Mail on Sunday earlier this year, went to 472 company directors. YouGov has a good record in terms of interactive polling and the accuracy of its political forecasting. It asked the company directors to list three main barriers to growth for their companies. The largest problem was red tape, with 57 per cent; the second was the tax burden, with 44 per cent: the strength of the pound was 8 per cent; being outside the euro was 5 per cent; and I acknowledge that weak demand was 38 per cent. That is an index of the perception of what the business community must live with. I repeat my gratitude to my noble friend for initiating this debate and I look forward to the Minister's response.
3.55 p.m.
Baroness Noakes: My Lords, I add my thanks to my noble friend Lady Hogg for bringing this important topic before your Lordships' House today and for her excellent introductory speech. I declare an interest as a director of a number of companies.
When considering what to cover in today's debate I felt spoilt for choice. There are so many areas of business life that have been burdened by the Government that we could easily have spent the whole day talking about the harmful effects of the Government's policies.
The productivity analysis in this year's Red Book is damning: UK productivity in terms of output per worker is only three-quarters of that achieved in the

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US and, to our shame, we lag behind France and Germany whose economies we do not normally admire. Productivity is now increasing at only half the rate it was at the end of the last period of Conservative government. It is easy to see why that is the case when we look at the fiscal and regulatory burdens that have been created.
I shall concentrate on just three areas. I start with the impact that the Government have on small and medium-sized enterprises. I emphasise that I have no personal experience of working in the SME sector but I have met many chartered accountants who work in or advise SMEs. They are absolutely convinced that the Government's policies make life increasingly difficult for them. One of them, a finance director of a successful online business, was quoted in the accountancy press last week. I am conscious that the accountancy press is not the reading of choice of most noble Lords, and they may not have read what he said. He said that Britain is not a good place for small businesses. Like all small businessmen—or perhaps all businessmen—he thought taxes were too high. But his real concern was the increasing burden of regulation. He said:
"The Government sometimes have a view that time is free and that a finance director's time is well spent in filling in forms".
Filling in forms is not value-adding work. The time could be better spent building businesses. It is the diversion of time from running the business, rather than the direct cost of regulation, that is so devastating.
Nearly 80 per cent of members of the Institute of Directors surveyed earlier this year said that they were spending more time and money on tax-related administration alone. Businesses are the Government's unpaid tax collectors and administrators. That has been the case since PAYE was so ingeniously devised more than 50 years ago. While that affects businesses of all sizes, an increasing burden in this area affects the SME sector disproportionately.
A particular concern in recent years has been the administration of the working families' tax credit system, which has been forced on to business. This year, employers have a new burden in the transition to the working tax credit system. After the transition, about half of the businesses surveyed by the Institute of Directors thought their compliance costs would increase and half thought their costs would stay the same. Not a single business thought that its costs would reduce.
The Chancellor has been endlessly inventive with his schemes of tax credits—he has designed and redesigned them—but he seems blind to their impact on businesses. A further area that small businesses find hard to cope with is the Government's extension of employee rights. We have extra pay and leave for maternity, for paternity and now even for adoption. If you are a small business—
Lord Haskel: My Lords, before the noble Baroness leaves productivity, she told us that although
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productivity in France and Germany was higher, according to the OECD there is more regulation in France and Germany. Can she explain that?
Baroness Noakes: My Lords, that is a paradox I cannot explain. It is perhaps easier to see why we lag behind the US in terms of regulatory burden. Other matters must operate to counterbalance the regulatory burden that exists in France and Germany. That is perhaps not the whole story but I believe it is an important part. I shall not let the noble Lord, Lord Haskel, deflect me from talking about the burdens on small businesses and the imposition of additional rights for employees. I spoke of maternity, paternity and adoption leave and pay.
I was about to make the point that a small business finds it difficult to cope with those burdens. The impact that a single employee can make in a business of 40 or 50 employees can be disproportionately large. In turn, that makes it difficult to run a business successfully. Employees now have new rights to ask for flexible working hours. For many small businesses that is a nightmare. To the noble Lord, Lord Haskel, I say that family-friendly policies can cause many problems for small businesses.
I can quite understand why the Government think that all of those changes are a good idea in electoral terms but they seem to ignore the very significant impact experienced at the sharp end by small companies. If we ignore the SME sector we ignore a very important part of the economy. The contribution that SMEs—businesses of 250 employees or fewer—make to the economy accounts for around 40 per cent of GDP. If one harms that sector one potentially harms the engine room of growth in our economy. That can be very difficult. The Government have an important part to play, particularly, I hope, in looking at exemptions from regulation for SMEs so that regulations do not continue to cause economic harm.
My second topic is pensions. I do not need to remind noble Lords that this country has a pensions crisis. A major contributor to that has been the Government's fiscal stealth raid on pension funds, to which my noble friend Lord Brooke referred. The change in the tax credit system is costing pension funds and, therefore, ultimately the businesses that support them £5 billion a year. Another £1.5 billion a year is lost in contracted out rebates. Those annual hits are equivalent to around 15 per cent of pension fund income. That is not insignificant. Cumulatively, pension funds must have lost well over £30 billion. That has increased the financial burden of pensions on businesses. The plain fact is that that financial burden has become so intolerable that companies have been closing their defined benefit schemes in droves. The Association of Consulting Actuaries found that only 40 per cent of final salary schemes were still open to new members and half of those were considering closure.
On the subject of pensions we must remember the Government's big idea of stakeholder pensions which all employers with more than five employees were obliged to set up. The result of all of that effort by businesses was that 90 per cent of employer-designated

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stakeholder schemes have no members at all and the Government have missed their target of 5 million stakeholder pensions by a mile. Only a little over 1 million people have signed up. The Government have created a pensions crisis but have no solutions. The Green Paper published last year was a damp squib in terms of policies but the small print shows an alarming potential for increasing the regulatory burdens on employers.
The third and last area I shall cover is the impact of regulation in the health sector and in particular as it affects care homes. In relation to the NHS the Government have never been happier than when prescribing in the minutest detail how things should be done. For the past six years they have been busily micro-managing the NHS. It was perhaps no surprise that the diversity of provision in the largely private care home sector was too tempting to resist.
With great enthusiasm the Government devised a new regulatory regime for care homes including new standards to be met down to the smallest details such as the width of doors. Many things were wrong with those standards. Some showed that the Government did not understand how care was delivered to certain types of resident. Others clearly showed that the Government did not understand the economic impact of their recommendations in terms of the cost of alterations to care homes. Above all the Government failed to understand that many of those businesses were small businesses that simply could not or would not live within such a complex regulatory regime.
Very late in the day the Government watered down the standards, but it was too late. Care home owners had already thrown in the towel. The facts are that 60,000 care home beds have been lost since the Government came to power. In many cases the regulations were the straw that broke the camel's back. The care home sector has been decimated at a time when society, with an ageing population, needs it most.
I know that the Government talk a good story on deregulation and I have no doubt that we shall be hearing more of the same from the Minister today. But there is a simple way in which the Government could show their deregulatory intent: they could have an annual budget for the regulatory burdens on business and a department that needed to impose burdens could have a share of that budget. Unlike all other budgets, it should go down every year, so that if a department wanted to impose additional burdens, first, it would have to play a zero sum game to find burdens that it could reduce and, secondly, it would have to examine its total burdens to see what further reductions it would have to make. If that simple discipline were imposed on departments by the Government, in particular by the Treasury, that could have a very important impact. I commend that to the Government.
4.7 p.m.
Lord Razzall: My Lords, I join noble Lords in thanking the noble Baroness for introducing the debate. Having listened to the early speeches, particularly those from the noble Baroness, Lady Hogg, and the noble Lord, Lord Freeman, I was optimistic that the debate would be about steps that the Government should take to reduce the regulatory burden in the United Kingdom, rather than the partisan discussion that appears to have emerged in the past couple of speeches. They seem to suggest that until 1997 we lived in a regulation-free low-tax successful economy and that since then we have lived in an unsuccessful economy because of the groaning burdens that this Government have imposed on industry.
That is the impression that one would have received from listening to the attacks that the noble Baroness. Lady Noakes, and the noble Lord, Lord Brooke, made on the Government's record. In relation to pension funds, for example, they made no mention of the cataclysmic collapse in stock markets in the past two to three years or the fact that the whole of the private sector during the 1990s took a pensions holiday because they were advised by their actuaries so to do. If one listens to the noble Baroness, Lady Noakes, or to the noble Lord, Lord Brooke, that is entirely the fault of the Government. Such is party politics even in your Lordships' House.
Then the noble Lord, Lord Haskel, tells us that we live in a regulation-free climate and that this country has the best government in the world for regulation of businesses. Again, that does not help us much in the debate. As an outside observer and as someone who has not been a member of a party that has been in government during the period, I would have thought that it would be fair to say—both sides could agree on this—that by and large we are probably less regulated than continental Europe. Those of us who have conducted business in the United States would probably suggest that we are less regulated than that bastion of capitalism. Those on this side of the House who wish to argue that regulation in this country depresses our rate of growth below that of other countries have a difficulty explaining the French and German examples—and, indeed, the example of the United States of America. Anyone who has done business there groans under the regulation forms that have to be filled in.
Having said all that, we on these Benches consider that the way to approach the matter is not to be complacent and say, "Yes, we are a successful economy". There are problems with regulations. Indeed, on every page of my party's most recent manifesto, we printed a regulation that we would want a future government to repeal. There are 25 of them, many of which still exist.
I shall not ask the Minister to answer about all 25 when he responds, because we would run out of time. I shall not even ask him to write to me, because I know the answer. However, at least five characteristics cause

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a problem in the imposition of regulation by central government. Perhaps I may briefly describe them and give one or two examples.
The first, which has been touched on, is what has become known as gold-plating of European Union legislation. Your Lordships would not expect someone from my party to disagree with the optimism with which a large number of European Union directives, especially employment legislation, have been implemented. However, to take the Working Time Directive as an example, we supported it, as did the Government, but its implementation in this country has been cumbersome and contrasts with the light touch employed elsewhere in continental Europe.
Far too often, governments—this is not an attack on the Labour government, but on governments of all persuasions—fail to adopt that light-touch approach, which involves providing a high-level legal framework that avoids complex and mandatory record-keeping, but which workers can use to assert their rights where necessary. Regulatory impact assessments, which have been mentioned, help in that area, but to be more effective they should be performed by an independent body, rather than by government departments. That process works extremely well in the Netherlands, by the way. So the first point is gold-plating and over-zealous implementation of European Union legislation.
The second area in which governments of both persuasions have been guilty is where conflicting UK and European Union regulations address the same issue. One example is coming down the track with the proposed European Union duty to trade fairly, which, if the Government behave in the way in which governments normally behave, will sit alongside existing UK customer protections.
We have argued in favour of the general duty to trade fairly and will support implementation of the directive when it is introduced, but we shall require that its application to each sphere of business is clarified simply. If there is a conflict between the European directive to trade fairly and existing UK law, that UK law must be repealed. In the past, there has been a tendency to leave in place UK law that is in conflict with or touches on the same points as European directives, increasing the burden of regulation on British industry.
My third point concerns multiple layers of application. The best example of that is the fire regulations. With the Fire Precautions Act 1971, the Fire Precautions Regulations 1977 and local Acts and by-laws, more than 100 different regulations are currently actively in place which affect dealing with fire problems. That requires each layer of regulation to be assessed to identify the requirements applying to a business at any one time—a major burden on large, small and medium-sized firms alike.
Where regulations are amended or updated, it should be a requirement that a single explanation of the regulations that apply is produced. When a new regulation is introduced, any owner, operator or director of a business should receive an explanation of exactly what regulations apply to that activity.
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My fourth point concerns the requirement to provide information under the Statistics of Trade Act 1947. That is a major irritation to large sectors of British industry. I have in my hand a letter from a small manufacturing company in Stockport—at the heart of our manufacturing sector in the North West—which, under that Act, is required to report regularly on the following: its quarterly capital expenditure; annual business inquiries, parts 1 and 2; monthly wages and salaries; quarterly stocks; a survey of research and development carried out in the UK in the current year; the annual register inquiry; an annual inquiry into international trade and services; an annual/quarterly production inquiry; and a sales quarterly inquiry.
The writer of the letter states that when the company has slowed down and not filled in the forms, the Office for National Statistics in Newport has told it that it will refer it to the enforcement squad under Section 1 of the Statistics of Trade Act 1947. That is an example of the sort of thing discussed by the noble Baroness, Lady Noakes, which seriously reduces the productivity of British industry because of people having to be employed to answer such inquiries.
What is the remedy? One remedy would be that any regulation should be governed by a sunset clause, lapsing automatically unless positively reimposed, prompting the Government to assess whether the regulations were strictly necessary. I should have thought that regulations under the Statistics of Trade Act 1947 could well fall into that category.
My final point, which I have saved until last because it concerns a major con trick on British industry by governments of all persuasions, is the use of business to administer government policy. The most effective method of collection of tax was imposed through the pay-as-you-earn system, which has enabled enormous numbers of people in the private sector to collect tax on behalf of central government. The Inland Revenue does not collect PAYE; employees working for business do. That cost is imposed on British industry.
Similarly, when value added tax was introduced, the system was clever. The private sector collects VAT, not Customs and Excise. The most recent example of that is the administration of the working families' tax credit, which provides an additional cost to business. Governments of all persuasions should consider that fifth area and whether it is the most efficient use of the private sector's time to be the free collection agency of tax revenue.
In conclusion, I agree with the noble Lord, Lord Freeman: the problem is that governments of all persuasions start with questions asked here and in another place. Every time one of your Lordships stands up to ask, "What are the Government going to do about X, Y or Z?", if the Minister replies, "We shall consider it", that process inevitably grinds its way through the system and ends with a new regulation.
Lord Freeman: My Lords, I am grateful to the noble Lord for giving way; time is still with him. He helpfully referred to scrutiny of European legislation. Does he agree that we have an anomaly? Your Lordships'

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House scrutinises European legislation upstream, as it were—before detailed directives and regulations are drafted—while the other place carefully scrutinises legislation when it is issued as directives and regulations; but the left and right hand do not appear to grasp each other.
Lord Razzall: My Lords, I agree entirely with what the noble Lord, Lord Freeman, says, except for one word that he used. He said that the other place looked "carefully" at what comes out of Europe. I agree entirely that the left and right hands are not in tune in monitoring changes.
The problem starts with us. Noble Lords stand up to ask what the Government are going to do about different issues. The noble Lord, Lord Dormand, very often asks what the Government will do about excessive pay. He is right: what will the Government do about it?
Lord Dormand of Easington: My Lords, I am glad that the noble Lord is adding to my case. But he has probably noticed that recently, in the papers, the Government have specifically mentioned doing something. Not before time, if I may say so.
Lord Razzall: My Lords, the point that I was making is that, if you have succeeded in your campaign to get the Government to do something about excessive pay, it will add to the regulatory burden on business in complying with what you want. The problem always starts with us.
4.21 p.m.
Lord Saatchi: My Lords, I, too, thank my noble friend Lady Hogg for allowing us the opportunity for this timely debate in your Lordships' House. As always, it is a pleasure and a privilege to make the winding-up speech for our Benches in a debate to which so many distinguished noble Lords have contributed. It is often said that there is a special merit in the composition of your Lordships' House through its ability to bring into play in debates such as this one people with real experience and specialist knowledge of economic affairs. That has been clearly evident again today.
My noble friend Lady Hogg, who, I assure noble Lords, knows as much about the subject as anyone I know, set the scene in a typically pointed and robust introduction. Let me try to sum up in the same spirit. It is a striking fact that the debate coincides with the report today from the manufacturing industry which says that government policies are doing it more harm than good. Apparently, new measures such as the climate change levy, higher national insurance contributions and employment law red tape make matters worse for it, while so-called DTI assistance policies suffer from extreme bureaucracy and therefore fail to make things better.
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It is certainly a grim fact that, despite the Prime Minister's Better Regulation Task Force, the new Regulatory Impact Unit in the Cabinet Office and the Regulatory Reform Act 2001, it is a losing battle, as my noble friend Lord Freeman said. New regulation affecting business has been introduced every 26 minutes of the working day since the Government came into office, a rate exceeded only by government press releases, the emission of which occurs every four minutes. In the mean time, as my noble friend Lord Freeman said, and my noble friend Lady Noakes underlined, while taxes on business have increased in the past six years so have the cost and complexity of compliance.
The question is whether anyone actually cares. Imagine the journey of a missive from industry to the splendid desk of the Chancellor in the new glittering palace of the Treasury. Consider, for example, the sort of submissions that my noble friend Lord Freeman read out to us from the British Chambers of Commerce or the CBI. That would constitute the sort of "carping and exaggerated complaints" that the noble Lord, Lord Haskel—I think that they were his words—read out. Picture the scene when those weighty tomes from the CBI, the IoD or the British Chambers of Commerce pass across the desks of the Chancellor's staff. Imagine the reaction from those who learned their economics at the knee of the noble Lord, Lord Haskel. "What do the fat cats want today?" one of them would ask. "What are they complaining about now?" another would groan.
Why do they say such things? Why are the Government so profoundly anti-business? Doctors say that our faults today are often explained by genetic defects inherited from a previous generation. That certainly seems to apply to the Benches opposite, whose birth defects in relation to business arose at the first meeting of the International Working Men's Association at St Martin's Hall in London in September 1864. Then, a group of long-forgotten individuals—except that one of them was Karl Marx—published the resolutions of their new party. The first was:
"The economical emancipation of the working classes".
From whom were they to be emancipated? As the noble Lord, Lord Haskel, implied, and the Communist manifesto made clear, from the "capitalist exploiters" of course. As Beatrice Webb said later:
"Some people fall in love with their chauffeur. I fell in love with Soviet Communism".
The descendants of that famous gathering in 1864, now comfortably seated on the Front Bench opposite—yes, you two—believe that "unbridled capitalism", usually associated with America, should be reined in, controlled, or, as the noble Lord, Lord Haskel, put it, balanced. Hence, the anti-globalisation, anti-multinational corporation agenda that drives the EU, to which our own Government have succumbed.
Like the EU, our Government present themselves as the quintessence of caring, overlooking the fact that labour laws that they enact to protect employees end up costing them their jobs. Those are the unintended

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and accidental consequences of which my noble friend Lord Brooke spoke. It is, perhaps, why a German consultant told Die Welt last week:
"I would not recommend any investment in manufacturing in Germany".
It is probably also why French company bankruptcies rose by 17 per cent last year. It is also why in both countries—I think that the noble Lord, Lord Razzall, said that those countries had a light touch—unemployment is twice that of America or Britain. On the second part of my noble friend's theme in this debate, it is also why, mesmerised by the idea of unfair tax competition, the Government are set on their path of closing the gap in tax between the UK and the euro-zone by the brilliant expedient of raising our tax burden to their level.
Do I exaggerate? I shall trace a direct line from that meeting in 1864 to another meeting that took place a few years ago in Brussels. Again, this story will particularly appeal to the noble Lord, Lord Razzall. At that time, my right honourable friend Michael Howard was the Secretary of State for Employment. There was the threat of a new EU directive concerning employment law that he thought would be likely to lead to a loss of jobs, lower profits, higher costs and more unemployment. Michael Howard gathered from an article that a finance Minister of one of the EU states had some sympathy with that view, so he got on a plane and went to see him. He told the Minister that he was against the new directive because he was worried that it would put up costs, lead to job losses, lower pay and higher unemployment, and asked him whether he would support his opposition to it. The Minister looked at him in an uncomprehending way and asked, "But if we all do the same, what is the problem?"
That brings me to the basic problem. I shall suggest to noble Lords a test of this Government's approach to business. I know that in a few moments the Minister will contest the basis of the tests and, I am sure, will offer his own marking system. The test concerns the type of leadership that the Government give to business by the example that they themselves set for businessmen. I shall take some headings from the coursework at Harvard Business School. Perhaps we can consider what a hard-pressed businessman would make of what the Government do with them.
I shall start with the heading "Cost control". Some 154,000 people have been laid off in manufacturing industry in the past 12 months. Who hires them? The Government. Some 124,000 people were hired in the same period in what is called public administration. What is the result? The most accurate gauge of public sector inflation—known, for some reason, as the GDP deflator for government consumption—rose by 2.2 per cent a year in the five years to 1998. By the end of 1999, it was running at 4 per cent. It rose to 5.75 per cent in 2000. In the financial year to the end of last March, the figure was 6.5 per cent—three times the economy's overall inflation rate of 1.8 per cent.
The number of pages of recruitment advertisements in the "Society" section of the Guardian has trebled from an average of 50, in 1997, to an average of 150
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today. Like my noble friend Lady Hogg, I carried out a weight test. I can confirm that, at 327 grammes, the "Society" section of the Guardian, where the Government do their hiring, now weighs more than the Financial Times, The Times and the Daily Mirror put together. Meantime, head office costs—I am talking about No. 10—which are a good and telling measure of the mindset at the top of an organisation, have doubled from £6.9 million in 1997 to £13 million today, partly because of a doubling of the number of PR men.
Any savvy business school student could work out the result. Output per worker in the public sector rose by 0.3 per cent in the past year, versus 3.5 per cent for the private sector. That is why 70 per cent of' the public are right to say that the new national insurance contributions money will be wasted. Seventy per cent of it is wasted in higher costs.
I shall take a second heading from Harvard: "Debt management". Every businessman knows how crucial it is. What would your Lordships do with a finance director who said that he needed to borrow £32 billion in the next financial year, then said that he needed £54 billion, then said that he wanted £72 billion of new debt, then, last November, said that he needed £100 billion, before, two weeks ago, saying that he made it £118 billion—all in the space of 18 months? Care with debt, as any good business school teaches, is always vital for the good business manager. What example do the Government give? Income is up 1.5 per cent and spending up 7.5 per cent. The Government's response is, "Don't worry, we'll borrow the money to fill the black hole".
Lord Razzall: My Lords, would the noble Lord, Lord Saatchi, be prepared, in order to elucidate his point, which I well understand in the context of criticism of governments, to give similar figures for 1996 and 1997?
Lord Saatchi: My Lords, does the noble Lord mean figures for the rate of growth of spending?
Lord Razzall: My Lords, I mean figures for the amount of borrowing that the Conservative government left this Government with.
Lord Saatchi: My Lords, I do not have that figure to hand.
Lord McIntosh of Haringey: My Lords, you could write to him.
Lord Saatchi: My Lords, that is a good idea. As we know, the Government made a great deal of the fact that they had repaid the debts of their predecessor. We now know what happened.
Lord Razzall: My Lords, I thought that the point that the noble Lord was going to make was that, when the finance director—the Chancellor of the

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Exchequer—for 1996 and 1997 got to the ballot box, he was sacked by the electorate in the way that he ought to have been.
Lord Saatchi: My Lords, I am not sure that I completely follow that point, but I am sure that it was a good one.
The third course heading is "Transparency". Business school students are taught never to weave a tangled web and never to engage in too-clever-by-half accounting practices because it will all unravel in the end. What is the Government's example to business? First, they tried to bury £15 billion a year of tax credit costs in the notes to their accounts. Currently, they are trying to magic about £100 billion of debt off their balance sheet by the creation of special purpose vehicles that carry the debt away from the public gaze. It is no wonder that Professor Likierman, chief adviser to the Treasury on such matters, said:
"Reader understanding [of financial reports in the public sector] is sometimes felt by those who compile them to be a disadvantage".
I end the series of tests with the final Harvard coursework heading. It is probably the most crucial, as it concerns human relations, a vital issue to everyone in business. The heading is "Profit-related compensation". Business school students are taught that pay should be linked to results, which could be sales, profits, market share, share price, customer satisfaction or whatever. In a bizarre caricature of business school teaching, the Government have somehow absorbed into their collective brain the idea of business-like targets for their employees. So it was that the Secretary of State for Health told a radio programme on 4th March that,
"Everyone has targets these days. It's part of the currency of management in the private sector".
Today, the Government have more targets than there were in the first Soviet five-year plan, published in October, 1928. In its initial form, that plan prescribed just 50 targets for industry: the 2002 Comprehensive Spending Review contains 130 such performance targets. The Department for Education and Skills has 18 targets, the Home Office has 20, and the NHS Plan contains 400, some of which, I am sure, deal with what my noble friend Lady Noakes described in the care home area.
The editor of the Guardian agrees with what my noble friend Lord King of Bridgwater said about what, I think, he called the inability of the system to administer what Parliament has enacted. Here is what he said about the Government's business-like approach:
"They have become the modern day equivalent of Russian train managers who, in the most oppressive period of Soviet rule, sent out numerous empty trains through the middle of the night to fulfil their timetable targets".
We can see why Lenin warned the second Comintern in 1920 that that approach was "an infantile disorder". The result is not just a ham sandwich without mustard or trifle without custard, which would be bad enough, but a dysfunctional hybrid, a bizarre caricature of the capitalist business model.
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The Government directly employ 25 per cent of the population—7 million people. They control the lives of 40 per cent of the population by, first, taxing them and, then, allowing them to claim means-tested benefits. They have made 90 per cent of the population eligible for a government credit. It is on to that body that the Government are attempting to graft the head of the American type of businessman that, they say, they so admire. They are putting a panther's head on a camel's body. Is it any wonder that the monster so created is doomed to die?
With regard to the regulation or taxation of business, the Government are nobbled by their heritage. As all my noble friends said today and as my noble friend Lady Thatcher—I am sorry not to see her in her place today—once memorably said,
"The facts of life do invariably turn out to be Tory".
4.37 p.m.
Lord McIntosh of Haringey: My Lords, I am particularly grateful, for two reasons, to the noble Baroness, Lady Hogg, for introducing the debate. First, there is the more personal reason that she anticipated a response from me that would, she said, be thoughtful and considered. I shall try to achieve that, although I cannot promise that I will. I must say to her that I thought that her introductory speech was thoughtful and considered, and I am grateful for it. It was a contrast to some of the speeches that followed.
The second reason why I am grateful to the noble Baroness is that she added to the words of her Motion. To the phrase "fiscal and regulatory burden", she added the word "economic". That was right. We cannot think about the position of business in this country or in any country without considering the economic circumstances as well as the fiscal and regulatory circumstances. As one who ran a small business myself for 30 years—I have declared that interest before—I believe that it was the economic climate, rather than the fiscal and regulatory burden, that was the key to whether I slept at night, whether I could employ people and whether the business was successful.
In the 1980s, I paid interest at a rate of something like 16 per cent and, because of international connections, was able to go to a Swiss private hank and get finance at 7 per cent. It was then that I realised that there was something wrong with the way in which that government conducted economic policy. That was enormously more important to me than fiscal burdens. I paid corporation tax roughly every other year because it was advantageous to claim it back in the years when I could avoid paying it. That is true of a great number of small and medium enterprises. As to regulatory burdens, yes, I went quite frequently to the office on Saturday afternoons and Sunday mornings to complete the VAT returns. I hasten to say that that was much more serious than any other regulatory burden. It is only under the present Government that small enterprises have been relieved of that burden by being allowed to make a VAT return on the basis of turnover rather than on the basis of a collation of transactions.

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I return to the economic climate because that seems to be the most important consideration. Of course it is true that our economic performance has improved over the past six years; of course it is also true that some of the foundations for that were set in the previous few years. But we are in an economy which has the lowest inflation for 30 years; which has the lowest business interest rates for nearly 50 years; which has the lowest unemployment rate since the 1970s; and which has faster growth than any other major EU economy. Any honest businessman or woman will say that that is more important than the other issues which have been debated today.
The noble Baroness, Lady Hogg, made a legitimate point about levels of business investment, to which I shall return. Business investment is not dependent on fiscal or regulatory burdens, it is dependent on volatility or stability in the economy. That is what we should have been debating. If the noble Baroness, Lady Hogg, had put down her full Motion at the beginning rather than the more limited Motion, perhaps the debate would have been a little wider and would have benefited for it.
I turn therefore to the issue of taxation. I have heard it said—indeed the CBI has said—that business taxes have risen by over £47 billion. I studied those figures in some detail and I shall respond to them. But I look at taxation in the context of the fact that we have the lowest corporation tax rates in history and that we have capital gains tax on business assets at 10 per cent, which the noble Baroness, Lady Hogg, specifically welcomed. That is a lower figure than in the United States. Within the past year, the OECD said that this is a "lightly taxed economy". We have a high VAT threshold which is of enormous importance to small businesses, as well as having the option of more simplified VAT calculation.
The CBI said, and the noble Lord, Lord Saatchi, repeated it, that taxes on business have increased. I listened to the points made by the noble Lord, Lord Brooke, about the CBI and I have looked at those figures. The £47 billion figure that he quoted includes the abolition of payable tax credits which removed a major distortion in the tax system and which encouraged companies to pay out their profits as dividends rather than retaining them for reinvestment in the business. It includes the windfall tax, which was a clear Labour manifesto commitment and a one-off tax—£5.2 billion of which was spent on measures of direct benefit to business, including employer subsidies and efforts to enhance labour supply.
The figures include the increase in employer national insurance contributions announced in the Budget 2002, which have just taken effect, and which of course are of huge benefit to business because the money is going into the National Health Service to improve the health of employees. The CBI said that workplace absence cost over £10 billion in 2002. Above all, the CBI figures are aggregated over a period of eight years, which gives a somewhat misleading picture.
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Therefore, I challenge the view that the Government have raised business taxes by more than 47 per cent. I point to the rates of business taxation as evidence that our fiscal system is far from being inimical to business and is recognised, not just in this country but internationally, as being favourable to business.
Returning to the economy, it is true that we arc not isolated from the global economy. Unlike the position in the 1990s, world trade is falling—profits, markets and investments are falling, as is the volume of world trade. As my noble friend Lord Haskel and the noble Baroness, Lady Noakes, noted, of course that has an effect on productivity. Until the slow-down in the world economy our productivity was rising fast. Our productivity was the fastest growing in Europe. We were closing the gap with France and Germany and I believe we are closing that gap still. But clearly a world slow-down makes a huge difference.
A large part of my speaking notes, such as they are, was devoted to matters which have not been raised in debate—in other words, to the actual regulatory regime for business. It is interesting that few of the matters I noted as being a significant element in the regulatory regime of business came up in debate. That must be because—I am glad to hear—they are no longer in controversy in this House. On listening to business leaders and to those who write letters to the business press, there are constant complaints about employment legislation, environmental legislation and other such matters. But today there has been a strange silence on nearly all of these points. There are those in business who would say that the Conservative Opposition have pulled their punches. The noble Lord, Lord Brooke, in particular, commented on the cost of employment legislation. But he quoted the gross figures which include the value of benefits to recipients. The gross costs of employment legislation are indeed £5 billion; namely, I per cent of the wages and salaries bill or £4 per employee per week. But the administrative cost, which is what we ought to be concerned with, is one penny per employee per week. In respect of tax credits, as the noble Lord, Lord Razzall, pointed out, yes, for more than 50 years we have been using business as tax collectors. Governments of all shades have done so and I do not hear the Conservative Party saying that it will abandon that and go back on PAYE. The real cost of tax credits is the implementation costs and not the gross costs. I have heard no criticism of that.
I have heard no criticism of the minimum wage, which is criticised widely outside. I have heard criticism of pensions policy, but that was answered very effectively by the noble Lord, Lord Razzall. I do not propose to repeat what he said because I could not say it as well. I have heard hardly any criticism of the working time directive, holidays, time off, or maternity leave. Yes, the noble Baroness, Lady Noakes, criticised flexible working, although she failed to recognise that the flexible working provisions allow a request to be made to the employer for flexible working; they do not require the request to be fulfilled.

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I have heard no criticism of what employers complain about often; namely, trade union recognition and the role of employment tribunals. There was some comment about agency work and the noble Lord, Lord Brooke, paid tribute to Alan Johnson. There was reference to the extraordinary claim made by the CBI that this measure will cost 160,000 jobs. We heard that type of claim about the minimum wage when it was introduced and we shall sit quite comfortably until we hear whether the claim is fulfilled. Of course, the noble Lord, Lord Brooke, knows as well as I do that agency work was used as a way of avoiding employment protection laws. It had to be dealt with and has been dealt with effectively.
Turning to manufacturing industry, I heard no comment today on the beneficial aspects of government policy—for example, the way in which we set up the small firms loan guarantee scheme, which we debated last week, the regional venture capital funds or the regional selective assistance. All of these were set up with the support of both the CBI and the TUC. One would have thought that there might be some discussion of that in a debate in your Lordships' House. While criticism has been made of manufacturing investment and manufacturing productivity levels, to both of which I have responded, so far as I can see, that criticism has not been related effectively to fiscal and regulatory burdens.
We recognise the productivity gap between us and other European countries, but no one answered the legitimate questions of my noble friend Lord Haskel about why it should be true that there is higher productivity where there is also a higher degree of regulation.
Baroness Hogg: My Lords, I am most grateful to the Minister for allowing me to intervene. Does he recognise that in those areas where the level of unemployment is higher, there is a false calculation; that is, if he were to measure output across the entire workforce in countries with higher rates of unemployment than the UK, the so-called productivity gap would disappear?
Lord McIntosh of Haringey: My Lords, I am not sure whether it is true to say that productivity is measured across the entire workforce rather than across the actual or potential workforce. I shall have to think about it. The point made by the noble Baroness sounds reasonable, but I am not convinced that that is how the statistics are produced.
Lord King of Bridgwater: My Lords, if the noble Lord is adducing in support of his argument the question posed by the noble Lord, Lord Haskel, why is it the case that the Prime Minister has been trying to persuade the governments of Europe to adopt a more flexible and less regulatory approach? The noble Lord's arguments appear to be totally contrary to his own Government's policy.
Lord McIntosh of Haringey: My Lords, my noble friend Lord Haskel sought to point out that there are
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many different ways of running one's own economy and that, within the European Union, there is room for diversity of social and economic policies. My right honourable friend the Prime Minister certainly would not dissent from that.
I should have thought that some reference would have been made to the way in which the Government have encouraged competition. I am grateful for the passing reference made by the noble Baroness, Lady Hogg, but surely the Government's support for competition—it is an outstanding feature of this administration—ought to be a relevant subject for debate.
I listened to all that was said about small and medium enterprises and I agree with the noble Baroness, Lady Noakes, that the old phrase, "They are the engine room of growth"—we must coin a new cliché—still rings true. However, when the noble Lord, Lord Freeman, quoted the Director-General of the CBI, Digby Jones, on the effect of regulation on small businesses, he cited a remark made in February 2001. In January of this year Digby Jones was quoted in the Sunday Express as saying,
"Britain is definitely the best place to do business compared with the rest of Europe. We also have a more entrepreneurial legislative and fiscal framework than the United States".
I suggest that we look to comments made in 2003 rather than those made in 2001.
The noble Lord, Lord Saatchi, said that DTI help for small businesses was too complex and bureaucratic. He was entirely right to make that point. That is why in December of last year the Secretary of State announced a "bonfire of support services". The department has cut the number of different support services from well over 100 to approximately 25. We are now allowing a 12-week period between the passing of regulations and their implementation so that the Small Business Service has sufficient time to ensure that small businesses can comply with and benefit from the newly organised services.
The Anderson and Growth Plus study entitled Not Just Peanuts awarded the United Kingdom first place in a study of business environments, saying that we are the country providing the most "entrepreneur-friendly environment". The other countries studied were nine European nations and the United States.
I had hoped to hear reference made to companies legislation or the draft Bill, while no reference at all—except in an attack on the climate change levy by the noble Lord, Lord Saatchi—was made to environmental legislation, landfill tax or packaging regulations, all of which are enormously helpful to business as well as to consumers. Furthermore, no reference was made to science and innovation and to the Government's science policy. Noble Lords did not mention the fact that while we comprise 1 per cent of the world's population, we have 5 per cent of global science budgets, while our R&D tax credits have already amounted to over £400 million per year and are continuing to increase.
I believe that I have dealt with practically all the points, but I refer now to the regulatory aspect of the debate. We have gathered sufficient evidence to say

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that, of the approximately 4,000 statutory instruments referred to, some 95 per cent of them have no effect whatsoever on business. In February 2002 we put in place the Regulatory Reform Action Plan. Some 500 measures were identified and already over one-quarter have been implemented. Certainly the Better Regulation Task Force, under the competent leadership of Mr David Arculus, is more effective not only as regards consultation but also at going into action, above all in persuading departments to put forward deregulation proposals. Although the task force may be only advisory, as the noble Lord, Lord Freeman, pointed out, it is finally having an effect.
I turn to the EU regulatory burden. Both the noble Lord, Lord Razzall, and the noble Baroness, Lady Hogg, referred to this issue. Because we are a part of the European Union, consumers enjoy lower prices, employees have better jobs with higher minimum standards and business has access to one of the largest and richest markets in the world. Surely that is worth while.
I listened to what was said about an annual regulatory budget, but as my right honourable friend the Chancellor announced in the Budget this year, departments are now to be accountable in their departmental reports for reporting progress on deregulation. Furthermore, on the issue of sunset clauses raised by the noble Lord, Lord Razzall, the guide to regulatory impact assessments produced in January of this year cites examples of good practice in sunset clauses. It is something to which we are not at all antagonistic.
We have had a debate introduced with great skill and clarity, for which I thank the noble Baroness, Lady Hogg. We heard a series of speeches to which I have listened with interest, although sometimes with a degree of incredulity. However, I hope that we have reached a conclusion which is worthy of your Lordships' House. I am grateful to all noble Lords who have taken part.
Lord Freeman: My Lords, the Minister has dealt with many points set out in his brief, even if they were not raised in the debate, but he has not responded to the point I put to him in my remarks. If he cannot answer the point I made about the Government's approach to a Joint Select Committee to deal with the merits of secondary legislation, will he undertake to write to me?
Lord McIntosh of Haringey: My Lords, I understand that a form of tacit agreement has been reached between the House of Commons and the House of Lords to the effect that we would try it out first. The Commons will then look at our experience before reaching a decision on whether to take up the proposal.
Lord King of Bridgwater: My Lords, I, too, wish to draw attention to a point I mentioned in my brief intervention, but which was not covered by the Minister in his remarks. I do not expect an answer
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today, but I should like to think that the point has been registered. It is not a party political matter; rather it derives from my experience on both sides of the problem. One of the considerations that must be taken into account is this: can the system, the organisation or the department actually handle what has been legislated for and is then to be regulated? That can add to the regulatory burden, one which can prove to be an impossible burden for the department itself.
Lord McIntosh of Haringey: My Lords, I agree entirely with the noble Lord, Lord King, although I do not believe he will be satisfied if I say that that is exactly what my noble friend Lord Macdonald is doing with the Regulatory Impact Unit in the Cabinet Office, because it is clear that setting up a structure is not the same as ensuring that it is implemented. However, I can certainly give the noble Lord an assurance that the Government are keenly aware of the problem he has raised.
4.59 p.m.
Baroness Hogg: My Lords, I am most grateful to all noble Lords who have taken part in what has been an excellent debate. It was brief and to the point, and I do not propose to spoil our timekeeping. I thank the Minister for his remarks. Personally, I thought that I had heard rather more points mentioned in the debate than he appeared to think were raised. Nonetheless it was clear that he had done his homework and his recital on the issues that are of concern to business was extremely helpful. I know he will have listened to the views that have been expressed and I hope that we will be able to move forward on some of the issues. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

School Funding
5 p.m.
Lord Hanningfield Lord Hanningfield rose to call attention to the funding of schools; and to move for Papers.
The noble Lord said: My Lords, I am pleased to be able to introduce this debate on the funding of schools. I declare an interest as leader of Essex County Council, but more of that later.
Education is a mammoth service—more than 25,000 schools; more than 8 million schoolchildren—and if the Government get wrong the delivery of education we are all in serious trouble. The debate today will probe whether the Government have done just that.
Over the past few months we have seen a steady stream of reports suggesting a dangerous black hole in the funding of schools. That culminated on Friday with the National Association of Head Teachers describing the funding situation this year as "catastrophic".
The National Association of Head Teachers blames the Government for this disastrous funding situation. It states:
"It is very clear to us that although there are local authorities who are guilty of not passing on as much money as they should, the problem lies not with LEAs but with the Government. It has simply not put enough money into the new funding system this year".
So we have a catastrophic situation. A government flagship policy; unions talking about strike action; schools handing back their budgets. By any definition it demands to be taken seriously.
But what is the Government's reaction? According to The Times Educational Supplement the Secretary of State for Education told chief education officers that requests for more money,
"just flood straight over my head".
He went on to say,
"I don't listen to what you say quite frankly".
In the run-up to this year's NUT conference, Doug McAvoy said,
"We've not had the relationship we've got now with the Government during my time as general secretary and deputy general secretary. It's worse than anything that happened through the Thatcher years".
Rather than partnership, we have confrontation and a break-down of communications. In their flagship policy area, the Government have succeeded in alienating teachers, head teachers, chief education officers, unions, local authorities and the Local Government Association.
There is absolutely no doubt that the problems schools are facing this year are a direct result of changes that the Government have made to the funding formula. Enormous turbulence was introduced into the system as a result of the changes. The Government are absolutely responsible for the effect of this review and for its conduct and timing.
The ODPM Select Committee noted in its report on the new funding formula that, although there had been three years to work on the review,
"most of the substantive work … was carried out in the last year … The result is that many of the new formulae do not appear to be evidence-based and can be criticised for being insufficiently robust and more open to judgement than was previously the case".
In the end, the formula review had the appearance of being rushed. Local authorities had to set budgets on the basis of a settlement that was finalised only at the eleventh hour. That obviously makes budgetary planning difficult for local authorities and, as a consequence, for schools.
What of the levels of funding themselves? The first point to make is that, rather than taking money out of schools, local authorities actually put additional money in. In 2003–04, the Local Government Association estimates that local authorities will put £100 million more into schools than has been provided by the Government. This continues a trend that has seen additional investment of £4.3 billion by local authorities in schools since 1993. If the Secretary of
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State wants to take powers to pass money to schools directly, he should be aware that this additional investment will be taken out of the system.
But let us return to the head teachers' contention that the Government have simply not put enough into the system this year. According to the Local Government Association the Government's funding settlement did not take into account a number of significant pressures. For example, teachers' employers' pension increases of between 13.1 and 13.5 per cent will cost schools £50 million this year; additional national insurance contributions will take another £115 million out of the system; teachers' pay increases will account for the loss of a further £548 million; schools' inflationary pressures are worth £200 million; and the withdrawal of the Standards Fund grants will cut a further £335 million from the available funding. When one takes all of these pressures into account it is no wonder that some schools are finding themselves in difficulties. The Government have simply got their sums wrong.
On Friday, the Government published tables purporting to show that rather than a lack of central funding the problem was that money was being held up in the system by local authorities. That is quite outrageous and totally wrong. It is typical of the Government that while there is a crisis in our schools that teachers and local authorities are working hard to address, they are focused on passing the buck and spin.
My own education authority, Essex County Council, is one of the authorities identified in the Department for Education and Skills' release as withholding money from schools. That is an accusation I absolutely refute. Indeed, I find it risible, as will others who understand the funding system. Essex has an excellent track record on devolving budgets to schools. According to the DfES's own data, we delegated more cash per pupil than any other shire authority in 1999, 2000 and 2001. In 2002–03, we were the third best performers on this measure. At the same time we are the lowest spenders of any education authority in the country on central administration. I stress that we are the lowest spenders in the whole country on central administration.
The Government and not the LEA are to blame for the difficulties now being faced by schools in Essex and their hundreds of thousands of pupils. After all, the Government have imposed on Essex the worst grant settlement of any authority in the country. We lost £30 million this year. The formula changes mean that we will retain only a further £45 million as a consequence of the floor mechanism.
Turbulence and uncertainty are the future for Essex schools because our funding levels will depend on where the Secretary of State chooses to set the floor. If the floor were to be removed we would lose £45 million, which is equivalent to 11.5 per cent on the council tax. Even with the floor, we are running just to stand still and losing out in relation to all other authorities.
Three times I have mentioned in the Chamber—I still have not had an answer as to whether the Government accept this—that the increase in the total

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grant to the county council was £7 million less than the increase in our education formula funding share alone. I repeat: the money we received from the Government to pay not only for our schools but for community care, child protection, roads, the environment, waste management, libraries and so on, was £7 million less than the Government expected us to passport to schools. Our predicament was so severe that even the Government recognised it and granted an additional £1.2 million to Essex schools, about £6 per pupil.
The effect of the Government's changes to the funding mechanism and the turbulence created in the system was that some authorities—such as Birmingham—received an excess of grant over formula share approaching £40 million, whereas Essex received minus £7 million. Where is the equity in that?
Despite these difficulties we went ahead and passported. We held back £1 million because there was not enough early years demand to justify the expenditure—another government Minister told us to do so—although we still spent £1 million on early years in excess of funding from the Government. We were able to do that only by ratcheting up the council tax. It is the people of Essex, not the Government, who are paying to maintain the quality of education in our schools.
Finding that extra £7 million by itself added more than half of a percentage point to our budget and, because of the gearing effect, it added 2 percentage points to the council tax alone. Government underfunding is responsible for the crisis in our schools and government underfunding is responsible for the steep rises in council tax throughout the South East this year.
For the sake of completeness I must comment on the Government's publication of the numbers relating to allocated spend. Associating this figure with the financial crisis in schools is absurd. It is a policy agreed with our head teachers—all authorities have this underspending and most of them discuss it with their head teachers—and much of the unallocated money is due to restrictions that the Government place on the funding that we can distribute to schools. For example, a third of the unallocated money, more than £7 million, is the ICT component of the Standards Fund. It is the Government who require schools to jump through hoops before this money can be allocated to them through the LEA. It is not the LEA's fault but the Government's regulations. Ministers do not seem to understand their own regulations.
We also hold money centrally to fund in-year pupil number increases and to support the education of pupils out of school. Under the old system, we would delegate the pupil retention budget to schools and then claw back the funding where pupils had to be taken out of schools. The Government told us that we could not do that and that we should hold the money centrally.
The point is that we do this in discussion with our schools and our head teachers. Our funding system is quite transparent: we sit down with our head teachers and discuss how to delegate the money. They know that the £21 million is theirs and will be allocated to
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them as the year goes on. They do not need the money upfront, of course. That is not what the underfunding crisis is about. Schools do not pay all their hills at the start of the financial year. Let us be clear that schools are underfunded because the Government have not put in enough money. It is nothing whatever to do with the profiling of payments.
Some press releases indicate that local authorities are sitting on pots of money. That is not the case. Our finances come in, as the Minister will know, over the year. Revenue support grant and council tax income are basically paid to us monthly, not as a lump sum at the beginning of the year. We receive income from government and council tax payers over the year. We passport it and give it to schools monthly, over the year. It is not a funding problem at this moment but over the year. As I said, press releases have indicated that local authorities are sitting on money. I am afraid that that is simply one more red herring thrown up by the Government to try and avoid shouldering the responsibility for this mess.
The final irony, so far as I am concerned, is that within the figure of £21 million of unallocated funding for Essex, the Government have counted in the £1.2 million they have just given us because they recognised we were underfunded. Needless to say, the money will be passed directly to the schools as soon as we receive it from the Government.
The Office of the Deputy Prime Minister is committed to freeing up local authorities. Let us accept that proposition in good faith. The Department for Education and Skills, however, is obsessed with centralisation. It wants to micromanage inputs as well as specify outputs. In attempting to do so, it has got itself into one almighty mess.
Instead of focusing on raising standards in schools, the Secretary of State for Education and Skills has become obsessed with LEA spending profiles. It is irrelevant. The plain fact is that the Government have got their sums wrong and have not invested enough money in schools. They should stop digging now, own up to their mistakes and work with LEAs and schools to seek ways out of this situation.
If the Department for Education and Skills wants to continue down the road of centralisation, it can expect more of the same. The more it insists on taking the reins, the more it will have to be prepared to accept accountability for its failure to deliver. The Secretary of State for Health wants to do the opposite for the health service—he wants to delegate more downwards.
While the Government pay lip service to the principle of devolution, the actions of departments such as the DfES make it clear that there is only one game in town—centralisation, centralisation, centralisation.
I am grateful for the opportunity to have opened this debate. I am very concerned about the situation; I live with it in Essex every day. If we had more money to give the schools, we would love to give it to them, but a council tax increase of 16.7 per cent was high

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enough. Anything I can do to help the people of Essex I will do. I hope the Minister will say the same when she responds.
I look forward to hearing the contributions of your Lordships to this debate. I beg to move for Papers.
5.14 p.m.
Baroness Warnock: My Lords, I am extremely grateful to the noble Lord, Lord Hanningfield, for giving your Lordships' House the opportunity to debate what has manifestly become a crisis in the funding of schools. No one can open a newspaper without realising that there is a crisis. However, it is a very complex matter, and I cannot claim to understand the funding formula that is now in place.
There are conflicting stories about what has happened to the extra funding that was promised and seems to have got lost. I look forward to hearing some clarification from the Minister on this point.
I want to confine my remarks to the funding of secondary schools, where there is no doubt that teachers are to be made redundant or not be replaced, and thus the staff-student ratio will be badly affected. Who exactly is responsible for the current chaos seems to me less important than the probable consequences. How is it possible to expect more pupils to stay on at secondary school and more to go on to higher education if educational standards are allowed to drop through lack of resources? That is the real issue in this debate.
In some ways, an under-resourced secondary school system is even more disastrous than lack of funding for undergraduate teaching, because everyone has to go to school and everyone deserves proper teaching at this stage.
It has been suggested, according to accounts in the press, that a revival of the grant-maintained system is being considered. This, I suppose, is simply because the Government seem to be laying the blame for the crisis on the local education authorities—as we have heard—from whom the grant-maintained schools were virtually freed. But without a further outlay by the Treasury, this would not make matters any better. What is needed is plainly more resources, and these resources must come from somewhere. I do not believe in the least that the local education authorities are sitting on vast sums of money. It is impossible that they should be.
I would like to think that, at this moment of crisis, the Government might take a rather longer look at some of the systems for putting more resources into the secondary school system than simply shuffling more money between the local education authorities and the Treasury. I would like to think that they might at least consider mixed public and private funding, not unlike—although not exactly the same as—the direct grant system, which was abolished, as everyone knows, by the Labour Party in the 1960s. The abolition of the direct grant nearly 40 years ago was largely the work of Anthony Crosland, who was determined—I think very properly—to give the new
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comprehensive system every possible chance by stemming what he thought of as the flood of talented children into a form of the private sector. I respect his arguments and I respected him enormously as a Secretary of State for Education.
I suppose that here I must declare an interest, though not a current interest. I was headmistress for six years of a direct grant school in Oxford, and for much longer I was part of the council of the Girls' Day School Trust, all 24 of whose schools were once direct grant schools. Later, when they became independent schools, they took up as many assisted places as they could.
The great fault, in my view, of the direct grant schools was that free places were offered to children from maintained primary schools if they did well in the entrance examination, without parental means tests. In a place such as Oxford, the parents of the brightest children from maintained schools could very well have afforded fees which, in any case, could not be raised from their relatively modest level without consultation with the government department. That was the fault of the system.
The glory of the system, however, was that in addition to the free places there was a sliding scale of fees. The parents of all children who wanted to, who had been admitted to school, could apply for a means test. There were children who paid no fees—as well as the scholarship or free place children—on a sliding scale going up to children who paid the full fees. No one except the administrators at the school and in the department knew what fees other children paid. That seemed to me an enormous advantage. Of course, there were some extremely good schools in the direct grant sector. One has only to think of Bristol Grammar School, Manchester Grammar School and so on.
Crosland was right in that the principle of the direct grant schools was incompatible with the comprehensive principle on which he set so much store. As a matter of fact, the comprehensive schools were never given a full chance to show what they could do—which some of them continue to do. However, the comprehensive principle has been long abandoned.
It is hard to reconcile the theory of specialist schools with that principle, for example, although I have never really understood that theory. I have a granddaughter at a sports specialist school, which is the only accessible school in the rural area where she lives. She is keen on tennis and girls' football, but she has played neither of them in the two years that she has been in the school. I am a bit baffled by the theory of specialist schools, especially in rural areas.
It is hard to reconcile the theory of specialist schools, technical colleges and city academies with the comprehensive theory. The crucial advantage of reinventing something like the old direct grant schools is that it is a living example of public and private funding being mixed and harmonising in potential centres of excellence. As far as I know, there is only one example of such a school at present, although there

1133
may be others, and I may be misinformed. That is the Belvedere School in Liverpool, which has some very good as well as very had comprehensive schools.
That school belongs to the Girls' Day School Trust and is supported by the generosity of Mr Peter Lampl's trust, which funds children who apply from maintained primary schools all over Liverpool and whose parents are means tested. That is a crucial difference between Mr Lampl's system and the old direct grant schools. The rest of the children's parents pay full fees, although they may also ask to be means tested and their children receive bursaries as appropriate rather than free place scholarship. The experiment seems to be working very well.
I suggest that parents who wish to pay for their children's education should be encouraged to do so. However, their children and the educational standards at such newly invented direct grant schools as I have described would greatly benefit from a proper social mix at the schools as well as their high academic ambitions.
It was the previous Conservative government's hope, as it has been the hope of this government, that industry would be a source for mixing private and public financing in secondary schools—hence the technical colleges. However, industry has not proved willing to help out in the necessary business of finding new resources for education, and it may not be in a position to do so. The Government cannot rely on that source, nor have they successfully relied on it in the past. They are far more likely to succeed in attracting more resources into secondary education by enlisting parents with moderate—not necessarily enormous—incomes, who are ambitious for their own children and for children who are less well off.
It is sometimes assumed that parents will always resent paying for children other than their own children at school. The principle of the direct grant showed that that was not so. No parents, in my experience, ever objected to the fact that they paid full fees when they knew that a large number of children paid no fees at all or paid fees on a sliding scale. The only thing that they objected to was that some children who happened to have been at maintained primary schools and whose parents were equally as well off as them—in exactly their income position—had free education. In a university town in those old days, people were reasonably well off, although they are not now. But that was the system of scholarships to which people were accustomed.
It is interesting to note that many of the big boys' public schools, starting with Eton but led by Mr Graham Able at Dulwich, are now saying that in future there will not be non-means-tested scholarships. All scholarship money will go to children who cannot afford the fees. That is a worthy and prudent move.
Parents who are academically ambitious for their children, or musically ambitious or ambitious in sports, will like the idea of schools such as I describe. They have the chance of being both socially mixed and, undoubtedly, centres of excellence. I hope that the Minister will undertake to consider not necessarily the
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scheme that I have outlined but some such way in which to mix private and public finance for secondary education.
5.27 p.m.
Lord Henley: My Lords, I start by offering my thanks to my noble friend Lord Hanningfield for introducing this debate. As we all agree, the subject is highly topical and crucially important. We know how much importance the Prime Minister himself attaches to education—"education, education, education", as he put it some years ago. As a result, we know how much importance his party attaches to it.
For that reason. I offer my commiserations to the noble Baroness, Lady Ashton, who does not seem to have attracted as much support as one would have expected on this occasion. The Benches behind her were pretty empty earlier on, although they seem to be filling up a bit, if not much. One would expect on an occasion such as this that she would have brought in a few more speakers to support the Government's case, which no doubt she will make very effectively at the end of the debate. She may make it so effectively that she finds herself transferred to the equally hot spot—the vacant spot in this House—of health spokesman. But that is a matter for other people and another day.
As my noble friend Lord Hanningfield made clear, this is a very complicated subject and it has become much more so in recent years, especially with changes to the formula. I suppose that I ought to know something of what I am talking about. I served in the 1980s as a member of a local education authority in Cumbria. In the mid-1990s I was a Minister in the Department for Education and Employment, as it was known. I continued briefly as spokesman in opposition after the 1997 election before relinquishing that honour to my noble friend Lady Blatch, who will speak for us at the end of the debate. I ought to know a little about education funding, although I never had responsibility for it in the department. However, as Lord Palmerston famously said about the Schleswig-Holstein question, he had forgotten what it was about. I have certainly forgotten what little I did know about the complexities of funding. I also imagine that—just as Lord Palmerston commented on those who went mad—the funding formula is perhaps driving Ministers and others who have to deal with it mad at this very moment. I leave that for the noble Baroness to answer in due course.
What I do know is that, last December, the School Standards Minister announced that, in 2003–04, there was, I believe, an extra £1.4 billion for local education authorities. He went on to make it pretty clear that every LEA would receive an increase of at least 3.2 per cent per pupil and that no one would lose out in real terms. The Government made quite a thing of that announcement—but they always make quite a thing of such announcements. We seem to have new announcements daily. We have heard new boasts about spending on this and spending on that. What we have slightly less of are improvements as a result of those spending increases. What we have even less of is talk about the extra burden on individuals and

1135
businesses as a result of those spending increases which I believe now amount to a sum roughly equivalent to £5,500 per household in extra taxation since 1996–97. All of that spending has gone on worthy causes such as health and education but we see relatively few improvements.
I return to education itself. We were told that there was to be the increase mentioned by my noble friend Lord Hanningfield of £1.4 billion for the LEAs. Since then—and my noble friend has put the case very strongly for Essex—we have heard not only from LEAs but from the schools themselves on what is really happening. Again and again we have heard examples of schools that have lost out and seen dramatic funding cuts. A survey of the Sunday Times top-performing 25 schools carried out by the shadow schools Minister, my colleague Graham Brady, showed that, of the 20 schools that responded, 17 face certain cuts, five of at least £100,000 and two of at least £250,000; that the anticipated range of cuts is £60,000 to £300,000; and that the average shortfall for schools able to give a figure is £155,000. We all know just how many people can be employed in a school for £155,000. Such cuts really do make quite a difference.
We have even heard from one Fiona Millar, personal assistant to the Prime Minister's wife and partner of Alastair Campbell. She could not restrain herself in her role as chairman of the governors of a north London primary school in complaining about the cuts to her school. She said:
"Although we will do our best to maintain standards, we cannot guarantee that the quality of education will not suffer. In particular, it is our most needy children who stand to lose most because we will not have the staff to provide the same level of extra support. We believe the Government has not thought through the implications of all its changes for some of the neediest schools. Parents can protest in many ways. For example, letters of protest need to be written".
That school was facing a shortfall of £127,000.
As we know, the Government responded to all the criticism by saying that the money had been held back by the local education authorities. Last Friday, I believe, a letter was sent to all LEAs and directors of education seeking detailed answers. I have seen a copy of what I presume is a fairly standard letter, with various additions for local areas, which was sent on 2nd May to the director of education of Cumbria County Council. No doubt there are similar letters, and no doubt my noble friend Lord Hanningfield has seen the one sent to the director of education in Essex County Council. My noble friend spoke about the micro-management that the Government are seeking in education and this letter seems a pretty good example of it. It presents that local authority, and no doubt other local authorities, with a whole raft of extraordinarily detailed questions.
I can assure the noble Baroness that Cumbria's local education authority is not holding back any of the money and has passed more than 100 per cent of the schools' budget on to schools. In fact, the figure is 100.6 per cent. It is the burden on the LEAs which has been increased. For example, the pay increases to which my noble friend referred amount to £445 million
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in total. Pension contributions also have been increased, amounting, I believe, to £635 million. Gordon Brown's famous increases in national insurance contributions amount to another £115 million. All of that adds up, I understand, to £1.195 billion—which goes quite a long way into the £1.4 billion that the Government have boasted about.
I think we can say that the Government's handling of the education budgets and allocations has been unsatisfactory for a number of reasons. There has been, as my noble friend put it, a great deal of tampering with and changes to the funding mechanisms which have left schools and probably some LEAs struggling to get to grips with the absurd and unnecessary complexities of the system. That has been exacerbated by the separate but unrelated funding for the Learning and Skills Council, which now, I understand, funds post-16 education. There has also been the failure of the Secretary of State and his department to warn schools well in advance of the increases which I just mentioned in national insurance contributions, pensions and teachers' pay.
I should give other examples, such as the problem with the teachers' pay progression. There has also been the Government's failure this year to fund adequately the threshold payments for teachers. As I understand it, two years ago funding was provided and about 90 per cent of teachers passed through the threshold. This year, however, the Government incorrectly calculated—I should be grateful for the noble Baroness's comments—that 60 per cent of teachers will pass through the threshold, whereas schools calculate that the figure is nearer to 100 per cent. The Government have awarded funding sufficient only for their original 60 per cent.
I turn to specific grants. There was, I believe, a grant to reduce infant class sizes to less than 30 this year. This year that grant has been subsumed into overall funding and is therefore not targeted as it should be. Some schools must therefore receive less than in previous years. If those schools have taken on classroom assistants or additional teachers to service the commensurate increases in the number of classes, they will inevitably be faced with higher staffing costs. Therefore, there must be redundancies or economies elsewhere if the financial books are to be balanced.
Finally, there is the question of whether the extra money even reached the schools. Yesterday we saw the publication of the Public Expenditure Statistical Analyses 2003, a very complicated and weighty document with which greater experts than me will perhaps eventually get to grips and make interesting discoveries. I am grateful to The Times, which has already done some of that work, for pointing out that although the Government boasted about their £1.4 billion spending increase—when in reality we have seen thousands of schools complaining about cuts—that money might not even have got through to the local authorities. According to The Times, the statistical analysis for 2003 published only yesterday shows that the DfES underspent by £1 billion. The Government are complaining that £590 million is missing from education and blaming it on local

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authorities. Perhaps it is the Department for Education that has the money and not the LEAs. Perhaps the noble Baroness will comment on what The Times business section says about the underspend in the Department for Education where spending fell more than £1 billion short of its target.
5.40 p.m.
Baroness Byford: My Lords, my main responsibilities in this House are agriculture, the environment and rural affairs. However, education is an important if not vital part of all three.
As education is not my main interest my knowledge is limited compared with that of some other noble Lords. However, I listen to the radio, watch TV, read the newspapers and my husband is chairman of governors at an inner-city primary school and a governor at a county middle school. Between them all I am subjected to a constant background hum of discontent, concern and occasional despair.
I am aware that education funds come from the Government to county and metropolitan councils. I understand that the means of calculating the amount each council receives is very complicated and that they all get different amounts according to their circumstances. That means that in 2003–04, Tower Hamlets has £5,337 per pupil whereas there is £3,354 for Milton Keynes, £3,162 for Southend, £2,990 for Poole and, at the bottom of the heap, £2,930 for Leicestershire.
I know that Tower Hamlets has enormous problems of poverty, social inadequacy and ill health but I do wonder what its education offers that, in a climate of national curriculum and national pay scales, costs £2,407 per pupil per year more than Leicestershire. I note, moreover, that in the years since 1997–98, Tower Hamlets has had a real terms increase of £1,160 per pupil compared with Leicestershire's £500. If I were a cynic. I would say that that is beginning to look like favouritism.
The consequences of those disparities will vary from place to place, from school to school and will be affected by the calibre, or lack of it, of LEA officers, head teachers, governors and other staff. In Leicester in the inner-city primary there is no funding crisis as such but there is only one parent governor out of a complement of four. The school has some 270 pupils; 17 mother tongues are spoken; 120 pupils have special educational needs; approximately 35 are children of asylum seekers and 65 per cent receive free lunches. I appreciate and understand the extra demands made in those circumstances. The school also runs a breakfast club. The children need a lot of love, care and support in addition to their educational needs.
In Leicestershire in the 11 to 14 middle school there is a deficit of over £150,000. That will mean that some teachers will not be replaced. The school has approximately 940 children. It expected 30 more and budgeted for that number. As I say, there is a huge finance problem. The LEA and the school have got together and produced a three-year plan but because there is no additional funding there is a need to
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rationalise resources—for example, staffing—and to review contracts and budget allocations. The school and the local education authority are confident that over the next three years the deficit will be cleared but the school should not have been put in that situation in the first place.
There are problems today but there are even bigger problems looming in the years ahead if funding is not sorted out. Many schools are rotting away from within. The landlords look after the structure and the externals but schools are having to make choices between resources for teaching and learning and building maintenance. Can the Minister tell us how many councils have served hygiene warnings on local schools, especially in relation to the state of repair and decorative order of kitchens and washrooms?
One of the costs of running a school is resources and nowadays they are expensive. The National Grid for Learning has helped equip most schools with computers, interactive white boards, access to the Internet and administrative and curriculum software. My worry—I believe that I am not alone—is what will happen in two or three years' time when all of this comes up for renewal? Software and service packages are not likely to fall in price. Indeed, some software manufacturers sell licences which involve schools in updating at the behest of the maker and being required to upgrade the computers needed to run the upgraded programmes.
Some noble Lords will know of my interest in broadband, particularly in rural areas. Depending on how it is installed it may be capital expensive with low running costs or capital acceptable but with high running costs.
Lord Graham of Edmonton: My Lords, I am grateful to the noble Baroness for giving way. Like other members of her party who have spoken, the noble Baroness sincerely and genuinely reiterates the constant theme that more money needs to be spent on education, especially secondary education, to iron out some of the anomalies. Will the noble Baroness tell us how that would be achieved as her party has pledged to cut public expenditure by 20 per cent?
Baroness Byford: My Lords, I thank the noble Lord for his intervention. I shall let my colleague on the Front Bench respond to that point. I speak as a Back-Bencher, not as a Front Bench spokesman That obviously makes a difference. But my interpretation of the matter is very clear. It is not always a question of what money is available but rather of how it is used. I believe that at the moment it is not being used to best advantage. I say to the noble Lord, Lord Graham, that the school I mentioned is examining the way in which it operates to see whether it can save money. However, it is not simply a question of money although money is obviously a dominant factor as regards a school being able to work successfully. However, I shall leave the more detailed response on that point to my colleague on the Front Bench.
I have raised, and will continue to raise, the issue of broadband. As I say, depending on how it is installed it may be capital expensive with low running costs or

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capital acceptable but with higher running costs. Can the Minister tell us how many LEAs have gone down the latter route? There is a difference between the two routes.
Funding problems lead inevitably to cost saving schemes, reallocation of duties and task reduction. I was surprised and alarmed to hear that fire risk self-assessment is now a standard part of modern governance in schools. A group of governors and the head teacher sit round and simply fill in a form designed to highlight areas in the school which may be a source of risk either of starting a conflagration or of injuring staff or pupils in the event of one. Is that really something that they should be doing? Are they adequately trained? I am assured that the form is simple and that the task is easy but there are many aspects of fire hazard which are not even touched upon. Does the Minister support that delegation? In the event of a major fire with one or more fatalities and some serious injuries, will the Minister assure the House that governors, schools and head teachers cannot be held responsible in any way? At the moment I believe that they can.
The Government are increasingly passing even more responsibilities to hard working, unpaid governors who do their best to ensure a safe environment for our children. Does the Minister appreciate the great responsibility which is being given to them? Is she content that schools will be able to attract and keep governors in the future?
Like a previous speaker I touch briefly on the question of supply teachers. Increasingly schools are spending many thousands of pounds on supply teachers when regular teachers are absent. What are the Government doing about that? Will the Minister give the House some figures with regard to supply teachers?
I thank my noble friend Lord Hanningfield for giving us the opportunity to debate funding in schools. Before the noble Lord, Lord Graham, leaves the Chamber perhaps he will be interested to hear—as other noble Lords have said—that this Government claimed that for them "education, education, education" was a real priority. I put it more strongly than the noble Lord, Lord Henley. How disappointed the Minister must be that there is not one spokesman on the Labour Benches in this debate, and nor is there one from the Liberal Benches; I exclude the winding-up speeches. Last week, on 29th April, there was a debate in another place with no speaker from either party. Has "education, education, education" lost top slot? Perhaps noble Lords on those Benches realise that the Government are not achieving what they set out to achieve.
Before I finish, I would like to pay my tribute and thanks to all those who work within our schools. Teachers are obviously key to the success, but thousands of other workers all play their part. The one thing for which they all hope is financial stability. As other noble Lords have said, confidence in that has been shattered. Teachers are considering striking, as my noble friend Lord Hanningfield said. The
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Government accuse the local authorities, but I believe that the funding arrangements are inadequate or, at best, unfair.
Who picks up the underfunding? The local authorities, of course, which send it on to us, the council tax payers. Enough is enough. A likely disaster faces us. Perhaps that is why speakers are absent from other Benches. I do not wish to make a political issue of that, but I think that means that noble Lords from those Benches either do not appreciate that there is a dire crisis in the funding of schools, or accept it and feel that they can do nothing more. At best, the Government's priorities are not being fulfilled.
I have spoken of two schools particularly. As I said at the beginning, funding is not purely the problem at the inner-city school of Leicester, which has adequate funding. However, some of the other schools are really struggling. To be faced with a deficit of £150,000 with that number of pupils is indeed unacceptable.
I would like to thank again my noble friend Lord Hanningfield for giving us the opportunity to debate the subject, and I look forward to the Minister's response.
Lord Graham of Edmonton: My Lords, this is not the first time that the noble Baroness and I have crossed swords on her drawing the attention of the House to the absence of Labour Members in certain debates. I assure her that there will be occasions in future when the Opposition Benches will be empty of speakers. I would not dream of drawing attention to the fact that that indicates that Opposition Members are not interested. The pot should not call the kettle black.
Baroness Byford: My Lords, the noble Lord and I have had debates across the Chamber on the subject, usually when debating housing and circumstances for poor families or families in need. He accepted, quite rightly, that there were only a few speakers from our Benches, but there were at least some speakers. Today there is no speaker from the Government Back Benches.
5.53 p.m.
The Lord Bishop of Chelmsford: My Lords, it is a particular pleasure in my last few weeks as Bishop of Chelmsford to contribute to a debate introduced by the noble Lord, Lord Hanningfield, who shares an interest in a considerable part of the same patch as I do. I warmly welcome his bringing this important debate to your Lordship's House, rooted as it is in his long experience of public service in Essex. He has argued trenchantly in support of our county.
In many ways, local education authorities have a difficult task. In all the various celebrations last year, their centenary went almost unnoticed. Perhaps that is not surprising. They are ground between the upper millstone of central government and the nether millstone of schools. No longer do either central government or schools see the money that they administer as the local authority's money. Central government sees the money as the Treasury's money

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and wants to see it handed on to schools; schools see it as their own money and, quite naturally, want to have as much of it as they can. No wonder local government is ground line.
But it seems that the Government have taken on an almost impossible task this year as well. For many years, as noble Lords will recognise, schools and local authorities in parts of the country far distant from London have complained that the funding formula has seemed to benefit schools in London and the South East at their expense. The formula was ripe for refinement, perhaps even for scrapping and starting again. In any change there are likely to be winners as well as losers. Nor would it be surprising if a great noise of protest was heard from the losers and not overwhelmed by the deafening silence from the winners. That is human nature.
The Minister and her colleagues may regret, however, that the change eventually took place at a time when the upward pressure on teachers' salaries, pension contributions and national insurance costs was so great. Some indication of the current situation is that independent schools seem to be planning to increase fees to parents on average by at least 12 per cent, more than the total increase in government allocations for school budgets.
The Church of England has a very substantial stake in the educational system throughout this country, with a quarter of all primary schools and a comparatively small but growing number of secondary schools. I must therefore speak from beyond the experience of the county of Essex and the east London boroughs in my diocese. But before I do, I should like to express my own delight that a secondary school in Chelmsford, Rainsford High School, is this autumn to be reopened as the new St Peter's Church of England arts college. That development has arisen from the diocese's good partnership with the local authority.
For the Church of England, the partnership with local government in education is as important as the vital partnership with central government. That is not a matter of lip service but of practical action, and it is equally true in other dioceses and with other local authorities. That is why, 10 or 15 years ago, diocesan directors of education were often seen on school platforms explaining to parents' meetings why they supported maintaining a funding arrangement through the local authority.
Noble Lords will remember that that was a time of uncertainty for local education authorities regarding their role and their future. Now there are clear expectations of them and no doubt about their role in school improvement and other connected services. There should be no doubt therefore as to the funding that they need for that work. On the other hand, schools deserve a clearer picture and straightforward expectation of the funding that they hope to receive. They should be able to plan forward for more than one year and to know where they are. If, as it seems, the Government have indicated an intention to look again at direct school funding, I hope that our partners in
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local government no longer see that proposal as a direct assault on their integrity. On behalf of these Benches, I would welcome that exploration.
Finally, I hope that the current debate in and around schools about funding does not put at risk the prize of remodelling the school workforce. Incidentally, that is not language with which I feel comfortable, but it is the language that the Government use for a goal that we support. Teaching will not be undermined by increasing support staff in schools; rather it will be enhanced. I have seen far too many teachers demoralised by too much bureaucracy and the demands of unsupportive parents. They need all the help they can receive. We want to see the teaching profession increasingly recognised for what is—immensely significant for our country and its future, and immensely honourable.
6 p.m.
Baroness Seccombe: My Lords, I thank my noble friend Lord Hanningfield for allowing us to debate this issue. It is not only topical, but disturbing and vital to practically everyone in this country. Whether we are parents, grandparents or members of the general public, we all have a vested interest in the nation's children having the best possible education.
It does seem very odd that a Government who came to power with the slogan—and we have it again—"education, education, education", should have got it so wrong and landed themselves in such difficulty. I suspect that there are two main reasons: first, the never-ending thousands of directives initiated over the past six years by various Secretaries of State, so that no one knows whether they are coming or going, making life much complicated; secondly, this Government are so hooked on always exaggerating a story that they find themselves wound up in the spinning network to such an extent that even they do not know what is happening outside the department. The same money has been announced over and over again, and triple accounting has been the order of the day. In the end, no one has a clue how much extra funding has been given to schools. As a result of this fiasco, everyone has lost confidence, is suspicious of every announcement and thinks, to quote a saying, "What a fine mess we are in now!".
Government intervention over how councils spend their money and the very real problem that many authorities face under the new funding formula have not only been confusing to councils but have left schools lurching from crisis to crisis. The Government just do not seem to have learnt that you cannot control from the centre; life is not like that and the result is only too plain to see.
The fundamental necessity for any head teacher is the knowledge that there are sufficient funds to employ the required staff to man all the departments, so that they are able to nurture the children and so achieve the best possible results for the pupils in their care. If heads do not have confidence in their financial future, it must be impossible to function efficiently. Therefore, it is not surprising that we hear of head teachers facing the

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sacking of staff. Many feel that they have now had enough and are under such pressure that they are contemplating resigning their posts.
The Government appear to refuse to recognise the full impact of their actions in such matters as raising the national insurance contribution and the vast sums required to fund the pensions black hole. Both of these, together with teachers' complicated pay awards, will be ongoing burdens as the Chancellor of the Exchequer continues to drain pensions funds of £5 billion each and every year, and no doubt the national insurance contribution will increase year by year. That will be a massive extra expense on public services. These escalating costs are real taxes on jobs; and I am afraid that sacking is how they will have to be paid for unless the Secretary of State and the Chancellor make the required funds available.
This past week has seen some bizarre events; and some say that timing is everything. First, just two days before the local elections, the newspapers reported that on Friday the Secretary of State would name and shame the councils which had failed to pass on the money to schools—The Times even quoted a leaked document which actually names some councils on the list. However, later in the week the Secretary of State said that it was not about naming and shaming but only to highlight the situation for discussion.
Ministers appear to be very complacent and wish to shift the blame on to LEAs. Sir Jeremy Beecham of the Local Government Association said:
"Local councils are not holding back millions of pounds. Much of these funds are being allocated to a range of educational needs and some are due to be distributed later in the year".
Councils are obliged by government to withhold sufficient funds for the considerable number of initiatives so ordered by the DfES and it does appear that there are just insufficient funds since the assessment which took place earlier this year—an assessment which resulted in enormous sums of money being transferred from southern areas to those in the North, and happily for some Ministers, to the advantage of schools in their constituencies.
I was very amused and indeed delighted to see that the Secretary of State is now actively considering reviving grant-maintained schools. It is reported that he considers it an error to have abolished them. I only wish that he had thought so at the time. It would give some form of comfort to those of us who fought so hard for their retention in the first education Bill that new Labour brought before this House in 1998. Grant-maintained schools were most successful and the initiatives that emerged were exciting and inspirational. Head teachers took opportunities to develop and generate ideas. The 1998 Act deprived them of their independence and so, frustratingly, much was lost when the dead hand of government took over.
I conclude on an optimistic note. It takes courage to change your mind in the way we understand the Secretary of State to be thinking; but what could be better than for all heads to be given the freedom to take their schools forward without all the interference and
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bureaucracy that stems from centralisation? Such action would give huge numbers of people great pleasure and would really benefit future generations of our children.
6.6 p.m.
Baroness Cumberlege: My Lords, I begin by declaring an interest. I chair two panels which recommend the level of county councillors' remuneration. Like other noble Lords, I thank my noble friend Lord Hanningfield for securing this debate, which is not only very interesting but important. After all, children make up 16 per cent of the population but 100 per cent of our future.
There can be few who are more concerned than the noble Baroness, Lady Ashton, who carries huge responsibilities, and the nation's aspirations. It is a perverse parent who does not want his or her child to receive the very best education, and a perverse school that does not want its pupils to succeed. In addition, every government want to provide enough money for every child to optimise his or her potential. But the current position, where schools are distraught, local education authorities betrayed and the Government angry, does nothing to improve the quality of education.
As I understand it, the genesis of the current problem lies in the September 2000 finance Green Paper, Modernising Local Government. This promised reform of the local government finance system was intended to produce a simple "plan based" system as opposed to a formulaic one. But Ministers were overwhelmed by a barrage of opposition from many quarters and dropped the idea of a plan based system. As my noble friend Lord Hanningfield said, the work on the new formula then started late. The policy was delayed and options for consultation were not published until July last year.
The Department of the Deputy Prime Minister was thrown by the delay, allowing the Department for Education and Skills to devise its own grant formula and protection arrangements.
In December, the local government finance proposals were at last published. They were of unprecedented complexity and lacked the background information which would enable local government to work out the implications. Far from producing a system that was simpler, fairer and more transparent—as was promised—they produced a system that was more complicated, unfair and totally opaque. Even the DfES seems to have problems understanding its own system. As John Crase wrote in the Guardian yesterday,
"The reason Miliband cannot put his finger on the missing £500m is because there is no missing £500m. It was a chimera all along".
None of us would dispute that the national amount of money for education is probably just about enough. The problem is that the formula inevitably creates winners and losers at local level. The Government set a floor, or minimum, of 3.2 per cent for every LEA, but that, as I shall explain later, has significant drawbacks.

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The DfES damping arrangements operate on per-pupil funding and are entirely separate from the overall ODPM floors and ceilings which operate in the central government grant. That further complicates the picture in that the two dampened systems are not internally consistent. The problem is made worse by two further technicalities in that some authorities are affected by the results of the census, affecting ODPM damping, but that does not change pupil numbers or DfES damping. Consequently resource equalisation does not affect education's formula spending share but it does distort the distribution of overall grant.
As the right reverend Prelate the Bishop of Chelmsford has said, because of all these interacting factors, winners and losers were produced. Some authorities are rightly complaining that they do not have enough grant to passport the extra money into schools. Responding to that impossible situation of their own making, Ministers have tried to introduce a number of quick fixes. They include an additional London grant of £11 million, but that is not targeted at passporting problems, so it has only helped some of those London boroughs in difficulty. Ministers have realised that because of movements between formula and specific grants—another significant complexity in the system—some education authorities have not had the education floor increase of 3.2 per cent funding per pupil. That is because loss of standards funds were not taken into account in the DfES protection arrangements. In March of this year Ministers, realising that the position was untenable, found another £28 million for 36 local education authorities to correct the problem and ensure that all authorities had the minimum of 3.2 per cent per pupil.
Despite all those attempts to fix the problem many authorities and schools are still rightly complaining. Even if the education protection system is working, which it is not for many local authorities, individual schools may have budget problems for three reasons. First, Learning and Skills Council funding for sixth forms is at about the right level for LEAs but its distribution is very different, creating another set of winners and losers. Secondly, some schools have had more standards funds than others, so loss of these will affect them more. Indeed my own LEA has decided to restore the two Standards Fund Grants in spite of the Government's actions, and that will safeguard some teachers' jobs. As a consequence, we council tax payers have the highest county council increase of any in the country. I do not resent it—much. It shows the courage and commitment of East Sussex to education, but it is a council that has a declared policy of low council taxation. What I do resent is that my council has been forced to set aside its policy in order to bail out the Government's incompetence. As a council tax payer my increase of 19.6 per cent does nothing to improve the quality of education, nothing to develop, innovate or create projects within the curriculum, but is simply to maintain the status quo and to save us from the consequences of an inept government. Thirdly, changes in pupil numbers will always going be a significant problem for some schools. Many, perhaps most primary schools, face falling pupil numbers, so it
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is difficult in those LEAs to protect the budgets of all schools. A loss of 20 pupils could equate with at least one teacher, but since all classes have to be kept, savings are difficult to achieve.
In the light of these problems—serious problems when we consider that a child has only one opportunity for pre-adult education—it is foolish and unhelpful to portray the LEAs as the villains of the piece. Not only does it damage the important partnership between government and local authorities, but because the Government's figures cannot be trusted it reduces the Government's overall credibility. Even when I was a county and a district councillor we were making hard choices but there was a feeling that both national and local government were working towards the common good. Our priorities were just that—our priorities; not a remote bureaucracy that had no understanding or feeling, imposing its will on us, the locally-elected members who were trying to respond to our local electorates.
This year in East Sussex our position is similar to that of Essex, which we have already heard about from my noble friend Lord Hanningfield. East Sussex has received an extra £10 million in its overall grant to cover all county council services. The Government's "passporting" target required an increase in schools' expenditure alone of £12.6 million. I am not very good at maths but even I can see that that is a nonsense. Initially the council was accused of holding on to the money but it seems to me right that a modest (13 per cent should be held as a contingency to cover costs such as places in special schools which arise during the year; salary protections where there are major changes in schools; free school meals; running costs of temporary accommodation installed during the year and so on. A further £1.3 million has yet to be allocated with the full agreement of schools and their governing bodies to cover other contingencies such as support for newly qualified teachers, infant class downsizing and so on. That is a prudent policy which even the Chancellor should applaud. The Minister will know that that is the way LEAs have always worked in that the Government themselves phase their allocations throughout the year.
In conclusion, this is not the first government to recognise the complexity of schools funding but after six years there are no signs of radical change. The cry "education, education, education" was great. We are now inspired. We know the priority. We see the path. We have heard the cry, but all campaigns are won by the quality of the people on the ground doing the work and the logistics involved. Will the Government change tack? Will they trust teachers, encourage, listen and concentrate on those rather boring technicalities that are the Government's responsibility and can be done by them alone? Will they learn the lessons of grant-maintained schools, as my noble friend Lady Seccombe has said, and fund each school directly by a simple, transparent and fair national funding system? Will they support LEAs in their difficult task, recognising that greater autonomy goes hand in hand

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with innovation, creativity and increased quality, and that blaming and shaming does nothing but demoralise and ensure a downward spiral?
On a more positive note, what plans do the Government have to sort out the problem so that next year schools, governors and parents do not endure a repetition of the same shambolic situation?
6.18 p.m.
Baroness Sharp of Guildford: My Lords, I thank the noble Lord, Lord Hanningfield, for introducing this debate so ably and for giving us an opportunity to debate this important issue, which seems to have arisen relatively suddenly, although, as has been pointed out, there have been a number of pointers going in that direction for some while.
The substantial black hole that has opened up in school budgets poses real problems for the Government, LEAs and schools. In this debate, we have heard many of the reasons why that black hole emerged. Those reasons fall into three categories. Of the extra money that the Government allowed for the financial year 2003–04, which I believe was approximately £1,500 million, they did not allow fully for the increase in employers' pension fund contributions, or for the increase in national insurance, or fully for the increase in teachers' pay, or for supplements in the performance-related pay scheme, or fully for the withdrawal of the standards fund.
On top of that, it appears, through discussions with schools, that a number of other issues have arisen. One of them is that, given the recruitment and retention issues that schools have faced, they were anxious to keep rather than to lose staff and there has been what might be called a creep in terms of pay scales. Many staff are now moving on to the upper end of the performance-related pay scales. A problem in that regard is that while 75 per cent of the actual cost, the basic pay cost, is still currently met by the Government—therein lies a problem further down the road—that is not true with regard to national insurance contributions or pension contributions. Schools are therefore having to find larger sums to meet such costs.
Other costs arise, partly as a result of legislation that we passed in this House. For example, many schools must meet costs from the Special Educational Needs and Disability Act for equipment and necessary changes to buildings. They, too, must be funded from the annual budget rather than from special funds.
In my discussions with a local school, another issue that came up was insurance. The cost of insurance at the school rose from £17,000 a year to £28,000 a year; that is an increase of £11,000 in one year, which is a fairly substantial increase. In itself, perhaps it is not so substantial, compared with the school's budget, which is getting on for £1 million. Nevertheless, it is an extra cost that must be met from somewhere and is difficult to cope with. As the noble Baroness, Lady
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Cumberlege, said, there have been changes in funding for sixth forms, which have helped some and hindered others.
On top of all that, at the LEA level, has come the redistribution of funding through the Office of the Deputy Prime Minister. As the noble Lord, Lord Hanningfield, and the noble Baroness, Lady Cumberlege, said, problems of turbulence and uncertainty have arisen. There are clearly some losers and some gainers and, as always, the losers are screaming and the gainers are not. That has posed real problems and it has not solved some of the more fundamental problems that we face in this country. I refer to the sheer opacity of local government funding, the fact that there is no transparency and the fact that the voter cannot understand where accountability lies.
We want to resolve that crisis. The Government have, as many noble Lords have said, pointed at their favourite Aunt Sally, local education authorities. The Harry Potter of the education world, the schools Minister, David Miliband, wrote what many regard as an aggressive and offensive letter to local education authorities making it clear that, in his eyes, the fault lies with them and with no one else.
When reading the detail of the 18-page press release issued by the noble Baroness's department, time and again one comes to the conclusion that LEAs have, on the whole, been doing precisely what they were told. Last year, we passed that splendid Act, in which we made it clear that money must be passported through to schools. So far as I can see, most LEAs have been doing that.
I shall give an example that I know in detail. Like other noble Lords, I went to my local LEA and said, "What has been happening to your budget?". Surrey has one of the bigger budgets—it is one of the bigger LEAs. Its total budget for education is £456 million, of which £409 million was passported straight to the schools, leaving £47 million. Of that £47 million, which has not yet been passed on to schools, the largest item is £21 million for transport. The next largest item is £8 million for youth services, which the Government were keen for local authorities to improve. I for one am delighted about that and would like more money rather than less to be spent on youth services. Another £8 million was put aside for school improvement activities, which, again, is part of the Government's programme. There is £4 million extra for special educational needs support. Yet the Secretary of State criticises local authorities for putting too much on one side for special educational needs support. At the same time, the Audit Commission published a report that said that, by and large, LEAs are not spending enough on special educational needs. One is sometimes left rather perplexed by all of this. Surrey for one is not doing anything wrong; I applaud the fact that it put some extra money on one side for special educational needs support.
As with many other LEAs, Surrey is spending above SSA by £3 million this year—I believe that only 19 out of 148 spent below the SSA. It is doing so despite the

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fact that we, along with many other LEAs in the South, have just undergone a council tax increase of nearly 20 per cent.
The conclusion that has been reached by many noble Lords, and to which I have come, is that LEAs are not in this case to blame. Who then is to blame? Are the schools to blame? No, certainly not. Expectations were built up by the Government of a substantial real terms increase. Now that they have done their sums for next year, the money is just not there. Some schools—perhaps the lucky ones—have reserves. The National Association of Schoolmasters and Union of Women Teachers was very upset about the degree to which schools have built up reserves. Nevertheless, those schools with reserves currently have a buffer against the vagaries of the funding mechanisms that have hit them. They are the lucky ones. The problem that arises is that many schools must conclude with deficit budgets unless something is done by 31st May, when all of these matters must be decided. There is a real problem that must be solved.
The conclusion that one comes to is that, like it or not, the DIES and the Office of the Deputy Prime Minister together got their sums wrong. There is a serious problem. That suggests that the DfES does not understand the full complexities of local government finance; but very few people do.
We should look forward and recognise that this issue can and may well arise again in subsequent years. The new workload agreement will appear later this year. There is just not enough money in the system to fund it; the Government want to carry it forward. Coming down the line is the question of the full funding of performance-related pay. Once again, that must involve a major transfer of funds from central government to local authorities and on to schools. There are real problems in that regard.
What can be done about this? The DIES got its sums wrong and schools, through no fault of their own, are running substantial deficits and must lay off staff unless some rapid relief can be found. In the short run, I have three ideas for some rapid relief that the DIES might find. In agriculture there is such a thing as red diesel. The noble Baroness, Lady Byford, knows all about it. One of the largest items that is not on the schools budget in Surrey is transport costs. That is also true of other authorities. Currently, much of those transport costs are the costs of duty paid to the Government, which are taken from LEAs. The Government may refund those duties to the LEAs or pray that in aid. One of the reasons for having school transport is to stop children being taken to school in private cars. We are anxious that children use public transport. One may call it green diesel instead of red diesel.
The school teachers superannuation scheme is a pay-as-you-go scheme and not a funded scheme, despite the fact that increased contributions have been called for. It is perfectly feasible for the Government to say that for this year those extra employers' contributions need not be paid. Why not consider that as a way of relieving the budgets of local authorities in
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the short term? If there are to be retirements, perhaps it would be wise for the Government to reopen the national early retirement scheme.
The noble Baroness, Lady Cumberlege, mentioned that primary school rolls are falling and in the next few years that will roll on to secondary schools. Perhaps we shall have to consider early retirement and a nationally funded scheme rather than one that has to be met by local authorities. That is another idea that perhaps could be considered.
In the long run it seems to me that something more serious needs to be done. We on these Benches do not follow the route of the noble Baronesses, Lady Warnock and Lady Seccombe. We do not believe that the right route is grant maintained schools or direct grant schools. We believe in a system of education and we believe that there need to be links between primary and secondary schools. Also secondary schools need to work together. Therefore, we believe that local education authorities should co-ordinate at the local level. It is absurd to think that the Government could run the 25,000 schools in this country. I recall a previous Secretary of State for Education saying that if there were no local education authorities they would have to be invented.
Local education authorities in this country have a proud tradition of running schools and running them well. We need to reinforce those local education authorities. Indeed we need to reinforce the whole of local government, to devolve responsibilities down and to have a taxation system whereby what is raised locally funds local services so that people can see clearly that the one is linked to the other, rather than a system whereby the Treasury dictates who may spend what. There is such opacity that people vote in local government elections protesting about a council tax which has largely been imposed by central government and which has nothing to do with local services whatever.
We on these Benches would like to restore the power of local education authorities rather than to take power further away from them. We want a funding system that is transparent, clear and gives the taxpayers some idea of the services that are provided for them.
6.33 p.m.
Baroness Blatch: My Lords, this is an important debate. I am grateful to my noble friend Lord Hanningfield for initiating it. An important theme has come through all the contributions. My noble friend Lord Hanningfield gave some fairly impressive statistics from his own authority, Essex, but such a story could be repeated by many authorities all over the country.
There is no doubt that there is a crisis, not only in the funding system, but also in the trust that people place in the Government and particularly in the Ministers of the department. The insensitivity of Ministers to the level of frustration, even anger, over the handling of this year's settlement is palpable. I do not want noble Lords to take my word for it because

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the Minister opposite will say, "You would say that, wouldn't you?". The Prime Minister himself, unlike the departmental Ministers, has to be fair, accepting that there are problems for particular schools in particular local education authority areas.
Fiona Millar, the partner of the Prime Minister's aide, Alastair Campbell, and a very New Labour lady, spoke out bravely as chairman of school governors in support of Gospel Oak Primary School. In her letter to parents—I quote a different part of that letter—she wrote:
"The Government has changed the way it allocates block grants to councils and has moved money from the South East to the North. We believe the Government has not thought through the implications of all changes for some of the neediest schools. We will have to cut our spending on resources drastically".
A recent Select Committee report dated 17th December 2002. commenting on the development work for the new funding formula, reads:
"The result is that many of the new formulae do not appear to be evidence-based and can be criticised for being insufficiently robust and more open to judgment than was previously the case".
The report describes the system as "confusing".
At the Secondary Heads Conference, John Dunford told the Secretary of State that schools across the country were stunned by budget allocations that left many schools with large deficits. A head teacher, Michael Chapman, speaking for heads in East Yorkshire, told the conference:
"In the last 12 years, this is far and away the worst budget settlement that I have had to manage as a head teacher".
On 4th April The Times quoted David Hart of the NAHT as saying:
"We are facing the ultimate absurdity of being required to recruit extra teachers and support staff to deliver the changes to teachers contracts, while at the same time schools are talking about redundancies. We are parties to this agreement but we have come to the conclusion that if the Government can't deliver on the funding that it promised, then we are entitled to say we can't agree to these changes".
I could go on quoting teachers, governors, parents, teacher unions and others, but I shall cite only one more criticism of this year's settlement, that of the department itself. In a leaked memo, sent between the Department for Education and Skills and No. 10 Downing Street, the scope of the Government's deception and incompetence has been revealed.
As an aside I hope that Ministers, who have to date accused local government, will not now turn their fire on to officials. Whatever the role of officials in all this may be, Ministers are responsible for the decisions that they make in their department and they are also responsible for the public relations that accompany those decisions.
The leaked memo seen by the Times Educational Supplement shows that the record investment in education promised by the Chancellor last year is no more than a mirage. The memo also shows for the first time that Ministers accept that councils are not solely to blame. Even if all the additional money intended were passed to schools, rises in teachers' pay, national insurance and pension costs, among many other
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pressures, mean that they would receive an average increase of just £26 per pupil this year. That represents barely 1 per cent, which contrasts sharply with a promise made by Ministers of an increase after inflation of 3.2 per cent at least for each local education authority. However, as reported by the Times Educational Supplement from the leaked memo, the 3.2 per cent floor is a little less than schools would need to meet all the pressures that they face.
Mr Miliband and the Secretary of State are guilty of building up expectations; they are guilty of spinning this settlement announcement into a gross distortion; they are guilty of pointing the finger of blame at local education authorities and schools; and they are guilty of dashing the hopes of so many in our schools by wilful deception. Consider the behaviour of a Secretary of State for Education, who says, when addressing the Association of Chief Education Officers—this has been quoted before in the debate—that directing more money towards schools would not solve their problems and that any such request,
"just floods straight over my head".
He added:
"I do not listen to what you say quite frankly".
I can do no better than to quote the leader in the Times Educational Supplement of 2nd May, which stated:
"Even by the Department for Education and Skills's own account, the way the Government has managed to turn supposedly record rises in school funding into a shambolic crisis is astonishing. Ministers' attempts to shift the blame to local authorities are somewhat undermined by the memo the department sent to 10 Downing Street. This shows that the much vaunted £2.7 billion increase is largely illusory".
Such an admission of culpability by the department, albeit in private, will come as little comfort to those staff in our schools who will lose their jobs or to the pupils who will face larger class sizes or even a shorter school week.
Certainly the Secretary of State and Mr Miliband have been in denial over this issue during endless public appearances, placing the blame on virtually anyone passing Sanctuary Buildings. Their performances compared well with the Iraqi information Minister for misinformation; except that they were not as enjoyable.
The letter to heads from schools' Minister, David Miliband, late last year guaranteeing an across-the-board rise in funding raised expectations that were unlikely ever fully to be met. Misunderstandings could have been avoided if Mr Miliband had taken more care with the drafting of that correspondence. The letter ignored two basic issues: first, that increases in the education formula spending share do not necessarily translate into increases in council grant; secondly, that a major part of many schools' overall funding—namely, the Standards Fund—was being cut. The new formula devised by the Government for funding local authorities effectively redistributed funds around the country—mainly from the south of England to the north.

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The overall reduction in the Standards Fund impacts especially severely on councils funded on or near the floor, because they receive no compensating increase in general council grant—a point made extremely well by my noble friend Lady Cumberlege. The lumpy nature of Standards Fund applications and the implications for schools as Standards Fund categories come and go is not a new phenomenon but, when combined with other financial pressures, it means that some schools will experience levels of financial hardship well beyond the norm.
Although the department deleted several Standards Fund grants in 2003–04, the burdens placed on schools previously receiving those grants remain. Although new Standards Fund initiatives have been introduced, schools are not always eligible for, for example, Excellence In Cities grants.
Secondly, as I said, the fact that an increase in the EFSS is not necessarily translated into a corresponding increase in council grant does not appear to have been understood by the Government; neither does the effect of changes in grant distribution. Some councils are even being told to pass extra funds to schools greater than the total increase given to the council for all services—a point made by my noble friend Lord Hanningfield. From what I have heard about meetings with the schools Minister, Mr Miliband, to discuss school funding with local authorities, his lack of technical understanding of how the funding system works did not exactly generate confidence and served only to highlight the level of incompetence displayed by Ministers.
To turn to another aspect of budgeting, many councils are obliged to pay teachers at inner London rates, yet feel that that is not fully reflected in their revenue support grant. Also, the flat rate nature of the school standards grant is recognised to discriminate against London and parts of the South East because of the higher costs in London and the surrounding counties, so increasing the proportion of funding by that means helps only to exacerbate the problem.
As many people have said, the cost pressures on schools have not been fully met. There is a shortfall in employers' superannuation contributions of £50 million; we know that national insurance contributions are £115 million. The teachers' pay increase of 2.9 per cent, which, when aggregated, is in fact 3.25 per cent, taking into account the London area, totals £548 million. There are other inflationary issues, including non-pay cost increases and support staff pay. The withdrawal of the Standards Fund is of course part of the equation.
There is also the cost of integrating the changes to teachers' contracts and additional costs resulting from the recent special educational needs Act. The Autistic Society, whose Autism Awareness Week is next week, states in its most recent press release:
"the present funding crisis facing UK schools is causing serious concern".
Rather than accept and acknowledge the inherent weaknesses in the system, together with the impact of those financial burdens, the Government decided to
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blame local education authorities for the crisis, alleging that they had somehow conspired to withhold £500 million from schools, in a cynical piece of political buck-passing. The Minister may deny that, because such a denial is true of her personally, but her colleagues in another place are on record as having blamed local authorities, so they cannot be defended. Not only were certain LEAs named and shamed, but the Secretary of State for Education, no doubt wanting to live up to his "bruiser" image, made a thinly veiled threat that local authorities would be removed from the education system altogether.
Ministers' role in the process has been central. They really must accept more responsibility. As requested, local authorities have told the Government that they will be spending £100 million above the Government's provision for schools. The Secretary of State insisted on approving every council's schools budget before it was allowed to set its council tax.
I shall use Wandsworth as an example. Wandsworth has been accused of holding back £4.1 million. That breaks down into £3.5 million from the Standards Fund and £600,000 for newly-qualified teachers and special educational needs. Rightly, it says that the key issue is that the academic and financial years do not coincide. That has two major implications for funding of schools. Some funding, notably some Standards Fund grant, is allocated on the basis of the academic year. Standards funding is allocated on the basis of a school's needs on an academic-year-by-academic-year basis, as it always has been.
It is misleading in the extreme to say that Wandsworth is holding back the 7/12ths of the financial year 2003–04 funding that corresponds to the 2003–04 academic year—September to April 2004—because it will not know where it should be allocated until the new school circumstances are known in September. What is it supposed to do? Schools are used to that. If the Secretary of State wants Wandsworth, or any other LEA, to allocate everything on 1st April, it can of course do that, but the effect will be to freeze the allocation on the basis of the needs of academic year 2002–03, rather than on the basis of the needs of the academic year 2003–04.
There is £600,000 that has been held back for support to newly-qualified teachers and special educational needs—the former because education authorities do not know until later on in the year which schools will be appointing newly-qualified teachers; the latter to fund youngsters who receive statements during the course of the year. Of course, again, the authorities could allocate the money to schools now—perhaps on a guesswork basis as to where the statements may arise—but how would they provide the extra help needed for youngsters statemented later in the year?
Similarly, in Wandsworth, 5/12ths of the ethnic minority achievement grant is also allocated now; the rest in September. As the noble Baroness knows, the issue of special educational needs is important. Wandsworth says that this year it has increased provision for SEN by 18 per cent, although the inner

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London average is higher than that, so it now needs a clear steer from the Secretary of State—does he really want Wandsworth to cut funding for special educational needs to delegate more money to mainstream schools?
This is certainly a crisis made in Whitehall, not in the town hall. The reality is redundancies, resignations and a real possibility that the teachers' workload agreement will not be realised. Indeed, the National Association of Head Teachers has rightly expressed concern about the Government's boast about the generosity of a settlement for the coming two financial years. The Government themselves have accounted for almost all of this year's increase—in national insurance contributions, pensions, pay awards, and incremental pay. But they have not included—and almost totally disregarded—class size reforms, the implementation of the workload agreement, special educational needs reforms and the effects of two major changes to the way in which schools are funded.
I return to the Times Educational Supplement leader of 2nd May, which referred to the changes. It states:
"The DIES is not responsible for all of this. But it apparently went along with—
the Office of the Deputy Prime Minister—
"without bothering to investigate the effects at school level. Only now has it woken up to the realisation that there is worse to come. Next year the fuller costs of the workload agreement begin to bite. But the department now says even more money will have to be found just to stand still and avoid 'large numbers of losers'.
None of this can have enhanced the Treasury's confidence in the DfES. The truculence of Charles Clarke when first confronted by complaints about funding probably stemmed from the ignorance and complacency displayed by his department. This incompetence even outstripped that shown at the DIES last year over A-level reforms. At this rate, David Miliband, implicated in both of these blunders and responsible for the workload agreement, will need more than friends at Number 10 if he hopes to survive in office".
The funding increases for education, for which schools are exhorted to be grateful, have been soaked up by the Government's own actions and policies. Billions are held back every year by the department. Record numbers of centrally controlled initiatives are spawned, many to no benefit, and largely at the expense of core funding for schools. New burdens such as Learning and Skills Councils, admissions forums and schools forums all pre-empt monies that could be spent more wisely at local level. Time prevents me from completing a sorry catalogue of fund-wasting projects. We are within the time allocated for this debate. I have no doubt whatever that the Minister will also use the time wisely.
The important message is not the quantum of funding, as pointed out by the noble Lord, Lord—
Lord Graham of Edmonton: Graham.
Baroness Blatch: My Lords, I was going to call him Lord Ted. The noble Lord, Lord Graham of Edmonton, is in his place. The important message is that central funding and centrally controlled funding should form a greater proportion of schools' core
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funding. Convert the burgeoning of national bureaucracy into funds for schools. Abolish the command-and-control system. I can say categorically at this Dispatch Box that we have no plans as a party to reduce expenditure by 20 per cent. But we believe that there is enormous scope within the system to convert money spent on bureaucracy and unnecessary projects to put into front-line services. That is where our energies will be spent.
The Government promised simplicity, transparency and fairness. They have failed on all counts. The level of anger and frustration in our schools shown by staff, parents and governors is considerable. Teachers feel betrayed. Greater honesty, a little humility and even an apology would not go amiss.
6.52 p.m.
Lord Graham of Edmonton: Go on, sock it to them!
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, I am grateful to my noble friend "Lord Ted" for his comment. I thank the noble Lord, Lord Hanningfield, for securing the debate. I am very aware of the strength of feeling about the issue that has arisen since we announced the settlement for 2003–04. I accept, as the noble Baroness, Lady Blatch, would expect me to, that there are problems in schools and that we need to look for ways to resolve them. I understand the particular interest of the noble Lord, Lord Hanningfield, in his role as leader of Essex County Council. I recognise how the arrangements are affecting schools in Essex.
I am grateful to the noble Lord, Lord Henley, for offering me a change of role. Perhaps I can look forward to debating foundation hospitals with noble Lords. But I can assure him of my sanity, or at least I hope I can. It is always a delight when the noble Baroness, Lady Byford, participates in debates. The noble Baroness is eminently qualified to participate, as are all noble Lords, in this important discussion.
As noble Lords have said, it is a year of change for the schools funding system. I say to the noble Baroness, Lady Cumberlege, that it has been a year of radical change. The local government funding formula has changed. There have been significant changes in the balance between central and local discretion. There has been an end to some ring-fencing of central grants by central government. We are not micromanaging, as the noble Lord, Lord Hanningfield, said, but looking to develop that relationship. Many local authorities and schools have criticised ring-fencing for a long time. There have been changes to the distribution of the money.
There has been a significant drive by the Government to encourage three-year budgets for schools of the type that the noble Baroness, Lady Byford, mentioned, in the context of schools which, I recognise, have fluctuating pupil numbers and related issues to deal with. I agree with all noble Lords that, as schools begin to plan, it is important for their confidence and planning that they have as much notice

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as possible of the three-year horizon. That view is widely shared in your Lordships' House and, perhaps even more importantly, in schools and education authorities.
In response to the noble Baronesses, Lady Warnock and Lady Seccombe, my right honourable friend does not propose a return to grant-maintained schools. Eminent though our press reports can be—I can perhaps speak with some authority on the subject—not all journalists get everything right all the time.
In response to the noble Lord, Lord Henley, the important issue is performance in schools and delivery. Noble Lords have heard me speak often on the quality of education that we have. I agree with the noble Lord that it is very important that we see the results of our expenditure. I believe that the rise in standards in primary and secondary education are a testimony to that. I know that noble Lords will want to join me in supporting what the noble Baroness, Lady Byford, said about the absolute importance and value that we must all place on our teaching profession. In response to the noble Baroness, Lady Cumberlege, I do trust teachers. They almost perform miracles every day on behalf of our children.
I wish to try to shed some light on some of the issues raised. I apologise now if any noble Lord feels that I have not done that as adequately as I might in the time I have. I give my usual assurance that I shall write to any noble Lord who feels that I have not adequately answered any point. I am very conscious, given the knowledge and experience around the House, that many noble Lords have had long experience of funding issues both in local and central government. I listened with great interest to the noble Baroness, Lady Cumberlege, who gave an exposition of the history of the issues surrounding local government finance, and to many noble Lords, not least the noble Lord, Lord Hanningfield, who has personal experience of dealing with the issue at local authority level. I pay tribute to all that experience. I am humble in the remarks that I make in your Lordships' House.
It is universally accepted that there has been an increase in revenue funding for schools. All the teacher conferences recognise that we were talking about an increase of the order of £2.6 billion. In that context, there is no mirage. We agree that that has happened. It is an increase of 11.6 per cent, which is £250 million more than the pressures that we calculated from pay, pensions, national insurance and the ending of grants. We calculate that nationally those pressures represent an increase in costs of 10.5 per cent.
I could describe those figures in many different ways. I shall give one other example to try to convey the information as simply as I can. The education formula spending share for 2003–04 has increased by 6.5 per cent, or 5.2 per cent per pupil. Noble Lords will know that there are different ways of looking at the figures. That is sometimes one of the difficulties. Those figures are in addition to compensation of £586 million for the hulk of the pension contribution increase and £500 million of grant funding transferred into general funding in 2003–04. The school standards direct grant
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is increasing by almost £150 million in 2003–04. I wish to make clear to the noble Baroness, Lady Blatch, that we did not promise an increase after inflation of 3.2 per cent. We promised an increase in cash of 3.2 per cent after taking account of the transfer of funds to pensions and for specific grants. I hope that teat has clarified the position.
As noble Lords indicated, we have listened to representations from education authorities and schools. We recognise that the combination of a low increase in education formula spending share, coupled with a reduction in the grants through the Standards Fund, would lead to low budget increases for some schools. For that reason, we announced an additional grant of £28 million to ensure that the effective increase in education funding for all education authorities and their schools between 2002–03 and 2003–04 is no less than 3.2 per cent. The noble Lord, Lord Hanningfield, said that in Essex the figures were 3.02 per cent, I think, supplemented by £1,162,000 to bring the total to 3.2 per cent.
Taking those factors into account, 36 local education authorities received a share of that additional money. They are now at the level of 3.2 per cent per pupil for every local education authority. We have set as a condition to the allocation of the money that it must be passed on in full to schools. But it is for each local education authority to use its judgment and local knowledge to decide how much funding individual schools should receive.
The majority of education authorities have received more than the 3.2 per cent minimum increase. But I recognise what noble Lords have been saying about the issues for authorities who feel that the increases need to be considered in the context of what is happening in individual schools. I shall discuss that matter further in a moment.
I think that the noble Baroness, Lady Cumberlege, implied that the London costs did not include authorities that were on the floor because of the ODPM grant floor, as opposed to the DIES grant floor of 3.2 per cent. I checked with officials, and I can say that we have added those authorities to the list of those who received the £11 million.
Baroness Blatch: My Lords, we must be certain about this. It is important that the figure of 3.2 per cent is properly understood. If schools have lost substantial sums of standards grant and are given an increase of 3.2 per cent on what they had last year, will that be a 3.2 per cent cash increase on top of what would have been their budget last time, including standards grant, or does the standards grant, in many cases, invalidate the 3.2 per cent?
Baroness Ashton of Upholland: My Lords, I shall try to explain by going through the figures one more time for the noble Baroness and others. I hope that that will help.
We took the pensions, the class size grant and the nursery education grant. The total was £986 million. That was paid out before we sorted out the floors and

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ceilings, which, as noble Lords are aware, are between 3.2 and 7 per cent. Because of the £400 million changes in the other grant—I think that that was the point that the noble Baroness was making—what happened in some areas was that schools that had received more money in direct grants received less. That was where the £28 million came in. As a consequence, some local authorities slipped below the 3.2 per cent level. The £28 million was the amount required to bring everybody back to the 3.2 per cent level in the light of the way in which the allocation of the grants had affected funding. I hope that that clarifies the situation for the noble Baroness.
Noble Lords rightly raised the issue of special educational needs. I want to make a couple of points about that. To the noble Baroness, Lady Sharp of Guildford, I say that the schools access initiative is partly a contribution towards making sure that schools can manage the changes that have resulted from legislation. There is no criticism from my right honourable friend the Secretary of State. We can see how important it is, as the noble Baroness, Lady Blatch, said, to support those of our children who have special educational needs. I am also aware that next week is autism awareness week. I spoke to the All-Party Group on Autism yesterday and made the point that we will recognise the needs in the work that I will do as Minister responsible for special educational needs in the coming months.
When considering funding, we must ensure that we are clear about what funding is retained at the centre—rightly, I hasten to add—to ensure that children can be funded at special schools or that funding is available for low incidence special educational needs and so on, as well as funding that will, perhaps, go into schools but of which schools are not yet aware. That is an important element of the thinking that is going on.
Noble Lords will not be surprised to hear that I shall not dwell too much on the question of funding in Essex per se, although I have information for the noble Lord, Lord Hanningfield. The noble Lord covered many of the issues, but I want him to be aware that I have considered the matter carefully. In that context, I say to the right reverend Prelate the Bishop of Chelmsford that I was delighted to hear of the partnership between the Church of England and Essex County Council. I am sure that noble Lords will agree with me that Chelmsford will miss the right reverend Prelate's contribution. I gather that this is his final week of duty in your Lordships' House. We can all agree that we shall be the poorer when he goes.
Noble Lords: Hear, hear.
Baroness Ashton of Upholland: My Lords, the noble Baroness, Lady Byford, mentioned capital. Capital has increased, since 1996–97, from £700 million to £3.8 billion this year. By 2005–06, it will be £5 billion. That is important. Noble Lords will know from their experience how necessary it is to ensure that our buildings are fit for purpose in a developing and changing world. I am proud that we have invested so much in capital expenditure and continue to do so.
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The noble Baroness raised specific issues about hygiene orders and fire risks. I apologise for not being able to answer those questions now, but I agree with her about the critical importance of the role of governors and the need to ensure that we have as many governors as possible. I ask any noble Lord here present who is not a governor to become one promptly. I shall write to the noble Baroness on the specific issues that she raised.
I share the noble Baroness's commitment to ICT in schools. I have a passion for broadband, and I recognise its value and importance, particularly to rural communities. On behalf of the department, I can say that we fully understand that we have an ongoing commitment that must be sustained. I am sure that noble Lords opposite will agree. We must ensure that that commitment to ICT in schools and to broadband continues.
The noble Lord, Lord Henley, raised the question of supply teachers. I struggled to get the figures for this year, but the latest figures that I have show that supply teacher numbers are falling, partly, as noble Lords will be aware from my comments last week, because teacher numbers are rising.
The noble Baroness, Lady Sharp of Guildford, and the noble Lord, Lord Henley, talked about performance-related pay and the commitment to the threshold. We must be clear about what the Government are doing in that area. We continue to fund 100 per cent of the cost of teachers passing through the threshold. We continue to fund those who have already gone through the threshold. We have said that we have a pot of money—£210 million this year—that is available for teachers who will go through the threshold and go onwards and upwards through the spine. We anticipate that, as with any other performance-related pay, schools will make decisions and will, this year, reward teachers who, they feel, need to continue on that way. We do not anticipate that that will be 100 per cent of teachers. I mean no criticism of teachers: that is simply a recognition of the way in which performance-related pay works and the way in which we approached it. I hope that that answers that question.
I want to spend a few minutes—I hope that I am using time wisely, as the noble Baroness, Lady Blatch, put it—talking about the critical issue of the role of local government. The noble Baroness, Lady Blatch, said that she felt that there had been overt criticism of local government. That is not how I interpret what we have tried to do. It is not about criticising local government; it is about recognising that there is a partnership between central and local government aimed at ensuring that we have adequate funding in schools. To the noble Lord, Lord Henley, I say that it is the Section 52 statements that tell us about the situation in schools—the list was published on Friday—and not press reports, however eminent.

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I accept that, in many cases, there are good reasons for the way in which local authorities handle their expenditure. We do not say that there are not good reasons for some of the ways in which money is held back by local authorities.
Lord Hanningfield: My Lords, the Minister used the words "held back". I repeat what I said earlier: we get the money in monthly instalments over the year, and we agree with our head teachers a formula for distributing it over the year. It is particularly offensive to say that we were holding back £20 million. We have not got the £20 million, and we have agreed with our head teachers how it will go to them. It was a big mistake to publish that last week. I am sure that it is the same in Birmingham, Kent or any other authority that does it: we agree a formula with our head teachers, and the money comes to us monthly.
The use of the words "held back", when we have agreed a process, has misled the public. Many people have asked me, "What are you doing with that money?". We have not got it. Will the Minister comment on that and, perhaps, correct it?
Baroness Ashton of Upholland: My Lords, if I have offended the noble Lord, I apologise unreservedly. I meant that, when we got the Section 52 returns, it was interesting to see that, in the local authority structure, there was quite a variation in different parts of the expenditure and in the amount of money within the local authority. I meant no offence to the noble Lord, and I apologise if there was any.
For the noble Lord's benefit, I shall go through some of the interesting things that we found. I say that they are "interesting", not that they are wrong. That is important. Our purpose is to understand the issues so that, working with local authority partners, we can resolve them. Nineteen local education authorities appear not to be passporting the full increase in their schools formula funding share into their schools budget. Eight of those said that they would. That means that £23 million that we understood would go into schools has not yet done so.
Most local education authorities—125—are increasing funding for their centrally funded pupil provision faster than they increase the funding for individual schools. In total, schools are getting £235 million less than a proportionate share of the increased resources.
There are big variations in the increases that local education authorities are making in their central funding for special educational needs. Forty-five education authorities have increased funding in this area by more than 30 per cent while 33 LEAs have increased their spending by only 5 per cent or less. These increases may be justified by local circumstances but will have an impact on schools' budgets, and we need to understand that.
Half of local authorities have increased their spending on educating pupils outside school—for example, at pupil referral units—by 30 per cent or more. Again, that has an impact. I do not criticise it, I
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simply say that it has an impact. Forty per cent of authorities are planning to spend more than £1 million from revenue budgets on capital spending at a time as I have explained to your Lordships' House already—when there is increasing funding from central government, and it continues to rise.
Over two-thirds of LEAs are holding hack more than £100,000 for contingency purposes. This amounts to approximately £64 million across the country. Again, it is important that we understand what is happening. A total of £533 million which LEAs have specifically earmarked for individual school budgets had not been allocated at the point that we received their statutory statements. Again, we need to understand that.
Finally, within many LEAs there are big budget differences in what is happening for individual schools. This means that in some education authorities schools are getting funding increases of 10 percentage points more than other schools in the same authority.
Against that backdrop, the Government think that it is legitimate for the department to be asking LEAs questions about their spending decisions which reflect what I said within the eight issues I set out. We want to work with education authorities and asked them to point to the steps that they intend to take to avoid any needless redundancies of staff to cover funding issues. We expect replies by 12th May.
In the light of that information, the Government will consider what changes might be made regarding funding arrangements for 2004–05. It is essential that we get a full understanding with LEAs about the decisions they have made and the impact those decisions have had on schools. Then we can look for a way forward, taking full account—I repeat, full account—of the views of education authorities and schools.
I am very grateful for all the analyses that I shall take away from this debate. I recognise that I shall run over on time, but I should like to refer to two or three points on the Standards Fund raised by noble Lords. The purpose of what we have done with the Standards Fund is to increase the control that schools and local authorities have had over how they manage their budgets.
The noble Lord, Lord Hanningfield, raised specifically the matter of the £7 million for the ICT Standard Fund and I should like to speak to this point. I believe that we have already said, but I want to place it on record with the noble Lord, Lord Hanningfield, and other noble Lords, that we shall work with education authorities to help them get all the money allocated. If that requires changes to the rules of the Standards Fund we are very willing to look at that. I shall take away the particular point raised by the noble Lord, Lord Hanningfield, about ICT and I shall ask the department to look at it at once. I hope that the noble Lord will take some comfort from that.
I do not believe that we have had a rushed change; we have had a very significant change to a number of the ways in which we produce the formula. Noble Lords will know that the formula is designed to bring

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a fairer system of funding; to recognise the need to provide funding for every pupil in this country regardless of where they are; and to take into account the issues that confront our children who are greatly disadvantaged in our areas where, for example, transport costs are very high and to ensure that we have dealt with those issues.
I say to the noble Baroness, Lady Byford, that the reason why Tower Hamlets receives more funding than Leicestershire is that when we looked at the additional costs of funding for some of our most deprived pupils we recognised that we needed to put more money into Tower Hamlets where we have many deprived pupils but also, within the fairer funding formula, to recognise the needs of all local authorities.
Baroness Byford: My Lords, I am grateful to the Minister for that comment. I no longer have my figures, but my query was that obviously it is a substantial figure. I was trying to question more acutely the reason why there was such a difference in funding. As I explained, in the two schools which I gave as examples, I suspect that the inner school in Leicester has as many if not more problems than the school in Tower Hamlets. Obviously, that is why I raised the issue; it was a significant difference.
Baroness Ashton of Upholland: My Lords, I am grateful to the noble Baroness for that clarification. Of course, within the overall education authority the issue of how many pupils are in need of additional support will be the factor. Perhaps the noble Baroness will agree with me that in a sense we are not comparing like with like in quite the same way. That is why it has been important to have the formula for ensuring that the basic amount payable for all pupils is the same and to then recognise areas of great deprivation; to recognise areas where costs are very high—which has been the other side of that equation—and to ensure we understand that; and, as I have said before and other noble Lords have raised, to look at issues of transport.
If the noble Baroness, Lady Byford, would like more information, I shall send her a fuller reply. Essentially, that is what we were trying to do by using more up to date information, recognising that the information, which I think is from 1991, is out of date in terms of where our children are and the needs and support they require.
As I said to the noble Baronesses, Lady Byford and Lady Sharp. I recognise the issues of transport and those are built in. I shall pass on the idea of the red diesel. Of course, as noble Lords would expect me to say, from these Benches I am delighted that it is red.
Therefore, within the context of a funding formula designed to deliver for every pupil a similar amount of money and to look at the issues that face education authorities in terms of deprivation, high costs and transport, I believe that this funding formula is a significant contribution and a much better formula than that we had before. I recognise the problems within the schools. We are committed to working with our partners in local government to resolve that, not
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only for this year, but to look at the issues for future years in the context of budgets that can be for three years ahead.
I am also very conscious of the role of school forums. I dug out some of the debates we had in your Lordships' House about the value or otherwise of these bodies. As we have said to a great number of schools all over the country, I urge that school forums are used exactly as we wanted them to be. The noble Lord, Lord Hanningfield, said—I am sure that he is right—that school forums are the opportunity for transparency which is critical in all local education authorities. I believe that that is an important contribution.
This Government are committed to education, education, education. We are committed to rising investment in schools; that will remain a priority. The noble Baroness, Lady Cumberlege, put it very well: children are 100 per cent of our future.
Baroness Cumberlege: My Lords, just before the noble Baroness sits down, perhaps I may ask whether this is the formula that will be used for next year's allocations or is she telling us that during the coming year it will be refined and changed so that we do not have the same shambolic situation we have at the moment?
Baroness Ashton of Upholland: My Lords, what I am saying is that my right honourable friend is extremely keen to work with his partners in local government and to look at precisely what is happening. Part of that is understanding why we have the variations that we do. As I said, there are significant variations between schools which are of great interest. He is committed to looking at the implications of that and, in particular—as I said to the noble Lord, Lord Hanningfield—at the Standards Fund issues, and at anything which might be done. I cannot commit him to saying that that means he will change the formula or anything of that nature, merely that he wants to ensure that as we move into this formula these concerns have been addressed.
7.17 p.m.
Lord Hanningfield: My Lords, I thank the Minister for that very comprehensive and courteous reply. It has been a debate with a lot of questions and I am sure that we shall have a great many more debates about education funding during the coming months. I was pleased to hear the Minister say that the Secretary of State wants to work with the departments in local government.
We shall certainly return to this issue but I should like to thank all noble Lords who participated in this debate, particularly the right reverend Prelate the Bishop of Chelmsford who is making his last appearance in the House of Lords. I thank all participants. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Regulatory Reform (Sugar Beet Research and Education) Order 2003
7.20 p.m.
The Parliamentary Under-Secretary of State, Department of Environment, Food and Rural Affairs (Lord Whitty)The Parliamentary Under-Secretary of State, Department of Environment, Food and Rural Affairs (Lord Whitty) rose to move, That the draft regulatory reform order laid before the House on 17th March be approved [17th Report from the Regulatory Reform Committee].
The noble Lord said: My Lords, probably the most remarkable thing about this order is that it is the first from the Department for Environment, Food and Rural Affairs to be brought forward under the Regulatory Reform Act 2001.
The order will repeal Section 68 of the Food Act 1984 and ends government involvement in research and education in the sugar beet sector. The industry welcomes this measure, which will give it complete control over its research and education programme.
In December 1998, following a consultation exercise, the Government announced that they would begin a phased withdrawal from sugar beet research and education and that the NFU, which represents all beet growers, and British Sugar would set up new industry-run research and education arrangements. The legal requirement placed on the Minister to draw up an annual research and education programme would remain until Section 68 could be repealed. The phased withdrawal has gone smoothly and only the repeal of Section 68 itself now remains.
Because the proposal to repeal Section 68 was drawn up prior to the introduction of the procedure for regulatory reform orders, it was not framed as a regulatory reform order and, as a consequence, the consultation process adopted by DEFRA does not reflect exactly the Cabinet Office guidelines. Nevertheless, the department has demonstrated to the satisfaction of both the Select Committee on Delegated Powers and Regulatory Reform and the corresponding committee in another place that the consultation exercise carried out in 1998 fully satisfied the requirements of the 2001 Act.
The Delegated Powers and Regulatory Reform Committee concluded that the proposal to repeal Section 68 of the Food Act was an appropriate use of the powers under the Regulatory Reform Act and would have the effect of reducing a burden on the sugar beet industry. I thank the members of that committee for the time they spent scrutinising the proposal and for recommending it to the House.
The committee in another place also considered that the proposal would remove a legal burden—it is a small one, but it is significant for members of the sugar beet industry—and would not create or impose any new burdens. The order was unanimously approved in another place. I commend the order to the House.
Moved, That the draft regulatory reform order laid before the House on 17th March be approved [17th Report from the Regulatory Reform Committee].—(Lord Whitty.)
Baroness Byford: My Lords, I thank the Minister for presenting this order to the House. As he explained, in future the sugar beet industry will carry out its own education and research functions. I understand that no representations were made to DEFRA during the period set out in Section 7 of the 2001 Act. Therefore, we obviously support the order.
In paragraph 10 of its 13th report the House of Commons Regulatory Reform Committee concluded:
"While we consider that the Department is correct to conclude that the proposals would remove a burden, we do not support the analysis used by the Department in reaching its conclusions".
I was slightly surprised by that comment. Can the Minister explain, first, whether his department has reflected on it? Secondly, what method of analysis was used and objected to? Lastly, was the acceptability of the method adopted queried by anyone in advance of its use? At present we can judge the position only in regard to the report itself. If the Minister is unable to respond tonight, I should be grateful if he would write to me.
Paragraph 11 explains the department's thinking, saying that two burdens on the industry will be removed. Paragraph 12 disputes that there is a double burden, while paragraph 13 makes it plain that the committee does not support either of the department's arguments in this regard. While we support the order before us, certain comments were made in the report of the House of Commons Regulatory Reform Committee which have caused me to raise my eyebrows. That is why I am putting these questions to the Minister.
Thereafter, the committee had no real criticisms; indeed, paragraph 22 states that the consultation had been "adequate". However, how the committee could have concluded that the consultation was adequate if it was not convinced of the methodology employed, I am not quite sure. In paragraph 31 the committee concludes:
"On the evidence before us, it appears that the proposals would be likely to result in substantial savings to the sugar beet industry".
I am sure that all noble Lords who take an interest in this sector will say, "Thank goodness for that and we welcome the order".
The 2002–03 17th report from the House of Lords committee concludes that it is appropriate for this proposal to be made under the aegis of the Regulatory Reform Act 2001.
Having made those few comments, we accept the statutory instrument. However, we are anxious to ensure that, in the future, all sugar beet growers should be included in consultation exercises and thus kept in touch with any changes that might take place. The report makes the comment that the NFU acts on behalf of all sugar beet growers, which I acknowledge.

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However, it is important to realise that certain sugar beet growers may not necessarily be members of the NFU.
Lord Livsey of Talgarth: My Lords, many of the points that I intended to raise have already been covered. However, I wish to make one or two additional remarks. As the noble Baroness has pointed out, it is clear that the House of Commons Regulatory Reform Committee was concerned about the position of small producers who are not members of the NFU. That is quite an important point and I wonder whether the Minister is himself satisfied on that aspect of the order. However, as has been pointed out both by the noble Baroness and the noble Lord, it appears that the committee is satisfied that a regulatory burden would be lifted as a result of the order. I, too, pay tribute to the committee, which appears to have undertaken a good deal of searching work in its approach to the examination of the order.
The Select Committee of the House of Lords is also satisfied with the fact that the burden will be lifted, as is the British sugar beet industry.
I should like to make one or two additional points. Apparently, the current levy stands at 12p per adjusted tonne of sugar beet and is subject to review. I think that I am right to assume that those arrangements will stand and that the industry will contribute in this way. However, if that is not the case, then I should like to be told.
The British Beet Research Organisation is preparing a research programme which in future will not burden the growers, although they will be involved in certain discussions about it. I have visited the Broom's Barn research station and I was impressed by the research being undertaken. I assume that the station will tender for future research and will continue to carry it out, if the powers-that-be are satisfied.
It was interesting to note that, from the educational point of view, beet growers receive a research magazine four times a year. They are given advance warning of issues such as aphids and spraying dates in relation to aphids causing damage. The magazine also ensures that growers are kept up to date on technological developments. All that is worthwhile to ensure an efficient and effective sugar beet industry. Certainly, if the industry is satisfied that the regulatory burdens have been lifted, as are the relevant committees of both Houses, then we, too, are well satisfied that this a right and proper order to be brought before the House.
Lord Whitty: My Lords, I am grateful for the support for the order expressed by the two opposition Front Benches. In regard to the present arrangements for research, perhaps I may say in response to the question put to me by the noble Lord, Lord Livsey, that the statutory levy ended in April 2000 as a result of the phasing-out process. Since then the industry has funded its own research programmes and a levy is attached to that. In a sense that is not a matter for me or for the House, but I can confirm that the industry
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funds the British Beet Research Organisation, paid for by the growers and by British Sugar. It is an independent, industry-based organisation which has taken on some of the work previously done under the former arrangements.
All this order seeks to remove is the outstanding residual requirement for the Minister to produce a programme of research, along with the requirement for the industry to participate in the drawing-up of that programme. The financial side has already been passed to an industry-based body.
Both the noble Baroness and the noble Lord raised the issue of representation of growers by the NFU. The sugar beet industry has certain slightly centralised arrangements because business between the growers and British Sugar—which is, in effect, the only customer—is negotiated via the NFU. In that context, the NFU represents all sugar beet growers. So it is slightly different from other circumstances where the union or trade association may have many growers outside; in sugar beet the NFU represents everyone, whether or not they are members. Although the committee expressed concerns about the point, it concluded that the consultation was adequate.
The committee questioned the two elements of Section 68, one of which imposes a burden on the industry, while the other imposes primarily a burden on the Minister. It felt that our analysis that we were dealing with them separately—and therefore claiming, in effect, that we were initiating two measures of deregulatory reform—was pushing our luck a little far. Nevertheless the committee agreed with the conclusions and the overall message that this is a deregulatory measure which removes a time and administrative burden from the industry and supported it.
As I said, because of the time position, the committee accepted the form of consultation, albeit that it was not entirely in line with what is now laid down for the regulatory reform order process. Although the wording is queried, the committee felt that our conclusions and methods were right, even though it would have preferred us to reach those conclusions through a different approach. There is not a huge argument between ourselves and the committee and the industry supports the order.
On Question, Motion agreed to.

Friendly Societies
7.31 p.m.
Lord Naseby Lord Naseby rose to ask Her Majesty's Government what future they see for friendly societies.
The noble Lord said: My Lords, I declare an interest as chairman of the Children's Mutual, formerly known as the Tunbridge Wells Equitable Friendly Society, which was founded in the last century.
Your Lordships may wonder why I have sought a debate after the Budget. I have done so because it seems to me to be a good time to reflect on the Budget and to look forward—I hope without it being seen as

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special pleading. My hope is for a considered, nonpartisan debate, because friendly societies and the work that they do are welcomed across the whole political spectrum.
Who are we? Currently there are 64 friendly societies within the membership of the Association of Friendly Societies, which makes up the vast bulk of friendly societies. They manage the investments of about 6 million people, with funds under management of about £17 billion. They are all mutual organisations with no shareholders, therefore saving at least 10 per cent of funds which would normally go to shareholders. As I have said, a good many of them were set up 120 years ago, or maybe even as long as 150 years ago.
They were originally set up to encourage self-help and personal responsibility and to enable people with limited resources to improve their economic status. I emphasise "limited resources" because, as I shall highlight later, it represents the key difference of a friendly society.
We see ourselves today as filling the gap between the micro-credit solutions offered by the community-based credit unions and the many commercial providers who have abandoned the less-well off sector—the most recent being, perhaps, the sorry case of AMP and, in particular, the Pearl, which many of us will have known from a previous incarnation as working very closely with the less affluent in society.
Let me paint a brief picture of four typical societies. There is a group of societies that we call "affinity societies", an example of which is the Police Mutual Assurance Society. It operates exclusively within the police forces, for both uniformed officers and the civilians who work in the Police Service. It has 160,000-plus members, principally police constables and police sergeants—people at that kind of level—earning between £23,000 and £25,000, who typically take out policies of between £8 per month and an average policy of about £12.50 per month. That is one section of the friendly society movement.
Then we have the big boys. The Liverpool Victoria Friendly Society—the biggest of the lot—has been in existence for more than 150 years. It offers a wide range of products directly, owns a number of subsidiary companies and cross-sells between the two. It, too, has many members with premium plans of between £9.50 and £12.50 a month.
There are a number of small groups, a typical example of which would be the Druids Sheffield Friendly Society. It is a small society, established in 1858, which helps its members in times of adversity and provides savings for their future. It offers a wide range of products and operates through a voluntary lodge secretary system working in a local community. These societies allow policies with premiums of £4.50 a month—in effect, £50 per year.
So those are three examples of the different kinds of societies. In my own society, the Children's Mutual, we would term ourselves as a specialist niche player. We have some 300,000 members. As the Government know, we have ownership of the trademark the "Baby
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Bond". Last year we were voted by the IFAs as worthy of two five-star awards for performance—and the highest award is five stars.
Even more importantly, we were voted service provider of the year, beating all the large pies such as Standard Life, Aviva and Legal and General—so much for those who allege that friendly societies are small, inefficient organisations. We were very proud to earn that award.
What are we about? We are about savings—a fairly key issue with a savings ratio as low as 4.9 per cent at the moment. The movement takes savings very seriously. That is why the movement welcomed the Government's proposals on the Child Trust Fund. We gave the Government public support in that respect and I was very happy to be associated with that public support.
We have welcomed in principle the Sandler concept. Indeed, we have sent the Treasury a long and considered response. It highlighted the question of who exactly are the targets for Sandler products, because the currently stated target of 29 million people is too broad, too diverse and too many. It is our belief that the Government should concentrate on the less well-off, because they are the people who need help and who need to be persuaded to save.
Who are they? As a movement, we believe that they are people in the income bracket of somewhere between £13,500 and £25,000. If we are correct, what right do we as a movement have to claim that we can reach or serve these families? We make the claim because there are no other organisations which play such an important role in delivering financial inclusion as friendly societies. We are the only financial organisations which will take an average premium of £11 per month and make it work through the tax exempt savings regime.
For example, with ISAs, more than 75 per cent of products have a minimum monthly payment of £50. Even insurance ISAs with a £1,000 cap have an average of £34.50. The average tax exempt premium is 80 per cent less than that for an investment ISA and 70 per cent less than an insurance ISA.
As an aside, it is interesting to note that while public life insurance companies are able to offer tax exempt policies for their own customers by forming a friendly society, not one of them, to my knowledge, has ever done so.
Some would argue that we are not efficient; that we do not give good value and that we are lacking in enterprise. I have already said that my own society won the service provider of the year award, but we are not alone. As polarisation rules have been eased—I thank the FSA for easing them—so societies have expanded distribution. The Family Assurance Friendly Society has built up a link with the Abbey National; Homeowners has built up a link with Bounty; and we at the Children's Mutual have built up a link with Boots.
Our persistency is better than the life industry, whose average after four years on sales through IFAs is 81.9 per cent—in other words, two out of 10 people

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lapse. Ours in the friendly society movement is 92 per cent, so less than one out of 10 lapse. Our reduction in yield for "with profit" policies across all years is better. The industry average for 10 years is 2.8 per cent; for mutuals it is 2.7 per cent. For 25 years the industry average is 1.4 per cent and for mutuals it is 11 per cent. If I were to break out the friendly societies' figures alone, they would be even better.
Just as an aside, as a typical example, a £25 per month with-profits endowment policy over the past 18 years is producing, in our society, £12,431, compared with a building society investment of £8,396 and an average managed unit trust of £9,361. So much for those journalists who allege high charges and poor performance.
Some will ask whether we really get to the less well-off. Some very interesting recent work has been done for the biggest friendly society, Liverpool Victoria, by Financial Acorn. Your Lordships will know that the Acorn work is a segmentation that is recognised across all sections of society as sophisticated and thorough. If anything, friendly societies might have thought that Liverpool Victoria might be a little more middle-class. But when it comes to moderate and inactive savers, who make up 48.8 per cent of the population, ISAs account for only 38 per cent and Liverpool Victoria's policyholders make up 52.5 per cent, so they are skewed to the less well-off. There is plenty more evidence from Professor Yarrow and others.
So much for the past. What of the future? The movement was delighted when the friendly societies were mentioned in the Chancellor's statement on the Child Trust Fund and that a decision had been made to have an open market. We continue to welcome that and the work that has been done. Yes, we are relatively small players. We give good returns, we are pretty efficient and we know what makes the less affluent tick. Whatever Sandler says, we know tax exempt works, as it has built into it an incentive. This group, of all groups, looks for value for money and response to incentives. One has only to ask any supermarket about this group to know whether it responds to incentives.
There were rumours that because of Sandler recommending that qualifying policies should go, tax exempt would have to go too, albeit as an unintentional side effect. Thankfully, the Government listened to the friendly societies' predicament and tax exempt is still with us, for it is vital to the movement. We have also taken the precaution of checking with the European Commission whether it sees any problems with the current tax-exempt status, and it confirms that it does not.
I suggest that if the Government are truly concerned with the less affluent, defined as those with an income of less than £25,000, and if they want the Child Trust Fund to be a success, they should listen to successful players—not just the big boys, who say they will operate within a 1 per cent regime, and then later withdraw. Indeed, we have an example with CAT
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standards mortgages today, where the biggest operators decided to withdraw. Some would call that predatory pricing.
Savings is such an important area. People tell us that they need disciplined savings. They need some advice, and advice costs money. The Government have said the Sandler recommendations will be considered further within a framework of ongoing regulatory change. Would the Minister be able to throw any light on the timetable for this consideration? When does he expect proposals to be drawn up? I do not necessarily expect an answer tonight, and would be grateful if he could write to me in due course.
Finally, we, the friendly society movement, take our job seriously. I submit that our responses to consultation papers are some of the very best the Government will receive and so, too, for the FSA—the latest being DP 19. The Government should listen to us and consult with us, for we have much to offer. Together we can achieve success. If they leave us sidelined or, at worst, undermined or so constrained that we cannot make a profit, I submit that they do a grave disservice to the less affluent, our 6 million members and our successful heritage.
7.44 p.m.
Lord Graham of Edmonton: My Lords, it is my pleasure and privilege to follow the noble Lord. Lord Naseby. I have never heard such a well prepared case, delivered so modestly—and, at times, slightly defensively. There is nothing to be defensive about. I come to this debate with my experience on a horse from the same stable. The stable is called mutuality and the horse that I ride very proudly is the Cooperative movement and many others too, as I shall mention. I hope that tonight we will provide the Minister with an opportunity of giving the House the benefit of his thinking.
To my knowledge, the Government have done not only as much as they could but a great deal more than some might have believed they were capable of in supporting the concept of mutuality. My good friend in another place, Gareth Thomas, produced a Bill which had the universal approval of all parties, changing legislation going back a long time. The noble Lord constantly referred to a timescale of about 150 years. The Rochdale pioneers were credited with the first successful co-operative venture in 1844—again, about 150 years ago. At the beginning and middle of the 19th century, the needs of the people produced a number of aids and comforts such as friendly societies, the Co-operative movement, trade unions, the Church and many others. Tonight we have heard the case for self-help and financial prudence on a modest scale.
The noble Lord pointed out that in the totality of the global reaches of the Chancellor, the mutual sector might be regarded as small beer. I speak as a consultant to the Co-operative Group which people know as the CWS and which is the national central federal body. Until last year, I was the chairman of the United Kingdom Co-operative Council. Within the co-operative movement there has been a renaissance

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and a recognition that the Co-op, which is a successful trader, is not just a shop on the corner but a concept and an idea capable of being applied in many ways.
The credit union movement, which deserves a mention, is not a poor man's bank; it is not there to keep the poor person out of debt. It is a thriving financial organisation. Many of the manifestations of how it operates go back to the friendly society movement, the Co-operative moment, and others.
We are celebrating a success, because we are still here. We are still alive. Many organisations have gone under—they have been absorbed, taken over, the funds have been diddled. We know the history. But when we talk about friendly societies and mutuality, we are celebrating something which has been a great credit not just to governments or one particular party—your Lordships will know that I do not make party or political points.
My background is the Co-op movement. I had lunch today with a person I had never seen before who comes from Newcastle upon Tyne, my home town. As we were reminiscing, I said, "Do you remember Newgate Street?" which was the headquarters of the Newcastle Co-op. She said, "Yes, I got all my shoes there". I said, "I know how you got your shoes". She asked, "How?" I said, "Your mam went down four times a year and drew the dividend, then she went straight down to the shoe department and the family was shod. She bought shirts and other things as well".
The savings of the working-class movement of Newcastle, which was no different from anywhere else, were the accrued dividends earned on their purchases. They did not have any spare money to put in £1 or £2 a month or even a year, but they knew that every quarter they would have £4 or £5 in dividends, which was their life savings. That was their nest egg. The Co-op movement has a great deal to be grateful for, as do the people of this country, for the way in which it bred in ordinary people the need to make provision. Friendly societies have given a respectable face to a movement of which we should all be greatly proud.
Another of my interests is as a patron to the benevolent section of the Ancient Order of Foresters. That is a friendly society that is undergoing great change, as most such bodies are, under the Financial Services Authority's manipulations. It is struggling and surviving. When I think what ordinary people are doing for themselves, I think of my good friends, Bert and Rita Overington, who run the Ancient Order of Forester's court, which is called Edmonton Pride. Every year, they distribute thousands of pounds to charities, which rely on gifts from people—from anyone. The country is well endowed with the Bert and Rita Overingtons of this world, who give an enormous amount of time and do it professionally.
At one time, friendly societies, Co-op societies and others were in danger of being managed by people who were not well trained and not up to date. Those days have gone. I respect very much the record of the friendly society with which the noble Lord, Lord Naseby, is associated. It must give him a great deal of pleasure to give us the story that he told us
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tonight, which may be atypical but is a good story about what can be done by a well trained, well managed, professionally organised business of that kind. So I say, thank you very much.
On Friday this week, my noble friend Lord Carter will introduce the Second Reading of a Bill that deals with the application of the Co-operative idea following the Industrial and Provident Societies (Amendment) Act. The Minister has a good story to tell about the way in which the mass movement with which I am associated has been treated by this Government previously.
When I became associated with the movement, I picked up the phrase, "The Co-op movement never made a millionaire but it never made a pauper". People did not join those movements to get rich—and certainly not to get rich quick. They trusted the good sense of the people in charge, many of whom were not professional at the start but were honest and had integrity. They gradually built up a reputation and kept good men and women around them. One thing that the friendly societies and Co-ops and others do is provide a training ground in democracy for ordinary men and women who otherwise may not have had the opportunity to demonstrate that they are articulate and able to manage affairs in one way or another.
The movement that was formed by the conditions of the early part of the 19th century, and which continues to survive, has made a valiant contribution. I was fascinated to hear the noble Lord proudly tell us of the achievements of the movement and of some of its problems and possible easements that might come. The Minister will satisfy this audience and the audience outside by reassuring us, in the context of trying to keep all the balls in the air, that friendly societies are well supported and constantly thought of. He will serve the movement well if he tells us that there is a place, in the enormous changes that have taken place, for the kind of people whom we represent. We represent organisations, but we represent people as well. I am grateful to the noble Lord for asking for this debate tonight.
7.54 p.m.
Lord Stewartby: My Lords, I begin by thanking my noble friend for giving us the opportunity to debate this subject. I, along with the noble Lord, Lord Graham, congratulate him on the comprehensive and effective way in which he opened the proceedings. He covered most or all of the important points, and I would not want merely to repeat what he said, but I have a long-standing interest in friendly societies.
During the 1980s, when I was a Treasury Minister, I was responsible for legislation relating to financial mutuals, which predominantly meant the building societies but also included credit unions and friendly societies. On a number of occasions, I had to consider the implications of other legislation or changes for those bodies. That is something that successive governments have done, and I welcome the reaction of

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the present Government in the past few months to the representations made to them about friendly societies and tax-exempt savings plans.
I came to appreciate the friendly societies from a number of aspects. My noble friend Lord Naseby quoted all the statistics, which are quite remarkable. Many of those bodies are not large, but if one aggregates their resources—their income each year approaches £2 billion—the sums are not insignificant. They are even more significant given that they are largely the product of a great range of policies spread among persons of very limited financial resources, in small packets. That is the aspect that is so important.
Friendly societies provide an opening to those on lower incomes, who have sometimes been described as "marginal savers". There is a distinct market here. It is not simply a question of the financial quantum. Some people are wary of the larger financial businesses—not only of banks but even of building societies. The whole ethos of the friendly society movement, like other mutuals, which as we have heard were established 100 or 200 years ago, is that they have a more direct connection with those whom they serve, to the extent of door-to-door collecting and calling. Such things would make no sense to a modern bank or a large building society, but they are the essence of mutuals. There is no doubt that friendly societies reach a lot of people through those means who otherwise would not be reached at all. It is a distinctive market.
Several of the societies accept subscriptions of less than £10 a month, which would not be on the radar for bigger financial institutions, as they are not geared to cope with a very large number of very small amounts. It is extremely important that people who want to contribute at that level can do so with organisations in which they feel confidence and which they trust.
I do not mean the phrase to be in any sense pejorative when I say that there is a financial underclass. We do not wish them to become disconnected from the rest of the community. It is terribly important that such opportunities should be available to them, and they may graduate to something larger as time goes on. That can be illustrated by the fact that monthly subscriptions to tax-exempt savings plans, which are limited to £25 a month to obtain the tax relief, are far lower than contributions to financial ISAs, to which the average contribution is three or four times higher. I think that that demonstrates that there is a body of people who want to save, and who will save if they can, but who cannot readily make the initial jump straight into the larger financial institutions. That is where friendly societies not only have a very important part to play but are likely to continue to have that part for a long time to come.
In his review of long-term savings and investment, Mr Sandler said:
"the use of tax mechanisms to increase aggregate savings levels is undesirable and likely to be ineffective".
I think that in this respect he was wrong. I believe that if it was not for the friendly societies and these tax-exempt savings plans, there would be nowhere for
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those people to go. To that extent, and it is not a very large amount of money, I think that they are important. Not only do they increase the aggregate; they increase it in a particularly valuable way through participation by those who would otherwise not be able to save at all.
Despite some of the criticisms occasionally made of friendly societies, they are a very valuable part of the financial scene. People have criticised them for their performance, but in today's climate the performance of plenty of financial institutions can be criticised. When investment markets have generally been so weak, it is partly a question of forces beyond their control. Sometimes they are criticised for their level of charges. However, when one has very small policies, the percentage charge tends to be a bit higher. There is a minimum cost of running these things. I do not think that it is a fair criticism to say that that is a disadvantage of friendly societies. It is inherent in the structure.
In what we have to accept is now an age of high-tech business and sophisticated financial services, the friendly societies may seem a bit of an anomaly. However, I think that in many aspects of British life—in our constitution, our business and our society—there is room for a few anomalies as long as there is a good case for them. I think that the case for friendly societies, and the case for the continuance of friendly societies, is very strong. Many of those who use them would without them not save at all. I think that that itself is an overwhelming argument.
8.3 p.m.
Baroness Maddock: My Lords, like other noble Lords who have spoken I am very grateful to the noble Lord, Lord Naseby, for introducing this debate. Indeed, he and I are both officers of the All-Party Parliamentary Group for Building Societies and Mutuals. In opening, he said that he did not want us to be particularly partisan. I do not know whether it is my political training or what, but I always like to try to explain where I am coming from philosophically. I hope that I will not be too partisan in doing that.
In researching, I realised that our party has a constitution, to which we have not only a preamble but a shortened preamble that we all carry round on our cards. The longer preamble contains a sentence which I think describes where we come from. It states:
"We want to see democracy, participation and the co-operative principle in industry and commerce within a competitive environment in which the state allows the market to operate freely where possible but intervenes where necessary".
I then read some of the history of developing thought in the Liberal Party and came across an interesting point which predates even my time in the party. In the 1950s, there was a group in which Jo Grimond was very prominent called the Unservile State Group. It was not officially affiliated with the Liberal Party, but it had some interesting members, some of whom have been or are still Members of this House. In 1953, it included Jo Grimond; Elliott Dodds; Richard Wainwright—whom some noble Lords may have known, although he did not become

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a Member of this place; Nancy Seear—Lady Seear, whom some noble Lords knew very well; Russell Johnston, now Lord Russell-Johnston; and William Wallace, who also sits on our Benches.
One way in which they sought to develop party policy was to emphasise the value of co-operation and mutuality. Although I think that that probably was not developed very thoroughly in following years, in recent years we have looked at how provision can be made other than totally by the state or totally by business. Our recent party conferences have examined the role of public services and developed that theme. I am therefore totally supportive of many of the comments made tonight. We have had a very good exposition of the success of friendly societies in the modern world.
Friendly societies have a very proud history. I read a claim somewhere that that history goes back to Roman times. I do not know whether that is true, but the first relevant Act of Parliament, on the relief of friendly societies, was passed in 1793. As has been said, friendly societies have stood the test of time and have even survived the introduction of the welfare state. Many of the ideas for the welfare state came from Beveridge, but I do not think that he envisaged that it would be developed in quite the collectivist way that it has.
One of the important features of the movement—which the noble Lords, Lord Naseby and Lord Graham, have pointed out—is its diversity. Organisations such as Liverpool Victoria have more than 1 million members and thousands of employees. Some of the other organisations, however, have no full-time staff and a membership of well under 100. The noble Lord, Lord Naseby, also pointed out the variety of financial products provided by those organisations. It is particularly interesting how many of them have been able to keep up in terms of performance with very big modern organisations. The noble Lord gave us a very clear indication of that.
In this day and age we often discuss how we can involve people in society in terms of voting and so on. Democracy forms an important part of friendly societies. They have a richness of democratic involvement that goes beyond their accountability to their members. For example, societies permit members to take part in decision-making on the basis of one member one vote. That has become a non-partisan phenomenon now although it was partisan at one time. Some societies have a body of delegates who are mandated to vote on behalf of the full membership. Even in small societies all members have an equal vote. I particularly commend that. It is in marked contrast to the concentration of power in other organisations, particularly plcs. I believe that the delegate form of governance permits greater hands-on involvement on the part of members in the operational management of friendly societies. That is very different from the role of shareholders in plcs. I understand that some societies also hold delegate meetings on a regular basis. That is another way of enhancing democratic involvement.
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As has already been pointed out, friendly societies are mutual organisations with no shareholders. Thus, the members are the principal stakeholders. Therefore, there is not the potential for a conflict of interest between the respective needs of shareholders for profit and members for value and service. In the event of a demutualisation the assets of a society would be distributed among the membership.
As has already been said, the core heritage of a great many friendly societies is rooted among the less affluent sectors of society. However, I understand that some members of professional groups go down the friendly society route. I understand that a certain society limits its membership to dentists. However, in the main, friendly societies have a particular strength in respect of their competencies in serving the less well off, as the noble Lord, Lord Stewartby, said. But unfortunately—I believe that the noble Lord, Lord Stewartby, touched on this—regulation has acted as a force to lessen the role played by a number of societies with poorer people. The noble Lord. Lord Stewartby, pointed out that some people go and collect premiums, but that is not always economic in this day and age. I hope that the Minister will comment on that point when he replies to the debate.
Traditionally the membership of friendly societies has encompassed a wide range of social classes. Many regard them as providing a valuable social service in encouraging saving and self-reliance on the part of people who might not otherwise save. They have thereby resulted in an increase in the amount of money that is put into savings.
I do not know whether noble Lords listened to a programme on Radio 4 this morning about debt. Debt is a huge problem among those young people who do not have the habit of saving. According to that programme men in their twenties are more indebted than women of that age. These days we often discuss the level of national debt. The habit of saving was much more prominent when I was younger. We should do all we can to safeguard friendly societies as they encourage people to save.
Savings in a friendly society have the benefit of tax exemption. I shall be a little partisan now as I understand that in the 1984 Budget Nigel Lawson reduced the maximum of tax exempt savings. Then the relevant sum was £9 a month. However, as the noble Lord, Lord Stewartby, pointed out, the relevant sum now is £25 a month. In retrospect that presented societies in large part as providers of savings and insurance to the poor. However, the wide membership spread still exists, especially in respect of savings for children. The Government recognise that. The noble Lord, Lord Naseby, spoke eloquently of the role his society has played in that area. The Government have tried to persuade people that saving is a good thing and have tried to help people to encourage children to save. Recent changes—PEPS. TESSAs and so on—have not actually encouraged people in the same way in which friendly societies encourage them to save.
As is obvious from my comments, I certainly believe that friendly societies have a unique contribution to make in facilitating what I will call financial inclusion.

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That is a buzzword, but it is important that everyone in society has a place where they can be included in the financial world. The Government have given significant attention to credit unions and their potential for addressing financial exclusion, which is very welcome. I think that they are beginning to realise the potential of the friendly societies, whose role is as important in a different way in ensuring that all people have access to financial institutions that suit them and their situation.
As I said, I am particularly attracted to friendly societies because of their democratic and communal nature. I hope that we will hear more from the Minister on the Government's view on the future of friendly societies. I think that the noble Lord, Lord Naseby, referred to the fact that a submission was made on the Budget about the role of friendly societies, particularly in terms of making child trust funds work. I hope that we will hear from the Minister that the Government have even better plans for their role. Once again, I thank the noble Lord, Lord Naseby, for the opportunity to take part in this interesting debate.
8.15 p.m.
Lord Higgins: My Lords, I join all those who have congratulated my noble friend Lord Naseby on introducing the debate on friendly societies this evening. He did so in fairly wide terms, which gives us an opportunity to discuss the various issues that arise. Everyone who has spoken has referred to the historical foundations of the friendly society movement, not least the noble Lord, Lord Graham of Edmonton, who referred to other mutual help institutions such as the Co-op. I agree with him, certainly as regards that institution. It is a more forward-looking institution than is sometimes supposed. There has certainly been widespread support for the friendly society movement, as there was in another place, where an Early-Day Motion was tabled a short time ago.
The debate is essentially about savings, which are of course crucial so far as macro-economic demand management is concerned. All else being equal, as economists are inclined to say, it is true that if we have more savings, we can have less taxation for any given economic situation. We need to put the debate into the general context of savings and the state of the economy, even though the friendly societies make a unique and rather unusual contribution to the problems.
At present, the Chancellor would be rather upset if there were suddenly a vast increase in savings overnight and a vast reduction in spending. The economy has been kept going in recent times very largely by the extent to which there has been an increase in consumption. None the less, the long-term balance between savings and borrowing is very important. As the noble Baroness, Lady Maddock, pointed out a moment or two ago, the increase in personal indebtedness as against personal savings is a cause for concern at present.
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Also a cause of concern is the decline in the savings ratio. I raised the matter with the Minister a short time ago, pointing out that since 1997 the savings ratio had virtually halved. Since then it has almost reached record low levels. He was inclined to talk in terms of averages, but the reality is that there has been a massive decline in the savings ratio. That is a matter in which the contribution made by friendly societies in increasing savings—I will come to the issue of whether they do so in a moment—is important.
The reason behind the savings ratio is well known. Much of it is related to savings so far as pensions are concerned. There really is a big problem, particularly, as my noble friend said, for those at the lower end of the income scale, because of the way in which the minimum income guarantee introduced by the Government is uprated with earnings. One really needs to save a very large amount now towards a pension if one is to get enough from those savings to float above the means-tested level. A short time ago, my honourable friend in another place, David Willetts, estimated that people would have to save something like 142,000 as a couple to float themselves above the minimum income guarantee level.
Such problems have had a severe effect on savings. It makes it all the more important to concentrate on savings other than for pensions, which is effectively what friendly societies do. When people's savings mature, they could invest the money and use it for a pension; but generally speaking, it is not what those who save with friendly societies do. They generally use it as an emergency reserve, to finance school fees, for disability and so on. So it is important to extend the scope of non-pension savings. My noble friends have all stressed strongly the way in which this relates to those on lower incomes.
Almost all speakers have mentioned the relationship to the Chancellor's new proposals for child trust funds—so-called baby bonds—and to the so-called savings gateway. It would be helpful if the Minister could give us some idea of how important he thinks the role of friendly societies is likely to be in the operation of those funds, given that overall the Chancellor has agreed that there should be an open market option as regards both funds.
I must say in passing that I have some doubts about the means-testing aspect of the proposals. A number of groups, including the Institute for Fiscal Studies, have expressed concern. It is argued that when a product continues from birth right through to age 18, a means-tested answer by the family in the first three years of a child's life may be vastly different from what it will be when the child is 18.
Both products are very complicated. It has been suggested that some typical families might have to go through 18 different means tests before it can be calculated whether or not they meet the requirements. Means-testing and complexity are hallmarks of anything that the present Chancellor introduces.
Nevertheless, because of the personal contact referred to by the noble Baroness, Lady Maddock, friendly societies may be in a better position to explain

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the complexities in this area to those on low incomes than an ordinary plc provider, which probably does not have the degree of personal contact to which the noble Lord, Lord Graham, and others drew attention.
The question of personal contact is important, as is the extent to which friendly societies provide an opportunity for those who are, as it were, financially excluded—the Early Day Motion even goes into detail about which category of financial persons they are—to take up a product that is not provided by any other organisation.
Against that background, we suddenly have a dash of cold water in the form of the Sandler report. It effectively comes up with two conclusions and a recommendation. It states that,
"the use of tax mechanisms to increase aggregate savings levels is undesirable and likely to be ineffective",
and that.
"governments should avoid introducing new tax-based savings incentives if their aim is to increase aggregate savings levels".
The report goes on to say:
"the concept of the qualifying life savings policy should be abolished for new business".
It looks as though that argument has been extended to so-called tax-exempt savings provided by friendly societies. It would be helpful if the Minister would give an indication of whether the Government feel that the arguments put forward by Sandler are relevant to friendly societies.
It is arguable that withdrawing an existing tax concession may have a different effect from introducing one, or even keeping it the same. It may be that if the abolition of the tax benefits to that very low income group were to reduce significantly the number of friendly societies—some figures have suggested that they might be cut by 50 per cent—it would mean that people at that low level did not have any alternative provider to which they could turn. It has been pointed out, for example, that the minimum contribution to an ISA in an ordinary company provision is likely to be much higher than that provided by friendly societies.
I take the point made by my noble friend Lord Stewartby, who suggested that friendly societies are inefficient. I think that he was arguing that in the nature of things if one is carrying out an operation involving very small amounts of money then there are real diseconomies of scale. Consequently one can be very efficient but the problem of higher costs is in the nature of the product. That is part of the reason why the other providers do not come into this market.
It can at least be argued that if there were a substantial reduction in the number of friendly societies as a result of the proposals made by Sandler being extended to them, one could find that the opportunity for saving by those on lower incomes was no longer available. To that extent the total amount of savings may be reduced. Sandler argues that the tax incentive has a redistributive effect rather than a savings-creating effect, but it is not at all clear whether there is anywhere else to go for those who are saving through this measure. Would the Minister kindly indicate whether he shares that view?
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This has been a fascinating debate. The basic theme that has run through it is that friendly societies are historic but not anachronistic. They make a substantial contribution to the level of savings. They provide a service to those who otherwise might not find any such service available. To that extent it is important that they should be given due consideration, as it appears has been done by government Ministers in taking their views into account, and as has been forcefully expressed both by my noble friend Lord Naseby and everyone else who has spoken in this debate. Of course there are both sides to the argument. However, on balance it is important that the Government should take these arguments into account, particularly against the background of the new products that they are proposing.
8.28 p.m.
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Naseby, asked in his excellent opening speech for a constructive debate. His contribution was certainly constructive and I hope that he will agree that all other contributions have been constructive. I hope that I will not break that mould, because we share two fundamental principles with the friendly societies movement, if I may call it that: first, the principle of mutuality, which has been the subject of virtually every speech, and secondly the principle of encouraging savings, in particular for less well-off people. The Government's view is that mutual organisations can foster greater trust among their members acting in their collective interest. As the noble Baroness, Lady Maddock, said, they provide a structure of democratic accountability. So we are committed to the principle of mutual organisations. Indeed, I must declare an interest, which I have previously declared. I have most of my financial business with Sun Life of Canada and Scottish Widows, both of which went in for demutualisation. On both occasions I voted against that and benefited from it.
The Government have changed the legislation for certain mutual organisations to ensure that any decision to convert them to company form is taken only with the active participation of membership. We want a competitive marketplace offering choice for consumers. As I hope to show, friendly societies and mutual societies more generally have a role to play.
I turn to the issue of encouraging savings, particularly for the less well-off. The noble Lord, Lord Higgins, rightly said that the savings ratio has been in decline and that we would wish generally to encourage an increase in the savings ratio but not, as he implied, at all stages of the economic cycle and certainly not on the basis that an increase in the savings ratio is an unalloyed good. There are advantages and disadvantages in changes in the balance between savings and consumption. I put that as neutrally as I can.
On the mutual sector more widely, we are supporting other mutual organisations. On Friday, we will support a Bill that the noble Lord, Lord Carter, is introducing to modernise the legislation on industrial and provident societies. We have introduced

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legislative reforms for building societies and credit unions. As the noble Lord, Lord Graham, knows, we have always been very supportive of the Cooperative movement.
We welcome the contribution that friendly societies in particular make, as has been said throughout this debate, to increase choice and competition. In the Financial Services and Markets Act, we introduced an independent ombudsman and a single financial services compensation scheme, which should increase confidence in potential members of friendly societies. The noble Baroness, Lady Maddock, seemed to suggest that there was some inhibition in the regulation of friendly societies. I cannot think of any way in which there has been. The transfer from the registrar of friendly societies to the Financial Services Authority has been pretty seamless. I am glad to notice that the noble Lord, Lord Naseby, indicates agreement with that. The FSA is required to consult and to undertake cost/benefit analysis, and it has indeed been consulting with the friendly society movement.
On tax exempt savings as a whole—I recognise their importance to the friendly society movement—tax exemption on premium life insurance policies means that income and gains that are referable to those policies are not taxed in the hands of the society. That exemption is unique to friendly societies. The amount of tax levied on non-friendly societies that provide insurance ISAs, for example, will be pretty minimal. It is common that where tax exempt policies are sold as qualifying policies, neither the society nor the policyholder pays tax. That has been an important element for friendly societies.
That brings me to Sandler. The Sandler report asked us to look again at the abolition of qualifying life insurance policies on the basis that they are a distortion and an unjustified additional complexity in the savings tax system; that they benefit mainly higher rate tax payers; and that there appears no justification for savings with a life-insurance element to be tax-advantaged over other forms of saving. We are certainly in favour of minimising distortions. We have talked with the mutual industry as a whole about the Sandler proposals and they put it to us that we should look at those tax proposals in the wider context of other tax issues including the market for insurance and other pooled investment products, such as unit trusts. We agree with that. We have decided to consider those recommendations within a wider framework. That will take account of regulatory change and other developments such as corporation tax reform. So this is not a short-term matter.
The noble Lord, Lord Naseby, asked for the timetable. We are considering the scope of that consideration, but I can assure him that we shall include the effect on friendly societies, on their tax exempt savings plans and on the savings of the less well off in general. We shall also, of course, listen to the friendly societies movement on that.
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The noble Lord, Lord Higgins, asked about the Sandler recommendation, abolishing qualifying life insurance policies. Many friendly societies sell qualifying life insurance policies. If the Sandler recommendation were to be implemented, that would automatically affect friendly societies. That is why we have not implemented it, but we are looking at it in this wider context. We do not want to pre-empt that review.
We are also committed to helping the less well off. We have specific policies that have been referred to in debate, including ISAs, the Saving Gateway and the Child Trust Fund. I am encouraged to learn, not least from the noble Lord, Lord Naseby, himself, of the close involvement of friendly societies in the Child Trust Fund and in Saving Gateways. Their experience in that area is invaluable. We believe that friendly societies have a huge opportunity to benefit from those new developments.
I turn to the government initiatives to develop the saving habit, starting with ISAs. It has been claimed by some politically motivated people—not tonight, of course—that ISAs have been disappointing. Since 1999 £105 billion pounds have been subscribed to ISAs. That is 14 million people, which is one in four adults: and that is 6 million more than held a TESSA or a PEP by 1998 to 1999. They are starting to change habits. One in five ISA holders are from lower income groups, compared with one in seven TESSA or PEP holders. The number of young people with ISAs is larger. About 10 friendly societies offer insurance ISAs and that is about 5 per cent of the ISA market. There is scope for the movement to develop and to market the ISA product.
Referring to the society of the noble Lord, Lord Naseby, I recognise that ISAs are available to adults only, which is why I now turn to the Child Trust Fund.
Lord Higgins: My Lords, I apologise if I appear to be politically motivated in any way. Does the Minister believe that the move as regards ISAs will be favourably or unfavourably affected by the withdrawal of the tax credit proposal by the Chancellor?
Lord McIntosh of Haringey: My Lords, the tax credit proposal is the 10 per cent tax credit, which is the last vestige of payable tax credits that were dealt with in 1997. It is a transitional measure until April 2004 and it gives investors an opportunity to adjust their portfolios. The amounts of money are very small indeed. The average tax credit per investor is only £25. That is the amount that we are talking about. I do not believe that there is a significant effect on the viability of ISAs.
I turn to the Child Trust Fund. That will provide an initial government endowment of £250—£500 for the poorest families. We are now engaged in detailed discussions including with the friendly societies. We expect the Child Trust Fund accounts to be available by 2005. We acknowledge that the Tunbridge Wells society and Children's Mutual gazumped us with the

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words "Baby Bond". I believe that it has the copyright. That will be respected. We certainly welcome the fact that it is involved. I was asked whether the bonds were not likely to be too complex. We are consulting on that, too, of course, but if we are to work towards saving by less-well-off people, it is essential that they should be targeted, which means a means test.
The savings gateway also has potential for friendly societies, because it will support saving by low-income groups. We shall conduct pilots to get the detail right, but there will be an opportunity for low-income individuals to save up to £375, which the Government will match pound for pound. When I hear my noble friend Lord Graham talking about the "divi" and the Co-op and when I hear about the history of the friendly society movement, it all has a familiar ring, does it not?
I thank the noble Lord, Lord Naseby, and all those who have taken part in the debate, for the opportunity to discuss the friendly society movement. I hope that
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the noble Lord will agree that the Government's response has been constructive. The friendly society movement has always well, for more than 200 years—played an important part in the spectrum of savings offerings to people in this country. It has already played an important part in the establishment of the Child Trust Fund.
The noble Baroness, Lady Maddock, asked me, in the terms of the Question, how we see the future of friendly societies. We hope that the movement continues its strong tradition, demonstrated over two centuries, of successfully adapting to changing environments and offering new or valued products to maintain its appeal to existing members and to attract new ones. The point is: they have been around for a very long time and they are still here. Long may that continue.
House adjourned at eighteen minutes before nine o'clock.

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